Submission
to the
Green Paper on Developing
Northern Australia
August 2014
Public Affairs and Marketing
Engineers Australia
11 National Circuit, Barton ACT 2600
Tel: 02 6270 6544
Email: policy@engineersaustralia.org.au
www.engineersaustralia.org.au
Engineers Australia Submission – Green Paper on Developing Northern Australia
About Engineers Australia
Engineers Australia is the peak body for engineering practitioners in Australia, representing all
disciplines and branches of engineering. With membership of over 100,000 Australia wide, Engineers
Australia is the largest and most diverse professional engineering body in Australia. All Engineers
Australia members are bound by Royal Charter to promote engineering and to facilitate its practice for
the common good. Engineers Australia maintains representation in every state and territory.
Engineers Australia thanks the Department of the Prime Minister and Cabinet for granting an extension
to the deadline of this consultation process.
Introduction and Context
This submission addresses matters relating to infrastructure delivery and planning, highlighting specific
issues that relate to the engineering workforce.
Variability in infrastructure project delivery remains a major concern for the engineering profession.
With roughly 60,000 engineers employed – in varying capacities – on infrastructure projects in
Australia, market fluctuations can have a clear effect on the overall engineering workforce.
‘Boom/bust' cycles of infrastructure delivery can create acute demand spikes across specific locations
or engineering specialisations. In the context of engineering skills shortages witnessed in Australia over
recent years, these fluctuations can have significant economic consequences.
The quantum, quality and condition of economic infrastructure are key determinants of productivity
growth and economic growth. These connections and the critical importance of productivity growth to
Australia’s future were articulated in the Australian Treasury’s Intergenerational Report. While effective
infrastructure delivery is critical to Northern Australia, we also need to be realistic in terms of our
capability to deliver benefits from infrastructure. Political, business and community expectations about
new or improved infrastructure are often raised to unrealistic levels, resulting in unnecessary public
criticism and blame when projects do not achieve their expected outcomes. New projects are often
described in transformative terms and claimed that they can be delivered in short time frames.
However, in reality, the vast majority of these projects provide only incremental improvements and all
have lengthy design, construct and commissioning phases.
Progress towards optimising Australia’s economic infrastructure has been slow and uneven. This has
been the message from Engineers Australia’s Infrastructure Report Cards, first released in 1999, with
updated national reports in 2001, 2005 and the latest in 2010. In 2010, Infrastructure Report Cards
were also released for each state and territory1.
It is clear from the Australian Treasury’s Intergenerational Reports that productivity growth is the key to
maintaining Australian standard of living and fiscal sustainability as the population ages. In turn,
access to and availability of economic infrastructure services are key drivers of productivity growth.
Engineers Australia’s periodic assessments of Australia’s economic infrastructure have demonstrated
that the infrastructure is barely adequate to meet present and future services and that major changes
are necessary. Recommendations made by Engineers Australia in the latest Infrastructure Report
Card deal with many of the matters covered by the Green Paper’s areas of focus.
Central to change is infrastructure planning and governance arrangements. These matters have been
addressed in some detail in the recent Draft Report by the Productivity Commission on Public
Infrastructure. Members of Engineers Australia have consistently advocated improved infrastructure
planning, particularly in respect to integration of planning with land use and urban planning and
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Engineers Australia Submission – Green Paper on Developing Northern Australia
planning for population growth. The Productivity Commission recommendations go to the core of
problems in this area and are strongly supported by Engineers Australia.
The Commission also proposes a set of integrated recommendations that are intended to reduce
infrastructure project bid costs and to put aside prevailing risk aversion to open the way for the adoption
of new technologies. Engineers Australia also strongly supports these recommendations, but adds an
important caveat. Effective implementation of the Commission’s recommendations depends on some
restoration of the loss of public sector engineering and technical expertise. Engineering structures in all
levels of government have been radically down-sized over the past two decades in favour of
outsourced resources to the point where the public sector’s ability to manage engineering contracts and
capacity to adequately assess the engineering competencies of contractors and sub-contractors has
been severely compromised. The consequences manifest themselves in higher costs and in a growing
list of failures chronicled by auditors-general.
For many years, Engineers Australia has argued that the information base for infrastructure decision
making is inadequate. While replicating the capital accounts of business entities may not be feasible,
this cannot be said about basic information relating to the stock of infrastructure, its age profile and how
it compares to the economic lives of assets, location of assets, attention to maintenance and the
current condition of assets. This information should be available in transparent form and be the
baseline for future decisions. The Productivity Commission has recommended the establishment of an
infrastructure cost benchmarking framework to assist planning and procurement processes. Engineers
Australia strongly supports this recommendation.
