2019 Queensland Major Projects Pipeline

2019
Queensland Major
Projects Pipeline
A JOINT INITIATIVE
AT A GLANCE
Major Projects Pipeline – Breakdown
$41.3 billion total (over 5 years)
Credibly
Unlikely Prospective proposed
37 39 15
projects valued at projects valued at projects valued at
$3.13bn $6.61bn $4.03bn
Unfunded $13.77 billion
Total Pipeline Major Project

Value Activity
$6.5b
$41.3b North Queensland
Funding $12.4b
6.8b Central
split Various Queensland
$23.4b $15.6b
Public Projects $41.3b South East
Total
$17.9b Queensland
Private Projects
Under Under
Announced procurement construction*
36 15 52
projects valued at projects valued at projects valued at
$10.14bn $6.66bn $10.77bn
Funded $27.57 billion

*Under construction or completed in 2018/19
Scale of Major
Recurring Projects Jobs
Expenditure
The funded pipeline will support
$8.3b per year
11,900 workers
each year on average
$23m per day
Fully-funding the pipeline
will support an extra
5,000 workers
each year on average
$2.2m
A JOINT INITIATIVE
$159m per
working
per week hour
CONTENTS
FOREWORD 1
SPONSORS2
EXECUTIVE SUMMARY 4
THE PIPELINE 2019 14
REGIONAL BREAKDOWN 28
ECONOMIC DRIVERS 46
IMPLICATIONS FOR THE 60
CONSTRUCTION SECTOR
CHALLENGES, RISKS 68
AND OPPORTUNITIES
CONCLUSION AND 90
RECOMMENDATIONS
2019 MAJOR 98
PROJECTS LIST
FOREWORD
We are proud to introduce the 2019 Queensland

Major Projects Pipeline Report to you - an
initiative of the Queensland Major Contractors
Association (QMCA) and the Infrastructure
Association of Queensland (IAQ).
The Pipeline Report captures At time of print, communities As industry peak bodies we
early stage information enabling in Northern Queensland are are committed to working
our members and wider market recovering from the devastating hard for our members and to
to plan for their future including impacts of recent heavy promoting Queensland as a
resourcing and capacity. For rains and flooding. Given the world leading destination for
government and private sector scale and financial impact to economic development and new
infrastructure proponents, this governments, it is likely that a infrastructure investment. We
ensures healthy and sustainable number of projects listed will be look forward to working with all
competition in the market and re-prioritised so that affected our stakeholders in 2019 to grow
successful delivery of major communities can receive the the pipeline of major projects in
infrastructure. necessary funding to recover in our great State.
the shortest time possible. As
A unique aspect of the Pipeline is Sincere thanks to our partner
reconstruction planning unfolds,
that the data is sourced directly BIS Oxford Economics for their
both our associations will provide
from both government and the expert guidance, compilation
their members with updates to
private sector, providing state of the project listings and the
any impacted projects and advise
wide visibility and awareness detailed independent analysis
of newly created reconstruction
of Queensland’s economic that underpins the report. We
packages.
infrastructure plans. The report also acknowledge our outgoing
provides a pipeline of projects The greatest threats to a partner Construction Skills
around a set of six standardised sustainable pipeline of projects Queensland for their past
stages through the project remain the identification of contributions to development
lifecycle. As projects move investable projects, availability of the report and for their
through the defined stages, of funds and timely investment sponsorship this year along with
from inception to business case, decisions. This year’s report collaborative partners Accura
investment decision, procurement also highlights an unusual Consulting, Cbus, Construction
and then construction, the concentration of activity Skills Queensland, Dial Before You
report ensures the market is emerging in very large major Dig, Pumps United, and regional
kept informed and up to date. projects above $500m in partners Plangrid, BMD, Economx
Our report also sends a strong value, that could also threaten and ARTC.
signal to potential infrastructure the sustainability of parts of
Through the support of our
investors that a highly motivated the supply chain. The ability
sponsors, it has been possible
engineering sector exists, with of governments to package
to improve the report format to
designers, contractors and service projects in a way that maximises
enhance the reading experience
providers eminently capable of local industry participation has
and provide access to key report
preparing for and delivering world assumed even greater importance
data through a dedicated website
class major engineering projects. to the continued short-term
qldmpp.com.au.
sustainability of the major
projects sector.
JON DAVIES STEVE ABSON

CHIEF EXECUTIVE OFFICER CHIEF EXECUTIVE OFFICER
2019 Queensland Major Projects Pipeline 1

SPONSORS
QMCA and IAQ would like to thank our partners and
supporters, without whom production of the 2019
Queensland Major Projects Pipeline Report would
not be possible.
COLLABORATION PARTNERS
Accura Consulting CBUS
Accura Consulting Accura Consulting provides Cbus is the leading industry super fund for the
commercial management, claims consulting, construction, building and allied industries.
planning support and expert witness services The Fund is focused on maximising retirement
in both time and quantum disciplines. outcomes for members and helping employers
manage their business superannuation needs.
Construction Skills Queensland Dial before you Dig

CSQ assists major projects to access building Dial Before You Dig is a Not for Profit
and construction training to address skills organisation that delivers a vital national
deficiencies that may hold up the project, community service designed to assist
individuals to become more multi-skilled in preventing damage and disruption to
and productive, or provide career pathway Australia’s vast infrastructure networks which
opportunities for the workforce. provide essential services we use
every day.
Pumps United
Pumps United are Australia’s leading provider of dewatering, pump rental and environmental
services, with over 45 years of experience, we are the dewatering contractors and pump hire
suppliers of choice for landmark construction projects, nationwide.
AMRUN JETTY
REGIONAL SPONSORS
BMD EconomX
BMD has grown from a small family owned EconomX design and implement leading
company to become one of Australia’s Local and Regional Content strategies for
largest privately-owned engineering Major Projects and Contractors. We provide
design, construction and land development strategy, technology and innovative thinking
contractors. which cover contracting, employment and
stakeholder management.
Inland Rail Plangrid

The Australian Government has committed PlanGrid is the leader in construction
$9.3 billion to deliver the once-in-a-generation productivity software that allows contractors
1,700km Melbourne to Brisbane Inland Rail. and owners in commercial, heavy civil and
Divided into 13 individual projects, it’s the other industries to collaborate easily from
largest freight rail infrastructure project in their mobile devices and desktop, managing
Australia. drawings, specs, photos, RFIs, field reports and
defect lists.
EXECUTIVE SUMMARY
Welcome to the third Queensland Major
Projects Pipeline Report (the Report)
developed by the Queensland Major
Contractors Association (QMCA) and the
Infrastructure Association of Queensland (IAQ).
This annual Report has The Report this year contains In this year’s Report there
become the key barometer mixed news. While last year’s is a focus on the regional
of current and future major call for increasing the volume implications of the pipeline.
project activity in Queensland. of funded work in the pipeline Eleven separate analyses
has been answered, there is are provided representing
It provides a comprehensive
still not enough funded work diverse regions of the state,
list of major project work
to avoid a decline in major with commentary on the
together with the predicted
project activity in 2019/20. outlook for each region. This
level of construction activity
And while the overall size of regional analysis shows that
based on both the completion
the pipeline is roughly the there are significant winners
of existing projects and the
same as last year, much more and losers in terms of major
likelihood of potential projects
of the pipeline is weighted project activity over the
proceeding. A complete list
towards the latter years of the next five years, with some
of major projects considered
forecast – and much of this regions set for substantial
for this analysis, and the
remains unfunded. volatility in work. Industry and
explicit assumptions for each
government can use these
project regarding work done, Other familiar challenges
regional profiles to better
are provided at the end of remain: the appropriate
plan for the coming phase of
this report. The report is identification of infrastructure
major project work – and also
therefore a useful source of initiatives, choosing the
use the analysis to see where
data to inform infrastructure most productive projects,
any emerging latent industry
policy and guide the timing of and coming up with funding
capacity may be tapped.
investment decisions. and financing solutions will
remain critical if growth in The Report also provides data
major project activity is to and forecasts for the broader
be sustained into the future. economic environment in
There are also challenges which major project activity is
regarding industry capacity taking place: for Queensland,
and capability to deliver major Australia and the global
projects in Queensland, given economy.
substantial infrastructure
investment programs
underway in New South Wales
and Victoria. COMING UP WITH
NEW FUNDING AND
FINANCING SOLUTIONS
WILL REMAIN CRITICAL
IF GROWTH IN MAJOR
PROJECT ACTIVITIES IS
TO BE SUSTAINED INTO
THE FUTURE
4 2019 Queensland Major Projects Pipeline

THERE IS GREATER CERTAINTY OF
MAJOR PROJECTS BEING DELIVERED
BY THE PUBLIC SECTOR, WHICH
NOW ACCOUNTS FOR 70% (OR
$19.3BN) OF FUNDED WORK
PUBLIC SECTOR PIPELINE

Credibly Under Under

Unlikely Prospective proposed Announced procurement construction*
17 11 4 23 9 26
projects valued at projects valued at projects valued at projects valued at projects valued at projects valued at
$1.01bn $2.10bn $1.06bn $7.07bn $6.22bn $5.98bn
Unfunded $4.17 billion Funded $19.27 billion
PRIVATE SECTOR PIPELINE

Credibly Under Under

Unlikely Prospective proposed Announced procurement construction*
20 28 11 13 6 26
projects valued at projects valued at projects valued at projects valued at projects valued at projects valued at
$2.12bn $4.51bn $2.97bn $3.07bn $0.44bn $4.79bn
Unfunded $9.60 billion Funded $8.30 billion
*Under construction or completed in 2018/19

KEY FINDINGS
In the 5 years between 2018/19 and 2022/23, 2021/22 is predicted to be the strongest year
the major projects pipeline is valued at $41.3bn. of major project activity since 2014/15 - with
This compares with $39.9bn identified in the a 70% increase from the current 2018/19
2018 Report between 2017/18 to 2021/22. financial year, subject to funding commitments.
However, there is a lower level of total work
(funded and unfunded) in both 2019/20 Growing mega-project concentration may
and 2020/21 than previously forecast have significant implications for industry
(see Figure A). competitiveness and sustainability. In 2018/19,
19% of project work is in projects valued
The share of overall total pipeline value is at $5m to $200m, whilst another 22% is in
weighted towards the public sector (57%) projects valued at between $200m to $500m.
– with Inland Rail (Commonwealth funded) However, by 2021/22, 89% of major funded
and Cross River Rail (State funded) notable project work is in projects with a value of
contributors to Engineering activity in the over $500m.
Report period (see Figure B).
Around half of all funded work in the pipeline
$27.6bn (67%) of the pipeline value is funded, is unsurprisingly focused in south east
whilst $13.8bn (33%) is unfunded. Unfunded Queensland. Meanwhile, more of the riskier,
projects represent between 39% to 44% unfunded projects lie in central, northern and
of the pipeline value in 2020/21, 2021/22 western regions of the state, as these regions
and 2022/23, introducing a normal level tend to be weighted to investment in mining
of uncertainty associated with business and large water projects (such as dams) that
case development and financial investment are typically unfunded.
decisions.
Queensland is now higher than the trough
There is greater certainty of major projects in 2014/15 but lags New South Wales and
being delivered by the public sector, which Victoria in terms of funding and delivering
now accounts for 70% (or $19.3bn) of funded infrastructure. With investment in these
work. Whilst there are notable private sector States set to be sustained at very high
projects and sustaining capital programs in levels, Queensland may face challenges in
delivery, the prospects for major greenfield competitively procuring construction services
mine and rail infrastructure development for major projects.
in regional areas such as the Galilee Basin
remains difficult to predict. According to BIS Oxford Economics, a higher
level of major projects activity since 2016/17
Funded work for 2018/19 is currently on par has had a broader, stimulatory effect on the
with total work in 2017/18 – just over $6bn – Queensland economy. However, any setback
with any slight growth in activity dependent in major project work, alongside weaker
on several projects securing funding growth in broader investment and consumer
commitments and mobilising in the second spending, is likely to contribute to a slowing
half of this financial year. in state economic growth in 2019/20.
A decline in major project work is expected

in 2019/20, before recovering in 2020/21.
Funded roads and bridges work in 2019/20
is 44% lower than 2018/19 as several very
large projects reach completion and are
not replaced by similar sized new projects.
Declines are also expected in electricity
(renewables), telecommunications and mining.

FIGURE A: COMPARISON OF MAJOR PROJECT ACTIVITY: 2019 VERSUS 2018
BY 2021/22, 89%
$Bn
12000 OF MAJOR FUNDED
PROJECT WORK IS
10000
IN PROJECTS
8000 WITH A VALUE OF
OVER $500M
6000
4000
2000
0
17/18 18/19 19/20 20/21 21/22 22/23
2018 Funded 2019 Funded
2018 Unfunded 2019 Unfunded
Source: BIS Oxford Economics, QMCA and IAQ member knowledge
FIGURE B: FUNDING MIX BY ASSET CLASS, 2019-2023, $MILLIONS,

ALL PROJECTS
TOTAL $23,449 $17,895
Defence $810
Water and Sewerage $2,556 $355
Non-Water Utilities $3,272 $4,331
Rail and Harbours $9,313 $855
Roads and Bridges $7,498 $660
Mining & Heavy Industry $11,694
0% 20% 40% 60% 80% 100%
Public Private
FIGURE C: MAJOR PROJECT OUTLOOK BY ALL SEGMENTS: 2018/19 TO 2022/23

$Bn
20
15
10
0
FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23
Funded Credibly Proposed
Prospective Unlikely

THERE IS CONSIDERABLE OPPORTUNITY FOR
THE DEVELOPMENT OF WATER PROJECTS
IN QUEENSLAND TO SUPPORT REGIONAL
COMMUNITIES, AGRICULTURE AND INDUSTRY
TOOWOOMBA SECOND RANGE CROSSING
CHALLENGES AND RECOMMENDATIONS

The key finding of this However, the last two years In this environment, sustaining
Report is that in 2017/18 and has seen a recovery in or growing current levels of
2018/19, major project activity major project work, led by major project work into the
has risen out of the trough new investments in roads future will require securing
experienced between 2015/16 and telecommunications funding and finance for
and 2016/17 – helping to drive (predominantly funded by the identified unfunded projects,
a turnaround in Queensland public sector), and renewable and originating, developing
State Final Demand and energy generation and mining and funding new projects that
employment. But major (mostly funded by the private are currently not identified in
project work is likely to suffer sector). the pipeline at all.
a setback of around $1.4bn
Maintaining this momentum There is considerable
in 2019/20 (23%), unless
is the core challenge facing opportunity for the
funding for new projects
Queensland. Funded development of water
is secured. For the setback
work in the pipeline for projects in Queensland to
not to occur in full, currently
the four sectors of roads, support regional communities,
unfunded projects such as
telecommunications, agriculture and industry.
Nullinga Dam, the Paradise
electricity and mining – falls Meanwhile, there are many
Dam Spillway Improvement,
away by 45% in 2019/20, and potential private sector
Pacific Motorway Section C
continues to fall in aggregate funded renewable energy
and Gold Coast Light Rail
through the subsequent 4 major projects which did not
Stage 3 require investment
years. While other sectors make the list this year, but
decisions and procurement.
offer replacement growth in could originate in future years.
Major project activity – funded work – particularly rail, However, this will require
mirroring the broader but also water, sewerage and stable environmental and
Queensland economy – defence – this growth is not energy policies at both
has been through a large enough to offset the severity the Commonwealth and
resources-driven cycle over of the decline. State level.
the past decade.

FIGURE D: FUNDED MAJOR PROJECT OUTLOOK BY SECTOR:
2018/19 TO 2022/23
KEY CHALLENGES
IDENTIFIED IN THIS
Defence YEAR’S REPORT
INCLUDE:
Water and Sewerage
MAJOR
Non-Water Utilities
PROJECT
DECLINE
IN 2019/20
Rail and Harbours
The prospect of a 24%
decline in major project
Roads and Bridges
activity over 2019/20.
Overall, funded work in the
Mining and Heavy Industry pipeline falls from $6.1bn
in 2018/19 to $4.6bn in
0 1 2 3 4 5 6 7 8 9 10
$Bn
2019/20 before recovering
Source: BIS Oxford Economics, QMCA and IAQ member knowledge slightly in 2020/21.
FIGURE E: FUNDED MAJOR PROJECT OUTLOOK BY REGION: 2019/20 TO
2022/23
Outback
SKILLS
Cairns SHORTAGES
Gold Coast
Queensland still faces
Wide Bay
significant competition for
Townsville construction skills from other
Sunshine Coast states – particularly New
Darling Downs – Maranoa
South Wales and Victoria.
The infrastructure investment
Fitzroy
program in other east coast
Mackay states is unlikely to slow down
Ipswich – Toowoomba – Logan significantly given projects
already underway. To the
Brisbane
contrary, there may be an
0 1 2 3 4 5 6 7 8
$Bn
upside to the Commonwealth
Source: BIS Oxford Economics, QMCA and IAQ member knowledge Government’s current
Infrastructure Investment
Program, to ward off the
negative impact of the
slowdown in residential
building or guard against
potential external shocks.
This may drive even stronger
demand for major project skills.
WHILE THE OVERALL SIZE OF
THE PIPELINE IS ROUGHLY THE
SAME AS LAST YEAR, MUCH MORE
OF THE PIPELINE IS WEIGHTED
TOWARDS THE LATTER YEARS OF
THE FORECAST – AND MUCH OF
THIS REMAINS UNFUNDED

REGIONAL PIPELINE VOLATILITY
There are vast differences in how major project activity will play out by region, by sector
and by project size through the forecast period. For many regions and sectors, volatility in the
pipeline is set to increase, placing pressure on construction industry contractors and suppliers.
The Toowoomba region will transition between the Toowoomba Second Range Crossing (road)
and Inland Rail (rail) projects. There is also a strong cycle of work ahead in the Brisbane region
that will require careful management. Meanwhile, other regions in the north and the west of
the state have very high shares of unfunded work in their pipelines, adding to uncertainty for
contractors and industry suppliers.
IN MEETING THESE PIPELINE CHALLENGES, THIS REPORT MAKES

THE FOLLOWING RECOMMENDATIONS:
INCREASE NUMBER
INCREASE INDUSTRY
1 COLLABORATION 2 OF SHOVEL READY
PROJECTS
Aim for a more collaborative approach Governments should consider raising the number
between government and the construction of “shovel ready” projects in the pipeline
industry, as is emerging in New South through early identification of infrastructure
Wales and Victoria. Looming capacity and network challenges and commit to earlier
capability challenges will likely require a evaluation of solutions and business cases.
greater partnership approach that maximises Similarly, future infrastructure requirements
the legacy of the infrastructure program. should be informed by a comprehensive review
Rather than being incentivised to secure of the quality of the existing infrastructure stock
the lowest priced work on each and every and the development of frequently updated
project, procurement will increasingly need customer metrics that can best indicate where
to encourage industry investment in capacity gaps may exist. Increasing the depth of the
and capability, reward innovation (and hence pipeline would improve its flexibility to help
productivity), and foster the development of smooth cycles in major project activity – that is,
critical skills needed to deliver major projects. allowing projects to be accelerated within the
pipeline to take advantage of any emerging local
industry capacity, such as seems likely to occur
in 2019/20.
SECURE COMMONWEALTH CONTRIBUTION

3 TO RAIL PROJECTS
Resolve Commonwealth funding contributions to passenger rail projects – the State

Government’s ability to fund infrastructure growth beyond its current budget commitments
is challenging. This is likely to hamper its ability to meet contributions required by the
Commonwealth per national partnership agreements covering transport and road projects.
Securing Commonwealth contributions towards the $5.4bn Cross River Rail project and further
contributions to the Beerburrum to Nambour Rail project would liberate funds from the forward
estimates to reinvest into other priorities.

IN THE 5 YEARS BETWEEN
2018/19 AND 2022/23, THE
MAJOR PROJECTS PIPELINE IS
VALUED AT $41.3BN
DEVELOP A FINALISE A
4 FUNDING PLAN 5 SEQ CITY DEAL
Consider asset recycling. Other states, City deals provide a new approach for all
including New South Wales and Victoria, levels of government to work together to
have already established long term plans for plan and deliver transformative outcomes for
infrastructure development, and have made the Queensland cities and are a key mechanism
hard decisions regarding funding and finance. of the Commonwealth Government’s Smart
With its traditionally stronger population Cities Plan (2016). The Townsville City Deal
and economic growth, Queensland needs struck in December 2016 was the first in
to develop a strategic plan for funding and Australia and an important start. A South East
financing infrastructure. As noted in previous Queensland (SEQ) Regional City Deal has the
Major Project Pipeline Reports, Queensland potential to be the foremost City Deal in the
could leverage substantial infrastructure
nation involving ten separate Councils. This
finance through asset recycling strategies.
‘new generation’ City Deal could provide a
structured, coordinated plan for infrastructure
development in south east Queensland
supported by all tiers of government.

IMPROVED NEEDS
6 CAPITAL EXPENDITURE 7 ANALYSIS
The State Government should maintain the Better identification of infrastructure gaps.
current focus on ensuring committed funds Broad economic measures and rules of thumb
for infrastructure delivery are spent as such as investment/GSP ratios are not ideal
planned. The gap between committed and determinants of the existence of infrastructure
actual spending on public investment has gaps but can show the cyclicality and trend
narrowed, from a peak of $1.7bn in 2014/15 to movements in investment over time. The lack
$333m in 2017/18. This positive trend should be of established benchmarks or satisfactory
maintained. methods of infrastructure gap identification is
problematic and perhaps should be addressed
in future infrastructure Audits by Infrastructure
Australia, as well as future Queensland State
Infrastructure Plans.
8 REVIEW PACKAGING STRATEGIES
Provide a diverse range of projects by size. This Report highlights that a very high proportion
of funded work in 2021/22 and 2022/23 is concentrated in projects valued over $500m. A
sustainable and competitive construction industry requires diverse participation in project
tenders and construction work. With this in mind, the State Government should look to review
their packaging strategies to support greater participation from the sector.
2021/22 IS PREDICTED TO
BE THE STRONGEST YEAR OF MAJOR
70 %
PROJECT ACTIVITY SINCE 2014/15
– WITH A 70% INCREASE FROM THE
CURRENT 2018/19 FINANCIAL YEAR,
SUBJECT TO FUNDING COMMITMENTS

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THE PIPELINE 2019
The 2019 Major Projects List ENGINEERING VALUE
is presented on page 98 of
this Report. The Major Projects
List includes engineering
projects in excess of $50m CONSTRUCTION PRINCIPAL'S
and was developed by CONTRACTOR’S COST
COST
BIS Oxford Economics in
coordination with QMCA
and IAQ member input
throughout November 2018
to January 2019.
BASE
ESTIMATE
RISK AND
CONTINGENCY
TOTAL PROJECT
COST
(CURRENT $)
ESCALATION
TOTAL
PROJECT COST
PROJECT
VALUE (OUTTURN $ FOR
COMPLETION
IN 2XXX)

OVER 90% OF
THE RAIL WORK
IN THE PIPELINE
IS FUNDED
MAJOR PROJECTS OUTLOOK

Figures 1 and 2 (overleaf) highlight the current activity and projections for major
project work for the period 2018/19 to 2022/23 based on the 2019 Major Projects List,
as well as historical data to 2011/12.
KEY ANALYSIS Rail continues to offer The pick up in work from

Total Major Project the strongest outlook for 2020/21 is founded on a
activity in the current growth in major project relatively small number
financial year is expected activity. From just $150m of large value projects in
to reach $6.6bn, a slight in 2018/19, major project south east Queensland such
improvement on the work in rail is expected as Brisbane Metro, Cross
forecast in the 2018 MPP to balloon to just over River Rail and Inland Rail
Report. Only $474m of this $4bn by 2021/22, led by with a sharp drop off in
figure is unfunded. simultaneous work on number of projects in the
Cross River Rail, Inland Rail $100-500m range.
A setback to major project
and the European Train
activity is now expected The value of water and
Control System, amongst sewerage, and mining
in 2019/20, with total
other projects. Over 90% and heavy industry
activity falling to $6.5bn
of rail work in the pipeline major project work in the
from that forecast last
is funded. Capacity and pipeline rises over time,
year and funded work
capability risks for rail but much of the increase
sliding to $4.7bn. The
remain, however, given remains unfunded, with
completion of several
the massive wave of rail many projects listed as
very large road projects is
investment underway unlikely to proceed. Water
expected to coincide with
nationally. and sewerage major project
the completion of a host of
work in the pipeline rises
renewable energy projects Some sectors simply do
from $189m in 2018/19 to
and a deceleration in NBN not have enough projects
just under $1bn by 2021/22,
activity – with not enough in the pipeline – whether
with mining and heavy
new projects coming funded or unfunded – to
industry activity rising from
through to sustain activity sustain major project work
$1.3bn in 2018/19 to $3.1bn
at current levels. through the next five years.
by 2021/22. However, at the
Funded roads major project
2021/22 peak, 60% of water
activity is expected to and sewerage projects
decline 44% over 2019/20 (principally dams) and
and fall further in the 71% of mining and heavy
early 2020s. Non-water industry projects remain
utilities activity, comprising unfunded. Indeed, outside
mostly electricity and of rail, more than 50% of
telecommunications work, the pipeline is unfunded
is also forecast to decline from 2021/22. Consequently,
substantially over the there is considerable risk to
same period. sustainable growth in major
project work.

