The federal government appears set to scrap funding for 82 ‘high risk’ infrastructure projects as part of its response to a review of infrastructure funding.
Key points:
- A broad review on infrastructure funding has recommended 82 projects miss out on federal government money
- The names and locations of those projects and the government’s response will be made public
- Regional road and phone infrastructure has been listed as an area in need of more funding
The government has expended considerable effort defending the review, ahead of expected criticism at the state, territory and local government levels.
It argued the existing 10-year pipeline of 274 projects could not be delivered within the current $120 billion budget allocation.
Reviewers Clare Gardiner-Barnes, Mike Mrdak AO and Reece Waldock AM found many projects lacked merit and were at high risk of further delay.
“There are projects that do not demonstrate merit, lack any national strategic rationale and do not meet the Australian government’s national investment priorities,” the review reads.
“In many cases these projects are also at high risk of further cost pressures and/or delays.
“A number of projects were allocated a commitment of Australian government funding too early in their planning process and before detailed planning and credible design and costing were undertaken.
“There are projects that do not demonstrate merit, lack any national strategic rationale and do not meet the Australian government’s national investment priorities.”
The names and locations of projects that will no longer receive federal funding have not yet been released.
The 82 projects are recommended to cease “following any payments necessary to fulfill contractual obligations”.
At the time of announcing the review in May, Infrastructure, Transport, Regional Development and Local Government Minister Catherine King committed to the 10-year $120bn infrastructure pipeline.
Ms King said there would be not cuts to the total pipeline budget.
“The Albanese government is committed to delivering infrastructure that builds Australia and improves lives,” she said.
“To do this, we need an infrastructure program that is fit for purpose, fiscally responsible and above all, deliverable.
“The independent review found that the Infrastructure Investment Program we inherited could not be delivered.
“With the co-operation of the states and territories we now have a forward plan of projects that are properly planned and targeted to unlock significant economic, social and environmental objectives.”
New funding model recommended
The review has also recommended the government adopt a 50:50 funding model for all new projects, with the Commonwealth covering half the cost and state, territory and local governments paying the remainder.
If adopted, the review also suggests states and territories should develop, in consultation with local governments, annual infrastructure plans including projects seeking federal funding in the next decade and submit it to the federal government.
For projects already underway the reviewers put forward a proposal for an independent assurance review process to allow for transparent examination of risks, commercial agreements, and timelines for high-risk developments.
Additional funding for the Roads to Recovery and mobile phone Black Spot program was also recommended, with the government flagging a response to that element in coming days.
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