The responsibility for infrastructure planning lies with government, irrespective of which sector
ultimately constructs and/or owns infrastructure assets. The corollary is that infrastructure planning and
procurement agencies require the competence, skills and experience to make the most effective
infrastructure decisions. However good, economists, accountants and lawyers do not make good
engineering decisions. Our earlier point about the de-engineering of the public sector is critical.
Effectively dealing with this problem does not entail reversing history and restoring past structures.
Rather, it means that agencies with engineering and technical responsibilities implement procedures to
identify the most appropriate mix of in-house and external engineering resources required to discharge
their responsibilities.
Infrastructure development in Australia has followed an intermittent course and at times there have
been prolonged gaps between projects. This has severe consequences, including increased costs and
availability of engineering skills when they are needed. Engineers are like everyone else facing
unemployment; they look for work that is available to sustain their lives. Intermittency in project
delivery means this is not always in engineering. Research by Engineers Australia has shown that
about 62 percent of Australians with engineering qualifications work in engineering. Intermittency is an
important contributor because many engineers who resort to work in other fields do not return to
engineering. The costs of their training and the costs of replacing their expertise increase the costs of
subsequent infrastructure development.
Engineers Australia’s Infrastructure Report Cards
Engineers Australia’s Infrastructure Report Cards are complex documents that synthesise qualitative
and quantitative information about the nation’s infrastructure into a form useful for policy analysis and
policy deliberations.
Documents examined include regional development plans, infrastructure strategic plans, documents
relating to specific infrastructure projects, government reports and government budgets and budget
statements. Statistics examined included financial statistics made available by state and territory
governments and the Commonwealth Government on funding for infrastructure, the progress of these
commitments and funding of and progress of maintenance of existing infrastructure assets.
Background statistics from a range of agencies on population and population growth, traffic volumes,
freight volumes, water supplies and use, waste water collections and volumes recycled, energy
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Engineers Australia Submission – Green Paper on Developing Northern Australia
supplies and demands and other statistics that influence the demand for, and supply of, infrastructure
services are also examined.
The synthesis includes the considered views of engineers with expertise and experience in
infrastructure matters in all states and territories. The final outcomes of the process are assessments
about the suitability of existing infrastructure for current and planned future uses. The scale used for
the assessments is as follows:
A
B
C
D
E
(Very Good); Infrastructure is fit for its current and anticipated future purposes.
(Good); Minor changes are required to enable infrastructure to be fit for its current and
anticipated future purposes.
(Adequate); Major changes are required to enable infrastructure to be fit for its current and
anticipated future purposes.
(Poor); Critical changes are required to enable infrastructure to be fit for its current and
anticipated future purposes.
(Inadequate); Inadequate for current and anticipated future purposes.
The 1999 Infrastructure Report Card assessed Australian economic infrastructure as ‘D’, poor and
critical changes were required to enable infrastructure to be fit for its current and anticipated future
purposes. Subsequent reports saw sufficient improvement to lift assessments to ‘C’ in 2001 and ‘C+’ in
2005 and again in 20103.
Only one jurisdiction, the ACT, was assessed higher but was qualified. Engineers Australia argues that
these assessments are inconsistent with the productivity growth necessary to meet the future
challenges outlined by the Treasury Intergenerational reports and that Australia’s economic
infrastructure must be improved through coordinated planning, maintenance and development at all
levels of government.
2010 Infrastructure Report Card Overview
In our 2005 Infrastructure Report Card, Engineers Australia identified that meeting demands for new
infrastructure and maintaining, upgrading or replacing ageing infrastructure was a major challenge
facing Australia.
There had been significant under-investment in infrastructure across the nation, which was imposing
constraints on all parts of the economy and the community. We called for coordinated planning
frameworks, and cooperation between governments as being vital to providing Australia’s future
infrastructure needs. Most importantly, we believed that Australia would benefit from the establishment
of a ‘national infrastructure council’ to provide independent advice about infrastructure priorities of
national significance.
In the intervening five years, Australia experienced significant economic and population growth, and
some improvements in infrastructure. It also weathered the global financial crisis (GFC). Spending on
infrastructure increased and there was a much better understanding of the role that infrastructure plays
in sustaining a viable economy. We saw the establishment of an independent infrastructure advisory
body at a national level, Infrastructure Australia, and a priority setting process that applied more rigour
to project funding decisions. Many jurisdictions developed infrastructure plans – though of variable
type and quality.
This 2010 Infrastructure Report Card for Australia was distilled from individual state and territory
outcomes, with appropriate weighting given to the relative size and economic importance of each. The
ratings of each state and territory showed that there were limited effects resulting from the early work of
Infrastructure Australia and the federal government’s GFC stimulus package.
