Instead,the state government’s independent infrastructure body has recommended the state’s $27 billion infrastructure spend be diverted to smaller projects that will provide “high returns and faster paybacks with less budget and delivery risks”.
An artist’s impression of the multibillion-dollar Beaches Link motorway,which is likely to be put on ice amid soaring construction costs.Supplied
Infrastructure NSW will on Tuesday release its five-yearly independent advice to government on the most important infrastructure priorities for the state for the next two decades.
The Coalition’s focus has been delivering major infrastructure since it came to power in 2011,including WestConnex and Sydney Metro,but the new advice warns pushing ahead with megaprojects is too risky. The report,which was brought forward at the request of former premier Gladys Berejiklian due to COVID-19,cites both the pandemic and an overheated construction market as the two biggest risks for charging ahead with big builds.
“It would be especially challenging to deliver additional megaprojects in a cost-efficient manner in coming years,” the report says.
The infrastructure capital expenditure in NSW has risen from about $15 billion each year a decade ago to $27 billion,and the report recommends the government maintains this level of spending.
An artist’s impression of the second stage of the light rail line over Parramatta River between Melrose Park and Wentworth Point.PAYCE
The strategy recommends delaying several major projects that have been announced but not funded,including the Beaches Link,Parramatta Light Rail Stage 2,a Great Western Highway tunnel and stages of Sydney Metro,including from south-west Sydney to the new airport.
Several dams should also be paused,however,the project to raise the Warragamba Dam wall should continue after three consecutive years of Hawkesbury/Nepean floods,the strategy recommends. Investment in the maintenance of the government’s big infrastructure assets is also highlighted as a priority.
The report recommends the government redo the business cases underpinning those projects,given most of them were developed before the COVID-19 pandemic.
TheHerald the NSW government was considering delaying several major projects,including the Beaches Link,given burgeoning construction costs and labour shortages.
Click to reload
Minister for Infrastructure Rob Stokes said NSW would remain the megaproject capital of Australia and a global leader in infrastructure delivery.
“That record infrastructure delivery will continue,but we must now consider the global challenges affecting us and the independent advice from Infrastructure NSW,” Stokes said.
“The report provides clear recommendations for us to diversify our infrastructure pipeline,consider more smaller projects while continuing to deliver city and state shaping projects.”
The Beaches Link,promised for years by the Coalition,became a Willoughby byelection issue,with independent community activist Larissa Penn nearly winning Berejiklian’s former seat on a platform of opposition to the project. The Liberals held the seat,but with a massive 20 per cent swing against the party.
Meanwhile,Nationals leader and Deputy Premier Paul Toole has championed a major road tunnel through the Blue Mountains as part of an upgrade to the Great Western Highway.
However,those projects,along with a long-touted extension to the M6 motorway in Sydney’s south are likely to be put on ice.
The report also highlights private investment as critical to future infrastructure projects as government deficits grow.
“A concerted effort is required to develop and embed policies that leverage increased private capital deployed to major infrastructure assets,” the report says. “Policy settings must facilitate private sector investment and avoid the risk of excessive government intervention that would diminish the appetite for private investment and increase calls upon scarce taxpayer funds.”
While acknowledging the COVID-19 pandemic stalled almost all migration,the report says the government must continue to plan for ongoing population growth.
Over the past two years people moved from major metropolitan centres,like Sydney,to regional areas. “However,Sydney is still expected to grow and remain the dominant centre for population growth in all scenarios,” the report said.
The report also highlights infrastructure delivery as critical in addressing housing affordability.
“New housing supply can only be delivered where infrastructure keeps pace with land use planning,” the report says.
“Community acceptance of new development relies on good local amenity – transport connections,schools and health services,public civic and green spaces,protection of local character and access to services close to home.”
The Morning Edition newsletter is our guide to the day’s most important and interesting stories,analysis and insights..