Australian Engineering Conference

Getting the fundamentals right in infrastructure: the importance of good planning

Friday 25 November 2016, Brisbane

Good afternoon ladies and gentlemen. It's a pleasure to be here in Brisbane for the Australian Engineering Conference,and a pleasure too to be amongst fellow engineers.

I would like to thank Stephen Durkin for the opportunity to address you as well as for his great leadership to our professional body.

I was reflecting during a visit to the UK recently on how lucky we are to have one single body representing engineers in this country.

Especially important right now when we are facing increased competition to attract school leavers into engineering and then when we have attracted them to retain them.

A key ongoing role for all of us and Engineers Australia.

It's never been more important therefore to celebrate the significant contribution engineers make to our nation and society, including through the provision of infrastructure central to our daily lives.

That's why I am so delighted to join you today, as a Fellow of Engineers Australia to provide an update on the work of Infrastructure Australia.

For those who aren't familiar with what we do, Infrastructure Australia provides independent research and advice to governments and the community on the projects and reforms Australia needs to fill today's infrastructure gaps and meet the challenges of the future.

We were established in July 2008, and in 2014, our Act was amended to give Infrastructure Australia new powers, and to create an independent board with the right to appoint its own CEO.

Under the Act, we have responsibility to strategically audit Australia's nationally significant infrastructure, and develop 15-year rolling Infrastructure Plans that specify national and state level priorities.

It has been a very important week for Infrastructure Australia. Just yesterday, the Urban Infrastructure Minister, Paul Fletcher, delivered the Government's formal response to the Australian Infrastructure Plan, which we released back in February.

In addition, the Prime Minister made his annual infrastructure statement to the Parliament, referencing the independent advice provided by Infrastructure Australia through the Australian Infrastructure Plan and Infrastructure Priority List.

And I'm pleased to say the Government's response effectively endorses the Australian Infrastructure Plan as the nation's long-term infrastructure reform agenda.

This afternoon I want to outline some of the broad, overarching themes of the Plan itself, including the importance of long-term strategic infrastructure planningand selecting the right projects to deliver the best outcomes for the community.

I also want to discuss the importance of investing in technologies that make better use of existing infrastructure and the important role the engineering profession has to play in driving these reforms.

Finally, I will share some thoughts on the key recommendations that have been addressed in the Government's response to the Plan, and discuss what's next for Infrastructure Australia as we pursue our policy and research program.

But first I want to set the scene by discussing the key findings of the 2015 Australian Infrastructure Audit and how it informed the development of the Australian Infrastructure Plan.

The Australian Infrastructure Audit identified the challenges that our infrastructure faces out to 2031 and for the first time provided an evidence base for a long term plan.

The Audit projected that by 2031, Australia's population would grow to more than 30 million people.

Between 2011 and 2031, almost three-quarters of our population growth will occur in Sydney, Melbourne, Brisbane and Perth. This means our biggest four cities will collectively need to accommodate an additional 5.9 million people, around 49%.

The smaller capital cities—Adelaide, Canberra, Hobart and Darwin are also projected to grow in total by 26%.

And the number of people living in Australia's regional areas is also projected to grow, from around 5.6 million in 2011 to 6.8 million in 2031 – an increase of around 22 per cent.

Overall, this will have a positive impact on our economy as it provides a larger domestic market for businesses and increases the size of the labour force. But it also places additional demands on infrastructure already subject to high levels of demand.

In fact, the Audit found that if we don't adequately plan for this significant rise in demand for infrastructure services, Australia could face a future of congestion and constraint.

And the economic cost of this is significant. Without action, road congestion alone is projected to cost the Australian economy $53 billion by 2031.

The Australian Infrastructure Plan responds to the challenges presented by our population growth and recommends fundamental changes to the way we plan, fund, deliver and use our infrastructure.

Launched here in Brisbane with the Prime Minister back in February, the Planis a reform document which provides a road map for governments, business and the community to address Australia's infrastructure challenges.