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Engineers Australia Submission – Green Paper on Developing Northern Australia
Given the long lead times for major infrastructure, it is not surprising that there was a mix of no change,
slight improvement and slight deterioration in individual infrastructure types between 2005 and 2010. In
2005, the result was a C+ overall and remained a C+ in 2010 (a ‘C’ rating reflects infrastructure that is
only adequate and in need of major changes).
Overall, our 2010 Infrastructure Report card showed that Australia’s infrastructure was in need of some
major improvements. It was clear that Australia faced significant challenges; economic growth
depends on our addressing the backlog of nationally significant infrastructure works. We identified that
this will require a greater focus on ongoing maintenance and renewals as well as new infrastructure to
meet demand.
It was clear in 2010 that the investment in infrastructure had still not caught up with the estimated $700
billion shortfall (then) caused by years of under-investment. Engineers Australia’s engineering
construction index charts for each state and territory provided some guidance. The overall index for
Australia had increased at a modest rate to almost $250 million per 100,000 population during the last
20 years. Only Queensland and Western Australia, the resources states, exceeded the national
average; all other states and territories lagged behind to varying degrees.
The lack of long-term strategic planning, coordination, integration and cooperation between levels of
government was a clear and severe constraint on Australia’s infrastructure. Australia had, and still has,
an extremely fragmented regulatory and planning framework. There are many federal bodies that are
responsible for regulation, policy or investment in infrastructure, and there are dozens more at the state
and territory level, each having different and often competing responsibilities and interests – add to this
the 700 local governments. This remains a major weakness in the Australian system, which requires a
willingness to cooperate between the various spheres of government to deliver efficient outcomes for
the community.
In 2010 Engineers Australia strongly recommended that priority-setting for projects must be based on
the advice of Infrastructure Australia at a national level following rigorous analysis and justification.
States and territories would benefit from advisory bodies operating on similar principles to Infrastructure
Australia and following the assessment guidelines that the national body has developed. Prioritysetting should include all infrastructure sectors.
Engineers Australia believes that underlying principles in any infrastructure planning process needs to
include productivity, liveability and sustainability. Sustainability is not only about the natural
environment, but includes economic and social issues, equity, affordability and effectiveness. Planning
regimes must remain flexible and open to change, given that forecasts often turn out to be inaccurate.
In 2010 we recommended that land use decisions must give priority to infrastructure that is nationally
significant, sustainable, affordable, and is vital to state and territory interests. Land use decisions must
be integrated with infrastructure priorities and urban encroachment on ports and airports must be
curbed. Australia’s economy is dependent on trade, which, in turn, is dependent on ports and airports.
To operate efficiently, there must be good road and rail transport links from ports to metropolitan and
regional centres.
One area identified in 2010 as needing particular attention was the sharing of financial and operational
risk between public and private participation in projects, which needs to be equitable for both parties –
this remains relevant today. All infrastructure owners must have adequate data on their infrastructure
assets, and must utilise this to plan and fund maintenance and renewal programs. Maintenance may
not be the most newsworthy activity, but it is the most essential in ensuring the longevity of any
infrastructure asset. Full transparency of whole-of-life asset costs is critical.
Engineers Australia’s 2010 Infrastructure Report Card recommended the following:
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Engineers Australia Submission – Green Paper on Developing Northern Australia
All governments must:





Deliver more efficient infrastructure outcomes and develop innovative funding models to provide
the required infrastructure.
Harmonise infrastructure planning and regulation through improved cooperation and collaboration
between all levels of government, business and the community.
Address the imbalance between urban and rural and remote communities regarding access to
high quality, reliable infrastructure.
Develop plans and implement projects in all sectors in advance of need, and either build in
capacity for growth or preserve land in all infrastructure sectors, particularly for ports, airports and
transport corridors.
Encourage private sector funding for infrastructure and where infrastructure delivery models
include the private sector, have the appropriate allocation of risk to deliver the best project
outcome.
State and territory governments must:


Develop long-term infrastructure visions and plans that accommodate projected economic growth
and population increases.
Establish independent planning infrastructure advisory groups to provide advice on infrastructure
priorities and provide infrastructure planning and funding advice.
Infrastructure owners and managers must:

Improve the maintenance of existing assets, through adequate funding and asset management
plans. Integrate climate change mitigation and adaptation into infrastructure plans.
Analysing Australia’s Infrastructure Trends – 2013
In order to assess any progress in the state of Australia’s infrastructure following the 2010
Infrastructure Report Card, Engineers Australia published an interim review in 2013: Analysing
Australia’s Infrastructure Trends 20132.
This report is a comprehensive work assessing the current state of Australia’s key infrastructure,
including roads, ports, railways, bridges, water, electricity and telecommunications assets. In this
report, Engineers Australia revisits the findings of our Infrastructure Report Card (IRC) series to assess
progress in these areas since our last evaluation in 2010.
