The ACT Government has handed down a Budget that sees $2.5 billion of new projects announced. However, Professionals Australia is very concerned about how much of the money will be wasted.
Wednesday, 4 June 2014
The ACT Government has handed down a Budget that sees $2.5 billion of new projects announced.
Professionals Australia ACT Director David Smith said that on conservative industry estimates(*) of waste equating to 6.5 per cent of infrastructure delivery, the ACT Government is set to waste at least $162.5 million of taxpayers money just on its announcements in this Budget.
“We welcome the investment but we can’t be silent about the waste any longer,” Mr Smith said.
“The facts are plain. We need greater investment in engineering capacity. Currently, each engineer in the ACT Government manages an average of $333 million worth of assets, with 60 engineers across $20 billion in assets.
“An increase in engineering capacity in the ACT government would help reduce the parts of that waste attributed to poor scope, design, contract management, dispute resolution and asset management planning.
Mr Smith said that there was active discussion around whether, in this economic environment, the Government’s announcement to spend $614 million on a new light rail project was the best use of taxpayers’ money.
“We welcome the decision to spend greater time to scope and plan this project but there needs to be a requisite increase in-house engineering capacity. At the moment the public transport engineers have come from elsewhere in ACT Government.
“Engineers are also telling us that there needs to be a separation of the plan to redevelop the Northbourne Avenue corridor, due to it being such a significant shift in public transport delivery. There needs to be a coherent whole of territory plan.
“It’s time to dispel the romance and take a more pragmatic approach to infrastructure delivery.
*Data from the Deloitte Access Economics Investment Monitor database shows that on average, completed economic infrastructure projects have seen cost over runs in seven of the past eight years, with that cost over run averaging 6.5%(lower than for mining projects, but substantial nonetheless). These cost over runs are particularly seen for larger projects ($1 billion +), where the degree of cost over run has averaged 12.7%.
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