The Infrastructure Projects
building Australia and its Property Industry

Australia’s Federal Government Budget 2017-18 released in early May, presented quite a large number of infrastructure projects. Many of these are not new and in fact while $70 billion worth of projects are committed across Australia, new spending initiatives announced in this budget represent only a small percentage. Nonetheless, this $70 billion investment does represent a plan of project spending over the period from 2013-14 to 2020-21 to transport infrastructure across Australia. This will be achieved using a combination of grant funding, loans and equity investments.

The Government announced that it is establishing a 10-year allocation for funding road and rail investments. This makes sense given that transformational projects are generally planned and built over many years. Notably, the Government is planning to deliver $75 billion in infrastructure funding and financing from 2017-18 to 2026-27.

New infrastructure commitments

Building on the Government’s existing record infrastructure spend, new investments in this Budget include:

  • $1.6 billion in new projects in Western Australia, including $100 million towards better road access to the Fiona Stanley Hospital Precinct and $700 million towards the METRONET rail project;
  • a $1 billion infrastructure package for Victoria, including $500 million for regional passenger rail, with $100 million for Geelong Rail Line upgrades, a further $20.2 million for Murray Basin Rail and $30 million towards a rail link to Tullamarine Airport; and
  • $844 million in Queensland for additional projects on the Bruce Highway, including upgrades to the Pine River to Caloundra section.

Western Sydney Airport

The Government will also commit up to $5.3 billion in equity to establish WSA Co to build a new airport for Western Sydney at Badgerys Creek with works to commence in late 2018. When it opens in 2026, the airport will have capacity for 10 million passengers a year and a 3.7 kilometre runway. The runway will be built to accommodate the largest passenger aircraft in operation today, including the Airbus A380.

The new airport will form the core of a new city deal for Western Sydney to capitalise on the opportunities the new airport will bring to the region. This builds on the $3.6 billion joint Australian Government and New South Wales Government Western Sydney Infrastructure Plan.

The Australian and New South Wales Governments are also conducting a joint scoping study to identify the rail needs of Western Sydney and Western Sydney Airport. The study is investigating route and service options, as well as timing, funding and financing for future rail investment in the region.

Rail Infrastructure

The Government is establishing a $10 billion transformational National Rail Program. This program is to fund rail projects across the nation that improve urban and regional rail services to better connect our communities. This Program will allow the Australian Government to partner with States and Territories to plan and deliver key rail infrastructure projects.

The Government plans to contribute $20 million to partner with proponents of fast rail projects to develop business cases for up to three projects that better connect our cities with major regional centres. These projects should serve to ease pressure on our larger cities, grow our regional cities, and unlock land for more housing.

Inland Rail

The Government announced plans to fully deliver the Melbourne to Brisbane Inland Rail project, using an additional $8.4 billion equity investment in the Australian Rail Track Corporation and a Public Private Partnership.

Inland Rail should have lasting benefits for regional communities, such as Toowoomba, Parkes and Northern Victoria. It is expected to create approximately 16,000 direct and indirect full-time equivalent jobs at its peak of construction. For the national economy, it is expected that the Inland Rail will improve access to markets and provide greater export opportunities.

Regional Growth Fund

The Government will provide $472 million in regional investments to support a Regional Growth Fund for local infrastructure projects that can make a real difference to regional economies, including $200 million to support a second round of the Building Better Regions Fund (BBRF). The BBRF provides funding for infrastructure and community investment projects that will create jobs, drive economic growth and build stronger regional communities.

Infrastructure and Project Financing Agency

The Government will establish the Infrastructure and Project Financing Agency, modelled on a similar body in the United Kingdom, to help the Government identify new financing solutions and provide advice on implementation.

The Government is currently providing $370 million in equity funding (plus land) towards the Moorebank intermodal freight precinct in NSW, a $2 billion concessional loan for Stage 2 of the WestConnex project in Sydney and the $5 billion Northern Australia Infrastructure Facility.

Major projects underway

The following lists the projects already in progress:

  • $3.6 billion for the joint Australian Government and NSW Western Sydney Infrastructure Plan
  • $1.6 billion to North-South Corridor in Adelaide
  • $1.5 billion of funding and a $2.0 billion concessional loan for the WestConnex project in Sydney
  • $500 million towards the $1 billion Monash Freeway upgrade
  • $500 million for the M80 Ring Road in Melbourne
  • $412 million for NorthConnex in Sydney
  • $914 million for the Gateway Upgrade North in Queensland
  • $833 million for NorthLink in Western Australia

New initiatives

The following is the set of new budget announcements

  • $1.6 billion towards a $2.3 billion Federal-State WA package. The package includes $1.2 billion for the METRONET rail project and $237 million for the Kwinana Freeway
  • $1 billion infrastructure package for Victoria, including:

° _$500 million for regional passenger rail
° _$20.2 million for Murray Basin Rail
° _$30 million towards a Melbourne Airport Rail Link business case
° _$844 million Bruce Highway upgrades, including Pine River to Caloundra

While the infrastructure spending plans contained in the Governments Budget provide a macro view of the large scale projects transforming the country, alternative aspect can be found through Rider Levett Bucknell’s (RLB) Crane Index .

Now in its 10th edition, the Q2 2017 Crane Index showcases that Sydney still commands the skies with more than 50% of all cranes in Australia. Melbourne with 22% and Brisbane 12% are the only other capital cities with more than 10% of the nation’s cranes.

The index, represented in the graph below, is a lineal representation of the number of fixed cranes in Australia over time, using the number of cranes.