The quality of Australia’s infrastructure is both a reflection of our economic prosperity and an indicator
of our potential for future growth. Since we last published our Infrastructure Report Card series in
2010, there was significant investment in Australia’s infrastructure, especially across the resources
sector.
While overall engineering construction is at record levels, a large amount of this work is specific to the
resources sector. This tends to obscure the wide variability in infrastructure investment across the
various asset classes, states and territories. This variation is particularly noticeable in Western
Australia and Queensland where spending on resource-related infrastructure, such as ports and
railways, masks the lack of attention given to non-resource projects.
Hence, while investment in infrastructure may be at record levels, this analysis showed us that
spending has not necessarily been spread evenly across public assets such as water and transport
infrastructure.
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ure_trends_2013_1.pdf
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Engineers Australia Submission – Green Paper on Developing Northern Australia
This report also revealed a staggering amount of economic infrastructure and engineering construction
work yet to be completed across the country. With the backlog of engineering construction estimated
at over half a trillion dollars, it is clear that engineering remains a key driver of Australia’s economy.
Analysing Australia’s Infrastructure Trends – 2013: Detail from Northern Australia
While our analysis of infrastructure on a state-by-state basis does not differentiate between the
northern and southern regions of Queensland, the Northern Territory and Western Australia, the
information contained in our 2013 update may provide useful background indicators of the challenges
facing the northern regions.
Western Australia Infrastructure Trends
The 2010 IRC assessed Western Australia’s infrastructure as ‘C+’, generally adequate to good with
some high quality components and some areas that need significant improvements due to capacity
constraints and ageing.
Several of the asset classes in Western Australia’s economic infrastructure have expanded because of
new infrastructure investments in urban areas and because of infrastructure investments
complementary to the development of a resources sector facility, and in some cases the latter is by far
the greater. Both are regarded as economic infrastructure in their potential to increase economic
activity, however, they each satisfy different demands for infrastructure services. For example, a
railway to haul ore from a mine to an export port is an essential complement to the mine, and under
ACCC third party arrangements may be accessed by users other than its owners. But a railway in this
location is unlikely to satisfy the demand for commuter rail transport.
In 1988-89, economic infrastructure activity in WA was $1.68 billion in real terms (11.8 percent of
national activity) and total engineering construction was $2.99 billion in real terms (17.0 percent of
national activity). The resources and heavy industry sector were already making its presence felt by a
very high activity level. By 2011-12, economic infrastructure activity had increased eight-fold to $13.93
billion and was now 24.0 percent of national activity. Total engineering construction had increased to
$39.69 billion, 34.6 percent of national activity.
In every other jurisdiction, roads represented the largest component of economic infrastructure and this
was also the case in Western Australia until about 2005-06. Since then, activity on roads infrastructure
has been exceeded by activity on railways, ports and bridges and by energy related facilities. National
and state roads were assessed as ‘B-‘ in the 2010 IRC and local roads as ‘C-‘ with significant caveats
relating to an inability to keep pace with growth in passenger and freight demand on major roads and
insufficient renewal and maintenance on local roads. There has been a consistent upwards trend in
road activity from $580.7 million in real terms in 1988-89, to $2.19 billion in 2011-12. Average annual
growth up to the 2010 IRC assessment year was 7.3 percent per annum but has since almost
disappeared with growth averaging just 0.6% per annum. The growth in activity was taken into account
in the IRC assessment and the flattening of activity since provides little basis for reappraisal.
The trend in activity on railways, ports and bridges was comparatively low and flat until about 2003-04
when a period of extraordinary expansion began that saw activity increase from $495.6 million in 200304 to $7.27 billion in 2011-12 with a 74 percent increase in the last year. Much of the IRC assessment
of ‘C+’ in 2010 dealt with persistent problems in the metropolitan rail network including overcrowding at
peak times, capacity constraints and intermodal facilities. The assessment noted that Pilbara lines
continue to be highly efficient reflecting recent design and construction. The pattern of activity in this
group is consistent with further expansion of resource sector facilities. While some part may be due to
activity in the south western corner of the state, additional information is required to make a full
assessment of the situation.
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Engineers Australia Submission – Green Paper on Developing Northern Australia
The 2010 IRC assessed Western Australia’s electricity infrastructure as ‘B-‘, noting that although
facilities were adequate in the South West Interconnected System, there were transmission capacity
and reliability issues in many urban and regional areas. Gas infrastructure was assessed as ‘C+’ with
the major concerns being the lack of a long term gas policy and unresolved single points of failure.
There have been two distinct growth phases for energy infrastructure, the first in the six years prior to
2000 and the second from 2002 to the present. Average growth in the lead-up to the 2010 IRC was
30.1 percent per annum, and although growth since has fallen back to average 9.2 percent per annum,
in other places this is high growth. These are positive signs and if activity continues at this level the
prospects for an improved assessment are sound.
