The potential for Australia’s record infrastructure pipeline to address some of the country’s most pressing challenges is dependent on structured support and investment from Government and industry leaders, says consulting firm Partners in Performance.
Australia is currently seeing unprecedented levels of infrastructure investment. The Australian government and states and territories have pledged a rolling $120 billion investment over the next 10 years in infrastructure projects.
However, project delivery is still challenged by significant cost overruns, seen across some of the largest projects over the past few years, according to Mohamed Abdulahi, a Director at Partners in Performance. He argues industry productivity must be revolutionised to combat the increasing size and complexity of projects, lack of market capacity and capability and rising labour and material costs.
“Construction has lagged in productivity growth relative to other sectors due to slower digital adoption, adversarial culture, and a lack of embedded disciplines to drive continuous improvement in operational efficiency,” says Abdulahi.
Over the past 30 years, the construction sector has become 25 per cent less productive compared to other Australian sectors such as mining, manufacturing, retail and transport. More recently, COVID is adding further constraints to productivity, with COVID-safe working practices adding additional costs.
These factors, among others, call for an overhaul of the sectors’ processes and management of productivity.
Protecting the future of Australian infrastructure
Without proper planning or ample productivity management, continued increased spending on current infrastructure projects could have unintended consequences for taxpayers.
“The solution lies in collaboration,” said Mr Abdulahi, “The infrastructure industry and key stakeholders must unite to drive transformation, improve productivity and achieve better integrated outcomes.”
“Government intervention will be instrumental in aligning fragmented players who are currently not motivated to take investment risk.”
This is particularly pivotal as projects become larger and more complex, says Abdulahi, and Government intervention must support the industry transformation by:
- Motivating behavioural change across the construction sector, from the ground up
- Mandating change and requirements in contractual mechanisms and via top-down policies
- Building eco-systems to accelerate productivity gains across the industry.
“The buck doesn’t stop with the Government, however,” said Abdulahi. “All industry players need to invest in the productivity transformation, pulling four value levers in parallel to motivate the industry to transform itself.”
These four value levers, according to Abdulahi, include:
- Innovation through construction industrialisation. Industry stakeholders need to improve planning and sequencing, and adopt new methods and best practices, such as prefabrication and modularisation.
- Investing at scale in technology (such as Building Information Modelling (BIM), AI, big data and predictive analysis) and harnessing it to streamline and automate construction processes
- Developing industry skills and culture to ensure the sustainability of the workforce through improved culture, diversity, health and safety. This should extend to more upskilling and training opportunities to attract skilled workers locally and overseas, and improved collaboration and incentives to target higher productivity and cost efficiency across the sector.
- Overhauling performance management to lift productivity across and within projects to improve transparency and accountability, by adopting agile project management methodologies.
“The program should create incentives and mechanisms to support and steer the industry towards a high productivity culture.”