2018 Queensland Major Projects Pipeline Projects 2018 Queensland Major Queensland Major Projects Pipeline A JOINT INITIATIVE OF THE QMCA, CSQ AND IAQ $M Total Pipeline 39,800,000,000 Annual Ave 7,960,000,000 Weekly Ave 153,000,000 Daily Ave 21,860,000 Hourly Ave 910,833 AT A GLANCE $7.9b per year Scale of $21m per day Recurring Expenditure Unfunded split Total Pipeline Major project Value activity $39.9b $2.1m Major $152m per Projects working per week hour Jobs Funding split The funded pipeline will support $8.2b 12,700 workers $20.2b North Queensland each year on average $39.9b Public Projects $13.6b Total $19.7b Fully-funding the pipeline South East Queensland will support an extra Private Projects $3.8b 4,700 workers Surat Basin each year on average 14.3b Various Major Projects Pipeline – Breakdown $39.9 billion total (over 5 years) Credibly Under Under Unlikely Prospective proposed Announced procurement construction 33 43 22 22 12 58 projects valued at projects valued at projects valued at projects valued at projects valued at projects valued at $6.9b $5.1b $4.1b $5.3b $4.1b $14.4b Unfunded $16.1 billion Funded $23.8 billion $M Total Pipeline 39,800,000,000 Annual Ave 7,960,000,000 Weekly Ave 153,000,000 Daily Ave 21,860,000 Hourly Ave 910,833 $7.9b per year Scale of $21m per day Recurring Expenditure Unfunded split Total Pipeline Major project Value activity $39.9b $2.1m Major $152m per Projects working per week hour Jobs Funding split The funded pipeline will support $8.2b 12,700 workers $20.2b North Queensland each year on average $39.9b Public Projects $13.6b Total $19.7b Fully-funding the pipeline South East Queensland will support an extra Private Projects $3.8b 4,700 workers Surat Basin each year on average 14.3b Various Major Projects Pipeline – Breakdown $39.9 billion total (over 5 years) Credibly Under Under Unlikely Prospective proposed Announced procurement construction 33 43 22 22 12 58 projects valued at projects valued at projects valued at projects valued at projects valued at projects valued at $6.9b $5.1b $4.1b $5.3b $4.1b $14.4b Unfunded $16.1 billion Funded $23.8 billion CONTENTS Foreword 1 Executive Summary 2 Long-term Challenges and Recommendations 5 Economic Outlook 10 Long-term Queensland Major Projects Pipeline 24 Workforce and Employment Outlook 38 Implications, Challenges and Risks 46 Conclusion and Recommendations 60 2018 Major Projects List 64 This report has been produced by the QMCA, CSQ and IAQ (“the Industry Bodies”) with the assistance of BIS Oxford Economics. The report is based on information available as at end March 2018 from public and private sources including Project Sponsors and the Industry Bodies, Project Sponsors and BIS Oxford Economics provide no warranty as to its accuracy, reliability or completeness. To the extent permitted by law, neither the Industry Bodies, Project Sponsors or BIS Oxford Economics or any of their related entities accept liability to any person for loss or damage arising from the use of the information contained in this report. FOREWORD We are proud to introduce the 2018 Queensland Major Projects Pipeline Report to you – an initiative of the Queensland Major Contractors Association (QMCA), Construction Skills Queensland (CSQ) and the Infrastructure Association of Queensland (IAQ). Nowhere else in Australia do industry For governments, the consolidated Queensland is a decentralised and peak bodies consult so closely with picture of state wide major project vast Australian state which requires governments, government-owned activity in the next four years can help continued investment in infrastructure corporations and private sector guide policy formation, unlock the by both public and private sectors proponents to accurately chart potential for private sector partnerships to meet demands of a growing the status of all major projects in and leverage capital works investment. population and increase our global their home state. The fruit of this competitiveness. Experience from The greatest threats to a sustainable approach is an authoritative report successful countries and jurisdictions pipeline of projects are the which describes the scale, timing around the world show that when identification of investable projects, and location of all major engineering public and private sectors face availability of funds and timely projects being considered or infrastructure challenges together, investment decisions. This year’s developed in Queensland. the public and economy are the big report highlights much lower levels winners. Perhaps the real worth of our Sincere thanks to our partner of private sector investment than report is that it sends a strong signal BIS-Oxford Economics for their expert previous years, with $9.4 billion of to potential