Relative to other asset categories, water and sewerage infrastructure activity in Western Australia has
followed a modest upwards trend. Even so, much has been achieved as noted by the 2010 IRC which
assessed potable water facilities as ‘B-‘ and waste water facilities as ‘B’, quite high ratings compared to
other jurisdictions. However, stormwater and irrigation were assessed as ‘C’ and ‘C+’, respectively, in
both cases recognising improvements since the previous assessment. Activity in water and sewerage
increased markedly during the drought years and peaked a year after the IRC assessment. Average
growth in the lead-up to the IRC was 9.5 percent per annum but opposite changes in the two years
since have resulted in effective zero change. Although activity levels are high, it remains to be seen
whether it is sufficient to overcome problems outstanding and to keep up with demand in a climate that
has experienced a drying trend for over two decades.
Western Australian telecommunications infrastructure was assessed as ‘C-‘ in 2010 and noted major
limitations in providing data services in the metropolitan area and limited availability outside it. Mobile
coverage outside major regional centres was another serious problem identified. Average growth in the
years leading up to the 2010 IRC was 9.1 percent per annum and activity increased to $461.1 million
in real terms in 2011-12 in a growth spurt which was within the bounds of historical activity.
Northern Territory Infrastructure Trends
Engineers Australia assessed Northern Territory infrastructure as ‘C+’ in 2010, noting that while some
asset categories were in good condition, a lot of improvement was necessary in other areas.
In 1988-89, economic infrastructure in the Northern Territory was $305.1 million in real terms (2.1
percent of national activity) and total engineering construction was $352.9 million in real terms (2.0
percent of national activity). Over the 25 years examined, these shares fell but the amounts involved
increased substantially. In 2011-12, economic infrastructure activity was $533.0 million and total
engineering construction had increased fivefold to $1.88 billion.
NT national roads were assessed as ‘B’, territory roads as ‘C-‘ and local roads as ‘D+’ recognising the
considerable disparity between road types and between urban and non-urban areas, with a backlog of
sealing and resealing work to provide all weather access. Roads activity in the NT is one of the few
areas with steady activity over a relatively long period. Average annual growth leading up to the 2010
IRC assessment was 6.6 percent per annum and accelerated to 21.9 percent per annum since. These
figures suggest that activity has improved and if sustained could lead to a better assessment.
NT rail infrastructure was assessed as ‘C+’ with some reservations expressed about the interface of
Port Darwin and rail, and about track conditions south of Alice Springs. Ports were also assessed as
‘C+’ with caveats about maintenance, capacity and bulk handling issues at the East Arm Wharf.
Activity was very low up to about 2001 when it was $14.5 million in real terms. The construction of the
Alice Springs to Darwin railway resulted in an extraordinary activity spike in the three years 2001-02 to
2003-04, with activity levels of $337.7 million, $498.3 million and $105.5 million, respectively. In the
peak year all other Territory infrastructure activity was $253 million combined. Following the
completion of the railway there was an accentuated level of activity averaging over $60 million per year
from 2005- 06 to 2008-09, most likely on port facilities, but activity then fell back to more ‘normal’ levels
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Engineers Australia Submission – Green Paper on Developing Northern Australia
and was $30.6 million in 2011-12. The higher levels of activity mentioned were taken into account in
the 2010 IRC assessment and the lower level of recent activity leaves open the question of what is
being done to deal with IRC reservations.
The NT’s electricity infrastructure was assessed as ‘C-‘, recognising improvements in generation
capacity but expressing reservations about the distribution infrastructure. Gas infrastructure was
assessed as ‘A-‘, one of the few asset groups in the country to be assessed this well. The energy
activity trend shows similar characteristics to the rail and ports trend just discussed.
Until 2003-04, with the exception of isolated years, annual activity was typically under $40 million in real
terms. In 2003-04 and 2004-05 there was an extraordinary two year burst of activity; $707.5 million
and $176.9 million, respectively, with subsequent activity returning to previous levels. There was a
strong year in 2008-09 with $107.6 million in activity but by 2011-12 this had abated to $82.7 million.
These high levels of activity were subsumed into the 2010 IRC assessment and activity since then
leaves open whether issues raised in the IRC are being addressed.
Potable water infrastructure facilities were assessed as ‘C-‘ in 2010, recognising that improvements
had occurred but that there were still concerns about water quality in many locations. Waste water
infrastructure was also assessed as ‘C-‘ with concerns expressed about sewage entering Darwin
harbour and inadequate facilities in remote communities. Until 2000-01, annual activity was typically
less than $25 million. Since then activity levels have steadily increased with two strong years, including
a new peak of $100.1 million in 2011-12. There are positive indicators here but the level of activity
needs to be sustained to warrant reassessment.