WORK UNDERTAKEN IN THE
CURRENT FINANCIAL YEAR IS
EXPECTED TO REACH $6.6BN,
A SLIGHT IMPROVEMENT ON
THE FORECAST IN THE 2018 MPP
REPORT. ONLY $474M OF THIS
FIGURE IS UNFUNDED
TOWNSVILLE RING ROAD
FUNDED VERSUS UNFUNDED PROJECTS

Altogether there is $41.3bn in major project work in the pipeline between 2018/19 and
2022/23 inclusive. Including $756m in now completed projects, the total funded pipeline
is $27.6bn. Unfunded projects in the pipeline amount to $13.8bn.
“Funded” project categories include: “Unfunded” project categories include:
Announced: projects which have Unlikely: projects considered not to
funding support but have not yet occur in the next five years, even if
entered the procurement stage (as announced. There are $3.1bn in
at January 2019). There are $10.1bn unlikely projects in the pipeline.
in announced projects in the pipeline.
Prospective: projects considered
Under Procurement: projects in a likely to occur over next five years
procurement stage but have not yet but not yet formally proposed. There
started construction (as at January are $6.6bn in prospective projects in
2019). There are $6.7bn in projects the pipeline.
under procurement in the pipeline.
Credibly Proposed: projects that are
Under Construction: projects in supported by government and/or
flight / under construction. There are the private sector but still in
$10bn in projects currently under prefeasibility/business case mode
construction in the pipeline. and so do not have funding
committed. There are $4.0bn
in credibly proposed projects
in the pipeline.
Figure 1 (over the page) illustrates the outlook

for major project activity based on the
subcategories of funded and unfunded work.

KEY FEATURES FIGURE 1: MAJOR PROJECT WORK DONE: ALL SEGMENTS
$Bn
Total major project activity
20
is now expected to rise
slightly to $6.6bn in the
current financial year, 15
surpassing the $6.5bn
forecast in the 2018 MPPR.
Only $474m of this remains 10
unfunded.
Total major project work 5
(funded and unfunded)
is expected to decline
0
in 2019/20, however, to FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23
$6.5bn. This decline is being
driven by the completion
of many large roads and
non-water utilities projects
(particularly electricity FIGURE 2: FUNDED MAJOR PROJECT WORK BY SECTOR
and telecommunications) $Bn
which is being only partially 20
offset by rising rail, water,

defence and mining major
15
project activity. Total activity
forecast for 2019/20 is
now approximately $0.7bn 10
less than forecast in the
2018 MPPR – and $1.8bn
5
still remains unfunded
compared to the nearly
$3bn in unfunded work for 0
2019/20 previously reported. FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23
Both funded and unfunded Mining and Heavy Industry Roads and Bridges Rail and Harbours
major project activity Non-Water Utilities Water and Sewerage Defence

is forecast to rise over Source: BIS Oxford Economics, QMCA and IAQ member knowledge
2020/21 and 2021/22.
Funded activity in the Total major project With the exception of
pipeline rises to $5.2bn and work falls in 2022/23 to 2019/20, total major
$6.8bn respectively, while $8.5bn, of which a hefty project activity is expected
the inclusion of unfunded proportion ($3.7bn) to move above 2018/19
projects sees the value of remains unfunded, mostly levels which are themselves
the pipeline rise to $8.7bn concentrated in mining and an improvement on
in 2020/21 and then surge roads. Railways remains recent years. However,
above $11bn in 2021/22. the most significant sector the outlook for funded
Mining – and particularly the for major project work in work (incorporating those
announced smaller Galilee the year, but funded work projects Announced,
Basin coal development declines. The completion Under Procurement or
from Adani (now included of large roads and water Under Construction) is
as ‘funded’) – is a key driver projects – without visibility much different, moving
of the upswing, as well on new projects – is a key below 2018/19 levels in
as very large rail projects driver of the decline in both 2019/20 and 2020/21
(Cross River Rail and Inland measured major project and only emerging above
Rail) which are timed to work in 2022/23. 2018/19 levels in 2021/22.
ramp up in this period.

100%
FIGURE 3: PIPELINE FUNDING MIX BY SECTOR AND YEAR The funded forecast view is
TOTAL $23,449 $17,895 similar to that of a “worst
case scenario” outlook,
Defence $810 should international
developments or public
Water and Sewerage $2,556 $355
sector finances deteriorate
Non-Water Utilities
significantly further,
$3,272 $4,331
or the combination of
Rail and Harbours $9,313 $855 threats to the Queensland
construction industry
Roads and Bridges $7,498 $660
remain unaddressed.
Maintaining a growing
Mining & Heavy Industry $11,694
pipeline of major project
0% 20% 40% 60% 80% 100%
work requires shifting
Public Private currently unfunded projects
Source: BIS Oxford Economics, QMCA and IAQ member knowledge into the funded category, as
well as growing the value of
FIGURE 4: COMBINED PIPELINE FUNDING MIX the pipeline overall. While
$Bn
the most likely scenario for
8
major project work excludes
7 “unlikely” projects, these
6
are included to show their
potential impact on major
5
project work, particularly
4 later in the forecast.
3
0
FY2019 FY2020 FY2021 FY2022 FY2023
Funded Private Unfunded Private
Funded Public Unfunded Public
THE DIVERGENCE BETWEEN FUNDED

AND UNFUNDED WORK PROFILES
MEANS THAT THERE IS STILL
SIGNIFICANT UNCERTAINTY IN THE
ULTIMATE DIRECTION OF MAJOR
PROJECT ACTIVITY IN QUEENSLAND

BOUNDARY ROAD
Major projects which have While simultaneous works

contributed to the stronger on these large projects have
ROADS AND levels of activity in 2018/19 but contributed to a significant
BRIDGES will wind down and move to upswing in roads activity in
After rising to a peak of completion from here include Queensland, their completion
$2.2bn in 2018/19, major (noting their construction – without replacement by
project work for roads and value): equivalent sized projects – is
bridges is projected to fall expected to drive weaker
Toowoomba Second
back to lower levels through major project activity in this
Range Crossing, $1.25bn,
the forecast period, generally sector. It should be noted
completion in 2018/19
cycling between $1.2bn to that this is not a new outlook
Gateway Upgrade North,
$1.5bn in activity per annum. for the roads sector in
$850m, completion in
While more major roads Queensland – MPPR reports in
2018/19
projects are expected to 2018 and 2017 also highlighted
Logan Motorway
commence in coming years, the decline in major roads
Enhancement Project,
these are generally smaller in investment inherent in the
size than projects currently pipeline from 2019/20.
2018/19
underway that will be
completed. Kingsford Smith Drive Funded roads activity is
Upgrade, $440m, expected to cycle between
completion in 2019/20 $1.0bn-$1.3bn between
Brisbane Airport New 2019/20 and 2021/22. Major
Parallel Runway, $380m, projects sustaining activity
completion in 2019/20 at these lower levels include
Sunshine Coast Airport New the Brisbane Metro ($550m),
East-West Runway, $240m, Pacific Motorway: Eight Miles
completion in 2019/20 Plains to Daisy Hill ($374m)
Ipswich Motorway: Rocklea and Varsity Lakes to Tugun
to Darra Stage 1, $200m, ($500m) and a range of
completion in 2019/20 projects along the Bruce
Highway. However, there is
Pacific Motorway; Miles
also an increasing profile
Platting Road to Rochedale
of unfunded work in the
Road (Gateway Merge),
pipeline, with unfunded work
exceeding funded work by
2019/20.
2022/23.

FIGURE 5: ROADS AND BRIDGES MAJOR PROJECT WORK DONE
BY FUNDING STATUS (INCLUDES BRISBANE METRO) RAILWAYS
$Bn AND
3 HARBOURS
Major project work across
2.5
the railways and harbours
2
segments in Queensland
moved to a higher plane
1.5 in the early 2010s, peaking
at over $1.6bn in 2013/14,
1 before falling to just $320m in
2016/17 with the completion
0.5
of the Moreton Bay Rail Link.
0
While harbours major project
FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 construction work has been
driven predominantly by the
demands of the resources
sector, across railways
there are also significant
FIGURE 6: RAILWAYS AND HARBOURS MAJOR PROJECT WORK DONE BY contributions from the public
FUNDING STATUS sector for passenger and
$Bn freight projects.
5
Rail and harbours major
project activity is anticipated
4
to remain relatively weak
in 2018/19 ($285m), but is
3
expected to ramp up very
strongly from here and grow
2
more than 10-fold over the
next four years, with funded
1 activity estimated to peak at
$3.75bn in 2021/22. This profile
0 is similar to that reported in
the 2018 MPPR, although with
Funded Credibly Proposed some differences:
2018/19 activity is higher
than previously reported
due to the inclusion of the
European Train Control
System Level 2 (worth
$589m over 5 years).
OUTSIDE OF RAIL, MORE

THAN 50% OF THE PIPELINE
IS UNFUNDED FROM 2021/22

2020/21 activity is lower North Galilee Basin Rail, with The main risk to the rail
than previously reported, an assumed construction projects is the strong
mainly due to a lower value of $750m, for Adani’s competition for key rail
value and scope ascribed announced Carmichael Coal construction skills nationally
to Adani’s smaller Galilee project, with activity to take given very large investment
Basin rail project, with the place between 2019/20 and programs already underway
bulk of work ascribed to 2022/23. While now listed as a in New South Wales,
that year. Due to Adani’s funded project, it is noted that Victoria, South Australia
announcement in late 2018 Adani’s Galilee coal project and Western Australia.
that they would fund a is still subject to risk and According to the Australasian
smaller Carmichael Coal requires satisfaction of several Railways Association’s
mine and rail development outstanding regulatory hurdles (ARA) Skills Capability
internally, this project has before it can commence. Study released in November
been shifted to ‘announced’ 2018, approximately 70,000
in this report. Beerburrum to Nambour Rail rail construction and
Upgrade, with a construction manufacturing jobs will be
Overall, the rail sector has
estimate of $500m, to be demanded above existing
the strongest outlook for any
undertaken between 2020/21 supply to support national
engineering construction
and 2023/24. rail infrastructure delivery by
segment in the pipeline, with
2022/23.1
very strong growth in activity
In the long term, another
supported by several key In contrast to rail, harbours
$4bn will likely be needed
funded projects including: major project work is
to upgrade the rail line from
relatively small, and focused
Cross River Rail, various Acacia Ridge and the Port
exclusively on the 2018/19 to
packages with a construction of Brisbane itself. However,
2020/21 period, with no major
value of $4.1bn, with early the timing of construction is
harbours projects appearing
works underway now likely to fall outside the scope
in subsequent years. With the
and work on the Tunnel of this report (after 2022/23)
completion of port facilities
Stations and Development with substantial planning
for the Amrun bauxite
(TSD) package and the Rail required given the urban
development, work in this
Integration and Systems nature of this project.
segment will be supported
Package (RIS) to get
The staggered timing of these by the:
underway late 2019/20.
funded projects combines to Brisbane International
produce a strong upswing Cruise Terminal ($130m)
Inland Rail includes three
in funded work over the
major sections valued at Townsville Port Expansion
next four years, with several
$4.45bn in construction work. Project: Channel Capacity
unfunded projects – notably
The largest of these sections Upgrade ($150m) and the
Sunshine Coast Light Rail and
– Gowrie to Kagaru – includes RG Tanner Coal Terminal
Gold Coast Light Rail Stage 3
complex tunnelling through upgrade as part of the Port
– adding potential upside.
the Toowoomba Ranges of Gladstone ($200m).
and is anticipated to take
Other harbour works which
place between 2020/21 and
could underpin activity are the
2023/24, with earlier works
Port of Gladstone - Second
in 2019/20.
Shipping Lane (Gatcombe
and Golding Cutting Channel
Duplication Project) and the
Port of Townsville - Outer
Harbour Expansion (Berths
14+15), although both of these
projects remain unfunded.
1 https://ara.net.au/content/rail-sector-skills-crisis-call-action

In August 2018, the CSIRO Lower Fitzroy Infrastructure
WATER AND Northern Australia Water Project, $195m,
SEWERAGE Resource Assessment2 commencing 2019/20
Water and sewerage major mapped three river systems Burdekin Falls Dam -
project work spiked in 2012/13, across northern Australia Saddle Dam and Monolith
largely underpinned by new which could potentially be Improvement, $210m,
water treatment facilities and used for irrigated agriculture commencing 2020/21
pipeline construction projects development. This included Three Rivers Irrigation
supporting upstream CSG the Mitchell river system in Project, $120m,
field development in the Surat far north Queensland, which commencing 2020/21
Basin. However, as these could drive the development Beaudesert Water Supply
projects moved to completion, of up to four dams – Pinnacles, Upgrade Pipeline, $100m,
work done weakened Rockwood, Nullinga and near commencing 2020/21
substantially, falling under Chillagoe – and which would
Lake McDonald Dam
$50m in 2015/16. see an extra 140,000 hectares
Upgrade, $80m,
of year-round crop irrigated.
Activity has risen in commencing 2019/20.
While there is still significant
subsequent years, however, As with water, major project
further assessment and
with the total value of major sewerage works are also
investigative work required on
project work forecast to be increasing in coming years,
specific dam projects before
$189m in 2018/19. The outlook with funded work rising
they can be added to pipeline,
for water and sewerage work from an estimated $89m in
the harnessing of northern
is highly positive, with funded 2018/19 to a peak of $232m
river systems may yet provide
activity in the pipeline rising in 2020/21. The major drivers
longer term opportunities and
almost four-fold to $507m by of this are the Gold Coast
benefits to the Queensland
2020/21 before easing back Council Long Term Water
economy.
in subsequent years. Total Recycled Water Release
major project work done in The pipeline identifies $670m
(Stages 1 and 2), with a
the pipeline averages just in funded water major project
combined construction value
under $600m per annum over work between 2019/20 and
of $248m, as well as the
the five years to 2022/23, 2021/22, a substantial increase
Northern (Inner Brisbane) and
although this figure is boosted on the $50m estimated for
Southern (Ipswich) Waste
by several currently unfunded 2018/19. Driving much of
Water Treatment Plant works,
dam projects including: this are projects in central,
worth a combined $313m.
Somerset Dam Upgrade, northern and outback regions
construction estimate of the state to either provide
$450m, credibly proposed water security or agricultural
Nullinga Dam, construction opportunities:
estimate $180m, credibly Haughton Pipeline
proposed Duplication, construction
Wyaralong Dam Water estimate $150m, under
Treatment Plant Stage construction
1, construction estimate
$150m, prospective
Urannah Dam, construction
THE HARNESSING OF
estimate $200m, unlikely. NORTHERN RIVER SYSTEMS
MAY YET PROVIDE LONGER
TERM OPPORTUNITIES
AND BENEFITS TO THE
QUEENSLAND ECONOMY
2 https://www.csiro.au/en/Research/Major-initiatives/Northern-Australia/Current-work/NAWRA
2 https://www.csiro.au/en/Research/Major-initiatives/Northern-Australia/Current-work/NAWRA
3 https://arena.gov.au/about/how-we-are-funded/

ELECTRICITY, FIGURE 7: WATER AND SEWERAGE MAJOR PROJECT WORK DONE BY
FUNDING STATUS
PIPELINES $Bn
AND 2
TELECOMS
Electricity, pipelines, and
telecoms major project work 1.5
done peaked at a record

$1.6bn in 2012/13 driven mainly
1
by booming LNG-related gas
pipeline construction. In the
electricity sector, a host of 0.5
new Powerlink distribution
and supply projects were a
key driver. The completion of 0
these major projects saw work
done decline sharply over Funded Credibly Proposed
2013/14 and 2014/15. Prospective Unlikely

During 2016/17 and 2017/18,
FIGURE 8: ARENA’S RELEASE OF $2 BILLION IN CORE GRANT FUNDING FOR
electricity, pipelines and RENEWABLE ENERGY PROJECTS3
telecoms major project work $bn
0.7
done jumped higher again,
driven by surging NBN 0.6
activity and a host of smaller
electricity generation projects 0.5
getting underway.
In 2018/19 non-water utility 0.4
major project works across

electricity, pipelines and 0.3
telecoms is estimated to
0.2
reach an impressive $2.5bn,
underwritten by no less than
0.1
30 separate renewable energy
generation projects valued
0.0
over the $50m threshold to FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21
be included in the pipeline, as Source: ARENA
well as: FIGURE 9: ELECTRICITY, PIPELINES AND TELECOMS MAJOR PROJECT WORK
DONE BY FUNDING STATUS
Transmission projects and
$Bn
substation upgrades,
3
A new gas fired power
station in the Lockyer Valley, 2.5
Pipelines for the Roma East
2.0
Gas Project; and
Over $800m in work
1.5
delivering Australia’s largest
public infrastructure project, 1.0
the National Broadband
Network (NBN). 0.5
0

Unlike the rail and water The winding down of works
sectors, however, the pipeline on the NBN rollout as it
for non-water utilities thins targets completion in 2020. DEFENCE
substantially beyond the While failures associated with Queensland is also benefiting
current financial year, with the planned use of acquired from the latest round of
total work done (funded and HFC cable networks saw the Commonwealth funded
unfunded) expected to nearly rollout partially stalled during defence initiatives. Projects
halve over the two years to 2018, NBN Co has adopted a include maintenance
2020/21 and remain at lower more construction-intensive infrastructure upgrades and
levels. The decline in funded solution – Fibre to the Curb the construction of the new
work is even sharper, falling (FTTC) – to service affected Growler Airborne Attack
from an estimated $2.1bn in HFC premises. Overall, Capability facilities at South
2018/19 to under $600m in construction activity related East Queensland’s RAAF Base
2021/22. to the NBN is anticipated to Amberley. Activity should also
remain high in 2018/19 but fall be boosted by the Australia
Key drivers of the decline
significantly in subsequent - Singapore Military training
include:
years as the NBN rollout initiative. The Initiative will
High levels of uncertainty
moves towards completion. provide increased access to
over national energy and
Australian military training
climate change policy, which, Following a surge of
areas for the Singapore
coupled with lower levels work related to the (now
Armed Forces, building on
of public funding through completed) North East Gas
Australia and Singapore’s
the Australian Renewable Connector, gas pipelines
existing Defence cooperation.
Energy Agency (ARENA) major project work has
Training facilities will be
after 2019/20, is constraining eased back in 2018/19, with
redeveloped at the Fitzroy’s
sustained investment in activity mostly supported by
Shoalwater Bay, which will first
renewable energy projects the Roma East Gas Project.
be remediated, as well as a
according to the Clean Energy The ongoing development
training facility further north in
Council.4 Queensland has of the coal seam gas fields
Townsville.
been the biggest winner to feed Queensland’s large
from the current boom in LNG processing facilities will Combined, the
renewable energy investment require continual upstream aforementioned projects
so far, with nearly $7bn worth investment in pipelines (and account for $810m in the
of investment in total creating other infrastructure) over the pipeline between 2018/19 and
4,500 direct jobs and adding long term. The Arrow Bowen 2022/23. On the downside,
5,640MW of new capacity.5 A Pipeline has been identified there may not be as much
lack of consensus on policy as a potential major project in engineering construction in
and ARENA funding between this space although it is listed the defence projects listed
the major parties at the as unlikely. in the pipeline than
Federal level is putting further anticipated here.
investment at risk.
QUEENSLAND HAS BEEN THE

BIGGEST WINNER FROM THE
CURRENT BOOM IN RENEWABLE
ENERGY INVESTMENT SO FAR,
WITH NEARLY $7BN WORTH OF
INVESTMENT IN TOTAL CREATING
4,500 DIRECT JOBS AND ADDING
5,640MW OF NEW CAPACITY
4 https://www.cleanenergycouncil.org.au/news/clean-energy-project-investment-doubles-in-2018-to-top-record-20-4
5 Ibid.

MINING FIGURE 10: DEFENCE MAJOR PROJECT WORK DONE BY FUNDING STATUS
$Bn
AND HEAVY 250
INDUSTRY
Mining and heavy industry
200
major project work simply
boomed between 2010/11
150
to 2012/13, increasing
collectively by over 200% to
reach an extraordinary peak 100
of $13.6bn. This represented

a second, LNG-focused, 50
phase of the resources boom

in Queensland, but there 0
were also substantial coal
developments during this time Funded Credibly Proposed
including the construction Prospective Unlikely
of the Broadmeadow, Caval Source: BIS Oxford Economics, QMCA and IAQ member knowledge
Ridge, Daunia and Grosvenor
coking coal mines, which also FIGURE 11: MINING AND HEAVY INDUSTRY MAJOR PROJECT WORK DONE BY
FUNDING STATUS
sustained a high level of major
$Bn
project work.
14
The completion of “once
12
in a generation” large LNG
projects in Queensland saw 10
mining and heavy industry
8
major project work collapse to
just $700m in 2016/17. 6
Mining and heavy industry 4

major project work has moved
2
to higher levels over 2017/18
and 2018/19, although in total 0
value terms it remains a mere FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23
shadow of the previous boom. Funded Credibly Proposed

In 2018/19, total major project
work eased to $1.3bn following
just over $2bn in activity the
previous year.
UNFUNDED WORK IN THE

PIPELINE FOR MINING AND
HEAVY INDUSTRY PROJECTS
RISES FROM 38% IN 2019/20
TO 75% BY 2022/23

The breakdown in work for Unfunded work in the pipeline Funded coal works are
2018/19 includes: for mining and heavy industry expected to remain steady
projects rises from 40% in through the forecast period,
$374m in gas-related
2019/20 to 75% by 2022/23 – with approximately $370m
works including $200m
the highest unfunded share of in work done per annum on
in upstream LNG gasfield
any engineering construction average over the five years
development, as well as
sector considered in this to 2022/23. Much of this is
work on the Gladstone LNG,
report. Given that Adani’s focused on the Carmichael
Roma East project and the
Carmichael mine in the Galilee development (assumed
Atlas Gas Processing Plant
Basin is now considered construction value of $900m)
and Pipeline;
funded in this report given from 2020/21, as well as the
$475m in works on major their announcement to finance Olive Downs ($300m) and
coal projects including a smaller scale development South Walker Creek ($100m)
Byerwen, the Overland internally – but is still subject developments.
Conveyor System at Caval to significant political and
By contrast, all other minerals
Ridge (now completed) and regulatory risks – the outlook
projects in the pipeline remain
Caval Ridge Expansion, the for the sector could be
unfunded – amounting to
Baralaba Coal Expansion, considered even more risky
approximately $367m per
Jellinbah and Kestral than the unfunded project
annum on average between
Expansion; and share suggests.
2018/19 and 2022/23 – and
$465m in other minerals On a funded basis, oil many of these are categorised
major project work, and gas and coal have as ‘unlikely’. Those that are not
mostly related to the (now a reasonably sustained considered unlikely include
completed) Amrun bauxite profile to 2022/23. Oil and Roseby Copper, Red Dome
development in the far gas projects are expected Mungana, Charters Towers
north of the state. to remain underpinned by and the North Queensland
The easing in mining and regular upstream gasfield Bio Energy Ethanol Plant.
heavy industry major development works to There are also seven unfunded
project work over 2018/19 feed the downstream LNG coal projects in the list
can be most attributed processing trains, with categorised as either credibly
to the completion or near the Arcadia Gas Project proposed or prospective
completion of several very providing a lift over 2019/20 which could be developed if
large projects in 2017/18 and 2020/21. Ongoing Australian dollar prices and
including Dugald River Zinc, development of Coal Seam global demand remains firm,
Capricorn Copper, Bauxite Gas (CSG) fields over the including Eagle Downs Coking
Hills and Phosphate Hills. operational life of LNG Coal, Maryborough, Peak
facilities will require continual Downs Expansion, Grosvenor
While the outlook for total
investment in related field Underground Stage 2, Styx,
(funded and unfunded) major
infrastructure, including roads, Middlemount Coking Coal
project work in mining and
pipelines and gas facilities, Stage 2 and Wilkie Creek.
heavy industry is positive – the
and water. Again, while not
value of work in the pipeline
as significant as downstream
rises to a peak of $3.1bn by
processing and infrastructure
2021/22 before easing slightly
projects, in aggregate they will
in 2022/23 – there remains
keep the volume of activity
considerable downside risk to
high compared to pre-boom
this profile.
times and offer a higher
share of work for domestic
contractors compared to that
which occurred on the LNG
trains themselves.

