Navigating Queensland's Construction & Infrastructure Landscape: Challenges and Opportunities

Queensland's infrastructure sector is currently in a state of anticipation for tender award as many projects remain on hold, awaiting the results of the upcoming election.

Key areas of focus include dam upgrades, with a program of works committed by Seqwater's Dam Improvement Program to be completed by 1 October 2035 projects in the water sector remains a key focus. With the last major dam, Wyaralong, built in 2011, finding experienced talent is a growing concern.

Despite the uncertainty, Tier 2 companies remain busy with capital upgrades in water, road infrastructure, and rail projects across the Gold Coast.

The state’s $14 billion health infrastructure spend continues to fuel opportunities, especially for Tier 1 construction companies. However, the push for more collaborative client-contractor relationships is shaping new approaches to project delivery. The "Big Build" is the biggest capital investment in health in Queensland history.

On a broader scale, projects tied to the 2032 Olympics are causing some apprehension. Delays in commencing infrastructure builds have raised concerns about timing, as the industry faces resource shortages and rising labour costs.

Major Projects Funding Insights:

According to the Queensland Major Contractors Association (QMCA), the state has $38.2 billion in publicly funded projects and $18.75 billion in privately funded projects. However, they have also highlighted $7.1 billion in public unfunded projects and a significant $27.91 billion in private unfunded opportunities. This reflects the vast potential for growth, but also underscores the need for securing funding and resources in an increasingly competitive market.

National Trends:

New South Wales:

In a major push towards clean energy, the New South Wales Government has committed over $3.9 billion in its 2023-24 Budget, setting a bold vision to meet the state’s emissions reduction targets of 50% by 2030 and net zero by 2050. The energy transition is supported by $1.8 billion for energy transmission and storage, and $1 billion to establish an Energy Security Corporation aimed at developing storage projects like pumped hydro, community batteries, and virtual power plants.

As Sydney transitions from major infrastructure to energy and HV projects, transferable skills in project delivery and commercial management are in high demand and companies are looking at the slow down in infrastructure spend and utilising the project delivery expertise in the transport sector to apply to delivering the energy package of works.

Victoria:

Government spending cuts have slowed down intermediate roles, but strategic growth and executive hires are still moving forward, particularly for 2025 initiatives. Companies are opting for blind recruitment searches to maintain stability during leadership transitions and preferring a proactive approach to hiring, investing in the process for key position months in advance.

Meanwhile, in Victoria, the Allan Government is navigating a precarious fiscal landscape, as the state grapples with a $26 million daily interest bill on its growing debt. With net debt set to rise from $156 billion to $188 billion by 2028, the state has already seen its credit rating downgraded from AAA to AA, increasing borrowing costs.

Victoria’s large-scale infrastructure projects, such as the Metro Tunnel and Suburban Rail Loop (SRL), are central to the state’s hopes for economic growth and a potential credit rating recovery. However, any significant cost overruns on these projects—especially on the SRL, which is budgeted between $30 billion and $34.5 billion—could lead to further downgrades, putting additional strain on Victoria’s finances.

Rating agencies have made it clear: should Victoria’s debt continue to rise, and operating revenues not improve as planned, the state’s credit rating could drop to AA- or worse. This would increase borrowing costs even further, compounding budget pressures and making debt less sustainable. With past infrastructure blowouts on the Metro Tunnel and North East Link, which have already seen billions in overruns, Victoria’s path forward depends heavily on completing these projects efficiently and on budget.

As Queensland—and the rest of Australia—grapples with these challenges, adaptability and collaboration will be key to navigating the evolving construction and infrastructure landscape.

?