infrastructure investors guidance, compilation of the project projects classified as only prospective that a highly motivated engineering listings and the detailed independent or considered unlikely to receive sector exists, with contractors and analysis that underpins the report. funding. Until positive business cases service providers eminently capable This year, we have increased our and investment decisions are made, of preparing for and delivering world investment in the report format to mining and industrial projects such class major projects. enhance reading experience and as those in the undeveloped Galilee improve access to key report data Basin remain at risk. The value of As industry peak bodies we are through a dedicated website. The public sector projects which have committed to promoting Queensland new design and look of this report is positive funding announcements as a world leading destination for a statement of confidence in the future or are currently under procurement economic development and new of our partnership and the continued outstrips the private sector. The report infrastructure investment. We look relevance of our report to industry for also forecasts a significant 72% forward to working with all our years to come. reduction in private sector mining and stakeholders in 2018 to grow the heavy industry projects in the next pipeline of major projects in our For infrastructure designers, five years compared to the last. The great State. contractors and other project ability of governments to identify and participants, this report is an deliver on their planned infrastructure indispensable business planning has therefore assumed even greater tool, capable of guiding well-informed importance to the continued short- decisions to participate in chosen term sustainability of the major projects market sectors and geographic contracting sector. regions. Peter Anusas Brett Schimming Steve Abson President Chief Executive Officer Chief Executive Officer Queensland Major Construction Skills Infrastructure Association Contractors Association Queensland of Queensland Queensland Major Projects Outlook | 2018 Queensland Major Projects Pipeline 1 EXECUTIVE SUMMARY Welcome to the second Queensland Major Projects Pipeline Report (the Report) developed by the Queensland Major Contractors Association (QMCA), Construction Skills Queensland (CSQ) and the Infrastructure Association of Queensland (IAQ). During this period, Queensland experienced a substantial boom and bust cycle in construction activity and major project work. The key finding of this Report is Industry can feel more confident that major project work has risen about investing in new equipment, Given rising major by 58% in 2017/2018 to $6.9 billion productivity enhancing initiatives and project activity in after two successive years of low skills development if they are given activity. Subject to level of funding reasonable lead times to prepare in other states and the commitments for 22 credibly proposed the form of a clear, long-term major need to meet growing projects, activity in 2018/2019 is projects pipeline – and if governments demand in Queensland, forecast to be retained at a similar and procuring agencies implement governments need to level. However, recovery in activity may supportive policies. consider how they can be short-lived and decline again in This year’s Report provides a raise additional funding 2019/2020 due to an identified lack comprehensive list of major project of viable replacement projects. for infrastructure work, together with analysis on the projects, accelerate Maintaining recent momentum is corresponding level of construction existing projects or therefore the core challenge facing activity this entails and the subsequent the state, requiring a range of demand for skilled construction labour. stimulate private initiatives to improve levels of funding This analysis is based on both the investment for infrastructure, ensure capability completion of existing projects and and capacity to manage a growing the likelihood of potential projects pipeline and, fundamentally, provide proceeding. A complete list of major positive conditions and frameworks projects considered for this analysis, that support the economy’s growth and the explicit assumptions for each engines: public and private investment. project regarding work done and Given rising major project activity construction workforces employed in other states, and the need to each year, are provided in the provide infrastructure to meet Appendix at the end of this report. growing demand in Queensland, As well as presenting the pipeline, the governments need to consider how Report discusses the key economic they can raise additional funding for settings where major project