MAJOR PROJECT FIGURE 12: MAJOR PROJECT WORKFORCE PROFILE
WORKFORCE Persons
25000
OUTLOOK
Major project workforces have
20000
been rising over the past two
years in response to higher
levels of major project activity. 15000
In 2017/18, we estimate that

10000
major project activity catered 10000
for just under 14,000 direct

full time equivalent (FTE) roles 5000
5000
spread across construction

labour (approximately 0
0
11,000 FTE positions) and FY18 FY19 FY20 FY21 FY22 FY23
white-collar occupations Project management - Funded Labour - Funded
in construction project Project management - Unfunded Labour - Unfunded
management (approximately Source: BIS Oxford Economics, QMCA and IAQ member knowledge
3,000 FTE positions). The
bulk of these positions were in
telecommunications, followed There is significant variation The sectors with the
by electricity and roads. in the outlook between total strongest FTE workforce
(funded and unfunded) demand growth potential
Given differences in the
and funded major project to the 2021/22 peak are
typical capital and labour
workforce demand which is rail (+6,400 FTE positions
intensity of major projects
implied by the projections across labour and project
by sector – and the different
in this Report. While the management – most of which
projections for major project
funded workforce profile is is funded), water (+3,000 FTE
work by sector – growth
fairly benign – albeit with a positions), coal (+927 FTE
in major project workforce
sharp retreats in 2019/20 and positions), oil and gas (690
demand does not exactly
2022/23 – there is a strong FTE positions). By contrast,
match growth in major project
positive cycle which could the weaker major project
work done. However, as shown
play out over the next few outlook for roads, electricity
in Figure 12, the outlook for
years if all currently unfunded and telecommunications over
major project workforce
projects were to proceed. the same period sees their
demand is still similar to the
In particular, total major respective projected total
overall major projects outlook.
project workforce demand workforce demand shrink by
In particular, following a
is projected to rise 31% from 1,100, 2,900 and 2,000 FTE
local peak in 2018/19, major
around 15,600 FTE positions positions respectively.
project workforce demand
this financial year (2018/19)
is anticipated to weaken in In practice, the path for
to a potential peak of over
2019/20 before recovering major project work is likely
20,000 FTE positions. Given
in the subsequent two years, to lie between the totals
relatively tight conditions
with the next local peak to be for funded work (a likely
in the major project market
2021/22. minimum demand) and total
nationally,6 this means that
work (a potential maximum)
achieving the full major
although more projects could
project pipeline of work is
yet emerge to push workforce
likely to come with significant
demand higher.
workforce supply challenges.
6 S
ee, for example, https://www.rlb.com/en/news/2019-01-21-skilled-labour-shortages-across-australia-and-new-
zealand-create-further-cost-pressure/

REGIONAL BREAKDOWN
This year’s Report provides a more detailed
focus on the regional implications of the
Queensland Major Projects Pipeline.
One of the key findings of the For the 2019 MPPR we have Under such an approach, the
2018 MPPR was how disparate examined this issue more regional analysis is now more
the growth in major project closely by moving away detailed and includes the
work was by broad region, the from the existing “5 region” following areas:
high volatility and variability perspective in past MPPRs Greater Brisbane
of work in regions, and large to a more detailed and Sunshine Coast
differences in each region’s systematic regional analysis Gold Coast
share of funded and unfunded based on the ABS SA4
Toowoomba-Ipswich-Logan
work which adds to pipeline regions. While there are 19
Darling Downs and Maranoa
uncertainty. SA4 regions in Queensland,
Wide Bay
we have condensed the 5
Brisbane SA4s (East, West, Fitzroy
North, South and Inner City) Mackay-Isaac
with two Moreton Bay SA4s Townsville
(North and South) into a Cairns
Greater Brisbane category. Outback
We have also combined
In this Section, separate
Toowoomba with Ipswich
major project pipelines are
and Logan-Beaudesert. The
provided for these 11 diverse
Queensland Outback SA4
regions of the state, with
region combines Outback
commentary on the outlook
North, Outback South and
for each region. This regional
Far North Queensland –
analysis shows that there are
essentially an area that covers
significant regional winners
the bulk of non-coal base
and losers in terms of major
metals and minerals mining,
project activity over the next
and the townships of Mt Isa,
five years, with some regions,
Cloncurry and Weipa.
particularly, set for substantial
volatility in work. Industry and
government can use these
regional profiles to better
plan for the coming phase of
major project work – and also
INDUSTRY AND use the pipeline to see where
GOVERNMENT CAN any emerging latent industry
USE THESE REGIONAL capacity may be tapped.
PROFILES TO
BETTER PLAN FOR
THE COMING PHASE
OF MAJOR
PROJECT WORK

FIGURE 13: FUNDED MAJOR PROJECT WORK OVER THE NEXT 5 YEARS BY REGION7
CAIRNS $0.8 BN
TOWNSVILLE $1.2 BN
MACKAY – ISAAC $3.4 BN

OUTBACK
$0.5BN
FITZROY $2.7 BN
WIDE BAY $0.8 BN
SUNSHINE COAST $1.4 BN

DARLING DOWNS –
MARANOA $2.3 BN BRISBANE $6.7 BN
GOLD COAST $0.9 BN
IPSWICH,
TOOWOOMBA &
LOGAN $4.1 BN
7 Regions may not add to total Queensland due to Multi Regional Projects.

THERE ARE SIGNIFICANT
REGIONAL WINNERS AND
LOSERS IN TERMS OF MAJOR
PROJECT ACTIVITY OVER
NORTHERN GAS PIPELINE THE NEXT FIVE YEARS
KEY POINTS
As may be expected given the concentration Meanwhile, the fastest growing regions in
of the Queensland population in the south east terms of funded major project work are also
corner, the majority of funded major project located in South East Queensland, and include
work is located here over the next five years. Brisbane, Gold Coast, Sunshine Coast, Ipswich
Major projects in Brisbane, the Sunshine Coast, – Toowoomba – Logan, and Wide Bay. These
the Gold Coast and Ipswich-Toowoomba-Logan regions are all expected to see average levels
account for $13.2bn or 48% of total funded of funded activity over the next five years 150%
major project work. higher than that of the past five years.
Conversely, unfunded projects are more By contrast Darling Downs-Maranoa, Fitzroy,

concentrated in the central and northern and Outback regions are facing much lower
regions. Two thirds of the major project levels of funded major project work over
pipeline in the Outback region remains the next five years compared to the average
unfunded, along with 68% of the pipeline in level of activity between 2012/13 and 2017/18
Townsville, 51% in Cairns and around 47% in as previous large projects have moved to
both the Wide Bay and Mackay regions. completion.
DARLING DOWNS-MARANOA, FITZROY,

AND OUTBACK REGIONS ARE FACING
MUCH LOWER LEVELS OF FUNDED
MAJOR PROJECT WORK OVER THE
NEXT FIVE YEARS COMPARED TO
THE AVERAGE LEVEL OF ACTIVITY
BETWEEN 2012/13 AND 2017/18

OVERVIEW
By our analysis, funded major project work will
average around $5.5bn per annum over the next
5 years, lower than the estimated $7.7bn per
annum of the previous 5 years.
This spending is spread across Work in Darling Downs- The Gold Coast region is
11 diverse regions each with Maranoa will also be principally supported by
different drivers and outlooks. underpinned by work on the roads activity, as well as
Inland Rail project, as well a small number of water
Large transport projects,
as ongoing coal seam gas and sewerage projects, and
notably Cross River Rail
work. This region accounts comprises 3% ($903m)
and Inland Rail, underpin
for 8% ($2.3bn) of all of the funded pipeline to
activity in the more densely
funded work. 2022/23.
populated south east corner
of Queensland. These large The announcement of a Renewables also underpin
projects are fully funded smaller scale mine by Adani, work over the short run
and secure a significant as well as other resource, in the Townsville region,
level of major work into the roads and renewable but there is also support
medium term. However, the projects is supporting from a number of roads,
central and northern regions the Mackay-Isaac region. water and harbors projects.
have a significant number This region has the third Funded work in the
of unfunded projects in the strongest funded pipeline Townsville region makes up
pipeline. These projects in Queensland, valued at 4% ($1.2bn) of the funded
reflect an upside to activity $3.4bn, over the five years pipeline.
if they were to secure to 2022/23. Activity in the region of
funding. The Fitzroy region will be Cairns will be supported
Around 24% ($6.7bn) of the supported by Defence by a significant amount of
funded major project work spending in Shoalwater renewables work, notably
in the pipeline over the five Bay, and also water and the Kidston project, as well
years to 2022/23 will be renewables projects. While as roads activity. Altogether,
centred in Greater Brisbane, accounting for 10% ($2.7bn) the Cairns region has
with the major project of the funded pipeline, $770m in funded work in
driving this being Cross average activity over the the pipeline.
River Rail. five years to 2022/23 will The Outback region has
remain far lower than the only one funded project
The next biggest region in
previous five year average. in the pipeline, which was
term of major project work
is Ipswich-Toowoomba- Major project work in completed in 2018/19
Logan, which is responsible the Sunshine Coast and (Amrun), yet there is upside
for around 15% ($4.1bn) of Wide Bay regions will be here given that two thirds
funded work in the pipeline centred around roads and of the pipeline in this region
over the next five years. In renewables. Together, these represents resources-related
2018/19, the Toowoomba regions account for 8% (or projects which are currently
Range Second Crossing is $2.3bn) of the funded major unfunded.
the largest project here, but project pipeline.
from the early 2020s this
region is heavily supported
by work on the Inland Rail
project.

CHART 14: FUNDED MAJOR PROJECT WORK OVER THE NEXT 5 YEARS BY
REGION, $BILLION8
Outback
Cairns
Gold Coast
Wide Bay
Townsville
Sunshine Coast
Darling Downs – Maranoa
Fitzroy
Mackay
Ipswich – Toowoomba – Logan
Brisbane
0 1 2 3 4 5 6 7 8
$Bn
CHART 15: AVERAGE GROWTH IN MAJOR PROJECT WORK OVER THE NEXT
5 YEARS BY REGION9
Fitzroy
Outback
Darling Downs - Maranoa
All regions
Mackay
Townsville
Cairns
Ipswich - Toowomba - Logan
Sunshine Coast
Wide Bay
Brisbane
Gold Coast
-100% -50% 0% 50% 100% 150% 200% 250%
CHART 16: ANNUAL FUNDED MAJOR PROJECT WORK OVER THE NEXT
5 YEARS BY REGION8
$Bn
8
1
8 R
egions may not add to total
0 Queensland due to Multi Regional
AVG FY19 FY20 FY21 FY22 FY23 Projects.
FY14-FY18
9 Figures in this chart represent
Darling Downs -
the ratio of average funded work
Brisbane Fitzroy Mackay Ipswich -
Maranoa Toowomba - Logan over the next five years (2018/19
to 2022/23) compared to the
Sunshine Coast Gold Coast Townsville Outback Wide Bay Cairns estimated average of major project
work in the region between
Source: BIS Oxford Economics, QMCA and IAQ member knowledge 2012/13 and 2017/18 inclusive.

GOLD COAST
“With a fast growing population, major project activity over
the next five years is centred around water, sewerage and
transport infrastructure”
Outlook:
The Gold Coast region has
South Stradbroke one of the fastest growing
pipeline
populations in Queensland.
The State Government has
Gold Coast Light Rail
Stage 3 responded to this growth with
Pacific Motorway; investment in Gold Coast Light
Mudgeeraba to Varsity
Lakes Capacity Rail and with an expansion
Upgrade
of the region’s water and
Pacific Motorway;
Varsity Lakes to Tugan sewerage infrastructure. While
Stage 3 of the Gold Coast
Light Rail project remains
Population: 622,095 unfunded, major project
Population growth has averaged 2.3% per annum over the last activity in the region will be
10 years. supported by road works
along the Pacific Highway. At
Sectors Driving Growth: present there is an average of
Roads, water and sewerage. Funded work to average $181m per $181m of funded project work
annum over the next 5 years. per annum over the next five
Unfunded Share: Key Unfunded Projects: years, a 207% increase from
Jabiru Island Bridges (Hope the past five years average.
Island Road (Oxley Drive) road
31% duplication - stage 4, $136m),
Gold Coast Light Rail Stage 3
($500m).
Pipeline health
100%
CHART 18: FUNDED MAJOR PROJECT PIPELINE BY SECTOR & FUNDED AND UNFUNDED PIPELINE
$Bn $Bn
0.35 0.5
0.3
0.4
0.25
0.2 0.3
0.15
0.2
0.1
0.5 0.1
0.0
FY19 FY20 FY21 FY22 FY23 0.0
Average FY19 FY20 FY21 FY22 FY23
Mining and Roads and Bridges Rail and FY14–FY18
Industry Harbours
Non-Water Utilities Water and Sewerage Defence Total Funded Total Unfunded

IPSWICH - TOOWOOMBA - LOGAN
“Very large road and rail projects to support
activity in the region, but with a strong cycle”
Outlook:
Major project activity in the
Ipswich-Toowoomba-Logan
Somerset Dam Upgrade
region is expected to suffer
a setback over the next two
Toowoomba Range Second
Crossing years with the completion
Ipswich Motorway,
Rocklea to Darra of several significant
Stage 1 projects including the $1.6bn
Inland Mainline Toowoomba Second Range
Freight Upgrade
- Gowrie to Crossing, defence-related
Kagaru
works at RAAF Amberley
and a range of renewable
generation projects. Funded
Population: 854,939 major project work is
Population growth has averaged 2.2% per annum over the last anticipated to rise again from
10 years. 2020/21 as work on Inland Rail
ramps up – involving complex
Sectors Driving Growth:
engineering and tunnelling
Roads, rail, water and defence.
through the Toowoomba
Unfunded Share: Key Unfunded Projects: Ranges – as well as ongoing
Somerset Dam Upgrade, Pacific water and sewerage activity.
Motorway; Section (C) Daisy Work done is unlikely to
31% Hill to Logan Motorway at surpass 2018/19 levels,
Loganholme, Wyaralong Dam however, unless currently
WTP Stage 1. unfunded projects proceed.
Overall funded major project
Pipeline health work is set to average $817m
100% per annum, more than double
the previous five years.
$Bn
$Bn
1.5 1.5
1.2 1.2
0.9 0.9
0.6
0.6
0.3
0.3
0.0
FY19 FY20 FY21 FY22 FY23 0.0
Industry Harbours

GREATER BRISBANE
“Population growth has underpinned the need
for publicly funded transport infrastructure”
Outlook:
There is a strong pipeline
of secured publicly funded
infrastructure work for Greater
Brisbane New Parallel
Brisbane through the next five
Runway Phase years. Funded major project
Cross River Rail
work is expected to average
Brisbane Metro $1.3bn per annum during this
Busway System period, with the bulk of work
Pacific Motorway; expected to be done between
Eight Mile Plains 2020/21 and 2022/23. Cross
to Daisy Hill
River Rail is the key project
The Greater Brisbane region includes Brisbane underpinning future activity.
and the Moreton Bay statistical areas. While work on road projects
is expected to decline in the
Population: 1,764,220 short term as the Gateway
Population growth has averaged 1.9% per annum over the last Motorway Upgrade North
10 years. (GUN) and Kingsford Smith
Sectors Driving Growth: Drive Upgrade projects wind
Publicly funded transport infrastructure works, notably down, road activity will be
Cross River Rail. supported in the medium
term by works on the Pacific
Funded Share: Key Unfunded Projects: Motorway and Brisbane Metro.
There is no unfunded
work in the pipeline.
100%
Pipeline health
100%
$Bn $Bn
4 3
1 1
0
FY19 FY20 FY21 FY22 FY23
0
Mining and Roads and Bridges Rail and
Industry Harbours FY14–FY18

SUNSHINE COAST
“Transport investments to support a lift
in major project activity on the Sunshine Coast”
Outlook:
Strong population growth in
the region, as well as rising
Sunshine Coast Airport -
New East-West Runway tourism activity, is driving
Bruce Highway -
Maroochydore Road a wave of new investment
Interchange Upgrade
in transport infrastructure
Bruce Highway;
through the next five years
Caloundra Road to
Sunshine Motorway including upgrades to roads,
Bruce Highway; Pine rail and airports. Funded work
River to Caloundra
Interchange is on track to average close
Beerburrum to Nambour
Rail Upgrade to $290m per annum over
the next five years, more than
double the average of the
Population: 346,520 previous five years. Work is
Population growth has averaged 2.3% per annum over the last largely supported by projects
10 years. along the Bruce Highway,
but also by the $780m
Beerburrum to Nambour
Roads (including airport works) and rail.
rail upgrade.
Unfunded Share: Key Unfunded Projects:
Sunshine Coast Light Rail
($500m).
12%
Pipeline health
100%
$Bn $Bn
0.4 0.5
0.3 0.4
0.3
0.2
0.2
0.1
0.1
0.0
FY19 FY20 FY21 FY22 FY23
0.0
Harbours FY14–FY18
Industry

DARLING DOWNS – MARANOA
“Upstream sustaining works on gas projects and
the Inland Rail to underpin activity”
Outlook:
Work in this region was
underpinned by very large
coal seam gas projects in the
Arcadia Gas Project Surat Basin. Activity in 2018/19
is expected to be less than
GLNG Roma East Gas project
half the annual average level
Cooper’s Gap of work for the past five years,
Wind Farm
(438WM) with funded work expected to
Inland Mainline
Freight Upgrade; decline further in 2019/20 and
NSW/QLD Border 2020/21 as several renewable
to Gowrie
energy projects move towards
completion. While upstream
Population: 129,067 gas related activities should
Population growth has averaged 0.7% per annum over the last provide a floor to work, the
10 years. next phase of growth for the
region will likely be driven by
Sectors Driving Growth: the Inland Rail project – and
Gas developments, renewables and rail.
in particular, the substantial
Unfunded Share: Key Unfunded Projects: NSW/QLD Border to Gowrie
Western Surat Gas Project section. Activity could be
($1.5bn), Bulli Creek Solar Farm higher if currently unfunded
40% (>1000 MW, $1.5bn), projects in renewables, coal
New Acland Stage 3 Expansion and gas were to proceed.
($350m). Overall, funded major project
work is expected to average
Pipeline health $468m per annum through
20% the five years to 2022/23, well

below the resources boom
fueled average of the previous
five years.
$Bn $Bn
0.8 1.4
0.7 1.2
0.6
1.0
0.5
0.8
0.4
0.3 0.6
0.2 0.4
0.1
0.2
0.0
FY19 FY20 FY21 FY22 FY23 0.0
Industry

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CONTACT INFO
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INLAND RAIL – CONNECTING

SOUTH WEST QUEENSLAND
INLAND RAIL IS THE LARGEST FREIGHT RAIL

INFRASTRUCTURE PROJECT IN AUSTRALIA
AND ONE OF THE MOST SIGNIFICANT
INFRASTRUCTURE PROJECTS IN THE WORLD.
The Inland Rail Programme will involve around $6 billion
of capital investment in Queensland over the construction
period to 2025 and will boost Queensland’s Gross State HELIDON
GOWRIE CALVERT
Product by $7.274 billion, including $2.2 billion in the
TOOWOOMBA ACACIA RIDGE*
Darling Downs region. GRANDCHESTER KAGARU
Toowoomba is a key location on the Inland Rail route. BROMELTON
As work on Inland Rail progresses, ARTC will expand its YELARBON
regional presence and capacity. INGLEWOOD
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*Connects to existing rail
Inland Rail. MAJOR CITY TOWN INLAND RAIL ALIGNMENT line to Port of Brisbane
1800 732 761

inlandrailqld@artc.com.au
inlandrail.com.au
IR_806
WIDE BAY
“Road works to drive major project activity
across the next five years”
Outlook:
While large renewable energy
projects are driving the bulk
of major project activity in
Susan River 2018/19, large roads projects
Solar Farm
along the Bruce Highway
should see activity sustained
Rockhampton at relatively strong levels
Northern
Access Upgrade through the next five years.
Stage 1 There is potentially a large
Lake McDonald Dam Upgrade upside to major project work
Gympie Bypass
in the early 2020s if currently
unfunded projects across
Population: 297,153 roads, water and coal
Population growth has averaged 1.1% per annum over the last proceed simultaneously.
10 years.

Roads, defence, water and renewables.
Unfunded Share: Key Unfunded Projects:

Mooloolah Road Interchange
48% ($450m), Paradise Dam
Spillway Improvement Project
($200m), Aramara Solar
Farm (140 MW, $280m),
Maryborough coal ($300m).
Pipeline health
80%
$Bn $Bn
0.3 0.6
0.5
0.2 0.4
0.3
0.1
0.2
0.1
0.0
FY19 FY20 FY21 FY22 FY23 0.0
Industry Harbours

FITZROY
“Defence, water and renewables projects will underpin
major project activity looking forward, but to a
level well below that seen during the LNG-related
construction boom”
Outlook:
Singapore Force Posture The Fitzroy region boomed
Initiatives - Shoalwater Bay during the first half of this
Capricorn Highway
(Rockhampton to decade on the back of a
Gracemere) plethora of major projects
Lower Fitzroy River across LNG and coal. However,
Infrastructure
Project - New Weir the completion of these
at Rookwood on
the Fitzroy River projects has seen major
Stage 2
Atlas Gas
project activity fall by over
Processing Plant 85%. In 2018/19, funded major
and Pipeline
project activity is expected
to be $539m, driven mainly
by coal expansions, upstream
Population: 226,455 oil and gas works as well as
Population growth has averaged 0.9% per annum over the last renewable energy projects.
10 years. Funded work is expected to
oscillate around these levels
Sectors Driving Growth: for the next few years as the
Defence, water, renewables, mining and heavy industry.
completion of coal-related
Unfunded Share: Key Unfunded Projects: projects is balanced by new
initiatives across defence
Rockhampton Ring Road
(Shoalwater Bay) and water
41% ($950m), Port of Gladstone
- Second Shipping Lane
(Rookwood Weir). However,
there is a substantial volume
($280m), Wandoan South
of unfunded work (mostly
Solar Project (1000MW, $1.2bn),
in coal) which could provide
Columboolan Solar Farm
upside to this outlook.
(310MW, $300m).
Pipeline health
30%
$Bn $Bn
0.8 0.4
0.7
0.6 0.3
0.5
0.4
0.2
0.3
0.2
0.1
0.1
0.0
FY19 FY20 FY21 FY22 FY23 0.0
Industry Harbours

MACKAY – ISAAC
“‘Mini’ Adani coal project and other resources
developments should support activity”
Outlook:
Major project activity in
the Mackay-Isaac region is
traditionally supported by
Mackay Ring significant resources projects,
Road - Stage 1
Olive Downs
but has been supplemented
in recent years with a burst
Adani Coal Mine of renewable energy projects
Project
including the Daydream,
Hayman, Collinsville and
Moranbah solar farms.
Looking ahead, funded
work in the pipeline is now
Population: 174,034 heavily influenced by Adani’s
Population growth has averaged 0.7% per annum over the last announcement to construct a
10 years. ‘scaled down’ Carmichael coal
mine (10mtpa) and related
Sectors Driving Growth: infrastructure across rail, water
Resources, roads, rail, renewables.
and electricity transmission.
Unfunded Share: Key Unfunded Projects: There is potential upside to
major project activity in the
Shell / Arrow Water Treatment
early 2020s if coal prices are
47% Facilities Bowen ($250m),
sustained.
Urannah Dam ($250m), Arrow
Bowen Pipeline ($450m), Eagle
Downs coking coal ($1.25bn),
Peak Downs coal expansion
($460m).
Pipeline health
80%
$Bn $Bn
1.0 2.0
0.9
0.8
1.5
0.7
0.6
0.5
1.0
0.4
0.3
0.2 0.5
0.1
0.0
FY19 FY20 FY21 FY22 FY23 0.0
Industry

TOWNSVILLE
“Funded defence, water and renewables projects will
continue to support the Townsville region, however there
is a very large volume of unfunded work in the pipeline”
Outlook:
Major project work in 2018/19
has been underpinned by
nearly $300m in renewable
Townsville Port energy works, but funded
Expansion Project
pipeline activity eases in
Sarina to Cairns - coming years as many of
Haughton River &
Pink Lily Lagoon these projects wind down,
Upgrade despite strengthening roads,
Burdekin rail and water works. The key
Falls Dam -
Saddle Dam upside for the region remains
and Monolith
Improvement electricity, with $873m of the
$2.4bn in unfunded work in
Population: 238,369 the pipeline associated with
Population growth has averaged 1.2% per annum over the last further electricity projects,
10 years. including the credibly
proposed North Queensland
Sectors Driving Growth: Power Station. Apart from
Defence, water, renewables and harbours. electricity, there is also over
Unfunded Share: Key Unfunded Projects: $1.2bn in unfunded minerals
Sarina to Cairns - Saltwater and other heavy industry
Creek Upgrade ($103m), major project work in the
68% Townsville Ring Road Stage Townsville region over the next
5 ($180m), Townsville Port five years, as well as $180m
Expansion Project - Outer in unfunded road works
Harbour Expansion (Berths (Townsville Ring Road).
14+15, $200m).
Pipeline health
50%
$Bn $Bn
1.5
0.4
1.2
0.3
0.9
0.2
0.6
0.1
0.3
0.0
FY19 FY20 FY21 FY22 FY23 0.0
Industry

CAIRNS
“Roads activity will continue to support Cairns, but
this region has a very high proportion of unfunded work
in the pipeline”
Outlook:
Funded work is anticipated
to be strong in the Cairns
region in 2018/19 – well
Smithfield Transport above the average for the
Corridor Upgrade past five years – supported
Cairns
Southern by a myriad renewable
Access energy projects. However,
Corridor
Stage 3 & 4 major project activity in the
Kidston Energy Cairns region is easing right
Hub – Solar, Hydro
& Transmission through the next five years,
despite a pickup in funded
roads works, as the current
mix of renewables projects
Population: 253,202 wind down to completion.
Population growth has averaged 1.3% per annum over the last If the Kidston hydro project
10 years. and transmission link were to
proceed, this could result in
Sectors Driving Growth: a large upswing in regional
Roads and renewable electricity generation. activity in 2019/20 and into
2020/21. The upswing during
Unfunded Share: Key Unfunded Projects: this period could be even
Red Dome Mungana gold stronger if the $250m Nullinga
Dam were to go ahead.
51% ($330m), Kidston Stage 3
Wind Project ($250m), Kidston
Pumped Hydro Storage Project
($330m), North Queensland
Transmission Line ($150m).
Pipeline health
60%
$Bn $Bn
0.3 0.6
0.5
0.2 0.4
0.3
0.1
0.2
0.1
0.0
FY19 FY20 FY21 FY22 FY23 0.0
Industry Harbours

OUTBACK
“The resource construction boom in the Outback
region is now over and, after 2018/19, all of the
major project work in the pipeline is unfunded”
Outlook:
The Outback region covers
approximately two thirds of
Amrun (South of the Queensland land area.
Embly), Bauxite
Hills While it represents only a
very small fraction of the
Queensland population, it
Merlin Molybdenum-
Rhenium Phase 2 does encompass significant
Cannington minerals resources areas and
Expansion
Roseby Copper
waterways. After 2018/19,
(Little Eva) with the completion of the
Amrun bauxite project, there
are no funded major projects
in the pipeline, although there
Population: 81,753 are a significant number
Population growth has averaged -0.2% per annum over the last of unfunded prospective
10 years. resources projects across
Sectors Driving Growth: molybdenum, copper, silver-
Resources and water. lead-zinc, phosphate and
graphite. These projects need
Unfunded Share: Key Unfunded Projects: to clear hurdles regarding
Merlin Molybdenum-Rhenium financing and financial
Phase 2 ($345m), Cannington viability, remoteness, and the
66% Expansion ($400m), Roseby environment. However, while
Copper (Little Eva, $320m), some projects may proceed,
Ardmore Project -Phosphate it is highly unlikely that total
Project ($120m). activity over the next five
years will match that of the
Pipeline health previous five years, which
10% were driven by the very large
Dugald River zinc ($1.5bn)
and Amrun bauxite ($2.1bn
including port works) projects.
$Bn $Bn
0.5
0.5
0.4 0.4
0.3 0.3
0.2
0.2
0.1
0.1
0.0
FY19 FY20 FY21 FY22 FY23 0.0
Industry Harbours

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The Queensland economy is traditionally one of the
stronger state performers in Australia, but has been
impacted in recent years by weak investment growth.
While one of Australia’s key

‘resources’ states – and one
KEY POINTS
of the largest exporters of ECONOMIC GROWTH TO SLOW FROM WEAKER
coal (and now gas) – the state PUBLIC AND PRIVATE INVESTMENT
economy is actually highly Queensland’s economic growth (as measured by Gross State
diversified and increasingly Product or GSP) rose from 2.0% in 2016/17 to 3.4% in 2017/18,
linked into global trade after averaging just 2.1% growth since 2012/13. The pick-up
networks through tourism, in 2017/18 has been underpinned by strong growth in private
agriculture and education non-dwelling construction. Economic growth is expected
industries. to slow below 3% this financial year however given weaker
Overall, Queensland economic stimulus from public and private investment.
growth (as measured by GSP)
is expected to slow below
QUEENSLAND ECONOMY RECOVERING BUT
3% over the next two years, SUSTAINABLE GROWTH STILL YEARS AWAY
before stronger growth in
Queensland State Final Demand (SFD) grew to 3.6% in
investment and consumer
2017/18. SFD growth in 2017/18 has been driven by strong
spending pushes GSP higher
increases in private investment (up 5.2%) – in turn led by
in the early 2020s.
private non-dwelling construction (up 16%) and investment
in plant and equipment (up 7.6%) – as well as government
consumption expenditure (up 5.6%). Unlike private
investment, however, public investment fell 0.9% in 2017/18,
presenting a drag on state economic growth.
QUEENSLAND ECONOMIC PERFORMANCE

SYNCHRONISING WITH OTHER STATES
Queensland's economic growth is gradually syncing back in
line with other states following the large boom and bust in
public and private investment. While economic growth (GSP)
will be supported by growth in net exports, SFD is expected
to slow this financial year as weaker growth in investment,
wages and consumer spending take their toll, despite higher
population growth.
GLOBAL ECONOMY HAS BEEN POSITIVE

TO QUEENSLAND BUT IS SET TO SLOW
Global economic growth is estimated to have peaked in
calendar 2018, but will likely moderate in coming years,
presenting risks and challenges to the Queensland economy.
World Gross Domestic Product (GDP) growth accelerated
to 3.7% in calendar 2018. From here, the world economy will
begin to slow, with growth forecast to average 3.5% over the
next five years, with significant downside risks emerging.

