- Unprecedent infrastructure investment has been announced by the state and territory government
- Mohammed Abdulahi, a director at Partners in Performance, has argued that industry productivity must be revolutionised
- The construction sector has become less productive compared to other sectors over the last 30 years
Structured support and investment are needed to help Australia meet its record infrastructure pipeline, said a global management consulting firm.
Partners in Performance noted that unprecedented levels of infrastructure investment are being witnessed across Australia, with the states and territories pledging over $120 billion of investment over the next decade in such projects.
The delivery of these projects, however, is expected to be challenged by significant cost overruns.
Revolution in industry must occur
Mohammed Abdulahi, a director at Partners in Performance, has argued that industry productivity must be revolutionised in order to combat not just the size and complexity of projects, but the lack of market capacity and rising costs.
“Construction has lagged in productivity growth relative to other sectors due to slower digital adoption, adversarial culture, and a lack of embedded disciplines to drive continuous improvement in operational efficiency,” said Mr Abdulahi.
The Australian Infrastructure Plan 2021 noted that over the past 30 years, the construction sector has become 25% less productive compared to other sectors such as manufacturing, mining, transport and retail.
Covid has added further constraints to productivity, with Covid-safe working practices, in particular, adding an additional cost.
Mr Abdulahi warned that without proper planning or ample productivity management, continued cost blowouts on infrastructure projects could unintentionally cause more consequences for taxpayers.
“The solution lies in collaboration,” said Mr Abdulahi.
“The infrastructure industry and key stakeholders must unite to drive transformation, improve productivity and achieve better integrated outcomes.”
“Government intervention will be instrumental in aligning fragmented players who are currently not motivated to take investment risk.”
Mohammed Abdulahi, Partners in Performance
He said government intervention must support the industry transformation by motivating behavioural changes across the construction sector, mandating changes and requirements, and building ecosystems that facilitates productivity gains.
“The buck doesn’t stop with the Government, however,” said Mr Abdulahi.
“All industry players need to invest in the productivity transformation, pulling four value levers in parallel to motivate the industry to transform itself.”
He added innovation, investing, developing and overhauling are the four value levers.
“The program should create incentives and mechanisms to support and steer the industry towards a high productivity culture.”
