Infrastructure Australia proposes to reform project governance and gives 30 billion reasons why this is critical for Australian businesses.
When the Australian Productivity Commission was asked to undertake an enquiry into ways to improve the delivery of major public infrastructure projects, Infrastructure Australia got ready to make a submission. But before they did, they sought expert input from the Caravel Group, the people behind DMS, whose report on the state of project delivery in Australia was a key element of the submission.
The Caravel report
- stated that 48% of projects fail to meet time, cost and quality objectives
- points to significant flaws that severely affect the cost and delivery of infrastructure projects.
Based on $215 billion infrastructure investments, this success/failure rate – with a conservative average cost overrun of 40% – amounts to capital wastage in the order of $30 billion per annum.
Thus, an increase in the project success rate of just 10% would save Australia a staggering $9 billion per annum.
With Project governance identified as a major contributor to project failure, the office recommended that the commission identify options for improving project governance as a mechanism for reducing overall infrastructure project costs.
The Infrastructure Australia report suggested that a bold reform is needed for Australia to “become world leaders in project governance”. Providing a project governance framework would be instrumental in this pursuit.
The public infrastructure inquiry