KEY POINTS – FURTHER ANALYSIS
ECONOMIC GROWTH TO SLOW Private infrastructure construction (non-mining
FROM WEAKER PUBLIC AND engineering construction) has also lifted
PRIVATE INVESTMENT recently, boosted almost entirely by a near
Private residential investment fell 4.1% in 7-fold increase in electricity generation (mostly
2017/18, following a four year upswing, and renewables) construction activity. However, this
further modest falls in new dwelling building “renewables boom” is at risk of reversing this
activity are likely over the next two years financial year and next as work on a range of
due to oversupply (particularly in the unit renewables projects winds down.
segment), with higher population growth
The trend decline in new public investment
helping to limit the housing decline. The falls
in Queensland has stabilised somewhat over
in new dwelling buildings work will be partially
the past two years, after falling by a third over
offset by higher alterations and additions
the previous six years, although new public
activity. The reduced drag from falling mining
investment did fall slightly again in 2017/18.
investment has helped the turnaround in state
Publicly funded engineering construction
economic growth. Mining investment is now
actually rose in 2017/18 – led by roads and
rising, led by increases in mining equipment
water projects – as did public non-residential
purchases and exploration, with a recovery
building, but was offset by lower public
in mining-related engineering construction
investment in equipment and intangibles.
expected to get underway from 2020/21.
Public investment is expected to edge higher
However, after resource exports made a
this financial year and next, led by roads,
significant contribution to GSP over recent
rail, water and sewerage, electricity and
years (and helped keep economic growth
non-dwelling building projects, although the
positive), export growth has stalled as the
completion of the NBN will mute the overall
Gladstone LNG plants have finished ramping
improvement.
up and as some export gas has been diverted
back to the domestic market. There have After strong export growth over the four years
also been some disruptions to coal and other to 2016/17, export growth stalled in 2017/18.
resource exports. However, the Australian dollar is expected
to remain in a competitive band, boosting
Non-mining business investment is now
the tradeable sectors of agriculture, tourism
recovering, particularly in the trade-exposed
(including parts of retail trade), manufacturing
sectors (which are being boosted by the more
and mining, with export growth expected to
competitive Australian dollar). Equipment
recover over the medium term.
and intellectual property products investment
is expected to rise further over the next two
years, before strengthening again through the
early 2020s. Private non-residential building
rebounded in 2017/18 and is forecast to exhibit
robust increases over the next two years,
before easing.

STATE FINAL DEMAND (SFD)
IS EXPECTED TO SLOW THIS
FINANCIAL YEAR AS WEAKER
GROWTH IN INVESTMENT, WAGES
AND CONSUMER SPENDING TAKE
THEIR TOLL, DESPITE HIGHER
POPULATION GROWTH
BRISBANE AIRPORT – INTERNATIONAL TERMINAL
QUEENSLAND Reflecting the economic As in other states, investment

ECONOMY RECOVERING improvement, employment cycles are not synchronised
BUT SUSTAINABLE growth in Queensland across the different sectors,
GROWTH STILL strengthened through 2017/18. while there will be a mixture of
YEARS AWAY However, much of the growth drivers and drags on growth
The Queensland economy, came through the first six over the next 2 years
as measured by State Final months of 2017/18, with
Population growth is now re-
Demand (SFD), has staged employment growth falling
accelerating toward 1.8%, after
a recovery over the last back near zero in the first half
slower population growth
two years, turning from of calendar 2018, and well
over recent years (with a low
contraction in 2014/15 and below the national pace of
of 1.2% in 2014/15) limited
2015/16 to solid growth of growth. At 6.4% Queensland’s
spending growth. Accelerating
3.6% in 2017/18. That’s ahead unemployment rate remains
population growth is being
of the pace of domestic well above the national
driven by higher interstate
demand growth for Australia average (5.1%) at the end of
and international migration
of 3.3%. Gross State Product 2018.
inflows (see Figure 29 on
(GSP) growth also rose to
While the Queensland page opposite). The rising
3.4%, bettering national
economy is now improving, population will provide
GDP growth of 2.9%, albeit
it will still be another 3 years some support to aggregate
Queensland’s growth was
before stronger, sustained household spending,
coming off a low base.
growth returns. Indeed, although weak wages and
growth in SFD is forecast to slower employment growth
slow to an average of 2.6% will continue to constrain
over the next two years. consumer spending over the
next two years.

FIGURE 28: QUEENSLAND ECONOMY – COMPONENTS OF STATE FINAL Private residential investment
DEMAND
fell 4.1% in 2017/18, following a
$Bn
400 Forecast four year upswing, and further
modest falls in new dwelling
350
building activity are likely
300 over the next two years due
250 to oversupply (particularly in
the unit segment), with higher
200
population growth helping to
150 limit the housing decline. The
falls in new dwelling buildings
100
work will be partially offset
50 by higher alterations and
0 additions activity. The reduced
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21
drag from falling mining
Private Consumption Government Consumption investment has helped the
Public Investment Private Investment turnaround in state economic
Source: BBIS Oxford Economics, ABS data growth. Mining investment is
FIGURE 29: QUEENSLAND ANNUAL POPULATION INCREASE BY SOURCE, now rising, led by increases in
THOUSANDS OF PERSONS
mining equipment purchases
thosands
120 Forecast and exploration, with a
recovery in mining-related
100 engineering construction
expected to get underway
80 from 2020/21. However, after
resource exports made a
60
significant contribution to
GSP over recent years (and
helped keep economic growth
40
positive), export growth has
stalled as the Gladstone LNG
20
plants have finished ramping
up and as some export gas
0
2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 has been diverted back to the
Natural Increase Overseas Migration Interstate Migration domestic market. There have
Source: BBIS Oxford Economics, ABS data also been some disruptions
FIGURE 30: GROWTH IN STATE FINAL DEMAND (STATES) AND GROSS to coal and other resource
NATIONAL EXPENDITURE (AUSTRALIA), 2001-2021, ANNUAL PERCENT
CHANGE exports. Non-mining business
20
Forecast investment is now recovering,
particularly in the trade-
15
exposed sectors (which are
10
being boosted by the more
competitive Australian dollar).
5 Equipment and intellectual
property products investment
0 is expected to rise further over
the next two years, before
-5 strengthening again through
the early 2020s. Private non-
-10
residential building rebounded
2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021
in 2017/18 and is forecast to
Queensland New South Wales Victoria exhibit robust increases over
South Australia Western Australia Australia the next two years, before
Source: BIS Oxford Economics, ABS data
easing.

Private infrastructure QUEENSLAND Growth in New South Wales
construction (non-mining ECONOMIC and Victoria has been
engineering construction) PERFORMANCE underpinned by strong levels
has also lifted recently, SYNCHRONISING of migration and continued
boosted almost entirely by WITH OTHER STATES buoyancy in construction. But
a near 7-fold increase in The economic performance of these drivers will ease back in
electricity generation (mostly Australia’s states is becoming coming years, and growth is
renewables) construction increasingly synchronised. The expected to decelerate from
activity. However, this mining states – Queensland 2017/18 levels. Queensland’s
“renewables boom” is at risk and Western Australia – economy is also expected
of reversing this financial year have borne the worst of the to decelerate in line with
and next as work on a range investment downturn, and all investment growth, despite
of renewables projects winds states are benefitting from rising migration and net
down. the lower Australian dollar exports.
(via trade exposed service
The trend decline in new Victoria was the strongest
and goods industries) and the
public investment in performing large state in
improvement in the broader
Queensland has stabilised 2017/18, benefiting from
domestic non-mining sector.
somewhat over the past strong population growth
two years, after falling by Western Australia will be and dwelling construction,
a third over the previous propped up by the ramp up in as well as strength in a range
six years, although new LNG production, while growth of services and construction
public investment did fall in South Australia is expected related to public infrastructure
slightly again in 2017/18. to remain modest. Momentum investment. However, the
Publicly funded engineering is also set to moderate slightly state’s economic performance
construction actually rose in in the Australian Capital will moderate as migration
2017/18 – led by roads and Territory after their recent and construction fall back.
water projects – as did public strong performance.
Similarly, New South Wales
non-residential building, but
Figure 30 (previous page) was an outperforming state,
was offset by lower public
shows how regional economic but momentum has slowed
investment in equipment and
performance shifted to service recently - the state lagged
intangibles. Public investment
the mining-resource rich the national average in
is expected to edge higher
states of Western Australia 2017/18. Growth will continue
this financial year and next,
and Queensland during the to decelerate in line with
led by roads, rail, water and
two phases of the resources the downturn in residential
sewerage, electricity and non-
investment boom (2003- construction and lower levels
dwelling building projects,
08, and again in 2010-13), of migration.
although the completion of
and allowed these states
the NBN will mute the overall
to capitalise on any latent
improvement.
construction capacity from
After strong export growth other jurisdictions.
over the four years to
2016/17, export growth stalled
in 2017/18. However, the
Australian dollar is expected
to remain in a competitive
band, boosting the tradeable
sectors of agriculture, tourism
(including parts of retail
trade), manufacturing and
mining, with export growth
expected to recover over the
medium term.

FIGURE 31: MAJOR TRANSPORT PROJECTS OVER $2BN, AUSTRALIA, VALUE OF WORK DONE
16.0 Forecast South Australia

North-South Corridor
Western Australia
Forrestfield Airport Rail Link & Metronet
14.0 Hancock Roy Hill (Pilbara)
Fortescue Metal Group (Pilbara)
BHP Billiton (Pilbara)
Rio Tinto (Pilbara)
Victoria
12.0
Melbourne Aiport Link
Inland Rail (VIC component)
Melbourne Metro Rail
Level Crossing Removal Program
10.0 Regional Rail Link
North East Link
West Gate Tunnel
EastLink (Mitcham-Frankston Tollway)
8.0 Queensland
Acacia Ridge to Port of Brisbane
Cross River Rail
Inland Rail (QLD component)
6.0 Warrego Highway
Gateway Motorway
Bruce Highway Upgrade
TransApex
4.0 Ipswich Motorway
New South Wales
Inland Rail (NSW component)
Sydney Metro West
Sydney Metro City & Southwest
2.0
Sydney Metro Northwest
F6 Extension
Western Harbour Tunnel & Beaches Link
Western Sydney Infrastructure Plan
0.0 NorthConnex
2006 2009 2012 2015 2018 2021 2024 2027 WestConnex
Pacific Highway Upgrade
Source: BIS Oxford Economics
On top of the east coast As population growth and However, slowing dwelling
building boom, however, the housing activity returned to building and consumer
state governments in Victoria these states post resources spending, along with generally
and New South Wales were boom, the resultant surge in weaker investment growth is
already planning for “catch- property revenues augmented expected to see GNE growth
up” infrastructure investment the finance from the asset weaken in coming years.
that had been delayed leases, turbo-charging a
However, over the last few
through the resources boom long – and likely sustained –
years, this situation has
years – including port and infrastructure cycle.
reversed. Resources and skills
electricity long term asset
Overall, Australian Gross have progressively flowed
leases that would provide
National Expenditure (or into the New South Wales and
critical finance for large,
GNE, the national corollary Victorian economies to service
generational infrastructure
of SFD) accelerated to 3.3% the growing infrastructure and
investments.
in 2017/18, led mainly by a building boom taking place
pickup in private investment there.
(particularly non-dwelling
construction and purchases of
plant and equipment).

LAKE MANCHESTER DAM UPGRADE
TRANSPORT Victoria Queensland

INFRASTRUCTURE The situation is similar with Transport infrastructure
New South Wales transport infrastructure construction has risen only
construction already having 37% from $4.1bn in 2015/16 to
Transport infrastructure
risen 107% since the 2013/14 $5.6bn in 2017/18. However,
construction surged to $11.3bn
trough (to $7.3bn) and, with further large projects
in 2017/18, already up 70%
with new investments in the taking place across the Bruce
from the 2014/15 trough.
Melbourne Metro as well as Highway, Pacific Motorway,
Given new projects such as
major road projects such as Inland Rail and Cross River
Inland Rail, Western Sydney
the North East Link, activity Rail projects, this figure is
Airport, Sydney Metro Stage
will be sustained at a high expected to rise above $7bn,
2 City and Southwest, Sydney
level, before edging higher albeit not until the early
Metro West and the Western
again in the early 2020s. 2020s.
Harbour Tunnel and Beaches
Link, BIS Oxford Economics
is forecasting New South
Wales transport infrastructure
investment to surpass $14bn
in 2022/23 alone.

FIGURE 32: NET ANNUAL CHANGE IN INVESTMENT AND STATE FINAL The most significant
DEMAND, QUEENSLAND
A%Ch $Bn infrastructure investments
10
30 undertaken by New
8 South Wales and Victoria
22
have focused on urban
6
solutions to unlock greater
14
4 efficiencies and productivity
2
6 in Sydney and Melbourne,
mirroring concerns from
0 -2
Infrastructure Australia that
-2 -10
more investment here was
required to avoid an emerging
-4
-18 infrastructure gap. Combined
with the Commonwealth
2001 2003 2005 2007 2009 2011 2013 2015 2017 Government’s own large
Change in Public Investment (RHS Change in private Investment (RHS) Infrastructure Investment
SFD A%Ch (LHS) Program (IIP) and its interest
Source: BBIS Oxford Economics, ABS data in revolutionising east coast
FIGURE 33: WORLD ECONOMIC GROWTH, ANNUAL PERCENT CHANGE freight links (through the
Calendar year, real $10bn+ Inland Rail project) as
Year Ended Euro Developing World well as another direct equity
December GDP US Japan area China India Asia GDP investment in building the
2009 -3.5 -2.8 -5.4 -4.3 9.5 5.1 4.4 -0.5 Western Sydney Airport, the
2010 3.0 2.5 4.2 2.1 10.6 10.9 4.8 5.3 infrastructure construction
2011 2.0 1.6 -0.1 1.7 9.5 6.9 4.3 4.1 boom along Australia’s east
2012 1.4 2.2 1.5 -0.4 7.8 5.5 4.2 3.3 coast is unlikely to subside
2013 1.5 1.7 2.0 0.3 7.8 6.2 3.8 3.4 anytime soon, and dominates
2014 2.2 2.6 0.3 1.8 7.3 7.1 4.0 3.5 the outlook for major
2015 2.5 2.9 1.4 2.2 6.9 7.5 4.5 3.2 transport project construction
2016 1.8 1.6 0.6 1.9 6.7 7.9 6.3 3.3 nationally as highlighted in
2017 2.5 2.3 1.8 2.4 6.9 6.2 4.2 3.7 Figure 31 (previous page).
Forecast Indeed, the peak of the “major
2018 2.5 2.8 1.7 2.2 6.4 7.5 4.1 3.9
projects” transport investment
2019 2.0 2.0 0.9 1.8 6.0 7.0 4.0 3.6
cycle across road and rail
2020 1.6 1.5 0.0 1.6 5.7 6.9 4.0 3.5
infrastructure is not expected
until the early to mid-2020s
2021 1.6 1.5 0.9 1.5 5.4 6.6 3.9 3.4
based on current projections,
2022 1.6 1.5 0.9 1.4 5.2 6.4 3.8 3.3
and the perceived ‘slump’
2023 1.7 1.9 0.8 1.2 5.0 6.4 5.0 3.4
in investment post 2023/24
Average Growth Rates
once current projects run their
2004-2008 2.8 2.4 1.2 2.1 11.6 8.5 9.5 4.8
course may not eventuate if
2009-2013 2.0 1.1 0.4 -0.4 9.0 6.9 7.6 3.1
these states continue to use
2014-2018 2.1 2.4 1.0 1.9 6.9 7.2 6.3 3.5
asset recycling strategies,
Forecast
debt finance, or private
2019-2023 1.8 2.0 0.8 1.4 5.5 6.8 5.3 3.4
public partnerships to extend
2024-2028 1.5 1.9 0.6 1.0 4.6 6.1 4.6 3.2
infrastructure investment
further. Figure 31, for instance,
does not include potential rail
links to the Western Sydney
Airport, nor Victoria’s recent
announcements of a potential
$30bn+ development of an
outer suburban rail network.

With stronger state finances, Global economic growth is On the other hand, solid
much of the infrastructure estimated to have peaked growth is expected to
investment boom in New at 3.7% in calendar 2018 continue in India and most
South Wales and Victoria is (GDP, US$ prices, PPP of east Asia (excluding China
being publicly funded, albeit exchange rate), as developed and Japan), which augers
with plans to ‘recycle’ funds economies move towards well for Queensland exports.
from long term asset leases. full employment and China Nevertheless, rising US
By contrast, Queensland continues its steady transition interest rates will pose a risk
public investment has actually to a slower, more sustainable for a number of emerging
fallen in real terms for 7 of the growth trajectory. Concerns economies given their high
past 8 years, with only a 2.6% over protectionism, a weak levels of foreign debt and the
increase in 2016/17 breaking Chinese yuan, rising US depreciating impact of US rate
a sequence of falls since interest rates, economic rises on their currencies.
2010/11. A 0.9% fall in public instability in emerging markets
Of more concern is rising
investment in 2017/18 sees as monetary settings revert to
protectionism in the form
activity a cumulative more ‘normal’ levels, and the
of tariffs imposed by the US
$7.2bn (or 31%) below the very growing risk of a hard Brexit
and reciprocal responses
high 2009/10 peak, but still present key economic risks in
from China and Europe.
well above the levels of (likely the short to medium term.
Although our current view is
under) investment during the
The US economy is currently that the trade war itself will
1990s and early 2000s.
growing at its fastest pace in have a relatively small impact
GLOBAL ECONOMY four years, but with capacity on overall global growth,
HAS BEEN POSITIVE constraints starting to bite, downside risks have increased.
TO QUEENSLAND BUT growth is expected to slow Much of the risks relate to
IS SET TO SLOW as the fiscal boost from tax uncertainty and their effects
The Australian and cuts dissipates and US interest on business and consumer
Queensland economies have rates rise. Chinese growth will confidence. Already there
been supported by a relatively continue to decelerate as the has been a correction to
positive global economy economy proceeds with its commodity prices, and we
in calendar 2017 and 2018. own structural transformation expect trade uncertainties to
Despite a number of risk toward domestic led growth. weigh on prices for the next
factors, global economic Momentum is also expected 1-2 years. However, by the
growth over calendar 2018 will to ease in Japan and Europe early 2020s, the tightening
likely have been the strongest as they return to supply-demand balance in
since 2010. However, recent full employment. a number of commodity
quarters of growth have been markets is expected to initiate
less spectacular and growth a recovery in prices, which will
is expected to slow further likely fuel the next round of
in coming years, presenting mining investment.
challenges for resources-
heavy trade-exposed
economies such
as Queensland.
THE RISK OF A SHARPER

SLOWDOWN IN CHINESE
GROWTH (AND DEMAND FOR
QUEENSLAND COMMODITIES)
WOULD PUT THE STATE IN A
MORE VULNERABLE POSITION

WHILE THE QUEENSLAND
ECONOMY IS NOW IMPROVING,
IT WILL STILL BE ANOTHER
THREE YEARS BEFORE
STRONGER, SUSTAINED
SWING STAGE GANTRY GROWTH RETURNS
KEY RISKS TO THE Escalation of the These actions have been

ECONOMIC OUTLOOK current trade war followed by retaliatory
The authorities are committed The most obvious external measures from China and
to maintaining growth around downside risk to Queensland’s Europe. With US President
6% per annum over the near economic outlook relates to Donald Trump threatening
term. Over the medium term, a further escalation of the to impose tariffs on more
we expect the government to current trade war between Chinese imports into the
continue to gradually liberalise the US and China and Europe US, the downside risks have
the financial system and (and some other countries certainly increased. Analysis
broader economy, which that run a trade surplus with by Oxford Economics
will allow balance sheets to the US). So far the US has suggests that while the direct
adjust and for financial risks imposed punitive tariffs of impact on growth is relatively
to ease back. 10% to 25% on a wide range of small the indirect effects can
items, with some higher tariffs be material. There is a risk
on specific items. that uncertainty around how
far the shift in US tariff policy
will go will weigh on business
and consumer confidence and
spending plans.

Australia has been a major The most likely trigger for While house prices are
beneficiary of the significant a downturn is a correction expected to achieve a soft
growth in trade between in financial and/or property landing, there is increasing
China and the US, and indeed, markets on the mainland, risk of a more substantial
China and the rest of the which could be set off by an adjustment. BIS Oxford
world. If Trump significantly aggressive tightening of credit Economics and the RBA still
upped the ante (including lending by the authorities. regards this risk as being
one of his earlier threats to However, this scenario is low, because in aggregate,
impose 45% tariffs on China), unlikely. household debt repayments
the resulting retaliatory as a proportion of household
action would lead to an Property markets non- income are not at critically
all-out trade war, with BIS mining investment and high levels. Indeed, many
upcoming election key
Oxford Economics modelling households are ahead in terms
domestic risks
estimating this would cut of mortgage repayments.
between 0.5% and 1% off Domestic risks are centred
Australia’s economic growth, on property markets, the
with potentially even worse pace of growth in non-
outcomes for Queensland, mining investment and the
given its close trade links with consequences of the next
the Asian region. Federal election (due during
or before May 2019).
The risk of a sharper
slowdown in Chinese growth
(and demand for Queensland THE ECONOMIC
commodities) would put the
state in a more vulnerable
PERFORMANCE
position – China accounts OF AUSTRALIA’S
for over 30% of Australia’s STATES IS BECOMING
exports, and sits at the heart INCREASINGLY
of East Asian supply chains. SYNCHRONISED

Nevertheless, the housing However, we expect relatively Meanwhile, the related
market was due for a high income levels to abandonment of a coherent,
correction and if, as expected, continue to attract migrants. market-based carbon-
this correction is ‘mild’, it Furthermore, as the positive reduction scheme in 2014,
reduces the risk of high benefits of the terms of trade and replacement with an
debt in the medium term. and increased labour supply inferior scheme, is hampering
Queensland overall remains of the past decade or two efforts to reduce Australia’s
better placed than New South start to wane, we expect both greenhouse gas emissions and
Wales or Victoria given it has governments and businesses target larger reductions – with
already seen a substantial to make a more concerted Australia’s current target of
correction in dwelling building effort to invest to sustain 26-28% below 2005 levels by
activity (particularly in the growth in productivity in the 2030 unlikely to be achieved.
inner-city units segment) long run. This means the economy
and, with stronger population Inconsistent energy and will – at some stage over the
growth, will likely outperform climate change policy medium to longer term – need
other east coast states in to undertake some harder
terms of house price growth. A lack of clarity and structural adjustments with
consistency in Australia’s larger negative economic
There is also an upside energy and climate change impacts on potential growth,
risk that non-mining policies represents both a in order to reduce emissions.
investment comes through major short term risk and
sooner and stronger than longer term threat to the The beneficial flipside to the
anticipated, possibly via the Queensland economy, but development of a coherent
tradeables sectors ramping this may become clearer after energy and climate change
up investment faster than the next Federal election, policy – as well as further
we expect, which may then given very different policy funding for clean energy – is
flow quickly onto other stances held by both major that it would likely provide
industries. Upside growth parties. Policy failures in the certainty needed to
potential could also come energy have seen substantial stimulate further investment in
from a marked acceleration in rises in gas and electricity renewable energy generation
wages growth, which would prices over the past two projects. As outlined in this
underpin stronger household years, which have stopped Report, renewable energy
consumption expenditure. energy-intensive investments generation and transmission
proceeding and hampered works has been a major driver
Longer term, the main risk to
the competitiveness of of growth in privately funded
Queensland – and Australia’s
manufacturers – with some engineering construction
growth prospects – relate
major businesses threatened in Queensland recently,
to the fundamental drivers
with closure and/or relocation with electricity engineering
of growth – lower trend
overseas. Once lost, these construction activity rising
population growth and
industries are unlikely five-fold to $1.85bn in 2017/18.
declining labour
productivity growth. to return.

