4.1  A record number of mega megaprojects are being built

Ten years ago, Australia had just one mega megaproject valued at $5 billion or more in today's dollars under construction: the Airport Link M7 and Northern Busway in Brisbane (Figure 4.1). At the time it was considered 'the most complex road and tunnel engineering feat in Queensland's history',74 and it made use of Australia's two largest tunnel boring machines as well as 17 road header machines - the most on any Australian construction project to that time.75

Figure 4.1: The number of projects expected to cost $5 billion or more has grown dramatically in just a few years

Number of projects under construction with an expected cost of at least $5 billion ($2020)

Source: Grattan analysis of Deloitte Access Economics Investment Monitor.

Now Australia has nine projects of this size or larger under construction:76

•  WestConnex (Sydney)

•  Sydney Metro City & Southwest

•  Metro Tunnel (Melbourne)

•  Inland Rail (Melbourne to Brisbane)

•  Cross River Rail (Brisbane)

•  West Gate Tunnel (Melbourne)

•  Removal of an additional 25 level crossings (Melbourne)

•  METRONET (Perth)

•  Pacific Highway Upgrade - Woolgoolga to Ballina (NSW)

The capacity of the engineering construction sector to manage so many projects on such an enormous scale has been called into question.77

Projects worth more than a couple of hundred million dollars can only be taken on by Tier 1 contractors, of which there are three in Australia: CPB, John Holland, and Acciona.

Industry players, large and small, are calling for large and megaprojects to be split into smaller packages of works, so that mid-tier firms can tender for them.78

But even if this happens in future, it won't change what's already in train.

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74. Bligh (2008).

75. John Holland (2020).

76. This does not include the North East Link project in Melbourne (discussed further in Section 4.2.2 on page 25), for which major works are yet to commence.

77. For example: Coorey (2019), Caisley (2019) and Infrastructure Australia (2019, p. 208).

78. For example: Croagh (2020) and Hayford (2020a, p. 7).