The 2010 IRC assessment for NT telecommunications was ‘C-‘, commenting on the number of urban
broadband blackspots and poor mobile coverage. Average growth in the years prior to the IRC was 5.6
percent per annum and has become negative 1.2 percent per annum since. These figures suggest the
status quo is being maintained but improvement requires higher activity levels.
Until 2000-01, there was only a small gap between economic infrastructure and total engineering
construction in the NT. In 2001-02, there was a sudden increase in activity levels to $1.14 billion from
$39.1 million the year before. Activity levels continued to grow for several years but experienced a
partial collapse in the three years from 2005 to 2008 before increasing once more to a new peak of
$2.07 billion in 2008-09 from $768.3 million the previous year. In subsequent years there have been
large fluctuations in activity at a relatively high level for the Territory.
Queensland Infrastructure Trends
The 2010 Engineers Australia IRC assessed Queensland infrastructure as ‘C+’, noting that many
infrastructure sectors faced significant problems, which if not addressed, will lead to substantial
reductions in quality and performance in future. Two issues received particular mention:
underinvestment in maintenance and renewals, and demand pressures caused by population growth.
In 1988-89, Queensland economic infrastructure activity was $3.16 billion in real terms (22.0 percent of
national activity) and total engineering construction was $3.56 billion in real terms (29.6 percent of
national activity). Growth in economic infrastructure averaged 7.2 percent per annum and in 2011-12
was $13.72 billion (20.2 percent of national activity) and growth in total engineering construction
benefited from rapid growth in the resources sector and averaged 11.0 percent per annum to be $33.98
billion in 2011-12.
The largest component of Queensland economic infrastructure is roads. The 2010 IRC assessed
national, State and local roads as ‘C-‘, noting that the overall quality of the road network has
deteriorated due to traffic volumes growing faster than infrastructure improvements and underinvestment in maintenance and renewals. Roads activity grew steadily to about 2002 when a more
pronounced growth spurt began, continuing through to 2009, followed by a lull for two years and a
resumption of the earlier trend in 2011-12. Average growth up to the IRC assessment was 8.1 percent
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Engineers Australia Submission – Green Paper on Developing Northern Australia
per annum and this has since fallen back to 6.0 percent per annum. The IRC assessment took account
of the changes through to 2009 and present activity levels would need to be maintained for some years
to warrant an upgraded assessment.
Activity on railways, ports and bridges followed a low but steady trend until about 2004, and most of the
change reflected in the overall growth rates can be attributed to activity since then. The 2010 IRC
assessed Queensland railways as ‘C-‘, noting that while coal networks had improved, there were major
problems with capacity constraints, congestion, particularly with respect to shared passenger and
freight lines and failure to keep pace with residential and industry development.
Ports were assessed as ‘B’, noting the dangers of expansion lagging behind increases in demand for
port facilities and associated roads. Average growth up to the IRC assessment was 14.3 percent per
annum and this has fallen to 1.8 percent per annum in the two years since. There appears to be little
prospect of an improved assessment.
Energy related infrastructure in Queensland has grown strongly for many years from $430.6 million in
real terms in 1988-89 to $3.12 billion in 2011-12. The 2010 IRC assessed electricity infrastructure as
‘C’ recognising that there has been improved performance in the south east Queensland distribution
network and commissioning of new generation plants. Reservations were expressed about failure to
deal with ageing transmission and distribution infrastructure, particularly outside the south east. Gas
infrastructure was assessed as ‘C+’, recognising the improvements that have occurred to service the
domestic market and plans for the export sector. Average growth in activity prior to the IRC was 12.0
percent per annum but has since reduced to 8.1 percent per annum with most of this coming in 201112. More evidence is needed to support an IRC assessment upgrade.
As was the case in several other states, Queensland activity in the water and sewerage sector was
relatively low until drought pressures led to a large increase in activity from about 2004 onwards. This
surge in activity is reflected in IRC assessments; potable water and waste water infrastructure were
assessed as ‘B-‘, noting the improvements that had occurred including major changes to institutional
arrangements. Stormwater was assessed as ‘C’ and irrigation as ‘C+’, noting that while some
improvements had occurred, significant problems remained unresolved. Average growth prior to the
IRC was 13.0 percent per annum, even higher in the period immediately before it, but has fallen back to
8.7 percent per annum since. Recent high activity was included in the IRC process and further
improvements would be needed to substantiate an improved assessment.
The IRC assessed Queensland’s communications infrastructure as ‘B’ with the major reservations
applying to areas away from the state’s east coast network. Activity in telecommunications activity has
been reasonably consistent over the years but fell before the 2010 IRC. Growth over this period
averaged just 0.8 percent per annum and even though this leaped to 21.9 percent per annum since,
the increased activity was within the bounds of past fluctuations. There is little basis to suggest any
change.