CBUS
A Role for Superannuation Funds in Financing
Major Queensland Projects
Leveraging additional private sector investment is Callebaut notes Cbus is invested in major Queensland
a key objective of public sector policy to support projects through IFM’s Australian Infrastructure Fund,
the development of major Queensland projects, which acquired shares in Brisbane Airport in 1997 and
which will ultimately boost economic growth in the the Port of Brisbane in 2010. Cbus has also developed
State. Superannuation funds are a natural investor in commercial and residential projects in Queensland,
infrastructure assets, which provide long-term, stable including 1 William Street Brisbane, through its wholly-
cashflows that align with the long timeframes of members owned subsidiary Cbus Property.
through their accumulation and retirement phases.
In addition, Cbus has an increasing allocation to both
Superannuation investment has historically focused on
greenfield and brownfield direct investments as part of
“brownfield”, established operating assets that generate
its Next Generation Investment Framework. In 2018, Cbus
proven cashflows. However, superannuation funds have
directly invested alongside the Dutch Infrastructure Fund
also invested in Australian “greenfield” new development
and Synergy in a portfolio of wind and solar renewable
projects through debt and equity investments with fund
generation assets in Western Australia known as Bright
managers and there is an increasing focus from a number
Energy Investments, as well as taking a stake in UK ports
of larger funds on direct investments.
group Forth Ports. Superannuation funds like Cbus are
Greenfield investments in suitable projects can improve actively monitoring the pipeline of major public private
diversification, offer an attractive risk return profile and partnership and other key projects in Queensland.
provide access to alternative revenue sources such as
There are a number of measures that Callebaut believes
availability payments from highly rated Governments.
governments have been and can continue to implement
These complement traditional GDP-linked assets such
to provide greater certainty to superannuation funds and
as ports and airports. According to Diana Callebaut,
other private sector investors. These include developing
Head of Infrastructure at Cbus “For an industry super
a committed and steady pipeline of investable projects,
fund like Cbus, investing in greenfield assets also has
bid processes that are as efficient as possible to minimise
a strong alignment with our membership base in the
costs, ensuring appropriate risk allocation between the
building and construction industry. From the perspective
public and private sectors and providing clear direction
of governments as procuring authorities for new
on key policy issues such as energy policy. For their part,
projects, Australian superannuation funds are responsible
superannuation funds can continue to maintain discipline
custodians of infrastructure assets, with returns funding
and rigour in evaluating opportunities, invest in specialist
the retirement savings of members.”
teams, continue to innovate and consider other alternative
As an example, Cbus has total funds under management procurement processes such as unsolicited proposals
of circa $46.5 billion at 31 December 2018, with circa $5.3 where it makes economic sense.
billion invested in diversified infrastructure assets. The
majority of the infrastructure portfolio is invested through
This information has been provided by United Super Pty Ltd
fund managers, IFM Investors and Morrison and Co, and (ABN 46 006 261 623 AFSL 233792) as trustee for Cbus (ABN 75
associated co-investments. 493 363 262) and contains general information. It doesn’t take
into account your specific needs, so you should look at your own
financial position, objectives and needs before making any financial
decisions. Read the relevant Cbus Product Disclosure Statement
and related documents to decide whether Cbus is right for you.
Call 1300 361 784 or visit www.cbussuper.com.au for a copy.
IMPLICATIONS FOR THE
CONSTRUCTION SECTOR
Booms and busts in investment cycles – across mining,
economic and social infrastructure, and housing – have had
a profound impact on Queensland’s construction industry.
Since the mid-2000s,

measured construction
KEY IMPLICATIONS
activity in Queensland has CONSTRUCTION ACTIVITY
been dominated by the Has risen a modest 6.7% over the past two years, following
tremendous cycle in resources a 40% collapse over 2014/15 and 2015/16.
investment, primarily coal
From a peak of $65.3bn in 2013/14, annual construction work
and LNG related projects.
done (encompassing residential building, non-residential
Construction activity tripled
building and engineering construction) now sits at just
between 2002 and 2014
over $42bn.
before collapsing 40% in
Much of the boom and bust in construction activity in
subsequent years.
Queensland was driven by the engineering construction
The volatility in work, high segment (including Major Projects).
competition for resources, Total engineering construction work done fell from an official
and sharp variations in peak of $47bn in 2013/14 to $18.6bn in 2015/16, but has
costs and prices continue to risen marginally to $21.4bn in 2017/18 on the back of roads,
challenge the sustainability electricity, telecommunications (NBN) and mining projects.
of the construction industry
in Queensland. While total
construction activity in
Queensland is likely to
CONSTRUCTION EMPLOYMENT
stabilise around current levels
WAGES AND PRODUCTIVITY
Employment growth was strong during the first phase of the
for the next few years, this
resources boom, but did not rise significantly again post GFC
masks wide variations by
during the more LNG-intensive boom phase.
construction segment – across
housing, non-residential There has been a solid construction employment recovery
building and engineering through 2017/18, although the modest outlook for construction
construction – as well as work from here remains a key risk.
within the engineering
construction segment itself.
Construction costs, which had CONSTRUCTION COSTS
flatlined in the wake of the The boom in construction activity in Queensland over the past
investment bust – are growing decade produced large increases in construction costs.
at the fastest pace for several Overall construction costs have not fallen substantially since
years, with sustained, high the boom and are again rising strongly, placing pressure on
levels of construction activity industry margins.
in New South Wales and
Victoria likely to continue to
provide resourcing challenges
for Queensland projects.

KEY IMPLICATIONS – FURTHER ANALYSIS
CONSTRUCTION Over 2014/15 and 2015/16, Since the end of the resources
ACTIVITY however, the value of total boom, Queensland’s
Strong government revenues construction work done fell construction market has
from the boom and surging by 40% as several multi-billion been overtaken by both New
population growth drove dollar LNG projects reached South Wales and Victoria,
a twin cycle in public or neared completion and with activity in those states
investment, particularly investment in coal projects supported by a strong
where infrastructure gaps continued to decline sharply. turnaround in economic and
become apparent in transport population growth driving
Over the past two years,
(roads and ports particularly, surging social and economic
total construction activity
but also rail), utilities and infrastructure construction.
has more or less stabilised in
social and institutional non- In turn, skills and other
Queensland, with work done
residential building (education construction resources such
settling at just over $40bn.
and health). While public as plant and equipment
However, cycles continue to
investment was sustained have moved from the former
play out under this steady
early on in the subsequent resource boom states into
exterior, with residential
resources investment bust, the new growth states.
building activity falling 6.4%
sharply falling revenues While New South Wales and
in 2017/18, offset by a pickup
eventually drove a retreat in Victoria are near the peak
in non-residential building
public investment – amplifying of their current construction
and engineering construction
the effect of the downturn cycle, construction activity
work.
in private investment on the is still expected to remain at
Queensland economy. Over the next two years, very high levels, presenting
total construction activity capacity and capability
Total construction activity
in Queensland is forecast challenges if Queensland is
(including residential building,
to edge lower, with weaker to sustainably grow its own
non-residential building and
residential and engineering construction market.
engineering construction)
construction activity
peaked at $65.3bn in work
offsetting modest growth in
done through 2013/14, almost
non-residential building.
140% higher than 2004/05
levels.

FIGURE 34: TOTAL CONSTRUCTION WORK DONE BY STATE CONSTRUCTION
$BILLION, CONSTANT 2015/16 PRICES
$Bn ACTIVITY
70 – RESIDENTIAL
60
BUILDING
After five consecutive years of
50
growth, residential work done
40 in Queensland eased back in
2017/18 (-6.4%). High density
30
residential construction
20
focused in inner Brisbane
pulled back 21% in 2017/18.
10
Total dwelling activity is set
0 to fall by a further 6% over
1993 1996 1999 2002 2005 2008 2011 2014 2017 2020 2023
Year ended June 2018/19 and 2019/20, despite
Queensland New South Wales Victoria South Australia the pickup in population
Western Australia Tasmania Northern Territory Australian Capital Territory growth, with detached
house and attached dwelling
segments contributing to
FIGURE 35: QUEENSLAND CONSTRUCTION WORK DONE BY SEGMENT
$BILLION, CONSTANT 2015/16 PRICES
the fall. The oversupply of
apartments in the Brisbane
$Bn
70 market is projected to see
60
high density work done
drop significantly over the
50
forecast horizon. Houses
40 are expected to fare better,
30
holding at a relatively strong
level, as regional areas
20
including the Gold Coast
10 and Sunshine Coast benefit
0
from solid population inflow.
North Queensland is also
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Year ended June set to bounce back after

Residential Building Non-Residential Building
underperforming for several
Engineering Construction less Oil and Gas Oil and Gas
years.
Source: BIS Oxford Economics, ABS data While stronger growth
in residential building is
expected late in the forecast
period as excess stock of
housing is absorbed, it
is unlikely to surpass the
previous peak in work in
2016/17.
QUEENSLAND CONSTRUCTION ACTIVITY

HAS RISEN A MODEST 6.7% OVER THE
PAST TWO YEARS, FOLLOWING A 40%
COLLAPSE OVER 2014/15 AND 2015/16

NEW OPPORTUNITIES MAY EMERGE
WITH THE COMMONWEALTH
GOVERNMENT’S INFRASTRUCTURE
INVESTMENT PROGRAM (IIP)
LOGAN ENHANCEMENT PROJECT
CONSTRUCTION Looking ahead, a number of CONSTRUCTION

ACTIVITY – NON- hospitality developments, ACTIVITY
RESIDENTIAL including the $1+ billion New – ENGINEERING
BUILDING Brisbane Casino, along with CONSTRUCTION
In 2016/17, non-residential education, accommodation A boom in mining and
building work done eased and health projects – including heavy industry construction,
back by 5% as work on a the second stage of the combined with elevated
number of major projects Sunshine Coast University levels of transport-related
came to an end. Health Hospital – is driving a construction, drove roaring
building declined sharply with strong surge in social engineering construction
the completion of the $950m and institutional building. activity over the first half
Sunshine Coast University Combined with further of this decade. Activity in
Hospital while office building increases in defence work, 2012/13 was more than double
also fell as projects like the total non-residential building the levels seen only a few
$265m 480 Queen Street work done is forecast to years earlier, although this
and $320m 1 William Street move above $9bn per annum, figure was heavily driven by
were completed. However, compared to the average of work on three simultaneous
with improving economic $7.4bn over the five years to LNG projects which saw
conditions and stronger 2017/18. Here, Queensland is oil and gas work done rise
population growth, non- joining the strong upswing from just $232m in 2008/09
residential building work in non-residential building to a peak of $23.3bn by
done rose 8.5% in 2017/18 activity nationally, although 2013/14. While engineering
and is expected to move to a this is principally being driven construction activity has fallen
higher plane over the next five by commercial and industrial dramatically from the 2013/14
years. Large defence projects development in New South peak, it has settled at a level
helped drive the rise in work Wales and Victoria. higher than the pre-resource
in 2017/18, along with rising boom years, supported by
commercial and industrial public investment in roads
activity. and telecommunications (the
NBN) and private investment
in renewable electricity
generation and resources.

As reflected in the outlook CONSTRUCTION Higher levels of residential
for work in the Major Projects EMPLOYMENT, building activity – a major
Pipeline in this Report, total WAGES AND employer of construction
engineering construction PRODUCTIVITY labour – was a key driver of
activity in Queensland is the employment rebound,
EMPLOYMENT
expected to track lower in along with an uptick in
coming years as key drivers Queensland construction engineering construction
supporting current strength industry employment has work from lower levels.
begin to reverse. In particular, surged 14.7% over the However, more recent quarters
engineering construction past two years, following show that the upswing in
activity is expected to ease as a long period of decline construction employment is
major roads projects move to since 2009/10. While there now reversing – in line with
completion, as uncertainty in was a substantial surge the near-term outlook of
renewable energy and climate in measured construction falling total construction
change policy impacts on activity during the second work done. Looking ahead,
electricity investment, and phase of the resources boom construction employment
as the rollout of the NBN in Queensland (between is likely to ease further as
begins to wind down. This will 2010 and 2014), construction residential building and
be partially offset by rising employment remained engineering construction
activity in rail, water and relatively steady at around fall back, followed by a mild
recreation. 228,000 persons during this recovery in the early 2020s.
period. This was due to the
A mild recovery in engineering bulk of the increased activity WAGES
construction activity is being focused in LNG facilities, Queensland construction
expected in Queensland where much of the recognised wages (measured by
in the early 2020s, led value of construction work construction industry Wage
predominantly by large rail was actually fabricated Price Index data) grew
projects as well as further offshore and only assembled significantly through the
resources investment. Overall, locally. 2000s construction boom –
total engineering construction
Construction employment rising over 40% between 2003
activity is expected to average
rose 14.7% to 239,000 persons and 2012 at an annual average
$20.7bn per annum through
over the two years to 2017/18, pace of 4.5% per annum.
the next five years to 2022/23.
rebounding from declines However, the slowdown
experienced over 2014/15 in growth in domestic
and 2015/16. construction work (excluding
fabricated LNG imports) post
boom saw construction wage
growth slow significantly.
Annual average construction
wage growth slumped to
1.8% in 2014/15, before falling
further to 1.2% through
2015/16 and 2016/17. Over the
2018 calendar year, wages
growth in the construction
industry has accelerated
ENGINEERING CONSTRUCTION to 1.8% and is expected to
ACTIVITY IS EXPECTED TO accelerate further in 2019.
EASE AS MAJOR ROADS
PROJECTS MOVE TO
COMPLETION

FIGURE 36: QUEENSLAND CONSTRUCTION INDUSTRY INDICATORS
$Bn
70 300
60
250
50
200
40
150
30
100
20
50
10
0 0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
QLD Construction GVA QLD Construction Work Done

QLD Construction Employment (RHS, 000s) QLD Construction Labour Productivity (RHS, 2008/09=100)
QLD Construction Wage Price Index (RHS, 2008/09=100)
PRODUCTIVITY However, this productivity While construction labour

Queensland construction surge is likely to have productivity declined sharply
labour productivity growth been overstated given the again between 2014/15 and
has historically been near likely understatement of 2016/17, it has settled at a
zero between the mid-1980s employment growth in the level some 10% above the
and mid-2000s, reflecting industry between 2009 decade average preceding
international trends.10 and 2013 (as Queensland the boom, indicating some
However, data from the ABS construction workers may structural improvements to
on Construction Gross Value have been misclassified as labour productivity in the
Added (i.e. the output of mining employees in the industry have taken place but
the domestic construction official statistics) coupled with this growth lags significantly
industry in Queensland, as unusually large increases in compared to other industries
opposed to “work done”) construction industry GVA as such as manufacturing.
versus employment revealed heavily offshore fabricated
growth in labour productivity LNG projects were rolled out.
during the second, post-GFC,
phase of the resources boom
(2009/10 and 2013/14).
10 M
cKinsey Global Institute (2013) “Infrastructure Productivity: How to Save $1 Trillion a Year”, McKinsey
and Company.

QUEENSLAND Rapid increases in Given the use of similar
CONSTRUCTION construction activity can construction materials,
COSTS go hand in hand with equipment and skilled
Along with much higher accelerating construction labour, the trend for costs in
volumes of Queensland costs is not surprising. High engineering construction can
construction activity during (and rising) levels of demand be extended to broader cost
the 2000s, there was also (i.e. construction activity) trends in the building and
a marked acceleration in places pressure on the existing construction industry.
the costs of delivering supply of inputs, boosting
The history of both of these
construction projects. High local input prices. Where
construction cost measures
and rising construction costs capacity constraints exist,
since 2010/11 is shown in
are an important issue for the rising construction activity
Figure 37. Construction costs
major projects industry as well can lead to strong increases
fell in 2008/09 following the
as the broader economy as: in local input prices as
onset of the GFC, but this
investment in new capacity is
It limits the quantum of proved to be temporary, as
itself costly and takes time to
publicly funded projects the large Chinese stimulus
come on stream.
that can be delivered program and the fall in the
against given State and But construction costs may Australian dollar cushioned
Commonwealth budgets. also vary due to changes in the domestic economy and
Where unplanned increases input prices determined in improved the prospects for
in construction costs occur, global markets (for example, the major resources projects.
it can effectively reduce the steel and oil products such Costs resumed their upward
funding available for further as bitumen and diesel fuel). trend from 2009/10, as
work. These price changes may the LNG sector joined the
occur independently from construction boom. The sheer
It worsens the
domestic construction activity. size of the LNG boom had the
competitiveness of
potential to overwhelm the
developing private sector COST TRENDS local construction industry,
industrial projects (e.g. in
The ABS publishes two however, the heavy use of
mining or manufacturing)
broad price series which are imported pre-fabricated
in Australia relative to
pertinent to and provide an modular structures helped
the rest of the world, in
insight into the cost trends take pressure off local
turn potentially impacting
experienced in Queensland’s supplies.
on decisions to invest in
engineering construction
Australian projects.
sector (see box below).
Implicit price deflator (IPD) for engineering construction work done

Is derived by dividing current price (nominal) engineering construction data from the
Australian Bureau of Statistics by its corresponding constant price (real) data series. This
effectively isolates changes in the price of construction, as opposed to changes in activity.
The Road and Bridge Index (RBI)

As part of the Producer Price Index at the state level, the RBI is an output price index
measuring changes in the prices (revenues) received by businesses undertaking road and
bridge construction less any direct tax paid. Being an output index, the RBI takes account
of contractor margins, and is available at the national level as well as for the five largest
jurisdictions in Australia: New South Wales, Victoria, Queensland, South Australia and
Western Australia.

FIGURE 37: GROWTH IN ENGINEERING CONSTRUCTION PRICES, QUEENSLAND
4.0
3.0
2.0
1.0
0.0
-1.0
2.0
-3.0
Mar-11
Jun-11
Sep-11
Dec-11
Mar-12
Jun-12
Sep-12
Dec-12
Mar-13
Jun-13
Sep-13
Dec-13
Mar-14
Jun-14
Sep-14
Dec-14
Mar-15
Jun-15
Sep-15
Dec-15
Mar-16
Jun-16
Sep-16
Dec-16
Mar-17
Jun-17
Sep-17
Dec-17
Mar-18
Jun-18
QLD Road and Bridge Index Q%ch QLD Engineering Construction IPD Q%ch
QLD Road and Bridge MAA M%ch QLD Engineering Construction MAT A%ch
With construction activity In particular, slowing global While this has been largely
falling sharply in Queensland demand for commodities due to sharply higher oil
(and also declining at the coupled with rapid increases prices (feeding through to
national level) from 2014/15, in supply courtesy of the diesel fuel for construction
growth in engineering resources investment boom plant and vehicles, as well
construction prices slowed in Australia and elsewhere as bitumen prices), other
sharply, as captured by both resulted in a commodities glut industry costs are also starting
the RBI and the engineering and substantial falls in prices to reaccelerate, albeit from a
construction IPD. Construction for those commodities used weak base. Given the number
prices actually declined in the construction process of construction projects
between 2014/5 and 2015/16 (particularly for oil and related already in flight at contracted
according to the RBI and products – such as bitumen prices, the prospect of
fell close to zero for the and fuel – as well as steel). persistent, higher growth in
engineering construction IPD construction costs is likely to
By contrast, over the past
during 2016/17. While falling presents risks and challenges
year, construction costs have
construction activity certainly to industry sustainability
re-accelerated sharply, with
played a part in slowing down and the financial health of
readings for both the RBI and
the growth in construction contractors and projects.
engineering construction IPD
costs – particularly through its
surging back to resource-
impact on slowing growth in
boom highs close to 4%
construction wages and the
in moving annual average
pricing of local equipment and
growth terms.
materials – it was also likely
influenced by international
factors.

CHALLENGES, RISKS
AND OPPORTUNITIES
Within this year’s pipeline there are a number
of challenges, and risks but also opportunities.
MAJOR PROJECTS DECLINE

IN 2019/20
Overall, funded work in the pipeline falls from $6.1bn in
2018/19 to $4.6bn in 2019/20 before recovering slightly in
2020/21 with a 24% decline in major project activity over
2019/20. Figure 38 (over leaf) compares last year’s MPPR
five-year outlook to the present forecast (note 2017/18 is now
historical rather than forecast, and 2022/23 is added to this
year’s pipeline). As per the 2018 MPPR, we include all major
engineering construction projects in Queensland above
$50m, as well as significant programs of work in utilities
and mining.11
PUBLIC AND PRIVATE

INVESTMENT
Queensland’s historical economic performance is heavily
influenced by large, long investment cycles – with major
projects funded by both the public and private sector
playing an important role. Over the past decade, the
resources investment boom and bust (and the public
investment it helped finance) drove a boom and bust in the
Queensland economy. More recently, however, Queensland’s
economic performance has been driven by other investment
cycles across residential building as well as infrastructure
(both publicly and privately funded).
While investment has picked up in Queensland in recent
years, the outlook for growth in investment, employment
and the broader economy is not exactly spectacular over
the remainder of the decade.
11 P
rogrammed work includes
estimates of the rollout of the
National Broadband Network
– Australia’s largest single
infrastructure project – as well
as works in water, sewerage and
upstream oil and gas development
to feed Queensland’s LNG
processing trains.

THIS REPORT’S OUTLOOK FOR
FALLING MAJOR PROJECT ACTIVITY
IN 2019/20 – AND LOW LEVELS OF
FUNDED WORK EXTENDING INTO
2020/21 – REPRESENTS A RISK TO
SUSTAINING STRONGER GROWTH IN
THE QUEENSLAND ECONOMY
There are vast differences in how major project activity will

play out by region, by sector and by project size through the
forecast period. For many regions and sectors, volatility in the
pipeline is set to increase, placing pressure on construction
industry contractors and suppliers. The Toowoomba region will
transition between the Toowoomba Second Range Crossing
(road) and Inland Rail (rail) projects. There is also a strong
cycle of work ahead in the Brisbane region that will require
careful management. Meanwhile, other regions in the north and
the west of the state have very high shares of unfunded work
in their pipelines, adding to uncertainty for contractors and
industry suppliers.
SKILLS SHORTAGES
Queensland still faces significant competition for construction

skills from other states – particularly New South Wales and
Victoria. The infrastructure investment program in other east
coast states is unlikely to slow down significantly given projects
already underway. To the contrary, there may be an upside
to the Commonwealth Government’s current Infrastructure
Investment Program, to ward off the negative impact of the
slowdown in residential building or guard against potential
ADANI’S
external shocks. This may drive even stronger demand for major CARMICHAEL COAL
project skills. DEVELOPMENT
ACCOUNTS FOR
$1.6BN OR 6% OF
THE FUNDED MAJOR
PROJECTS PIPELINE
6 %
MAJOR PROJECTS DECLINE IN 2019/20
Opportunity Opportunity Telecoms (NBN) activity is

As forecast in the previous The value of funded work also projected to be lower,
Report, major project work in the pipeline has risen to while privately funded
is expected to rise slightly $27.6bn, up from $23.8bn last electricity (renewables)
in the current financial year year. A significant component and mining activity is also
(2018/19). Funded work for of this increase is the inclusion expected to fall from previous
2018/19 is currently on a par of Adani’s smaller scale levels. By contrast, funded
with total work in 2017/18, with Carmichael coal development work in rail, harbours, water,
overall growth in activity in as funded in the 2019 pipeline sewerage and defence is
2018/19 now dependent on (totalling $1.6bn in activity expected to move higher.
several currently unfunded to 2022/23) which remains
Risk
projects proceeding. subject to commercial,
regulatory and political risk. A higher level of major
Opportunity and challenge The other key contributor is projects activity since
The total value of projects rail, where funded work in the 2016/17 has had a broader,
in the pipeline has remained final year of the projection stimulatory effect on the
relatively steady. This year, (2022/23) remains very high, Queensland economy but the
the major projects pipeline is supported by the Inland Rail setback projected in 2019/20,
valued at $41.3bn, compared packages. along with weaker growth
to $39.9bn in the 2018 in broader investment and
pipeline. Importantly, however, Challenge consumer spending, is likely
the total value of work in A setback in major project to contribute to a slowing
the pipeline (funded and work is expected in 2019/20. in state economic growth.
unfunded) is lower in 2019/20 The total value of major Major project work of the
and 2020/21 compared to project work in the pipeline type presented in this report
the projections in last year’s for 2019/20 is $6.5bn, down is a key contributor to public
MPPR, driven by falling on the $6.6bn estimated and private investment, which
construction value estimates / for 2018/19. Funded work is an important driver of the
scope on existing projects, as in 2019/20 currently rests Queensland economy. While
well as the removal of highly at $4.6bn, 24% lower than very large falls in major project
unlikely projects from the list. the estimate for 2018/19, work in 2014/15 and 2015/16
Sustaining the project pipeline representing significant drove a decline in Queensland
above $40bn is mainly due to downside risk. The decline in State Final Demand (SFD), a
the $8.3bn in work (funded funded work for 2019/20 is rise in major project activity
and unfunded) projected being driven by both public in 2017/18 was a key driver of
for 2022/23 – $2.1bn or 34% and private sectors. Funded stronger growth in both SFD
above the $6.2bn work for roads and bridges work in and the broader economy in
2017/18. We note, however, 2019/20 is 44% lower than that year. In this respect, this
that only $4.8bn of major 2018/19 as several large report’s outlook for falling
project work for 2022/23 is projects – including the major project activity in
currently classified as funded. Gateway Upgrade North, 2019/20 – and low levels of
Toowoomba Range Second funded work extending into
Crossing and the Logan 2020/21 – represents a risk to
Motorway Enhancement – sustaining stronger growth in
reach completion and are the Queensland economy.
not replaced by similar sized
new projects.

