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IA investment report garners call to look further

NatRoad puts facility access charging and operating hours in the frame


Infrastructure Australia’s 2019 Audit report continues to garner comment in industry and academic circles, with the National Road Transport Association (NatRoad) and a Deakin University infrastructure expert now weighing in.

NatRoad backs the level of road infrastructure investment called for but underscores the importance of proper implementation and other measures to make it a success.

“IA says the annual cost of road congestion is likely to grow by $18.9 billion to $38.8 billion in just over a decade without additional investment in road infrastructure, investment that NatRoad supports,” the organisation states.

The NatRoad policy of having better transport planning, including integration of freight plans with land use plans, was reinforced with the IA finding that land-use planning is poorly coordinated with freight operations, leading to operating restrictions on key facilities.

“For example, Sydney Airport is our largest air freight handler but is subject to a curfew between 11pm and 6am.

“In addition, intermodal terminals and warehouses can be limited in their operating hours by local governments due to concerns about noise impacts on residential areas.”

The ongoing issue of unilateral and uncontrolled access imposts at container terminals is also noted.

“The need for constraints on the price setting by stevedores for landside port charges was also reinforced,” NatRoad says. 

“IA says ‘if left unconstrained, stevedores may have the ability to continue to increase charges imposed on land transport operators beyond what is necessary to recover costs and make an adequate return’.

“The concern is that land transport operators are unable to choose between stevedores because they simply pick up or drop off the cargo owners’ consignments. In other words, land transport operators do not benefit from competition between stevedores in the same way shipping lines do.”

The IA findings also “strengthen NatRoad’s resolve” to put resources into the current review of the Heavy Vehicle National Law (HVNL). 

“IA found inconsistency in regulations can have significant impacts on costs for road transport operators, which are ultimately passed on to consumers,” the organisation says.

“It can also lead to a limited take-up of higher productivity vehicles, meaning road transport becomes less efficient. “

Read the initial responses to the 2019 Audit document, here

Meanwhile, Deakin University infrastructure expert Dr Dominic Ahiaga-Dagbui, who specialises in capital expenditure and cost overruns associated with delivering major infrastructure projects, says that history shows a large number of infrastructure projects routinely end up costing a lot more than predicted.

His caution comes following the release of Infrastructure Australia’s report which suggests that in order for the nation to cope with a forecast population of 31.4 million people in 15 years’ time, governments must spend $600 billion on major infrastructure projects during the coming decade and a half.

Ahiaga-Dagbui, who is active within Deakin’s School of Architecture and Built Environment, says research shows that pressure to start projects quickly often results in too much residual risk being carried through to the project finishing stage.

“Capital-intensive projects are notorious for being delivered late and over budget. In fact, the odds of successfully completing these projects to their predicted cost and time targets are only slightly better than a coin toss,” he says.

“Transport infrastructure projects, for example, routinely exceed their initial cost estimates leaving asset owners, financiers, contractors and taxpayers dissatisfied. The ongoing Sydney Light Rail project is a perfect example.”

“Despite the prevalence of cost overrun on mega projects, predicting and preventing these remain very challenging.

“In fact, a lot of the research in this area is superficial and largely ineffective in dealing with risks and uncertainty involved in major projects.”

Ahiaga-Dagbui is currently modelling transport infrastructure cost performance, as well as the impact of delivering megaprojects in Australia simultaneously. He hopes the results of this study will help government and policymakers provide assurance that projects that are funded are economically feasible and deliver value for money.

“It is welcome news that state and federal governments are investing in the critical infrastructure needed to support economic growth, connectivity, livability and safety of Australia.

“However, there are some major questions that need to be answered in order to deliver value-for-money for taxpayers.”

He believes empirical research is needed to address the possible impact of concurrently delivered large infrastructure on the resource-constrained Australian construction sector and argues that concurrently delivered high-value projects may have the tendency to outstrip the capacity of the supply chain to meet the demand for materials and labour.

“Research is also needed to explore the interventions available to delivery agencies and funding entities to sequence projects so that the demand for scarce inputs, such as finance and labour, does not negatively exceed supply,” he says.

And, in a comment that will chime with toll-paying transport firms amongst others, he notes: “The ability to reliably estimate the total financial investment needed for each project is critical for ensuring the adequate planning and resourcing of other projects.

“This would also help in alleviating the financial burden often placed on taxpayers and transport users.”

The freight aspect of the Audit can be found here.


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