We have focused our 78 reform recommendations in the Plan under four major themes:

• Productive cities, productive regions
• Efficient markets
• Sustainable and equitable infrastructure, and
• Better decisions, better delivery.

Also released alongside the Plan in February was a refreshed Infrastructure Priority List.

The List is a living document that provides a prioritised list of nationally-significant investments and guidance to decision makers on where they should direct funding.

Taking the data collected for the Audit as the primary evidence base, we have undertaken an assessment of our infrastructure gaps and requirements.

And we have also analysed both the challenges and the potential solutions through extensive consultations with all states and territories, industry and the community.

Consulting with over 500 stakeholders and receiving over 100 submissions.

Through this approach we developed a priority list of nationally significant investment opportunities that all levels of government can choose from. It's a consensus list of transformative projects.

So with the release of the Plan and Priority List: we are presenting a whole package that works together: the reforms we need to make, the investments we need to deliver and the mechanisms to deliver both.

One of the central themes underpinning both the Plan and the List is that we need to get better at long-term, integrated land-use planning.

Planning is absolutely key to preparing for shifts in infrastructure demand, and ensures we construct the right projects at the right time, for the right price.

In general, long-term, strategic planning promotes better project selection and ensures that potential investments are well-thought-through and address an identified infrastructure need.

Planning needs to be supported by strong governance arrangements that ensure infrastructure funding is directed towards projects which have a sound business case and a demonstrated economic benefit.

By international standards, Australia has a strong record of delivering high-quality infrastructure with robust governance arrangements.

Planning processes should encompass whole-of-life considerations. Indeed, constructing resilient assets can deliver lifecycle cost savings that ultimately benefit infrastructure users.

And of course, engineers are at the forefront of driving these kinds of considerations in our infrastructure planning.

We all benefit from infrastructure that is more reliable, efficient and safe. This is best served by a culture of long-term planning to deliver infrastructure that will serve current and future generations.

It's about transparent, evidenced-based decision making.

The involvement of engineers in the long-term planning also helps in establishing a pipeline of well-conceived investments that deliver the best outcomes for infrastructure users.

It goes without saying that before deciding to fund an infrastructure investment, governments at all levels should undertake extensive project development studies.

And as a profession, engineers obviously have an incredibly important role to play in whole of life asset considerations and identifying and addressing project risks early in the planning stage.

In the Plan,we recommend that Governments increase funding for the delivery of early project development work to ensure that decisions are guided by a detailed and robust evidence base.

This would improve the quality of decision making through enabling the proponent to understand the problem that needs to be addressed. And it enables a range of options to be developed, with a view to selecting a solution that will deliver the greatest benefit for infrastructure users.

Infrastructure Australia also has key role to play in improving project selection, through our rigorous assessment process.

Adding a project to the Infrastructure Priority List involves assessing the individual costs and benefits of a project, challenging their veracity and subjecting them to stress testing.

Assessing a business case in this way allows us to better understand the strategic fit, economic impact and deliverability of a project. This enables us to provide a high quality selection of nationally significant infrastructure solutions for all levels of government to choose from.

This year, the Infrastructure Australia Board has assessed a record number of business cases—14—and I am pleased to say that we are seeing significant improvements in the quality of business cases developed for major projects.

There is however more work to be done. In particular, to better align project proposals with an identified problem, and ensure a full range of potential solutions are considered before a decision is taken. We also want to see evidence of meaningful engagement with key stakeholders at each stage of the development process, to ensure that issues are identified early and can be addressed appropriately. 

In addition to long-term planning and selecting the projects that deliver the best outcomes for the community, another key theme of the Plan is that we need to make better use of existing infrastructure.

We need to ensure that existing infrastructure is used more efficiently, with a focus on maintenance and the use of new technology, including sensors and data analytics, to secure service improvements.

For example, on urban roads Intelligent Transport Systems are already collecting, storing and analysing data on traffic counts, travel times, congestion, incidents and faults through sensors at intersections to enable better management of traffic flows.

