Consult Australia has warned that billions of dollars in infrastructure cost overruns are being locked in long before projects reach the construction phase, pointing to a systemic failure in how major public works are planned and brought to market.
The warning arrives on the heels of the federal government allocating an additional AU$12.1 billion to new infrastructure projects in the May budget. It also follows the Commonwealth’s recent decision to scale back the Inland Rail project after its projected costs surged past $45 billion.
According to Consult Australia’s newly released Protecting Cost Certainty report, severe budget pressures are the predictable consequence of governments rushing projects to market with incomplete scopes, poorly understood risks, and unrealistic timeframes.
“We keep treating cost blowouts as if they’re unexpected, when they are the outcome of decisions we make early or avoid making altogether,” Jonathan Cartledge, Consult Australia’s CEO, said.
“In 2023, the Australian government identified AU$32.8 billion in cost overruns across the federal infrastructure pipeline, shelving dozens of projects in the process.
“Since then, Australia’s infrastructure sector has faced increasing scrutiny, but we continue to see the same pattern play out as projects are being pushed to market before risk is assessed and scope fully developed.”
The report, developed in partnership with project advisory firm WT, outlines five critical actions to safeguard public funds: putting risk allocation first, ensuring scope is fully verified before market tendering, communicating clear lifecycle roles, managing variations transparently, and enforcing disciplined cost management.
WT National Infrastructure Leader Sam Mendoza emphasised that adding financial contingency to a poorly planned project is no substitute for early risk management.
“If we want cost certainty, we have to stop treating these as delivery problems, when they are planning problems,” Mendoza said.
Cartledge concluded that reversing this trend will require coordinated discipline between governments and industry clients, urging decision-makers to resist political pressure to move on projects before they are genuinely ready.
“We can’t recover cost certainty at the end of a project. It’s built through decisions at every stage. That means engaging earlier, being clearer about risk, and resisting the pressure to move before a project is ready.”