Going forward would increase the risk of huge cost overruns and tax the “limited capacity of the government and the construction industry to deliver more megaprojects in the short term,” INSW says.
Infrastructure Australia, its federal counterpart, said last year that demand is growing 33% a year in the three eastern states, but the industry has little confidence in being able to handle more than 18% growth. Demand for key building materials is growing 120 per cent a year and with unemployment in NSW below 4 per cent, it is impossible to find enough workers.
While there will be a political price to delay projects, Perrottet should not run the risk of further cost outbursts at a time when the state is struggling to control the $ 70 billion in debt incurred during the COVID pandemic. 19.
When choosing projects to put on hold, the state should seize the opportunity to do its homework. Some of the projects, such as the Dungowan Dam, were advertised for political reasons and have not been rigorously evaluated for a business case.
Consideration should also be given to whether projects continue to accumulate due to slower population growth and social changes caused by the pandemic, such as increased work from home and the use of health video conferencing. and even in the courts.
While politicians like nation-building and legacy projects, Infrastructure NSW says smaller projects, such as repairing road pinch points, replacing old bridges, creating more open green spaces and active transportation brokers offer “more recovery” in the coming years.
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In the medium to long term, NSW will have to build many more infrastructure projects. Population growth stopped during the pandemic, but is expected to decline rapidly now that borders have reopened to around 1.2% in 2024-25.
The state must stay ahead of the curve.
But the government should re-prioritize and re-evaluate its huge project portfolio before it becomes a cost-cutting train disaster.