With a review of Western Australia’s public infrastructure concluding it is generally superior to other states, the Gallop Government is spending $4.7 billion this year to try and keep it that way.
With a review of Western Australia’s public infrastructure concluding it is generally superior to other states, the Gallop Government is spending $4.7 billion this year to try and keep it that way.
The Government’s big capital works budget, totalling $15.8 billion over the next four years, will add to the buoyant project climate fuelled primarily by booming private sector investment.
The Government’s spending is, for the most part, widely dispersed and therefore only a handful of big projects are included in the accompanying tables on major projects (pages 13, 15).
The Water Corporation, for instance, has been allocated $715 million this year and $2.1 billion over the next four years for water and wastewater services.
Within this total, the biggest item is the $387 million desalination plant that Multiplex and its French partner Degremont are building at Kwinana.
The electricity sector has been allocated $599 million this year and $2.1 billion over four years.
Most of the money will be spent on network improvements, such as replacing overhead wires and reducing transformer loadings.
Western Power also plans a series of upgrades to its generation capacity, including a $30 million upgrade to lift the capacity of the Muja power station by 54 megawatts.
Another big spending area is public transport, reflecting the $1.5 billion being spent upgrading the metropolitan rail network.
This includes about $1 billion on the Mandurah rail link, which has been broken down into six separate packages (see tables).
The health sector will be home to some of the biggest government projects over the next five years.
The single biggest project will be the 600-bed Fiona Stanley hospital, to be built at Murdoch at a cost of $420 million.
Government spending on roads will total $1.4 billion over the next four years, with the biggest item being the $450 million Peel Deviation (to be built over six years).
Like the private sector, the Government has started to face significant increases in construction costs as a result of rising labour rates and higher materials costs.
Budgets for the desalination plant, the Peel Deviation and the Mandurah rail link have all increased this year, in part because of design changes but mostly because of rising costs.
The Government says it is closely monitoring all other big projects and has not found any further cost blowouts.
“We’re aware there is a potential problem and we’re on the case,” Treasurer Eric Ripper told WA Business News.
Critics say the Government should brace for more increases. For instance, Opposition health spokesman Kim Hames says the Fiona Stanley hospital will cost at least $600 million.
Engineers Australia’s infrastructure report card was unimpressed with the Government’s capital works budget.
“Despite all the initiatives by the State Government, it is still considered that funding for infrastructure is insufficient. Currently roads appear to be suffering the most, particularly local government roads,” the report says.
The report, prepared by consulting firm GHD, also noted that “the Federal Government contribution to infrastructure funding is poor, particularly in regard to export related infrastructure”.
Another issue it raised was that “funding for maintenance is often overlooked until problems arise”.
The report assigned ratings to all major infrastructure types, based on their condition, reliability, sustainability and security.
National and state roads in WA were given a reasonable B- rating while local roads were given a C+ rating.
Ratings for rail infrastructure were even more diverse.
The private iron ore railways in the Pilbara were given an A rating and the urban rail network was rated B.
In contrast, interstate rail and the freight system were both rated C-. The overall rating for electricity was B-.
This masked a difference between the generation and transmission assets, which were seen as good, and the distribution network, which received a poor rating.
The report listed a series of problems with the distribution assets – ageing poles, pole-top fires, inappropriate design in some areas, increased loads on old infrastructure, and poor maintenance – that are being addressed through the Government’s four-year capital works budget.
The state’s ports also received an overall rating of B-. The report says the sustainability of the ports is the issue with the largest potential to cause problems.
In particular, it says social and community issues associated with dust, pollution, noise and congestion needs to be addressed urgently.
