In 2019, infrastructure contracts to the value of $A 27.1bn were awarded. In the first eight months of 2020, only $A 6.7bn in contracts have been awarded, a quarter of the 2019 total.
Of the contracts awarded, rail has played second fiddle to roads, water, social infrastructure and other transport sectors. Rail contracts comprised about $A 500m compared with roads which received more than $A 2bn.
IPA says that the drop in rail contracts was attributable to the fact that governments have funded small-scale projects as part of plans to stimulate the economy in the wake of the Covid-19 pandemic.
“Over the past few months, governments have taken smart steps to accelerate small-scale quick to market projects to soften the Covid landing,” says IPA chief executive Mr Adrian Dwyer, who pointed out that larger projects would sustain the economy for the long-term.
“This data shows we now need to accelerate approvals of large-scale projects, add to the major infrastructure pipeline, and ensure we keep pace on delivery.”
IPA believes contract values could pick up in the final quarter, with the contract for the next stage of Sydney Metro expected to be announced. Other contracts, such as the next section of the Inland Rail project, could also help boost the total rail infrastructure spend for 2020.
While the value of rail infrastructure contracts in 2020 was the smallest of the sector, it was the largest in 2019, with $A 11.6bn committed. In 2018, rail contracts worth $A 6.6bn were awarded.
IPA is an independent think tank chaired by former Cathay Pacific and British Airways CEO Sir Rod Eddington.
