Fears energy projects could push roads, rail out of $894b pipeline

afr.com:

Fears are rising that road and rail proposals could be delayed because of chronic skills shortages and cost blowouts as energy projects needed to deliver Australia’s ambitious 2030 renewable energy target overtake transport and form the bulk of work in an $894 billion infrastructure pipeline.

While cost blowouts are forcing some governments to consider putting projects on ice, such as the $25 billion Metro West in Sydney, construction companies are worried some transport projects may be canned as energy work gets priority.

The next stage of Sydney’s giant Metro underground rail project is under pressure because of cost blowouts. Rhett Wyman

Analysis of the project pipeline over the next seven years by industry think tank Infrastructure Partnerships Australia has revealed 578 projects in the works worth $894 billion.

Transport forms the bulk, with 287 projects worth $462 billion. There are 166 energy projects worth $348 billion.

But energy projects are expected to overtake transport and become 65 per cent to 75 per cent of total infrastructure projects by the end of the decade, as Australia rushes to meet its ambitious renewable energy target of 82 per cent by 2030.

Infrastructure Partnerships Australia chief executive Adrian Dwyer said some future transport projects might be in doubt if costs continued to rise as inflation wrought havoc on budgets.

“The point of competitive tension is cost escalation in future uncontracted transport projects,” Mr Dwyer told The Australian Financial Review.

“If the costs of these go up, then you can start to question the value for money.”

Mr Dwyer said the competition for workers to deliver projects over the rest of the decade would be fierce.

“There is a genuine labour shortage but