Australia is entering one of the most consequential periods of infrastructure development in its modern history. Infrastructure Australia puts the five-year major public infrastructure pipeline at a record $242 billion, up $29 billion in a year.

That investment can improve transport, accelerate the energy transition, strengthen water security and leave a legacy of skills and stronger supply chains. But its scale also raises a fundamental question: how do we extract the greatest possible value from every dollar invested?

Australia’s construction productivity record shows why that question matters. Labour productivity in construction grew 17 per cent between 1994-95 and 2023-24, compared with 64 per cent across market-sector industries and 58 per cent in manufacturing. Oxford Economics estimates stagnant construction productivity costs Australia $62 billion in lost work each year.

Learning from global experience

International experience offers useful lessons. Construction costs are shaped by geology, labour markets, standards, project scope, regulation and community expectations, so headline comparisons between projects or countries can be misleading. The more useful comparison is how different markets design, procure and deliver infrastructure.

The contrast between projects can still prompt useful questions. Copenhagen’s M4 metro extension delivered five stations and 5.7 kilometres of tunnel over almost six years for about $1.9 billion. Melbourne’s Metro Tunnel delivered five stations and twin nine-kilometre tunnels at a project cost of $13.48 billion. While these examples are not Webuild projects, they are referenced as publicly reported international benchmarks for infrastructure delivery and productivity.

Direct comparisons should be approached with caution, as factors such as project scope, geology, labour markets, regulatory requirements, design standards and included works vary significantly. But examining how such projects are designed, packaged, sequenced and delivered can reveal lessons that headline cost comparisons alone cannot.

Four ways to lift productivity

Successful infrastructure programs tend to share four characteristics: they create opportunities to standardise repeatable assets, resolve constructability early, allocate risk to those best able to manage it and allow capability to transfer between projects and jurisdictions.

Standardisation can improve certainty. Not every station, substation, viaduct or public asset needs to be entirely bespoke. Repeatable designs and standardised components can reduce interfaces, support more efficient manufacturing and give suppliers greater confidence to invest in capability.

The gains do not need to be revolutionary to matter. Applied across a pipeline of this scale, incremental improvements in productivity can create considerable value. Standardisation can also give contractors and suppliers opportunities to carry knowledge, systems and investment from one project to another, rather than starting again each time.

Early industry involvement improves constructability. Bringing delivery expertise into the design process means engineering, sequencing, logistics and supply-chain issues can be addressed while options remain open and changes are less costly.

Balanced risk allocation supports better outcomes. Risks are most efficiently managed by the party with the knowledge, authority and capability to control them. Collaborative contracting can improve transparency and give clients and contractors greater certainty.

Consistency helps capability scale. Greater alignment of relevant standards and requirements between jurisdictions can allow skills, systems, technologies and proven solutions developed on one program to be applied more readily to the next.

Technology is part of this productivity opportunity. Digital engineering, modern construction methods and more efficient manufacturing can improve planning and delivery, particularly where repeatable components and designs allow successful approaches to be used across multiple projects. The benefits are greater when procurement encourages proven innovation rather than requiring the industry to reinvent its approach for every project.

Combining global and local capability

None of this means importing another country’s model wholesale. Local contractors bring essential knowledge of Australian communities, conditions, supply chains and regulation. International contractors bring experience gained across different markets, technical environments and major transport, energy, water and tunnelling programs. The greatest gains will come from combining the two.

Infrastructure Australia estimates public infrastructure projects face a shortage of 141,000 workers, potentially rising to more than 300,000 by mid-2027. We cannot rely solely on adding more people to deliver more infrastructure. We also need to make better use of the capability already available.

At Webuild, our international experience gives us direct exposure to different approaches to major-project delivery. Bringing that knowledge into Australian projects, while developing local skills, suppliers and partnerships, can help expand the industry’s capacity rather than substitute for it.

Australia has the investment, the pipeline and the engineering capability to deliver an extraordinary decade of infrastructure. The opportunity is to build more while also building better – learning from what works here and overseas, lifting productivity and leaving Australia with a construction industry better equipped to deliver the projects that come next.

Credit: Australian Financial Review and Massimo Franceschi. Read the original article here.

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