(Note: Please see supporting appendix “Submission to the Australian Government’s Inquiry into the
Development of Northern Australia” submitted by Engineers Australia Northern Division to the Joint
Select Committee on Northern Australia)
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Appendix 1
Submission to the Australian
Government’s Inquiry into the
Development of Northern Australia
Executive Summary
Northern Australia has significant opportunity and potential for sustainable development. Enhancing the
economic opportunities for some of the most remote Australians through reliable transport and
essential services whilst maintaining The Territory’s natural advantages of national parks, world heritage
sites, fisheries and pristine environments is an opportunity others would envy.
To support this development, the engineering workforce is critical to planning, designing and delivering
the infrastructure which underpins the future development of the north. There are many engineering
challenges that require considerable planning and investment.
Transport infrastructure gaps will require significant investment to address the limited access to remote
locations across the vast distances of the Northern Territory. Reliable power, water and
telecommunications are services most Australians take for granted. However, many remote
communities struggle to get a reliable basic essential service.
If investment were available for the infrastructure development, the next challenge is developing a
workforce to deliver the infrastructure required. In particular, the engineering workforce is in demand in
many parts of Australia and around the world. Attracting the right skilled workforce is the first hurdle.
Retaining the workforce is achievable through a sustainable release of projects rather than through a
boom and bust cycle of project release.
There is an opportunity to “grow our own” but this takes time. Programs to encourage and support
maths and science in schools are essential. The indigenous population of the Northern Territory are also
a great untapped resource, but limited access to education does not encourage indigenous people to
take up engineering as a profession.
“Engineers Australia is the trusted voice of the profession. We are
the global home for engineering professionals renowned as leaders
in shaping a sustainable world.”
Engineers Australia supports the Development of the North initiative. However, it needs to be
recognised the significant challenges in making this opportunity a reality.
This paper provides information regarding the Infrastructure Report Cards that Engineers Australia
undertakes every 5 years, data and statistics about what engineering resources are currently available in
the Northern Territory and some challenges and ideas identified and developed by Engineers Australia
members.
1.
Introduction
The Australian Government is producing a White Paper on Developing Northern Australia. The White
paper will be a policy platform for the progressive development of the north over the next 20 years. This
paper is submitted by Engineers Australia (Northern Division) to provide input on the engineering
considerations in planning for northern development.
Engineers Australia is the peak body for the engineering profession and represents approximately
100,000 members Australia wide and overseas. The Northern Division represents Engineers Australia
members in the Northern Territory and those located in neighbouring countries including East Timor
and Indonesia.
The geographical area being defined by the Australian Government as Northern Australia includes all
parts of Australia north of the Tropic of Capricorn, spanning across Queensland, the Northern Territory
and Western Australia. It is understood that all of the Northern Territory, including Alice Springs, is
included.
The north has some natural advantages relating to agriculture, mining, energy and tourism. It also has
geographic advantages from its proximity to the fast-growing Asian and Tropical regions, presenting
opportunities in services such as education, health and engineering services. The north also has strategic
importance, with defence having an important role in the security and development of northern
Australia. However, it faces significant economic, environmental and social challenges, including: a
sparse population; infrastructure, transport and service delivery costs; competition for skilled labour;
unique and pristine ecological zones; harsh and extreme weather; and possible constraints around
water resource development.
The terms of reference of the White Paper are to:
1.
produce a stock take of northern Australia’s natural, geographic and strategic assets, and the
potential for further development of the region’s minerals, energy, agricultural, tourism, defence
and other industries, as well as a comprehensive assessment of risks and impediments to growth;
2.
set out agreed policy actions to:
 harness opportunities which capitalise on the region’s strengths, including ways to advance
trade, cultural and investment links with the Asia Pacific region and provide a regulatory and
economic environment that is conducive to business investment, competitiveness and
competition.
 manage impediments to growth, including from regulatory frameworks, land access
arrangements, environmental constraints, the lack of coordinated planning, participation of
Indigenous people in the economy and access to markets, skills and services, and
 create the right conditions for private sector investment, innovation, enterprise growth and
business formation (including in and for Indigenous communities).
3.
identify the critical economic and social infrastructure needed to support the long-term growth of
the region, and ways to incentivise public and private planning and investment in such
infrastructure, and
4.
include consideration of the policy options identified in the Coalition’s 2030 Vision for Developing
Northern Australia.
Engineers will play a significant role in ensuring the Australian and Northern Territory Government goals
are realised in implementing the Developing the North initiatives. This paper outlines the current
situation of engineering in the Northern Territory, what challenges will be faced in Developing the North
from an engineering perspective and possible initiatives to overcome or manage these challenges.
2.
