Problem in the pipeline

TOWNSVILLE and North Queensland should be “cautiously optimistic” about the future of the infrastructure and construction sectors, although there are threats facing the pipeline of projects.

The annual Queensland Major Projects Pipeline Report has found 4 per cent of the $41.3 billion being spent on funded infrastructure projects across the state in the next five years will be spent in the Townsville region.

In contrast, projects in the Mackay-isaac region account for $3.4 billion of the total spend, heavily influenced by their proximity to the Adani mine, while $800 million will be spent on major works in Cairns.

The report, by the Queensland Major Contractors Association (QMCA) and the Infrastructure Association of Queensland, found renewable energy projects worth nearly $300 million underpinned Townsville’s major project work in 2018-19. This includes the Clare and Haughton solar farm projects, both of which are under construction.

But as those projects wind down, the pipeline of work will ease despite “strengthening roads, rail and water works”.

QMCA chief executive Jon Davies said the recent approval of Adani’s Carmichael Mine, the securing of NAIF funding for the Kidston Hydro project and flood recovery work meant Townsville had a reason to be “cautiously optimistic” about the future of the infrastructure and construction sector.

But this should be “tempered” with challenges facing the industry due to the lack of shovel-ready projects, availability of funds and timely investment decisions.

“Right now, there can sometimes be years between a project receiving a positive business case assessment from Building Queensland or Infrastructure Australia and tender documents being prepared by an agency,” Mr Davies said.

“We believe some modest investment in advancing these projects can provide agencies with the ability to move quickly to procurement and help smooth out predicted dips in forward investment.”

The report notes there is a “very large volume” of projects in the pipeline that remain without guaranteed funding.

This includes Stage 5 of the Townsville Ring Road, which has secured a commitment of $144 million from the Federal Government, but the release of the funding relies first on a tick off by Building Queensland and Infrastructure Australia.

The State Government is contributing $36 million to the project for planning, design and construction.

A business case is expected to be completed by late 2019.