In the Plan, we propose these kinds of targeted investments as part of a broader program of network optimisation. This simply refers to the opportunities for low cost/high value investments which address capacity constraints.

Network optimisation essentially targets the key pinch points on urban road networks with comparatively high public transport and freight use.

A key part of this is using data and technology to improve network operations by, for example, optimising traffic flow through intersection treatments, traffic light sequencing, clearways and incident management.

Embedding technology in existing infrastructure can provide operators with rich data on network performance and use, which in turn drives improvements in efficiency and reliability.

The next evolution will be to use this rich data and the insights it provides to change the structure, operation and use of our infrastructure.

In the Planwe also encourage greater use of technology in planning and designing infrastructure, as it can deliver substantial benefits during construction and operation.

Modelling technology in particular has a key role to play in driving down costs and providing detailed information for whole-of-life infrastructure investment.

The Infrastructure Plan recommends that the Australian Government make the use of Building Information Modelling mandatory for the design of large-scale complex infrastructure projects.

Many of you here today would be familiar with BIM. BIM allows the optimisation of asset design to support construction and operation.

To return to my earlier point on the importance of whole-of-life considerations, BIM presents a substantial opportunity to increase the efficiency of infrastructure throughout asset lifecycles.

Once again, it's about delivering the best outcomes for infrastructure users now and into the future.

Engineersare at the forefront of efforts to put the principles which I've outlined today, into practice.

Whether it be better planning, better project selection or better use of existing infrastructure, engineers have a vital role to play in delivering the infrastructure we need.

At Infrastructure Australia, we would encourage all engineers to engage with our infrastructure reform agenda.

In practice this means thinking beyond the individual project outcomes, as important as they are, and engaging with the broader outcomes around infrastructure delivery.

Together we can drive long-term change, and ensure that strategic long-term planning, thorough risk assessments and a whole-of-life approach to new infrastructure investments become business as usual.

Having outlined some of the broad themes in the Australian Infrastructure Plan, I want to take a moment to reflect on the Government's response which was delivered in Canberra yesterday.

The Government's response supported the vast majority of the Plan's recommendations. This shows that the Australian Infrastructure Plan sets the nation's long-term infrastructure reform agenda

We were particularly pleased to see a commitment to develop a National Freight and Supply Chain Strategy.

The Plan highlighted the need for a National Freight and Supply Chain Strategy to:

Define nationally significant freight corridors and precincts

Identify the network constraints and gaps, and

Outline a reform and investment pipeline to address these challenges.

As we point out in the Plan, a national approach offers clear strategic benefits and will help ensure Australia's freight and supply chain networks are properly equipped to meet projected future demand.

We are also very pleased to see the Government commit to a study on the potential benefits and impacts of road reform.

And we will certainly be making further contributions on the case for a fairer and more sustainable user-pays system of funding our roads.

We recognise that changing how we pay for roads will not be easy, however a user-pays system of road-funding could deliver secure, sustainable funding for our roads—and better services for users.

It's appropriate that the Government should focus initially on heavy vehicle charging, as indicated yesterday in the response to Plan.

Ensuring heavy vehicles are charged for the true costs they impose on the broader road network will increase competitiveness of Australia's freight networks and lead to better outcomes for all road users.

Overall, the Government's response to the Planis an important first step on the journey towards infrastructure reform, and Infrastructure Australia will continue to provide robust, independent advice on how these reforms should be progressed.

In addition, our work on business case assessment and adding projects to the Infrastructure Priority List is only just beginning.

As I said, we have assessed 14 business cases this year, but we have another 18 already under assessment for next year—with yet more to come.

We will also be continuing to refine our business case assessment framework in collaboration with our state and territory colleagues to ensure that it is fit for purpose, best practice and aligned to national and international guidelines.

We remain focused on progressing our policy and research program to support the implementation of the Plan's key recommendations, and improving project selection through our rigorous assessment framework.

With both the Plan and the IPL, we are working hard to support better infrastructure decision-making and delivery in Australia.

Thank you.