The Albanese government’s infrastructure review has recommended 82 projects should be cancelled, after finding the $120 billion program unsustainable in its current form.
Construction has not started on these projects. The review recommends the savings be used to provide “headroom” in the program which is facing a large cost overrun.
The review recommended 100 projects, not yet under construction, should go ahead, while a further 56, also unstarted, should proceed but on the basis that identified risks are addressed satisfactorily.
Thirty six projects, not under construction, should complete planning, detailed costings, and rescoping, with the allocated funding used for “headroom”, the review says.
The government says it accepts all the review’s recommendations in principle and will announce details on Thursday.
The review estimates a $32.8 billion cost blowout in the program, of which an estimated $14.2 billion is on projects not yet under construction.
The report says the ten-year pipeline of projects “cannot be delivered within the $120 billion allocation, even with current contributions from jurisdictions”.
“The Australian Government cannot afford within the current program settings, to meet the identified cost pressures, nor add any new projects for delivery to the pipeline in the next ten years, without significant changes taking immediate effect,” the report says.
Some projects “do not demonstrate merit, lack any national strategic rationale and do not meet the Australian Government’s national investment priorities.
"In many cases, these projects are also at high risk of further cost pressures and/or delays. A number of projects were allocated a commitment of Australian Government funding too early in their planning process and before detailed planning and credible design and costing were undertaken.”
The review says the federal government can cease or pause federal funding to projects, to create “headroom for reallocation to merit-based projects, to fund construction once planning, design and detailed costings are complete or to relieve some of the estimated cost pressures on current projects”.
The government says it will not cut the overall size of the A$120 billion program. It is committing extra funding for a number of projects.
The government has been in discussions with the states and territories over the revamping of the program, with the Queensland government – which faces an election next year – warning against cuts to its state.
Among the projects the government says it is maintaining are the Melbourne Airport Rail Link, the Milton Ulladulla Bypass, the Singleton Bypass, the Muswellbrook Bypass and the Tasman Bridge Upgrade.
Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
This article was originally published on The Conversation. Read the original article.
