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Victorian Infrastructure Industry: State of Play | Jan 2019

Victorian Infrastructure Industry: State of Play | Jan 2019

Posted on 30/01/2019 by Will Tilley

Copy Of State Of Play Jan 19

Over the past 12 months, the infrastructure industry has continued to gain momentum, but perhaps at a slightly slower pace than many expected; though that positions 2019 as a massive year. There are a number of reasons contributing to why 2018 turned out to be more steady going than all guns blazing; these include:

  • North East Program Alliance (NEPA) not rolling into the next section of works, due in part to government budget constraints with the Level Crossing Removal program
  • Fulton Hogan reportedly coming within days of a signed contract for the Princes Highway to Western Highway section of the M80 Upgrade, before the Victorian Government pulled the project off the market
  • Both the above freed a number of people up to take on roles with other companies and on other projects which were ramping up; including, but not limited to, Metro Tunnel, West Gate Tunnel and Western Roads Upgrade
  • The Northern Sections of the M80 upgrade went to market, attracting only two bidders. This, along with further planning required around the future interface with North East Link, put a halt to this tender also
  • It was an election year here in Victoria, and depending on who you talk to, it either had some impact or a large impact on decision making in government, and may have stalled the progress of some projects - particularly once the election drew near

With the Victorian election now run and won - with the Labor Party winning another term in government, we have a clear direction in which the infrastructure sector will head here in Victoria in the coming years. There are a number of major projects in tender currently, including:

  • Mordialloc Freeway - Tenders have been lodged and the project is due to be awarded in coming weeks
  • M80 Upgrade (Northern Sections)
  • Echuca-Moama Bridge
  • Monash Freeway Upgrade Stage 2
  • Suburban Roads Upgrades - Northern and South Eastern Packages
  • Regional Rail Revival (multiple tenders)
  • Project Zulu at Melbourne Airport

Many of the above projects will begin construction throughout 2019, along with the forgotten project that was the talk of the town in 2017 - The Melbourne Airport Third Runway. These projects add to existing projects including both the Metro Tunnel and West Gate Tunnel projects, which will both continue to gain momentum this year, and tunnelling will begin, the Level Crossing Removal Program, which has expanded from 50 level crossings to 75, Western Roads Upgrade, and the Ballarat Line Upgrade, amongst others.

The Renewable Energy Sector is also quite strong, with a number of wind and solar energy projects underway across the state. These include three significant wind projects in the West of Victoria, Murra Warra (116), Stockyard Hill (149) and Moorabool (107) featuring over 100 turbines each. There are a number of significant projects in the planning and permit stage, including WestWind's Golden Plains Wind Farm, which has just been granted planning approval and in its current specification will feature 181 Turbines and produce at least 800MW of energy and power the equivalent of 400,000 homes. With a push towards clean energy, this sector is expected to continue its strong growth over recent years.

Whilst we are beginning to see a slowing in the housing market for the first time in a long time, the land development sector, appears to still be in pretty good health - particularly on the Western side of Melbourne, where the urban sprawl has not reached as far as in the East.

It's not all about major projects and large contractors however. The abundance of major projects, and now mega projects, has had a significant flow on effect within the market. The tier one contractors are busy with projects predominantly above $200M, leaving the tier two contractors to compete with each other below this mark and pulling them upwards from smaller projects, leaving these to tier three contractors - and there is plenty of work in this space also, with Regional Roads Victoria alone, having 784 projects in planning or underway around Victoria, including road widening, safety barriers, active transport projects and other improvements. Adding local government, water authorities and non-government to this workload - there is plenty to be excited about.

Over the coming years, we will add three more "mega projects" to the in construction list - with the Airport Rail Link, North East Link, and the first stage of the Suburban Rail Loop all slated to begin construction between 2020 and 2022. With the West Gate Tunnel due to open in 2022 and Metro Tunnel in 2025, we will most certainly see unprecedented levels of activity in the industry.

 

This level of infrastructure activity provides a fantastic platform for people to grow their careers and their businesses, there are a wealth of opportunities. However, the unprecedented demand for skills and resources will also bring with it some potential traps and challenges. I will be posting another article next week, which will discuss how to make the most of these opportunities, how to limit the challenges, and avoid the traps.

If there are any particular challenges or topics you as an employee or employer would like to discuss, please let me know.