Australia’s largest ever infrastructure boom brings massive opportunities to reduce costs and carbon, but demands a completely new set of skills, says Turner & Townsend’s chairman and global chief executive officer Vincent Clancy (pictured).
Australia’s state and territory governments have committed tens of billions of dollars in their recent budgets to transport infrastructure. New South Wales has set aside $93 billion for infrastructure over the next four years, Queensland has earmarked $50 billion over the same period, while Victoria has $107 billion in projects underway.
This is on top of the federal government’s $100 million transport infrastructure pipeline, which includes fast rail and airports.
In June, Reserve Bank governor Philip Lowe encouraged governments to spend even more, pointing to the record-low interest rates and the capacity within the economy as incentives to invest.
The United Kingdom, too, is in the early days of one of its greatest construction programs in history. The current infrastructure spending spree, which includes major projects such as Crossrail and the third runway at Heathrow, represents more than $1 trillion over the next decade.
Turner & Townsend has worked on rail projects with a combined value of $100 billion over the last decade, including landmark improvements to London’s underground and the new light rail network with Sydney Metro.
Clancy says both nations are grappling with similar infrastructure challenges: projects of increasing “size, scale and complexity” and an accelerating march towards digital technology that “makes delivery tougher”.
The UK, for example, is currently creating a ‘digital railway’ controlled by artificial intelligence, while a $36 million ‘digital roads’ project is investing in smart technology and sensors to regulate traffic. Assimilating advanced technology into infrastructure demands a supply chain with a completely new set of skills, Clancy says.
“Every major city is having to reinvent its infrastructure. But we know we can’t deliver the way we have in the past.” Clancy says we must “fundamentally redesign” the way we approach infrastructure.
“Major contractors are under stress. The top 10 contractors in the UK, collectively, haven’t made a profit over the last five years. They’ve taken on work they can’t deliver because the supply chain is so stretched and margins are so low that there’s no money for reinvestment.”
The UK’s Construction Leadership Council, of which Clancy is a member, is determined to drive industry transformation. Drawing together business and government leaders, the council has set ambitious targets: slashing project costs by a third and halving project times and carbon emissions among them.
“Our goal is to make infrastructure more affordable through efficiencies so that we can invest in skills and innovation.”
The UK has established a Construction Sector Deal to enhance productivity through innovative technologies and upskilling. The deal, which influences a sector responsible for eight per cent of GDP and one in 10 jobs, has three areas of focus: digital transformation, design for manufacture, and ‘smart’ assets.
“The Construction Deal sets bold targets to reduce construction times, costs and carbon.
“We need to build new digital skills, find better ways to collaborate, and manufacture offsite rather than build onsite,” he says, adding that “there will be more exciting jobs and better careers for people”.
The countries that invest in infrastructure will prosper, Clancy asserts.
“There’s a direct link between infrastructure investment and economic and social prosperity. Our challenge is to create a sector that is fit for purpose: that embraces digital transformation, builds smart assets and designs for manufacture.
“I’ve been in this industry for a very long time. I love the industry and the impact we have on society, but it’s time for change. We need to do more with less.”
You’ve missed the chance to be part of the Property Council’s London Study Tour. But you can still subscribe to our mailing list and be among the first to know when the 2020 International Study Tour program cities and dates are announced.