Victoria is under pressure to follow the NSW and federal governments in setting up an independent infrastructure planning agency to create a much clearer pipeline of major projects.
The suggestion is contained in several submissions to a parliamentary inquiry from investors and peak professional bodies into the provision of infrastructure and the use of public private partnerships (PPPs). Many of the submissions also warn that the Victorian government needs to ensure a steady flow of projects to avoid a loss of crucial skills in both the public and private sector.
The government is under pressure over its performance on infrastructure and the state's Auditor-General last week recommended billions of dollars be poured into public transport to improve service levels. Macquarie Capital said in its contribution to the inquiry that it was unclear whether the selection of infrastructure projects was made on the “basis of maximum public benefit or for other political reasons”.
“In order to create transparency and accountability in the selection of infrastructure projects, the government should adopt a process in which an overarching plan prioritises projects on a most critical basis, similar to the structure of Infrastructure Australia,” Macquarie executive director Jim Miller and associate director Adam Nancarrow said.
Engineers Australia executive director Glenda Graham said Victoria should consider the establishment of a single organisation to provide the state with advice on the planning and prioritising of infrastructure.
“The key point being argued here is that infrastructure planning and implementation must be co-ordinated and integrated and this requires a different institutional model,” she said.
Another common theme in the submissions was the need for the government to retain skills. Another peak body, Consult Australia, said that robust processes to rank infrastructure proposals were essential and it recommended a state answer to Infrastructure Australia.
“To date, such a process is not replicated across all states and territories. This has led to delays in infrastructure delivery, budget blowouts and the politicisation of projects prioritisation and selection,” Consult Australia acting chairman Ric Bland said.
Lazard Australia special adviser and former federal finance minister Lindsay Tanner said problems with PPPs included “excessive, even prohibitive” bid costs, a lack of competition in the construction sector, vague contracts and a shortage of the specialised skills needed to guide government through complex projects.
“The absence of a predictable national pipeline of PPP projects makes it hard for investors to commit resources to this asset class.”
Mr Tanner said it was also important that those within government given responsibility for a PPP process must be allowed “maximum discretion to exercise personal judgment” to ensure the best outcome for the state.
Plenary Group, which has won several large jobs in Victoria, says a robust pipeline of projects is needed to retain people.
“It is critical the state's management and administrative structures facilitate the retention of recent corporate memory of executives and consultants and enable them to apply lessons learnt to upcoming projects,” said Plenary executive director corporate affairs Kelvyn Lavelle.
“In a competitive national and international market, Victoria can continue to grow an infrastructure environment where decision-making expertise and skills are retained in the state, rather than risk a brain drain to other markets.”
The chief executive of the Association of Professional Engineers Scientists and Managers Australia, Chris Walton, said the government needed more specialists on its payroll.
“How could you possibly know how much a train line or a bridge should cost unless you've actually built one before?” he said.
“Politicians and accountants just don't know if they are getting good value for money or not unless they get advice from properly skilled engineers.”
The Construction Forestry Energy and Mining Union criticises the government's favoured approach of building one-off project teams for big projects.
“While this may have short term efficiencies it is limiting the ability to build a pool of skilled infrastructure delivery experts in the Victorian public sector,” it says.
-Matthew Dunckley, The Australian Financial Review