Sharper procurement, design, and planning will be important to improve productivity for infrastructure, which has fallen behind other sectors, Infrastructure Australia says.
Sharper procurement, design, and planning will be important to improve productivity for infrastructure, which has fallen behind other sectors, Infrastructure Australia says.
The body is the independent judge of which infrastructure projects need to be prioritised in Australia, and on Friday it is releasing its 2021 Australian Infrastructure Plan, which is focussed on potential reforms to make the sector more competitive.
IA said productivity in infrastructure and construction had failed to keep up with growth, and it was one of a handful of sectors with falling productivity.
“Over the past 30 years, the sector has become 25 per cent less productive compared to mining, manufacturing, retail and transport,” IA said.
In plainer terms, it means Australia is not getting as much bang for its buck as it might do, when it comes to spending on projects in road, rail and other infrastructure.
Key to improving productivity will be governments making a series of improvements to how they approach project development.
One is using front end engineering and design processes at the start of project development, while others include sharpening up the approach to contracting.
Industrialisation of infrastructure production could improve productivity by 60 per cent, IA predicts, with modularised manufacture of components one example.
“The current approach to infrastructure requires each infrastructure asset to be uniquely designed, built, and operated,” the report said.
“However, like the shift from hand built automobiles to mass production led by Henry Ford and others, there is an opportunity to standardise components and approaches in infrastructure.
“This move to ‘industrialisation’ seeks to reverse the trend towards bespoke designs and move to a more consistent approach characterised by higher productivity.
“Infrastructure industrialisation involves the systematic adoption of highly efficient infrastructure production methods that emphasise the use of offsite manufacturing and automated component assembly processes.”
The national body also acknowledged growing pressure on costs, driven by poor government decisions on prioritising projects.
"Australia has already been facing an ongoing skills and materials shortage in the infrastructure sector and this situation is likely to get worse," the report said.
"More and more, countries that have traditionally provided Australia with skilled professionals are competing for these individuals as they too ramp up their infrastructure spending.
"The United States alone has proposed a USD 2 trillion infrastructure strategy.
"Further increases in demand will likely result in further negative impacts in the form of cost escalation and delays.
"Portfolio management can ease pressure on a sector that is critical to Australia’s economic recovery."
