Roads & Infrastructure caught up with Federal Infrastructure Minister Michael McCormack to discuss the government’s response to infrastructure during the COVID-19 crisis.
While no industry sector is immune from facing some kind of COVID-19 impact, some industries are hurting more than others.
The road construction sector conversely, while undoubtedly facing challenges, is charging on with critical nation-building infrastructure projects. For example, Cross River Rail, the largest infrastructure project in Queensland’s history, continues, with April seeing the announcement of a new priority. One of Victoria’s most congested level crossings in Toorak was also removed in April, with the Victorian Premier proclaiming that work looks a little different on the big build, with extra physical distancing precautions in place to protect workers from coronavirus.
Over in South Australia, the government is fast-tracking $120 million in infrastructure projects as part of its $1 billion economic stimulus package. Although the future remains somewhat uncertain, the message of governments is one of resilience.
The discussion of continued projects was symbolically expressed through the finalisation of the Pacific Highway duplication between Woolgooga and Ballina, which is on track for completion at the end of 2020. This comprises an additional 12-kilometre section between Tyndale and Maclean. The new section of four-lane divided highway supports more than 75 kilometres of completed highway delivered through the project.
In an exclusive interview with Roads & Infrastructure, Federal Government Infrastructure Minister Michael McCormack in early April shared his enthusiasm to see much-needed projects continue as normal, highlighting the government’s commitment to its existing 10-year pipeline.
The Federal Government’s Infrastructure Investment Program will see $100 billion flow to major projects over 10 years from 2019-20. Through its continued initiatives, the government is supporting critical road projects like the Pacific Highway and Western Sydney Airport in NSW, Bruce Highway in QLD, METRONET in Perth and Monash Freeway in Melbourne.
“We’re not stopping. I’ve had discussions generally twice a week every week since the start of March with transport and infrastructure ministers from throughout Australia,” Mr. McCormack explains.
He adds that ministers have been talking about bringing projects forward and what can be done to help the transport infrastructure sector get through the crisis.
When announcing the final steps on the Pacific Highway duplication between Woolgoolga and Ballina, Mr. McCormack highlighted how important investments like this were to regional economies during this difficult time. Speaking to Roads & Infrastructure, he says the safety benefit is huge.
“When the Pacific Highway is complete from Hexham to the Queensland border, that’s a saving of two and a half hours effectively of what the Pacific Highway once was,” he says.
He points to the Parkes to Narromine section of Inland Rail as an example of making a difference in the community, creating hundreds of jobs with businesses built in and around it. The section is one of 12 projects for Inland Rail, with works completed on a 5.3 kilometre of new rail near Parkes to link Inland Rail with the existing Broken Hill rail line to Perth.
Spanning more than 1700 kilometres, Inland Rail aims to provide a transit time of 24 hours or less for freight trains between Melbourne and Brisbane via regional Victoria, NSW and QLD. An Inland Rail Regional Opportunities Report produced by Ernst & Young found the total project will see a boost of up to $13.3 billion in gross regional product.
Mr. McCormack says that with borders closed to a large degree and international routes shut off, it’s important to get food, fuel and medical equipment moving across the country.
“It’s critical that the supply chain, logistics, construction [and] everything to do with infrastructure transport and indeed regional development…are all that they can be at this time,” he says.
He adds that in one sense supply chains are freed up as there are not as many people on the road during this time.
In keeping the supply chain ticking along, he says that construction companies are also quite forthright in adhering to social distancing and safety – a commendable effort.
“That’s one advantage of the construction industry, sometimes those workers and builders are not as such in close quarters with their colleagues,” he says.
The COVID-19 lockdown has led to a discussion, with a range of variances at a state and territory level, on what services are “essential” versus non-essential. The Australian Asphalt Pavement Association recently confirmed – through discussions with government bodies across the nation – that roads and associated roadworks are essential services. CEO Carlos Rial recently said he had been in talks with government bodies from across Australia and all have confirmed roads and associated roadworks are an essential service.
“Under many of the Essential Services Acts across the country it can be interpreted that roads and associated roadworks activities support the essential functions needed during emergent conditions,” he said.
Because jurisdictions will vary as to what as essential service means legally, on questions of whether there should be an amendment to any of the acts, Mr. McCormack says it comes down to “common sense”. He says that with parliaments largely in recess, it might be something for a future Council of Australian Governments to look at.
In its response to COVID-19, the Federal Government progressively rolled out three packages – its initial $17.6 billion stage one package, $66 billion stage two and $130 billion JobKeeper support package. Stage one included changes to the instant asset write-off from $30,000 to $150,000 which supports road construction purchases, with a multitude of other benefits across the three packages relevant to a variety of businesses.
On questions of whether Mr. McCormack would rule out a stage-four related infrastructure package, he says he doesn’t “rule anything in our out”.
He adds that COVID-19 has caused uncertainty and it remains to be seen how bad it will be for the health of the nation and economy, pointing out that the government has tried to slow and contain the virus as best as it can.
“We can take advice from the chief medical officer Dr Brendan Murphy and others as to what the likely outcomes might be of COVID-19 on the workforce and construction transport industry,” he says.
“If a number of their workers go down with the virus and have to either be hospitalised or self-isolate or indeed be quarantined that’s an issue.”
Likewise, on questions as to whether the current level of debt would affect future infrastructure funding, namely in the October budget, he says no one could put a figure on it, not even the most “learned treasury official”.
That said, he says he wrote to all local governments across Australia highlighting that he wanted to see them bring any maintenance projects they could forward.
While COVID-19 has dramatically changed our expectations for 2020, the issue has been overshadowed by what were some of Australia’s worst bushfires earlier this year. Mr. McCormack highlights the government’s focus in this area, pointing to its Bridges Renewal Program, which opened proposals for another round earlier this year.
“Certainly infrastructure and inland rail is going to of course be a project that will continue to roll out. I’m very excited about the projects it will do, with goods to be carted between Melbourne and Sydney in less than 24 hours for the first time in more than a 100 years.”
With project overruns a continued issue, it remains to be seen what impact COVID-19 will have on existing timelines.
When asked whether he would encourage project proponents experiencing financial stress to provide some kind of guarantee, Mr. McCormack says he would encourage them to “sing out” well before it comes a major issue. He points out that project participants do their best not to have overruns but sometimes face issues such as weather.
Importantly, Mr. McCormack says there are a range of vital projects being explored, including the Outback Way linking QLD to WA and, Wheatbuilt road projects in WA and secondary freight upgrades.
Additionally, the Roads of Strategic Importance initiative continues to ensure key freight roads are efficiently connected to industrial hubs.
He comments that other projects such as Western Sydney Airport will generate thousands of indirect and direct jobs and is one of the biggest infrastructure projects in the nation.
As far as future transport technologies goes, he says that organisations are working harder than ever despite disruptions to their working life, with many now working from home.
“I don’t wish or think at any stage we need to see a slowdown in our construction and infrastructure roll-out,” Mr. McCormack says.
“That said, it’s very early April 2 [at the time of interview]. This COVID-19 [situation] will potentially go for six months, we’re one month into that. I know all our planning and preparation has been for a six-month phase, hopefully it will be a lot shorter than that but at this stage who can tell.”