FIGURE 38: MAJOR PROJECT WORK DONE FORECAST: 2019 VERSUS 2018
$Bn
12000
10000
Challenge
8000
The pipeline also highlights
a significant shift in the mix
6000
of projects by value through
the next five years, which is 4000
likely to have implications
for the competitiveness 2000
and sustainability of the

0
construction industry.
17/18 18/19 19/20 20/21 21/22 22/23
In 2018/19, 19% of project
specific funded work (i.e. Previously Funded Current Funded
excluding programmed works) Previously Unfunded Current Unfunded
is on projects valued at $50m Source: BIS Oxford Economics, QMCA and IAQ member knowledge
to $200m, whilst another 22% FIGURE 39: FUNDED PIPELINE BY SIZE OF PROJECT
is based on projects valued $BILLION, CONSTANT 2015/16 PRICES
$Bn
at $200m to $500m in value.
7
However, by 2021/22, these
shares fall to 6% and 5% 6
respectively, meaning that
5
89% of major funded project
work in 2021/22 is based on 4
projects valued over $500m,
3
with this share rising to 94%
in 2022/23, as shown in 2
Figure 39.
1
Risk
0
hile more complex, larger
W FY18 FY19 FY20 FY21 FY22 FY23
projects are perhaps more $1bn+ $500m-$1bn $200m-$500m
likely to attract earlier
$100m-$200m $50m-100m
indications of funding to
ensure timely delivery, the
FIGURE 40: TRANSPORT AND UTILITIES ENGINEERING CONSTRUCTION BY
falling share of funded
STATE: 1986-2018 $BILLION, CONSTANT 2015/16 PRICES
projects in the $50m to $Bn
$200m range, particularly, is a 25
cause for concern considering

that these projects tend 20
to support a large number
of highly competitive
15
construction contractors
which form the backbone
10
for the industry.
0
1986 1990 1994 1998 2002 2006 2010 2014 2019
Queensland New South Wales Victoria

South Australia Western Australia

PUBLIC AND PRIVATE INVESTMENT
Challenge Risk championed by the private

Major project activity A high and rising share sector, including $6.8bn in
has risen in recent years of unfunded work in the resources-related investment
(following the post resources pipeline over time remains and $2.3bn in electricity –
slump) – helping to drive a a downside risk to major overwhelmingly renewable
turnaround in Queensland project work. While unfunded generation projects of the
State Final Demand and work represents just 7% of kind which has helped drive
employment – but is likely to total activity in 2018/19, this the current rise in work.
suffer a significant setback share rises sharply to 40% by
in 2019/20 unless funding for Opportunity and risk
2020/21 and 44% by 2022/23.
new projects is secured. Major Excluding the large (and While private investment
project activity – mirroring mostly funded) rail segment, decisions are heavily
the broader Queensland the share of unfunded work influenced by commercial
economy – has been through rises to 57% by 2021/22 and factors, there is much that
a large resources-driven 64% by 2022/23. Sectors governments at all levels
cycle over the past decade. with the highest share of can do to encourage private
However, the last two years unfunded work by 2022/23 projects, such as creating a
has seen a recovery in include mining and heavy stable policy environment,
major project work, led by industry (75%), water and setting clear and fair policy
new investments in roads sewerage (68%) and, perhaps targets and regulations,
and telecommunications surprisingly, roads and bridges and supporting transparent
(predominantly funded (52%). While commercial risk regulatory and approvals
by the public sector), and for the private sector tends to processes. Ultimately,
electricity and mining (mostly drive a high share of unfunded increasing certainty in the
funded by the private sector). work in the resources sector, way government deals with
Maintaining this momentum the high and rising proportion industry can go a long way
is the core challenge facing of unfunded work in water and to fostering future private
Queensland. Funded work roads by 2022/23 is mainly a investment although, in the
in the pipeline for the four public sector phenomenon. case of resources projects
growth sectors just mentioned particularly, much still
– roads, telecommunications, Opportunity depends on global factors
electricity and mining – falls In this environment, sustaining outside of direct government
away 45% in 2019/20, and or growing current levels of control.
continues to fall in aggregate major project work into the
through the subsequent four
Challenge and opportunity
future will require securing
years. While other sectors funding and finance for The pipeline also includes
offer growth in funded work existing unfunded projects, or $4.2bn in unfunded public
from here – particularly rail, originating, developing and sector projects through the
but also water, sewerage and funding new projects that are next five years, including
defence – this growth is not currently not in the pipeline $2bn in unfunded road and
enough to offset the severity at all. The 2019 pipeline shows rail projects, and $1.4bn in
of the decline in other asset that, despite falling from last unfunded water projects. This
classes. year, there is still a substantial is down from the $4.7bn in
volume ($13.8bn) of unfunded unfunded work in last year’s
work which may yet be pipeline, with the bulk of
tapped. Well over half of this unfunded work lying in the
unfunded total are projects latter two years of the
pipeline projection.

For these projects, it makes In particular, governments Combined with the
sense that governments should be prepared to be Commonwealth Government’s
apply a robust cost-benefit flexible in the delivery of own large Infrastructure
framework in assessing the public sector pipeline, Investment Program (IIP) and
whether these projects should bringing forward projects its interest in revolutionising
proceed – and, where the with positive net economic east coast freight links
projects fail on this criteria, be benefits during periods of (through the $10bn+
ready to consider alternative pipeline weakness or having Inland Rail project) as well
solutions. By definition, only the discretion to shift delivery as another direct equity
projects that offer positive timelines on other projects investment in building the
net economic benefits can when these may clash with a Western Sydney Airport, the
possibly help bridge any surge in major project work. infrastructure construction
perceived ‘infrastructure gap’.12 In turn, pipeline flexibility boom along Australia’s east
requires pipeline depth (i.e. coast is unlikely to subside
Even so, the pipeline shows
having projects which can be substantially anytime soon
that even if all currently
called upon in weak times) – despite near term pipeline
unfunded projects were to
and having the financial risks in Queensland – and
proceed in 2019/20, major
capability to fund and deliver. dominates the outlook for
project activity may still end
This suggests that project major transport project
up below the level of 2018/19.
origination – i.e. the generation construction nationally.
However, if all unfunded
of actual project opportunities Indeed, risks are emerging
work were to proceed in
– along with employing on the upside to the
subsequent years also, major
appropriate funding and Commonwealth Government’s
project work could increase by
financing mechanisms, remain current IIP and equity
as much as 70% (exceeding
core challenges. infrastructure investments
$11bn) by 2021/22. This
plan.
potential volatility suggests Opportunity and risk
that there is still a challenge Expectations of a slowing
Public infrastructure
ahead if government and national economy this
investment amongst
industry wish to maintain financial year and next as
Australia’s east coast
a relatively stable (instead residential building activity
states has surged in recent
of highly cyclical) project continues to cool, along with
years. The most significant
pipeline which delivers a potential change of Federal
infrastructure investments
infrastructure in a timely way Government that may favour
undertaken by New South
to meet demand whilst also increasing public investment
Wales and Victoria have
allowing the construction rather than cutting taxes as
focused on urban solutions to
industry to sustainably build a method of stimulus, could
unlock greater efficiencies and
capacity and capability yet lengthen the current
productivity in Sydney and
without driving significant upswing in publicly-funded
Melbourne, mirroring concerns
cost increases as seen during infrastructure construction
from Infrastructure Australia
the resources boom. nationally despite the winding
that more investment here
down in NBN-related work.14
was required to avoid an
emerging infrastructure gap.13
12 T errill, M. and B. Coates (2016) “Budget Explainer: does Australia really have an infrastructure deficit?”,
The Conversation, April 28th.
13 Infrastructure Australia (2016) Infrastructure Plan.
14 Jericho, G. (2019) “How the drop-off in construction gives Labor an election spending blueprint”, Guardian Australia,
January 17th, https://www.theguardian.com/business/grogonomics/2019/jan/17/how-the-drop-off-in-construction-
gives-labor-an-election-spending-blueprint?CMP=Share_iOSApp_Other

Negative global shocks Public investment growth has It also means investing in
affecting growth in key been very weak or negative critical infrastructure for new
trading partners, particularly over 2016/17 and 2017/18, growth regions – which are
China, could also have the and is anticipated to move benefiting from the lower
Federal Government reaching lower again over 2018/19 and post-boom Australian dollar –
for the fiscal stimulus lever. 2019/20 before recovering to ‘crowd in’ private business
Having ‘shovel ready’ projects – in line with the outlook for investment decisions.
available (i.e. that have publicly funded major project
According to the pipeline, the
been properly planned and activity in this report. Private
public sector will continue
assessed through rigorous investment, meanwhile,
to play a significant role in
cost benefit analysis) would while rising 5.2% in 2017/18,
funding and developing many
be vital for an investment- is expected to slow in line
categories of infrastructure
driven stimulus program to with housing activity and
over the coming five
work and it would be likely private non-dwelling building.
years. Over the five years
that those states with a Consequently, economic
to 2022/23, public sector
certified pipeline of productive growth (as captured by Gross
funded major project work
projects available would be State Product or GSP) is
(whether currently funded
the most to benefit. expected to slow back below
or not) makes up 56% of
3% by the end of the decade
Challenge and opportunity the total pipeline value (up
according to the State Budget,
from 50% two years ago),
Queensland’s historical compared to average growth
but the share is much higher
economic performance is rate exceeding 4% prior to
in the transport, water and
heavily influenced by large, the resources boom – with
sewerage, and defence
long investment cycles – with deleterious consequences for
segments of activity.
major projects funded by both growth in employment and
the public and private sector incomes. Interestingly, the pipeline
playing an important role.15 does provide some indication
Over the past decade, the Challenge and opportunity of the level of new funding
resources investment boom While the share of public commitments required to
and bust (and the public sector investment in total keep annual activity on major
investment it helped finance) engineering construction is projects on a sustained or
drove a boom and bust in lower in Queensland than in upward trajectory. According
the Queensland economy. other states such as Victoria to the pipeline, funded work
More recently, however, and New South Wales due to for 2018/19 is now matching
Queensland’s economic higher private sector funded total activity for 2017/18,
performance has been driven mining-related activities, with some small upside if the
by other investment cycles publicly funded projects play remaining unfunded projects
across residential building as a major role in driving the in 2018/19 were to achieve
well as infrastructure (both state’s economic growth. funding and proceed.
publicly and privately funded). However, the challenge will
Sustained investment in
While investment has picked productive infrastructure will be sustaining major project
up in Queensland in recent remain a critical component work in 2019/20 and 2020/21,
years, the outlook for growth of Queensland’s broader where funded work dips
in investment, employment economic strategy to ensure substantially. Currently, the
and the broader economy is cities and regional centres pipeline shows that a further
not exactly spectacular over offer competitive benefits $1.4bn in activity on major
the remainder of the decade. and help keep cost of living projects is still required on top
(and cost of business) of currently funded work to
pressures contained. sustain funded 2018/19 levels
of activity into 2019/20.
15 Investment in economics represents the addition to capital stock or productive capacity. It mostly consists of the
construction of buildings and structures and purchases of plant and equipment, but also includes growth in livestock,
minerals exploration and intellectual property. This is a very different meaning from finance, where investment refers
to the purchase or creation of an asset with the expectation of generating financial returns.

While this represents an
improvement on the even
larger funding gap highlighted
in last year’s report, this is still
a very substantial challenge. Opportunity and risk While Brisbane activity is on
By 2020/21, the additional the increase again in 2020/21,
The regional analysis
funding requirement is still the same cannot be said for
presented in this report
$900m. the Ipswich-Toowoomba-
highlights differences in the
The main issue is that while outlook in major project Logan and Darling Downs-
there is $1.8bn in unfunded work across the state. Maranoa (where funded major
major project work in the Unsurprisingly, given the project work will not recover
pipeline in 2019/20 and $3.4bn concentration of population until the rollout of Inland Rail
in 2020/21 – only $425m and in south east Queensland, in the early 2020s) or the
$755m of this represents around half of all funded work Outback region (where there
public infrastructure projects. in the pipeline is focused here. is no funded work at all in
The bulk of unfunded work Brisbane itself is expected to the pipeline beyond 2018/19).
in these years is held by the see the strongest growth in Furthermore, while funded
private sector in resources work. Meanwhile, more of the major project work booms in
and electricity (renewable riskier, unfunded projects lie in Brisbane in the early 2020s,
generation) projects. If central, northern and western for most other regions it
these projects do not regions of the state, as these begins to decline significantly.
achieve funding (through regions tend to be relatively At the very least, falling
either unsatisfactory global more prominent with regards activity in a region may
economic conditions or, in the to investment in mining and indicate an emerging surplus
case of renewable generation, large water projects (such as in local industry capacity
failures in Australian climate dams) that are more typically and capability which could
and energy policy that restrict unfunded in the pipeline. be put to use on new works
development), there is simply – potentially offering better
not enough public sector Challenge and opportunity
value for money procurement
major project work currently The large differences in the and delivery – whilst also
available to fill the gap. outlook for funded major helping smooth local
project work by region investment cycles.
While publicly funded activity
suggest that governments and
has risen in recent years,
industry should give serious
this gap in public sector
consideration to location in
major project work has been
guiding new investment or
known for some time and
funding decisions.
was highlighted in last year’s
MPPR. Not having enough In 2019/20, the biggest
“shovel ready” projects declines in funded work occur
available over the next two in the Ipswich-Toowoomba-
years – while funded work Logan and Outback regions,
increases significantly in with falls also anticipated in
2021/22 on the back of major Brisbane, the Sunshine Coast
rail projects – represents a and Darling Downs-Maranoa.
significant public sector failure
which puts the stability of
the pipeline at risk and opens
up cyclical challenges for
industry.

SKILLS SHORTAGES
Challenge Challenge Challenge

While economic infrastructure It is in this heated east coast For the rail industry, there
investment16 in Queensland is major project environment will also be a substantial
now higher than the trough that the Queensland pull on skills required in
in 2014/15, Queensland Government will be rolling out manufacturing in support of
lags New South Wales and its own $43bn capital works local content (again, including
Victoria in terms of funding budget over the coming four electrical and mechanical
and delivering infrastructure years, placing further pressure trades) as well as longer term
investment as shown in Figure on skills and resources. Even operations and maintenance
40 (refer to page 71). As New Western Australia is likely to skills as new lines are
South Wales and Victoria are put increasing pressure on commissioned. This is on top
likely to continue to ramp key ‘in demand’ skill sets as of the emerging construction
up or sustain infrastructure infrastructure and mining- skills task as over $8.6bn in
investment over the next related construction rises in funded rail major project work
five years, Queensland that state in coming years, is rolled out in Queensland
may face challenges in following a long period of through the period to 2022/23
competitively procuring decline. as part of a $44bn program of
construction services for works nationally.
While more research will need
major projects. To minimise
to be undertaken to identify The major projects workforce
risks of project delays, failures
Queensland’s specific needs, analysis presented earlier in
and rising construction costs,
various skills demand and this report also highlights
Queensland needs to apply
‘workforce gap’ analyses potential skills constraints
a longer-term approach to
recently undertaken for New that may present a risk to the
planning for capacity and
South Wales17, as well as the pipeline. Overall, total major
capability in the construction
road18 and rail19 industries, project activity (funded and
industry. Such a plan should
indicate that the greatest unfunded) in the pipeline is
cover:
skills risks will revolve around projected to raise workforce
future workforce key ‘on site’ occupations demand by 32%, with the
requirements and skills including onsite engineers and strongest increases likely to be
planning for required surveyors, site supervisors in rail: an additional 6,400 FTE
construction materials, and and construction managers, direct construction positions
meeting critical transport concreters, form workers and required for the mostly funded
and logistics challenges as steel fixers, mechanical and rail pipeline.
major projects reach the electrical trades, tunnellers
construction phase. and truck drivers.
16 That is, investment in non-building infrastructure such as transport and utilities.

17 BIS Oxford Economics (2018a) NSW Construction Delivery Assessment: Capacity and Capability, for Infrastructure
NSW and available online: https://insw-sis.visualise.today/documents/about/NSW_Construction_Delivery_
Assessment_Capability_and_Capacity.pdf
18 BIS Oxford Economics (2018b) Roads Workforce Capability 2017-2027, Austroads, https://www.onlinepublications.
austroads.com.au/items/AP-R574-18
19 BIS Oxford Economics (2018c), Australasian Railways Association Skills Capability Study, Skills Crisis: A Call to
Action. https://ara.net.au/ara-skills-capability-study

THE 2019 PIPELINE SHOWS THAT,
DESPITE FALLING FROM LAST YEAR,
THERE IS STILL A SUBSTANTIAL
VOLUME ($13.3BN) OF UNFUNDED
WORK WHICH MAY YET BE TAPPED
GOLD COAST SEAWAY OUTFALL TUNNEL
CHALLENGES AND RISKS - FURTHER ANALYSIS

COLLABORATION Capacity and capability risks Maintain workforce
BETWEEN INDUSTRY have been recognised by development initiatives
AND GOVERNMENT infrastructure agencies in New that mandate participation
REMAINS THE KEY TO South Wales and Victoria. on eligible projects by
MEETING CAPACITY Recent work undertaken by apprentices and/or
AND CAPABILITY RISKS
BIS Oxford Economics for trainees and through other
In an environment where Infrastructure New South workforce training.
strong east coast demand for Wales,20 for example, points Develop and maintain
infrastructure construction towards several strategies a plan for construction
is likely to be sustained or that help reduce risks and materials, so that the
even increase further, coupled leave a positive legacy of demand and supply balance
with potential limits on public infrastructure investment: for scarce quarry products
finance, it remains sensible for The provision of a clear can be quantified, mapped,
governments and industry to and coherent long term emerging gaps identified
seek collaborative solutions to project pipeline to give quickly, and strategies put
project delivery challenges to industry the best possible into place to accelerate the
ensure value for money. chance of responding, development of new supply
rather than separate sources and related logistics
pipelines by governments where appropriate.
and the private sector –
this is a key feature of
this report.
20 BIS Oxford Economics (2018a), p116-117.

Search continually Procurement reform requires While it remains to be seen
for improvements a more collaborative approach whether the high ideals of
in procurement that to be adopted between the 10 Point Commitment
encourage industry industry and government effectively filter down from the
participation, innovation to encourage maximum executive level to the working
and investment in capacity participation and investment procurement departments
and capability. In particular, in capacity and capability; and within government agencies,
processes should be appropriately manage risks to the likely risks from capability
reformed if they: ensure value for money. and capacity pressures
create long term risks to over the coming five years
Such approaches – as
industry sustainability and suggests that similar plans
embodied in the New South
costs by inadvertently should be considered by other
Wales Government’s recently
encouraging contractors state governments such as
released 10 Point Commitment
to take risks on quality Queensland.
for the Construction Industry21
take up scarce resources – are increasingly becoming The market for major
through the tendering seen as “best practice” in this infrastructure projects is,
process space. Key points of the plan after all, a national one
do not provide a include: where decisions by Tier One
sustainable risk/ 1. Procure and manage contractors whether to bid
margins balance that will projects in a more on particular projects are
encourage firms to invest collaborative way taken on a national rather
in skilled staff 2. Adopt partnership- than State basis.
do not encourage the based approaches to risk In this environment, the
participation of the full allocation Queensland Government
spectrum of resources 3. Standardise contracts and should be looking at what it
across the construction procurement methods now needs to do to achieve
industry, across all tiers
4. Develop and promote a value for money procurement
do not encourage transparent pipeline of and a sustainable construction
innovation or the use projects industry.
of new technologies,
5. Reduce the cost of bidding
ranging from Building PUT POLICIES AND
6. Establish a consistent
Information Modelling PLANS IN PLACE
Government policy on bid
(BIM), new resource- Overall, sustaining growth
cost contributions
saving materials or in the Queensland economy
7. Monitor and reward high
construction techniques, requires putting into place
performance
or appropriate skills plans and policies that will
development. 8. Improve the security and
encourage and sustain both
timeliness of contract
private and public investment
payments
in the state over the long term.
9. Improve skills and training
10. Increase industry diversity
21 NSW Government (2018) NSW Government Action Plan: A ten point commitment to the construction sector, view
2/11/18 http://www.infrastructure.nsw.gov.au/media/1649/10-point-commitment-to-the-construction-industry-
final-002.pdf

Queensland’s long-term FIGURE 41: MIX OF MAJOR PROJECT WORK DONE BY FUNDING SOURCE:
SECTORS AND TOTAL: 2018/19-2022/23
economic strategy should $Bn
concentrate on leveraging 12
from (or improving) core

(or potential) strengths. For 10
Queensland, this includes

8
its vast natural resource
wealth, its close proximity
6
to Australia’s largest trading
partners, its iconic Australian
4
tourism destinations and
enviable lifestyle benefits.
2
State Government strategy
should continue to focus
0
on boosting programs to Roads and Railways and Defence Water and Non-water Mining and
Bridges Harbours Sewerage Utilities Heavy industry
create more jobs and attract
businesses and enable Public Private
Queensland’s economy Source: BIS Oxford Economics, QMCA and IAQ member knowledge
to transition to be more
balanced, innovative and
Due to Commence 2019/20: Paradise Dam Spillway
productive.
Townsville Port Expansion Improvement Project -
ACCELERATE Project - Outer Harbour $200m
CURRENTLY UNFUNDED Expansion (berths 14+15) - Burdekin Falls - hydro-
PUBLIC PROJECTS $200m electric power station
Decisions to fund, or Nullinga Dam - $323m (50MW) - $200m
accelerate, the development Somerset Dam Upgrade - A further $1.3bn and $1.2bn in
of currently unfunded public $600m unfunded public sector major
sector projects will assist project work is in the pipeline
Due to Commence 2020/21
in stabilising major project for 2021/22 and 2022/23
Yamanto to Ebenezer
work over the next two years respectively, which may be
Upgrade - $340m
– but will not be a complete able to be accelerated if weak
Hope Island Road (Oxley
solution. Ideally, governments major project conditions
Drive) road duplication -
at the State and Federal level persist in coming years,
Stage 4 - $136m
should also be investigating include:
new projects that will be Pacific Motorway; Section
Centenary Hwy Bus Lanes
required to meet Queensland’s (C) Daisy Hill to Logan
- Ipswich Mwy to Toowong
infrastructure challenges in Motorway - $250m
- $400m
the coming decade – Sarina to Cairns - Saltwater
Centenary Hwy Bridge
and be prepared to accelerate Creek Upgrade - $103m
Duplication - $150m
these in periods of Townsville Ring Road
Rockhampton Ring Road -
pipeline weakness. Stage 5 - $180m
$950m
Gold Coast Light Rail
Ipswich Rail Line - Darra-
Stage 3 - $500m
Redbank 3rd track - $218m
North Coast Line Capacity
Sunshine Coast Light Rail -
Upgrade (Brisbane to
$500m
Cairns) - $116m
Urannah Dam - $250m
Wyralong Dam WTP
Stage 1 - $200m

BRISBANE AIRPORT INTERNATIONAL APRON EXPANSION
GOVERNMENTS While public investment is ENCOURAGING PRIVATE

NEED TO SPEND projected to rise according INVESTMENT WILL
AS COMMITTED to MYFER, it is important ALSO BE IMPORTANT
This analysis assumes that to note that this also While public infrastructure
all funded work proceeds as includes spending on social investment is important,
planned: that governments infrastructure (e.g. hospitals, it is not an end in itself.
actually spend what they schools and other non- The core aim of public
have committed to funding residential building projects) infrastructure investment –
in Budgets. Here, the State as well as purchases of and Queensland’s broader
Government’s performance equipment (e.g. rollingstock economic strategy – should
shows some improvement for railways lines, IT and be to boost productivity
in recent years, with the office equipment) and and competitiveness which
gap between actual and intangibles (e.g. software will also help stimulate local
committed funding on public systems) not considered in private investment decisions.
infrastructure – referred to this report. Realising this
As shown in Figure 43
as purchases of non-financial growth outcome, in any case,
(over the page), the bulk of
assets – from that year’s means continuing to close
currently unfunded major
Budget falling from around the gap between actual and
project activity, year by year,
$1.5bn in both 2014/15 and committed expenditure.
is actually related to private
2015/16, to $333m in 2017/18,
sector projects.
according to latest data from
the 2018 Mid-Year Fiscal and
Economic Review (MYFER)
and shown in Figure 42.

FIGURE 42: PURCHASES OF NON-FINANCIAL ASSETS, $BILLION
NON-FINANCIAL PUBLIC SECTOR, QUEENSLAND
14
12
10
0
Actual 2011–12 Budget 2012–13 Budget 2013–14 Budget 2014–15 Budget

2015–16 Budget 2016–17 Budget 2017–18 Budget 2018–19 Budget 2018–MYFER
Source: BIS Oxford Economics, Queensland Budget Papers, Various
Therefore, another path to Beyond public investment Boosting private sector

avoiding a future slump in itself, State and Federal investment can also be
major project work requires Governments should also achieved through good public
governments doing what be looking at ways to investment choices which
they can to provide the right encourage the return of ‘crowd in’ private investment
conditions for these projects private investment (by far the (e.g. building better transport
to proceed (while recognising bigger part of the investment links which encourage broad
that there may also be ‘pie’) and re-establish the regional investment by the
broader constraints, such as positive growth mindset. private sector, or investing in
the state of global commodity While supporting market-led lower cost energy to attract
markets). proposals is an important industry and other business).
plank here, the overall record Perhaps more importantly,
The public sector only makes
of success for getting these governments should also set
up a very small part of the
projects to the construction clearer messages about future
total Queensland economy
phase is not strong. policy to give the private
(around 25 per cent in
Meanwhile, the Northern sector confidence to invest.
expenditure terms) and this
Australia Infrastructure Facility Unfortunately, the record here
is not expected to change
(NAIF) was also supposed has not been consistent, with
substantially in the future.
to encourage private sector arguments over energy policy,
Consequently, achieving long
projects but few projects mining, financing, and tax and
term economic goals will
have materialised from spend policies likely to have
depend crucially on how the
this initiative. had a negative impact on
public sector can develop
business confidence.
policies to stimulate private
decisions on where to invest
and live.

FIGURE 43: FUTURE UNFUNDED WORK DONE PROFILE: PUBLIC VERSUS ENSURING
PRIVATE SECTOR, $BILLIONS
$Bn
SUSTAINABLE
3.0
INVESTMENT
IN ECONOMIC
2.5
INFRASTRUCTURE
Queensland is currently
2.0
relying heavily on new
Commonwealth and private
1.5 sector funding to drive the
upswing in major project
1.0 work from the 2014/15 trough.
Through the next five years to
0.5 2022/23, nearly one third of
proposed major project work
0
FY19 FY20 FY21 FY22 FY23 remains unfunded, presenting
risks to the sustainability of
Unfunded Private Unfunded Public the project pipeline. For the
Source: BIS Oxford Economics, QMCA and IAQ member knowledge public sector, only around
FIGURE 44: QUEENSLAND PUBLIC INVESTMENT: 1986-2018
$3.7bn of the $23bn pipeline
$Bn Percent of work is unfunded. However,
30 10%
as noted, there is simply
9%
25
not enough projects in the
8%
pipeline to sustain major
20
7% project work over the next
6% two years.
15 5%
This raises important
4%
10 questions:
3%
Is Queensland investing in
50
2% economic infrastructure at
1% an appropriate level – and
0 0% is the risk of falling major
project work over the next
Publicly funded Other public investment two years an indication that
engineering construction excluding asset sales
an infrastructure gap is re-
Public engineering construction 30 year average Public EC / 10m persons
per 10 million persons emerging?
Total public investment as a % 30 year average Pub Inv / GSP Are there funding and
of Queensland GSP (RHS)
BIS Oxford Economics, ABS data
financing constraints that
may prevent Queensland
from maintaining an
appropriate level of
economic infrastructure
investment in future?
QUEENSLAND NEEDS
TO APPLY A LONGER-
TERM APPROACH TO
PLANNING FOR CAPACITY
AND CAPABILITY IN THE
CONSTRUCTION INDUSTRY

With regards to the first Indeed, Terrill and Batrouney Figure 44 shows the path
question, identifying (2018) show that Australian of public investment in
underinvestment in cities have already been Queensland over the past
infrastructure and “remarkably adaptive” in 32 years, with investment
‘infrastructure gaps’ in dealing with strong increases in economic infrastructure
practice is very difficult. While in population, potentially reflected in the engineering
various organisations have reducing the need for construction share. This
attempted to quantify the infrastructure investment as a shows a rising trend (in
size of the infrastructure gap solution.24 Growing population volume terms) over time,
in Australia – with estimates density within cities – and with a significant “catch
typically ranging in the changing behaviours by up” cycle in the 2000s as
hundreds of billions of dollars commuters in where to live the state invested in large
– they are invariably based and how to travel – means water systems and networks
on methodologies which that infrastructure spending to battle the Millennium
are not publicly available, or does not necessarily Drought and used surging
‘rules of thumb’ (e.g. share need to keep pace with royalty revenue to “catch up”
of infrastructure spending to population growth. And on transport infrastructure
GDP) that are not adequately rather than requiring “mega” spending.25 On a population
explained or tested.22 Ideally, infrastructure solutions, basis, public investment
specific quality or service governments should also in economic infrastructure
indicators such as engineering consider a range of other in 2017/18 was back to its
‘report cards’23, rising policies that can help cities 30-year average, following
congestion costs, increasing adapt to growing populations, a dip below this average
travel times, or number of including abolishing stamp between 2014 and 2016. While
blackouts for example tend to duties on homes, revisiting publicly funded engineering
indicate when infrastructure zoning laws, introduce construction is still well below
gaps may be present – but of demand management policies the 2008/09 peak, on this
themselves do not necessarily such as road user charging, basis it seems to be not at
provide optimal solutions to and consider smaller projects critically low levels yet, though
the infrastructure problem (including maintenance) with there is still a concern that
at hand: whether it requires high net benefits. this may drop back in coming
substantial new investment years. As a share of GSP,
With these caveats in
at all, or the quantum of however, public investment
mind, it is worth comparing
investment required. continues a trend decline
Queensland’s recent
and, as at 2017/18, reached a
infrastructure investment
record low.
performance over time, and
against other states.
22 See, for example, Terrill, M. and B. Coates (2016) for a discussion of such studies.
23 Such as those formerly produced by Engineers Australia – the last Engineers Report card for Queensland was
produced in 2010.
24 Terrill, M. and H. Batrouney (2018) Remarkably adaptive: Australian cities in a time of growth, Grattan Institute,
October 2018.
25 There was also during this time substantial private investment in road transport infrastructure in Brisbane, including
the Clem Jones Tunnel and Airport Link.

The difference in recent As per Figure 44 (page 82), Recent analysis by the
behaviour between public there is a trend weakening International Monetary Fund
engineering construction as a in this ratio during the shows that, across advanced
share of population and public 1990s before a stronger economies, average public
investment as a share of GSP phase of investment in the investment as a ratio of GDP
measures may be caused by 2000s. Again, as per Figure has decreased from 5% in
several factors including: 44 (page 82), there is a the 1960s to just over 3% in
significant weakening again 2012, and was in the 4% range
The broader public
between 2014 and 2016, through the mid-1980s.26 The
investment measure
before a recent recovery decline is fairly consistent over
includes investment in
which places activity close the period.
social building, equipment
to the long run average as a
and intangibles, which may In Queensland, public
share of GSP. Unsurprisingly,
not be keeping pace with investment as a share of GSP
the “investment premium”
economic growth, or has fallen from around 7% in
between the Queensland
The development of highly the 1980s to around 4% by
transport and utilities
capital-intensive industries 2018 but was still very high
construction to GSP ratio and
in Queensland, such as (around 6.9%) in 2012 due to
that for New South Wales
mining, gas extracting the surge in public investment
and Victoria has narrowed
and processing, and that commenced in 2006
in recent years given the
energy, which now deliver which delivered major water
large rollout of infrastructure
substantially higher levels security schemes, hospitals
investment in the other east
of economic production and major road projects.
coast states, from an average
whilst driving weak (or Overall, between 1986 and
of 1.1% that existed prior to
even negative) employment 2018, public investment as a
2008, to 0.7% over the past
growth in their operations share of GDP in Queensland
decade.
phase. This may suggest has averaged around 6%
that a lower level of public Meanwhile, comparing
though it had fallen away
investment is required to Queensland against
in more recent years.
meet a given level of GSP, international ‘norms’ for public
Publicly funded engineering
other things being equal. investment is challenging
construction in Queensland as
given that different countries
Figure 45 shows the share a share of GSP also shows the
often use different definitions
of transport and utilities same downward trend – from
of both the ‘public sector’
engineering construction 3.4% in the late 1980s, to 2.3%
and ‘public investment’,
(public and privately funded) currently (and rising from a
and there can also be sharp
to GSP in Queensland has trough of 1.9% in 2015/16).
differences in outcomes
wavered between 2.5-4.5% of Overall, the trend of declining
across countries given
GSP over the past 32 years, public investment as a share
differing stages of economic
considerably higher than of GDP in Queensland mirrors
development, population
other states, likely reflecting that seen for advanced
growth and a range of other
its stronger rate of population economies globally, with any
factors including the use of
growth, its typically wider discrepancies likely explained
the private sector to deliver
distances, and relatively by timing of local public
‘traditional’ public sector
high resources investment investment cycles and the
investment.
intensity which also drives impact of (private sector led,
infrastructure investment. and highly capital intensive)
Interestingly, it is also well resources and mining
above Western Australia – investment.
Australia’s other key
resources state.
26 IMF (2018) World Economic Outlook Database, April 2018.

Research suggests that FIGURE 45: QUEENSLAND TRANSPORT AND UTILITIES CONSTRUCTION AS
SHARE OF GSP: 1986-2018
following strong investment
7%
between 2006 and 2012, it is
difficult to argue convincingly 6%
that Queensland has a major
5%
“infrastructure deficit” and
the Building Queensland
4%
Pipeline and Business Case
Framework is providing 3%
improved assurance that
2%
Queensland is investing in
the right projects. However,
1%
the lack of established
benchmarks or satisfactory 0%
methods of infrastructure 1986 1990 1994 1998 2002 2006 2010 2014 2019
pipeline assessment may be Queensland New South Wales Victoria
problematic and perhaps South Australia Western Australia
could be addressed in future Source: BIS Oxford Economics, ABS data

infrastructure Audits by
FIGURE 46: PUBLIC SECTOR NET DEBT AS A SHARE OF GSP
Infrastructure Australia, as well
20%
as future Queensland State
15%
Overall, this analysis suggests
that Queensland economic
infrastructure spending is just 10%
keeping pace with historical

norms, but risks remain if 5%
activity were to fall away from
here; that is, if projects in
0%
the pipeline do not proceed.
Ideally, a more nuanced
analysis of infrastructure gaps -5%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
in Queensland would be better
Queensland New South Wales Victoria
informed by regular and
South Australia Western Australia
timely data on the quality of
Source: BIS Oxford Economicx, ABS data, Budget Papers (various)
services which infrastructure
provides – for example,
commute times in major cities,
the number of faults reported,
or capacity constraints in the
provision of utilities services
across water, electricity, gas
and telecommunications – as
well as the structural quality
of the infrastructure itself
through regular engineering
reports to assess how much
stock needs to be replaced
or renewed.

AT A BROADER LEVEL, THE DEBT LEVELS
OF AUSTRALIA’S MAJOR STATES ARE STILL
CONSIDERED LOW BY INTERNATIONAL STANDARDS
BCC FERRY TERMINAL
While some data is available SUSTAINABLY As noted in previous MPPRs,

publicly (for example, FUNDING PUBLIC the use of debt finance for
commuting times and INFRASTRUCTURE long lived infrastructure
distances data can be sourced Ideally, the availability of projects makes sense on
from analysis by the Bureau funding and finance for both economic efficiency
of Infrastructure, Transport sustainable productive and intergenerational
and Regional Economics as infrastructure investment equity grounds, so long
well as the Census) there should not derail investment as the projects funded are
can be lag in the availability itself – and exploring shown to be productive
of data. In some cases, such innovating funding through rigorous cost
as independent analyses of mechanisms remain critical to benefit analysis. And from
asset quality such as that the outlook for the pipeline a financial perspective, the
undertaken in the past by and the Queensland economy. Queensland economy (and
Engineers Australia, there can more importantly, revenue
Despite its weakened post-
be a very long time between generation to the State
boom financial position, the
reviews. This suggests that Government) has improved at
Queensland Government still
governments should collect a rate better than anticipated
has important funding levers
and publish detailed data in recent years. This has
available to it. Indeed, recent
on asset and service quality helped bring down the public
State Budgets and the 2018
frequently to provide a sector net debt to GSP ratio
MYFER show that the State
better basis for assessing from a peak of 13% in 2013/14
Government will be increasing
the existence or risk of to 10% in 2017/18 – as shown in
its use of debt finance to help
future infrastructure gaps Figure 46 – and has afforded
deliver its $43.6bn capital
emerging – and what the most the State Government
program over the next four
appropriate solutions may be. the headroom to increase
years, with net debt27 rising
debt to finance productive
from $34.2bn in 2017/18 to
infrastructure investment.
$51.5bn in 2021/22.28
27 Public sector net debt is defined here as the sum of general government net debt plus the net debt of publicly owned
non-financial corporations but excludes the debt of public financial corporations. In State Budgets this is referred to as
the net debt of the non-financial public sector.
28 Queensland Treasury (2018), Mid-Year Fiscal and Economic Review, p27.

The debt to revenue ratio However, it remains important Finally, with the notable
for the general government that debt is used only to exception of the Cross River
sector in Queensland has also fund capital rather than Rail project, Queensland has
fallen substantially, from a recurrent expenses, and that been able to extract funding
peak of 91% in 2012/13 to 54% provision is made when raising from the Commonwealth
in 2017/18.29 Indeed, over the borrowing levels for likely Government in recent years in
next four years, Queensland’s increases in interest rates as helping to fund major public
public sector net debt/GSP monetary policies normalise sector projects. The next
ratio is not anticipated to rise in the United States and other Federal election (required to
back to the 2013/14 peak – countries following looser take place by May 2019 at
even allowing for reduced monetary policy settings the latest) will no doubt see
royalty revenues – and in the wake of the global many promises of further
remains in the ‘middle range’ financial crisis. Commonwealth infrastructure
of indebtedness amongst funding assistance for
Apart from debt, Queensland
Australia’s five largest states. Queensland, particularly if
still retains significant options
there is evidence that these
Figure 46 shows that in raising finance for higher
projects are productive and
Queensland is not alone levels of infrastructure
have a positive net benefit
in using debt to fund investment. Crucially, asset
under rigorous analysis.
infrastructure investment, recycling has not been
with Victoria and New South used to the same degree in However, Queensland
Wales, particularly, using Queensland as it has in other will only be able to take
debt now or in the future to states and this remains a advantage of any increases in
deliver large infrastructure potential source of finance Commonwealth infrastructure
investment programs. Western for future infrastructure funding if it has a store of
Australia, by contrast, is projects, so long as there is such “shovel ready” projects
looking to reduce net debt effective post-sale regulation available. With only one ‘High
as a share of GSP in coming of privatised assets to ensure Priority’ project out of 9 on
years, which suggests there prices remain competitive. Infrastructure Australia’s
will be constraints to future Introducing tolling on major current (February 2019)
State borrowing for public roads (possibly to manage Infrastructure Priority List
infrastructure. At a broader peak demands) or more (Brisbane Metro), and only
level, the debt levels of fundamental reform such two ‘Priority’ projects out of
Australia’s major states as a broad-based road user 10 (Beerburrum to Nambour
are still considered low by charge, could also help fund Rail Upgrade, and the Inland
international standards, with future infrastructure projects Rail project), Queensland has
the net debt to GDP ratio for – as well as potentially few major projects which have
Australia (19%) comparing pushing out the need for been positively evaluated by
favourably to similar advanced reinvesting in roads networks. Infrastructure Australia. A
economies including Canada And there are other funding further 15 projects are listed
(27%), the United Kingdom options too, as detailed in as Initiatives (including Cross
(78%), the United States (82%) previous MPPRs, including River Rail), meaning that they
and France (87%), but above expanding the number of City are still being assessed. This
Sweden (9%), New Zealand Deals (bringing all levels of compares to 103 projects
(5%) and Denmark (16%).30 government to the table for nationally.
a region), value capture, and
implementing genuine tax and
expenditure reforms.
29 Ibid, p34.
30 IMF (2018) World Economic Outlook Database, April 2018.

LEGACY WAY
With the next Federal election Currently, Infrastructure

on the horizon, securing Australia is evaluating the
Commonwealth contributions business cases for two
towards the $5.4bn Cross projects on the Pacific
River Rail project and Motorway which were
further contributions to the submitted in January 2019 –
Beerburrum to Nambour the $1.03bn Varsity Lakes to
Rail project would liberate Tugun and the $749m Eight
significant state capital from Miles Plains to Daisy Hill
the forward estimates to sections. These are both listed
reinvest into other priorities. as funded (announced) in the
current MPP, but successful
evaluation by Infrastructure
Australia could also see a
greater share of Federal
Funding attracted to
these projects.
CRUCIALLY, ASSET RECYCLING HAS

NOT BEEN USED TO THE SAME DEGREE
IN QUEENSLAND AS IT HAS IN OTHER
STATES AND THIS REMAINS A POTENTIAL
SOURCE OF FINANCE FOR FUTURE
INFRASTRUCTURE PROJECTS

CONSTRUCTION SKILLS QUEENSLAND
CSQ aims to underpin the future prosperity of building
and construction in Queensland using evidence and
data to plan investment in a skilled workforce to meet
industry needs.
Construction Skills Queensland (CSQ) is We also undertake comprehensive industry
proud to be a collaboration partner of the research and forecasting to ensure our training
QMPPR Report. investment continues to develop a pipeline of
the right skills for Queensland’s future building
CSQ works collaboratively with the industry
and construction activities.
to future-proof the building and construction
workforce and support the economic growth CSQ programs provide a pathway for eligible
of Queensland. new entrants and existing workers in the
industry to obtain new skills and qualifications
Reports such as the Queensland Major
in civil construction.
Projects Pipeline report play an important
part in identifying future infrastructure and CSQ assists major projects to access building
investment needs and helping to inform and construction training to address skills
planning by industry and government. deficiencies that may hold up the project,
individuals to become more multi-skilled
For our part, CSQ is here to help the
and productive, or provide career pathway
construction workforce connect with the skills
opportunities for the workforce.
they will require through subsidised training
delivered by registered training organisations. CSQ also supports strategic and innovative
skilling solutions to respond to emerging
issues and to pursue best practice in building
and construction.
CONTACT
info@csq.org.au
1800 798 488
www.csq.org.au

CONCLUSION AND
RECOMMENDATIONS
This Report shows that major project activity
in Queensland is now higher than the very
low trough experienced through 2015/16 and 2016/17.
In conclusion there are

downside risks to major MAJOR PROJECTS DECLINE
project activity in the state in IN 2019/20
the near term, and there are
significant challenges ahead The likely prospect of a 24% decline in major project
if meeting the twin goals of activity over 2019/20.
sustainability in infrastructure Overall, funded work in the pipeline falls from $6.1bn in
provision and sustainability in 2018/19 to $4.7bn in 2019/20 before recovering slightly
the Queensland construction the following year.
industry are to be achieved.
PUBLIC AND PRIVATE

INVESTMENT
There may be an upside to the Commonwealth

Government’s current Infrastructure Investment Program, to
ward off the negative impact of the slowdown in residential
building or guard against potential external shocks.
There are vast differences in how major project activity will

play out by region, by sector and by project size through the
forecast period.
For many regions and sectors, volatility in the pipeline is
set to increase, placing pressure on construction industry
contractors and suppliers.
Regions in the north and the west of the state have very
high shares of unfunded work in their pipelines, adding to
uncertainty for contractors and industry suppliers.
SKILLS SHORTAGES
Queensland still faces significant competition for construction

skills from other states – particularly New South Wales and
Victoria.
The infrastructure investment program in other east coast
states is unlikely to slow down given projects already in flight.

This Report makes the following recommendations:
INCREASE INDUSTRY INCREASE NUMBER

1 COLLABORATION 2 OF SHOVEL READY
PROJECTS
Aim for a more collaborative approach Governments should consider raising the
between government and the construction number of “shovel ready” projects in the
industry, as is emerging in New South pipeline through early identification of
Wales and Victoria. Looming capacity and infrastructure network challenges and
capability challenges will likely require a commit to earlier evaluation of solutions and
greater partnership approach that maximises business cases. Similarly, future infrastructure
the legacy of the infrastructure program. requirements should be informed by a
Rather than being incentivised to secure comprehensive review of the quality of
the lowest priced work on each and every the existing infrastructure stock and the
project, procurement will increasingly need development of frequently updated customer
to encourage industry investment in capacity metrics that can best indicate where gaps may
and capability, reward innovation (and hence exist. Increasing the depth of the pipeline would
productivity), and foster the development of improve its flexibility to help smooth cycles in
critical skills needed to deliver major projects. major project activity – that is, allowing projects
to be accelerated within the pipeline to take
advantage of any emerging local industry
capacity, such as seems likely to occur in
SECURE
2019/20.
COMMONWEALTH
3 CONTRIBUTION
TO RAIL PROJECTS
DEVELOP A
Resolve Commonwealth funding
contributions to passenger rail projects
4 FUNDING PLAN
– the State Government’s ability to fund
Consider asset recycling. Other states,
infrastructure growth beyond its current
including New South Wales and Victoria,
budget commitments is challenging.
have already established long term plans for
This is likely to hamper its ability to meet
infrastructure development, and have made the
contributions required by the Commonwealth
hard decisions regarding funding and finance.
per national partnership agreements covering
With its traditionally stronger population
transport and road projects. Securing
and economic growth, Queensland needs
Commonwealth contributions towards the to develop a strategic plan for funding and
$5.4bn Cross River Rail project and further financing infrastructure. As noted in previous
contributions to the Beerburrum to Nambour Major Project Pipeline Reports, Queensland
Rail project would liberate funds from the could leverage substantial infrastructure
forward estimates to reinvest into other finance through asset recycling strategies.
priorities.

FINALISE A
5 CITY SEQ DEAL 6 CAPITAL EXPENDITURE
City deals provide a new approach for all The State Government should maintain the
levels of government to work together to current focus on ensuring committed funds
plan and deliver transformative outcomes for for infrastructure delivery are spent as
Queensland cities and are a key mechanism planned. The gap between committed and
of the Commonwealth Government’s Smart actual spending on public investment has
Cities Plan (2016). The Townsville City Deal narrowed, from a peak of $1.7bn in 2014/15
struck in December 2016 was the first in to $333m in 2017/18. This positive trend should
Australia and an important start. A South East be maintained.
Queensland (SEQ) Regional City Deal has the
potential to be the foremost City Deal in the
nation involving ten separate Councils. This
‘new generation’ City Deal could provide a
structured, coordinated plan for infrastructure
development in south east Queensland
supported by all tiers of government.
IMPROVED NEEDS REVIEW PACKAGING

7 ANALYSIS 8 STRATEGIES
Better identification of infrastructure gaps. Provide a diverse range of projects by
Broad economic measures and rules of thumb size. This Report highlights that a very
such as investment/GSP ratios are not ideal high proportion of funded work in 2021/22
determinants of the existence of infrastructure and 2022/23 is concentrated in projects
gaps but can show the cyclicality and trend valued over $500m. A sustainable and
movements in investment over time. The lack competitive construction industry requires
of established benchmarks or satisfactory diverse participation in project tenders and
methods of infrastructure gap identification is construction work. With this in mind, the
problematic and perhaps should be addressed State Government should look to review
in future infrastructure Audits by Infrastructure their packaging strategies to support greater
Australia, as well as future Queensland State participation from the sector.

BEST PRACTICE INFRASTRUCTURE PROVISIONS
On top of these recommendations, the more general rules of ‘best practice’ infrastructure
provision continue to apply. Governments, particularly, will need to maintain and improve
reporting systems to ensure the timely identification of any infrastructure gaps, choose the most
productive projects and infrastructure solutions to address gaps, and come up with funding and
financing solutions if major project activity is to be matched with Queensland’s infrastructure
demands over the long term:
IDENTIFY THE GAPS REVIEW THE OPTIONS
Better identification of infrastructure gaps. Ensure that the best infrastructure solutions
Broad economic measures and rules of thumb are picked. This means that the business cases
such as investment/GSP ratios are not ideal for short and long-term public investment
determinants of the presence of infrastructure programs are based on maximising economic
gaps but can show the cyclicality and trend benefits through transparent cost benefit
movements in investment over time. Changing analysis (CBA). The creation of Building
behaviours and a rising population density are Queensland (BQ), along with the ongoing
increasing the adaptability of cities in meeting work of Infrastructure Australia evaluating
infrastructure constraints. business cases submitted for Commonwealth
Government funding, has seen far more
rigorous analysis undertaken in project
evaluation and selection in Queensland than
in the past.
FIND THE MONEY
Ensure there is appropriate funding and financing mechanisms in place. Sustainable investment in
economic infrastructure for Queensland will involve moving more major projects from ‘unfunded’
to ‘funded’ categories in coming years, as well as potentially accelerating developments to
take advantage of industry capacity and developing new projects. The high cyclicality of State
government revenues create challenges here for publicly funded work as it encourages more
spending on infrastructure in the good economic times (at a time when industry capacity to
deliver infrastructure is more stretched and costs are higher) and then pull back on infrastructure
spending in the bad economic times (when the broader economy could do with the spending
boost and costs can be lower). Because of this, governments should continue to look for ways
to smooth and increase project finance such as through City Deals, asset leases, market-led
proposals, value capture and the judicious use of debt finance. Inevitably, sustainable financing of
infrastructure over the long term will require genuine tax and expenditure reforms.

RISKS TO THE OUTLOOK
The outlook contained in this report is subject to significant upside and downside risks.
Despite the cyclicality of work projected, there is still the potential for further, more volatile,
cycles ahead given Queensland’s natural strengths and advantages: increasing connections
with the fast growing economies of Asia, traditionally strong population growth, and high
quality natural resources.
In this respect, the key risks which will affect the outlook for major project work as identified
in this Report, are:
HEALTH OF TRADING
1 PARTNERS 2 COMMODITY PRICES
The economic outlook for key trading partners, The trajectory of commodity prices, particularly
the strategic decisions they make in achieving for coal (both thermal and coking), as well as
sustainable growth, and how this will impact oil prices (which can influence returns to LNG
on the global trade of resources for which projects). Commodity price movements also
Queensland has a strong supply position, impact on Queensland Government royalty
particularly coking coal, thermal coal, and gas. revenues (as well as business taxes collected at
the Commonwealth level) which can influence
the future path of public infrastructure
CURRENCY investment.
3 FLUCTUATIONS
Movements in the value of the Australian
dollar, which not only affect the profitability 4 GOVERNMENT POLICY
and competitiveness of resources projects
but also helps drive investment in other Policy decisions by State and Federal
tradeable sectors of the Queensland economy, Governments, particularly with regard to the
including tourism, agriculture, education and resources and energy and how this may play
manufacturing. out in terms of encouraging private investment
in resources projects and energy infrastructure.

While most of these risks are Maintaining a healthy
outside of the control of those Queensland economy
operating in the construction depends on sustaining an
of major projects, it remains innovative construction
important that governments industry which is flexible in
and industry participants responding to the challenges
focus on what can be ahead, and has the right mix
controlled to ensure that the of skills and competencies to
Queensland construction meet future demand.
industry and economy
remains on a sustainable
footing. This includes taking
on the recommendations in
this Report with the aim of
mitigating the volatility of the
boom/bust investment cycle
and achieving high quality,
predictable and sustainable
outcomes, safe workplaces
and decent working
conditions.

PUMPS UNITED
Founded 45 years ago Pumps United are very With 11 branches and over 130 staff
proud to have opened our first Queensland nationally our team are excited to be
branch in Cairns during 2015 and then collaborative partners with the QMCA
Sunshine Coast with Gold Coast soon after. supporting its members. As the experts in
We employ local staff most having been in the water management specialising in Rental,
industry for over 20 years. Dewatering & Enviro solutions, we are driven
to exceed expectations within the Queensland
market and like most QMCA members Pumps
United are optimistic about the upcoming
projects detailed within this report.

1300 137 137
www.pumpsunited.com.au
DIAL BEFORE YOU DIG
You wouldn’t employ an unlicensed electrician or
plumber therefore don’t take the risk when hiring
a locator, ensure he is a DBYD Certified Locator.
DBYD CERTIFICATION LIMITED (DCL) has DBYD has addressed this concern by
been set up to offer certification for locators developing a rigorous assessment for
working with asset owners and contractors. locating that contains both theory and
The Certification recognises locators who have practical elements.
demonstrated a high level of understanding
It is the intention of DBYD and supported by
and practical expertise. Our mission is to
its members that locators will aspire to be a
deliver training and certification to ensure the
DBYD Certified Locator. Having successfully
location of network infrastructure. Our vision
passed the assessment the locator will have
is to have safer communities through training
recognition that he/she has met a standard
and locator certification.
that is endorsed by our asset owning members
WHAT IT MEANS TO BE and will be listed on the DCL website as a
A DBYD CERTIFIED LOCATOR DBYD Certified Locator.
In recent years the asset owning members of DBYD is “The Essential First Step” and we now
DBYD have voiced their concerns surrounding see engaging a DBYD Certified Locator as
the inconsistency of skill sets associated with “The Essential Second Step”.
locating, which can lead to damages to their
respective assets or more concerning serious
injuries to workers or the general public.

Paul Newman
1300 329 375
www.1100.com.au
2019 MAJOR PROJECTS LIST As at February 2019
PROJECT DESCRIPTION SPONSOR REGION

ROADS, BRIDGES and RUNWAYS
Kingsford Smith Drive Upgrade Brisbane City Council Brisbane Inner City
Brisbane Metro Busway System Brisbane City Council Brisbane Inner City
Brisbane New Parallel Runway Phase 2 Brisbane Airport Brisbane - North
BAC Automall Brisbane Airport Brisbane - North
Logan Motorway Enhancement Project Transurban Logan - Beaudesert
Yamanto to Ebenezer Upgrade Qld Government Ipswich
Centenary Hwy Bus Lanes - Ipswich Mwy to Qld Government Ipswich
Toowong
Centenary Hwy Bridge Duplication Qld Government Ipswich
Jabiru Island Bridges (Hope Island Road (Oxley Qld Government Gold Coast
Drive) road duplication - stage 4)
Ipswich Motorway; Rocklea to Darra Stage 1 - Qld Government & Federal Ipswich
Between Suscatand Street and Oxley Road Inc. Government
Bridge
Gateway Motorway Upgrade North (GUN) - Single Qld Government & Federal Brisbane - North
Package Government
Pacific Motorway; Section (C) Daisy Hill to Logan Qld Government & Federal Logan - Beaudesert
Motorway at Loganholme Government
Coomera Connector - Loganholme to Nerang Qld Government & Federal Gold Coast
Government
Pacific Motorway; Eight Mile Plains to Daisy Hill Qld Government & Federal Brisbane - South
Government
Pacific Motorway; Miles Platting Road to Rochedale Qld Government & Federal Logan - Beaudesert
Road (Gateway Merge) Government
Pacific Motorway; Mudgeeraba to Varsity Lakes Qld Government & Federal Gold Coast
Capacity Upgrade Government
Sunshine Coast Airport - New East-West Runway Queensland Airports Limited Sunshine Coast
Mooloolah Road Interchange Qld Government Wide Bay
Pacific Motorway - Varsity Lakes to Tugun Qld Government & Federal Gold Coast
Government
Rockhampton Ring Road Qld Government & Federal Fitzroy
Government
Capricorn Highway (Rockhampton to Gracemere) Qld Government & Federal Fitzroy
Government
Toowoomba Range Second Crossing Qld Government & Federal Toowoomba
Government
Bruce Highway; Caloundra Road to Sunshine Qld Government & Federal Sunshine Coast
Motorway Government
Bruce Highway; Pine River to Caloundra Interchange Qld Government & Federal Sunshine Coast
Government
Bruce Highway; Deception Bay Road Upgrades Qld Government & Federal Moreton Bay - North
Government
Bruce Highway - Maroochydore Road Interchange Qld Government & Federal Sunshine Coast
Upgrade Government
Bruce Highway - Burdekin Deviation Qld Government & Federal Townsville
Government
Bruce Highway - Ingham to Cardwell Range Qld Government & Federal Townsville
Deviation Government
Bruce Highway - Goorganga Plains Upgrade Qld Government & Federal Mackay - Isaac
Government

TOTAL VALUE ENGINEERING
($M) VALUE ($M) STATUS 18/19 19/20 20/21 21/22 22/23
650 440 Under Construction 106 30

944 550 Under Procurement 50 200 250 50
89 50 Under Procurement 25 25
512 420 Under Construction 180
340 263 Prospective 38 97 128
400 240 Prospective 18 120

136 102 Unlikely 10 20 72
250 188 Prospective 20 100 68
2400 1500 Unlikely
749 374 Announced 74 120 120
197 165 Under Construction 58 58 39

1030 550 Announced 150 200 150
950 750 Unlikely 50
662 430 Announced 20 150 150 110
150 75 Announced 10 40 25
187 149 Announced 10 70 69
1400 1050 Unlikely
460 345 Unlikely
330 248 Unlikely


ROADS, BRIDGES and RUNWAYS
Cooroy to Curra: (Section D) - Keefton Road to Qld Government & Federal Wide Bay
Curra (Gympie bypass) Government
Bruce Highway - Rockhampton Northern Access Federal Government Wide Bay
Upgrade Stage 1
Sarina to Cairns - Cairns Southern Access Corridor Federal Government Cairns
Stage 3 - Edmonton to Gordonvale
Sarina to Cairns - Cairns Southern Access Corridor Federal Government Cairns
Stage 4 - Kate Street to Aumuller Street
Sarina to Cairns - Haughton River & Pink Lily Lagoon Qld Government & Federal Townsville
Upgrade Government
Sarina to Cairns - Mackay Ring Road/Bypass - Qld Government & Federal Mackay - Isaac
Stage 1 Government
Sarina to Cairns - Mackay Northern Access Upgrade Federal Government Mackay - Isaac
Sarina to Cairns - Ingham to Cardwell Range Federal Government Townsville
Deviation
Sarina to Cairns - Saltwater Creek Upgrade Federal Government Townsville
Sarina to Cairns - Tiaro Flood Immunity Upgrade Federal Government Wide Bay
Townsville Ringroad stage 5 Qld Government & Federal Townsville
Government
Peak Downs Hwy Improvements - Eton Range Qld Government & Federal Mackay - Isaac
Government
Peak Downs Highway - Walkerston Bypass Qld Government & Federal Mackay - Isaac
Government
Smithfield Transport Corridor Upgrade Qld Government & Federal Cairns
Government
Neville Bonner Bridge Destination Brisbane Brisbane Inner City
RAIL
Beerburrum to Nambour Rail Upgrade Qld Government & Federal Sunshine Coast
Government
Varsity Lakes to Elanora Extension Qld Government / QR Gold Coast
Ipswich Rail Line - Darra-Redbank 3rd track Qld Government Ipswich
CRR; Early Works - Site Preperation + Demolition Qld Government Brisbane Inner City
CRR; Tunnel, Stations and Development (TSD) PPP Qld Government Brisbane Inner City
CRR; Rail, Integration and Systems package (RIS) Qld Government Brisbane Inner City
European Train Control System Level 2 Qld Government Brisbane Inner City
Gold Coast Light Rail Stage 3 Qld Government / Private Gold Coast
Sunshine Coast Light Rail Sunshine Coast Council Sunshine Coast
North Coast Line Capacity (Brisbane to Cairns) Qld Government
Inland Mainline Freight Upgrade; NSW/QLD Border ARTC Darling Downs -
to Gowrie Maranoa
Inland Mainline Freight Upgrade; Gowrie to Kagaru ARTC Ipswich
Inland Mainline Freight Upgrade; Kagaru to Acacia ARTC Logan - Beaudesert
Ridge & Bromelton
Brisbane Freight Corridor (POB Connection) Port Of Brisbane / Brisbane - East
Government
North Galilee Basin Rail Adani Mackay - Isaac

($M) VALUE ($M) STATUS 18/19 19/20 20/21 21/22 22/23
121 91 Under Procurement 10 51 30
80 60 Announced 15 35 10
460 280 Unlikely
103 77 Unlikely 19 38 21
107 80 Unlikely 40 40
189 120 Under Construction
150 113 Announced 65 48
780 500 Announced 25 50 200
859 600 Unlikely

218 153 Unlikely 70 83
634 589 Under Procurement 100 129 130 130 100
500 300 Credibly Proposed 50 200 50
500 300 Unlikely 50 150
1600 1350 Announced 200 500
3500 3000 Announced 200 400 800 800

150 100 Announced 20 60
4000 3250 Prospective
1000 750 Announced 150 250 250 100


HARBORS
Brisbane International Cruise Terminal (including Port of Brisbane Brisbane - North
dredging)
Port of Gladstone - Second Shipping Lane Gladstone Ports Corporation Fitzroy
(Gatcombe and Golding Cutting Channel
Duplication Project)
Townsville Port Expansion Project - Outer Harbour Qld Government Townsville
Expansion (berths 14+15)
Townsville Port Expansion Project - Channel Qld Government Townsville
Capacity Upgrade
Port of Gladstone - RG Tanner Coal Terminal Qld Government Fitzroy
Abbot Point Coal Terminal Expansion Adani Mackay - Isaac
DEFENCE
RAAF Amberley - Growler Project Federal Government Ipswich
RAAF Amberley - C17 project Federal Government Ipswich
Shoalwater Bay - Remediation Federal Government Fitzroy
Singapore Force Posture Initiatives - Shoalwater Bay Federal Government Fitzroy
Singapore Force Posture Initiatives - Townsville Federal Government Townsville
WATER
Lower Fitzroy River Infrastructure Project - New Gladstone Area Water Board Fitzroy
Weir at Rookwood on the Fitzroy River Stage 2 (GAWB)
Gladstone to Fitzroy River Pipeline Gladstone Area Water Board Fitzroy
(GAWB)
Three Rivers Irrigation Project Stanbroke Outback - North
Shell / Arrow Water Treatment Facilities Bowen Shell/Arrow/Bow Mackay - Isaac
Wyaralong Dam WTP Stage 1 SEQ Water Logan - Beaudesert
Beaudesert Water Supply Upgrade Pipeline SEQ Water Logan - Beaudesert
Nullinga Dam Federal/Queensland Cairns
Governemnt
Somerset Dam Upgrade SEQWater Ipswich
Lake McDonald Dam Upgrade SEQWater Wide Bay
Haughton Pipeline Duplication Townsville Council Townsville
Urannah Dam Bowen Collinsville Enterprises Mackay - Isaac
Burdekin Falls Dam - Saddle Dam and Monolith Sunwater Townsville
Improvement
Hells Gate Dam - Upper Burdekin Townsville Enterprise Townsville
Hells Gate Diversion Canal - 240km from Hells Gates Townsville Enterprise Townsville
to a Delineated Area
Paradise Dam Spillway Improvement Project Sunwater Wide Bay
Galilee Basin Water Supply Adani Mackay - Isaac
SEWERAGE
Bulimba Creek - Brisbane Queensland Urban Utilities Brisbane Inner City
(QUU)
Luggage Point Sewerage Scheme Queensland Urban Utilities Brisbane - North
(QUU)
Rubyanna WWTP Bundaberg Wide Bay
Gold Coast Council Long Term Water Recycled GCC Gold Coast
Water Release Stage 1
Gold Coast Council Long Term Water Recycled GCC Gold Coast
Water Release Stage 2 - South Stradbroke pipeline
Northern treatment Urban Utilities Brisbane Inner City
Southern treatment Urban Utilities Ipswich

($M) VALUE ($M) STATUS 18/19 19/20 20/21 21/22 22/23
280 196 Prospective 35 100 61
200 150 Unlikely 75 75
193 150 Announced 75 75
225 200 Announced 60 80 60

Unlikely

1100 400 Announced 100 100 100 100
1100 100 Announced 25 25 25 25
352 195 Announced 35 65 95
250 120 Unlikely
250 120 Credibly Proposed 60 60

200 150 Prospective 50 50 50
135 100 Announced 50 50

100 80 Announced 40 40
215 150 Announced 100 50
250 200 Unlikely 100 100
330 210 Announced 90 95 25
313 250 Unlikely

490 400 Unlikely
200 145 Prospective 35 80 30

600 500 Under Construction 25 25 25 25 25
71 50 Under Construction
250 188 Announced 60 128

170 136 Under Procurement 2 26 5 40 53


ELECTRICITY
North Queensland Power Station Private / Qld Gov / Feds Townsville
Mt Emerald Wind Farm (180 MW) Ratch-Australia Port Bajool Cairns
JV
Cooper’s Gap Wind Farm (438MW) AGL Darling Downs -
Maranoa
Kennedy Energy Park Stage 1 (Wind 40MW, Windlab / Eurus Energy Townsville
Solar 15MW)
Wandoan South Solar Project (1000MW) Equis Energy Fitzroy
Bulli Creek Solar Farm (>1000 MW) Solar Choice Darling Downs -
Maranoa
Clarke Creek Wind (800MW) Energy Pacific Vic Pty Ltd Mackay - Isaac
Raglan Solar (350MW) Eco Energy Group Fitzroy
Columboolan Solar Farm (Miles) (310MW) Luminous Energy Fitzroy
Bouldercombe Solar Farm (200MW) Eco Energy Group Fitzroy
Darling Downs Solar Farm (106.8 MW) APA Darling Downs -
Maranoa
Kidston Solar Project - Stage 2 (270 MW) Genex Power Cairns
150MW Kidston Stage 3 Wind Project Genex Cairns
Kidston Transmission Project Genex/Powerlink Cairns
Munna Creek Solar Farm Project (120 MW) Renewable Energy System Wide Bay
Technologies
Kidston Pumped Hydro Storage Project Genex Power Cairns
Moranbah Solar Farm (170MW) Adani Mackay - Isaac
Clare Solar Farm Project (100MW) FRV Townsville
Oakey Solar Farm Stage 2 (55 MW) Oakey 1 AssetCo Pty Ltd Darling Downs -
Maranoa
Lilyvale Solar Farm (100 MW) FRV Toowoomba
Childers Solar Farm (80 MW) ESCO Pacific Wide Bay
Stanwell Power Station Works Qld Government Fitzroy
Rollingstone Solar Farm (110 MW) ESCO Pacific Townsville
Emerald Solar Farm (100 MW) RES Australia Fitzroy
Yarranlea Solar Farm (100MW) Risen Energy Darling Downs -
Maranoa
Whitsunday Solar Farm (57.5 MW) Edify Energy / Wirsol Mackay - Isaac
Susan River Solar Farm (100MW) ESCO Pacific Wide Bay
Daydream Solar Farm (150 MW) Edify Energy / BlackRock Mackay - Isaac
Real Assets
Hayman Solar Farm (50 MW) Edify Energy / BlackRock Mackay - Isaac
Real Assets
Rodds Bay Solar (300MW) Renew Estate Fitzroy
Lower Wonga Solar Farm (Stage 1) 350MW Solar Q Wide Bay
Haughton Solar Farm 100MW Pacific Hydro Townsville
Beelbee Solar Farm 150MW APA Group Darling Downs -
Maranoa
Clarke Creek Wind and Solar Farm 200MW Lacour Mackay - Isaac
Comet Solar Farm 309MW Hadstone Energy Fitzroy
Majors Creek Solar Project 400MW Edify Energy Townsville
Burdekin Solar Farm 140MW CleanGen Mackay - Isaac

($M) VALUE ($M) STATUS 18/19 19/20 20/21 21/22 22/23

380 133 Completed 95
160 56 Completed 31
1200 420 Prospective 125 170 125

1500 525 Prospective 75 75 100 100
1000 350 Announced 75 100 100 75

310 109 Announced 54 54
400 140 Announced 70 70

200 100 Announced 100

200 70 Announced 70


300 105 Completed 30
350 123 Announced 60 63

560 196 Prospective
240 84 Prospective
320 112 Prospective

490 172 Prospective
640 224 Prospective
220 77 Prospective


ELECTRICITY
Desailly Renewable Energy Park 1000MW DP Energy Cairns
Archer Point Wind Farm 120MW Wind Power Queensland Townsville
Ingham Bio-Energy Project (110MW) North Queensland Bio- Townsville
Energy Corporation
Aramara Solar Farm (140 MW) Eco Energy World (EEW) Wide Bay
Australia
Powering North Queensland: Transmission Line Powerlink Cairns
Burdekin Falls - Hydro-Electric Power Station Stanwell Townsville
(50MW)
Substation Upgrades at Various SEQ Locations Qld Government Multi Multi
SunCoast Powerline Project - Palmwoods to Qld Government Sunshine Coast
Maroochydore
Lockyear Valley Gas Power Station Quin Brook Toowoomba
Galilee Basin Transmission Project Adani Mackay - Isaac
PIPELINES
Roma East Gas Project (pipeline component) Santos Darling Downs -
Maranoa
Arrow Bowen Pipeline Shell/Arrow/Bow Mackay - Isaac
TELECOMMUNICATIONS
National Broadband Network - Qld component NBN Co. Multi Multi
Public Safety Regional Radio Communication Qld Government Multi Multi
OIL & GAS
Queensland Curtis LNG Upstream Field QGC & Shell Fitzroy
Development (Sustaining)
Gladstone LNG Upstream Field Development Santos & Petronas Fitzroy
(Sustaining)
Western Surat Gas Project Senex Darling Downs -
Maranoa
Arcadia Gas Project Santos Darling Downs -
Maranoa
GLNG Roma East Project Santos & Petronas Darling Downs -
Maranoa
Australia Pacific LNG Upstream Field Development Origin/Conoco Phillips Darling Downs -
(Sustaining) Maranoa
Arrow - Upstream Field Development (Sustaining) Arrow/Shell Darling Downs -
Maranoa
Atlas Gas Processing Plant and Pipeline Jemena Fitzroy
COAL
Eagle Downs Coking Coal Aqulia / Vale Mackay - Isaac
Byerwen Qcoal Mackay - Isaac
Maryborough (Colton) Northern Energy (Owned By Wide Bay
New Hope)
New Acland Stage 3 Expansion New Hope Corporation Darling Downs -
Maranoa
Caval Ridge Expansion (part of the gazetted Bowen BHP Billiton / Mitsubishi Mackay - Isaac
Basin Coal Growth Project) Alliance (BMA)
Peak Downs Expansion BHP Billiton / Mitsubishi Mackay - Isaac
Alliance (BMA)
South Walker Creek BHP / Mitsui Mackay - Isaac
Grosvenor Underground Stage 2 Anglo Coal Mackay - Isaac
Styx’s Coal Project Waratah Coal / Queensland Fitzroy
Nickel

($M) VALUE ($M) STATUS 18/19 19/20 20/21 21/22 22/23
1600 560 Prospective

190 67 Prospective
640 110 Credibly Proposed 80



100 80 Announced 20 40 20
450 360 Unlikely 160 200

500 300 Announced 75 75 75 75
650 Under Construction 50 150 150 150 150
1500 1200 Prospective 30 60 60 60
600 Prospective 150 150 150 150
1250 600 Prospective 158 228 215

350 210 Unlikely 60 90 60
150 100 Under Procurement 20 40 40



COAL
Middlemount Coking Coal Mine Stage 2 Peabody / Yancoal Mackay - Isaac
Hail Creek Extension - Underground Rio Tinto Mackay - Isaac
Rolleston Expansion Xstrata/Glencore Fitzroy
Yarrabee Yancoal Fitzroy
Boundary Hill South Mine Extension Anglo Coal Fitzroy
Aquila Anglo Coal Mackay - Isaac
Foxleigh Plains Project Anglo/CAML/Nippon Mackay - Isaac
Eaglefield Coal Mine Expansion Peabody Mackay - Isaac
Monto Coal Mine Further Stages Peabody / China Huaneng Wide Bay
Group
Yamala (Emerald Project) Northern Energy Fitzroy
Olive Downs Pembroke Resources Mackay - Isaac
South Burnett Coal Project (Tarong) MRV Tarong Basin Coal Wide Bay
Curragh Mine - Next stage Expansion Wesfarmers Fitzroy
Jellinbah Jellinbah Fitzroy
Kestral Expansion Kestral Joint Venture Fitzroy
Wilkie Creek New Black Energy Darling Downs -
Maranoa
Carmichael Coal Mine Project (Stage 1) Adani Mackay - Isaac
OTHER MINERALS
Mt Elliot Chinova Outback - North
Merlin Molybdenum-Rhenium Phase 2 Chinova Outback - North
Cannington Expansion BHP Billiton Outback - North
Roseby Copper (Little Eva) Altona Resources Outback - North
Red Dome Mungana Mungana gold mines Cairns
Ravenswood Extension Project Resolute Mining Townsville
Charters Towers Citigold Corporation Townsville
SCONI Scandium Project (Phase 1) Metallica Minerals Townsville
Sarsfield Resoulte Mining Townsville
Paradise Phosphate South project Legand International holdings Outback - North
Ardmore Project - Phosphate Project Centrex Metals Outback - North
Highland Plains - Phosphate Project POZ Minerals Outback - North
Mt Dromerdary - Graphite Project Novonix Outback - North
North Queensland Bio Energy - Ethanol Plant North Queensland Bio Energy Townsville
Gladstone Energy and Ammonia Project Australian Future Energy Fitzroy
Sun Metals Zinc Refinery Stage 2 Sun Metals Townsville

($M) VALUE ($M) STATUS 18/19 19/20 20/21 21/22 22/23

1100 660 Unlikely 150 310
400 120 Unlikely 70 50
260 150 Unlikely
100 70 Unlikely
200 140 Unlikely 70
200 140 Unlikely 70
1500 1200 Unlikely
265 159 Unlikely 60
350 280 Unlikely

500 300 Announced 100 100 100
250 200 Prospective
200 160 Prospective
110 90 Under Procurement 70
120 80 Under Procurement 70
250 200 Prospective 50 100 50
1100 900 Announced 50 200 300 200
95 48 Unlikely 48
345 250 Unlikely 75 100 75
400 120 Unlikely 30 60 30
320 96 Prospective 21 45 30
167 92 Unlikely 38 54
246 135 Prospective 35 80 20
1300 800 Prospective 80 400 320
250 100 Prospective
400 300 Unlikely
120 100 Unlikely 50 50
100 80 Unlikely 40 40
100 80 Unlikely 40 40
640 200 Prospective 75 75 50
300 200 Announced 50 100 50

RATHER THAN BEING INCENTIVISED TO SECURE THE LOWEST
PRICED WORK ON EACH AND EVERY PROJECT, PROCUREMENT
WILL INCREASINGLY NEED TO ENCOURAGE INDUSTRY
INVESTMENT IN CAPACITY AND CAPABILITY, REWARD
INNOVATION (AND HENCE PRODUCTIVITY), AND CONSIDER
VALUE FOR MONEY IN A “LONG TERM” SENSE WHICH
RESULTS IN A SUSTAINABLE INDUSTRY DELIVERING QUALITY,
LONG-LIVED INFRASTRUCTURE
QLDMPP.COM.AU

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2019

$3.13bn $6.61bn $4.03bn

Unfunded $13.77 billion

Total Pipeline Major Project

$10.14bn $6.66bn $10.77bn

Funded $27.57 billion

We are proud to introduce the 2019 Queensland

JON DAVIES STEVE ABSON

2019 Queensland Major Projects Pipeline 1

Construction Skills Queensland Dial before you Dig

Inland Rail Plangrid

4 2019 Queensland Major Projects Pipeline

PUBLIC SECTOR PIPELINE

Credibly Under Under

$1.01bn $2.10bn $1.06bn $7.07bn $6.22bn $5.98bn

Unfunded $4.17 billion Funded $19.27 billion

PRIVATE SECTOR PIPELINE

Credibly Under Under

$2.12bn $4.51bn $2.97bn $3.07bn $0.44bn $4.79bn

Unfunded $9.60 billion Funded $8.30 billion

*Under construction or completed in 2018/19

2019 Queensland Major Projects Pipeline 5

A decline in major project work is expected

6 2019 Queensland Major Projects Pipeline

2018 Funded 2019 Funded

2018 Unfunded 2019 Unfunded

Source: BIS Oxford Economics, QMCA and IAQ member knowledge

FIGURE B: FUNDING MIX BY ASSET CLASS, 2019-2023, $MILLIONS,

Water and Sewerage $2,556 $355

Non-Water Utilities $3,272 $4,331

Rail and Harbours $9,313 $855

Roads and Bridges $7,498 $660

Mining & Heavy Industry $11,694

0% 20% 40% 60% 80% 100%

Source: BIS Oxford Economics, QMCA and IAQ member knowledge

FIGURE C: MAJOR PROJECT OUTLOOK BY ALL SEGMENTS: 2018/19 TO 2022/23

Funded Credibly Proposed

Source: BIS Oxford Economics, QMCA and IAQ member knowledge

2019 Queensland Major Projects Pipeline 7

TOOWOOMBA SECOND RANGE CROSSING

CHALLENGES AND RECOMMENDATIONS

8 2019 Queensland Major Projects Pipeline

2019 Queensland Major Projects Pipeline 9

IN MEETING THESE PIPELINE CHALLENGES, THIS REPORT MAKES

SECURE COMMONWEALTH CONTRIBUTION

Resolve Commonwealth funding contributions to passenger rail projects – the State

10 2019 Queensland Major Projects Pipeline

2019 Queensland Major Projects Pipeline 11

8 REVIEW PACKAGING STRATEGIES

12 2019 Queensland Major Projects Pipeline

FOR MORE INFORMAITON

The 2019 Major Projects List ENGINEERING VALUE

14 2019 Queensland Major Projects Pipeline

MAJOR PROJECTS OUTLOOK

KEY ANALYSIS  Rail continues to offer  The pick up in work from

2019 Queensland Major Projects Pipeline 15

TOWNSVILLE RING ROAD

FUNDED VERSUS UNFUNDED PROJECTS

Figure 1 (over the page) illustrates the outlook

16 2019 Queensland Major Projects Pipeline

which is being only partially 20

offset by rising rail, water,

major project activity Non-Water Utilities Water and Sewerage Defence

2019 Queensland Major Projects Pipeline 17

KEY ANALYSIS Rail continues to offer The pick up in work from