Northern Territory Infrastructure Status
It is clear from the Australian Treasury’s Intergenerational Reports that productivity growth is the key to
maintaining Australian standard of living and fiscal sustainability as the population ages. In turn, access
to and availability of economic infrastructure services are key drivers of productivity growth. Engineers
Australia’s periodic assessments of Australia’s economic infrastructure have demonstrated that the
infrastructure is barely adequate to meet present and future services and that major changes are
necessary. Every 5 years, Engineers Australia undertakes a review of the Nation’s infrastructure and
releases an Infrastructure Report Card (IRC) for every State and Territory. These complex documents
synthesise large volumes of qualitative and quantitative information about the nation’s infrastructure
into readily understood assessments3.
The reports assess strategic planning, budget and financial and other documents released by State and
Territory Governments and integrates these assessments with considered judgments from engineers
who are experts in infrastructure matters. Assessments are rated as follows:





A (Very Good); Infrastructure is fit for its current and anticipated future purposes.
B (Good); Minor changes are required to enable infrastructure to be fit for its current and anticipated
future purposes.
C (Adequate); Major changes are required to enable infrastructure to be fit for its current and anticipated
future purposes.
D (Poor); Critical changes are required to enable infrastructure to be fit for its current and anticipated
future purposes.
F (Inadequate); Inadequate for current and anticipated future purposes.
The Infrastructure Report Card 2010 Northern Territory (IRC 2010 NT) made the following
recommendations to improve Australia’s economic infrastructure. All governments must3:
1. Deliver more efficient infrastructure outcomes and develop innovative funding models to provide
the required infrastructure.
2. Harmonise infrastructure planning and regulation through improved cooperation and collaboration
between all levels of government, business and the community.
3. Address the imbalance between urban and rural and remote communities regarding access to high
quality, reliable infrastructure.
4. Develop plans and implement projects in all sectors in advance of need, and either build in capacity
for growth or preserve land in all infrastructure sectors, particularly for ports, airports and transport
corridors.
5. Encourage private sector funding for infrastructure and where infrastructure delivery models include
the private sector, have the appropriate allocation of risk to deliver the best project outcome.
4.1. Northern Territory Infrastructure Report Card 2010
3
Infrastructure Planning and Procurement – Submission to the HRSC on Infrastructure and Communications April 2014.
http://www.engineersaustralia.org.au/sites/default/files/shado/Resources/house_of_representatives_standing_committee_on_infrastruc
ture_and_communications_10.4.14.pdf
Engineers Australia assessed Northern Territory Infrastructure as ‘C+’ in 2010. The assessment is
summarised in Table 1 following, including changes since the earlier assessment in 2005, and
comparison against National IRC assessments. In order to assess any progress in the state of Australia’s
infrastructure following the 2010 IRC, Engineers Australia published an interim review in 2013:
Analysing Australia’s Infrastructure Trends 20134. This report is a comprehensive work assessing the
current state of Australia’s key infrastructure, including roads, ports, railways, bridges, water, electricity
and telecommunications assets. In this report, Engineers Australia revisits the findings of our
Infrastructure Report Card series to assess progress in these areas since our last evaluation in 2010. A
summary of the key areas of the NT’s progress on infrastructure to that time is also provided following
the NT Report Card 2010 below.
Of the total of 13 infrastructure types, 9 were rated as C (adequate or below) in the Northern Territory
in 2010. This implies that major changes were required to enable infrastructure to be fit for current
(2010) and anticipated future purposes.
Table 1 – Summary of 2005 and 2010 Infrastructure Report Cards for NT and National
Infrastructure Type
NT 2010
National 2010
NT 2005
National 2005
Roads Overall
C
C
Not Rated
C
National Roads
B
C+
B-
C+
C-
C
Territory Roads (Sealed)
Territory Roads (Unsealed)
Local Roads (Sealed)
C
CC
C
D+
D+
C+
D+
C+
B-
B-
B-
Potable Water
C-
B-
A
B+
B- (Barge
Landings)
A- (major
airports)
B+ (community
airports)
B- (outstation
and
pastoral
airstrips)
B- (metropolitan)
Wastewater
C-
B-
C
C+
Stormwater
B-
C
C+
C-
Irrigation
Not Rated
C
B
C-
Electricity
C-
C+
B-
C+
Local Roads (Unsealed)
Rail
Ports
Airports
4
D
CCC+
B
B-
Analysing Australia’s Infrastructure Trends 2013. Engineers Australia, Canberra. Available online at:
http://www.engineersaustralia.org.au/sites/default/files/shado/Representation/Research_and_Reports/analysing_australias_infrastructur
e_trends_2013_1.pdf
Infrastructure Type
NT 2010
National 2010
NT 2005
National 2005
Gas
A
B-
A
C+
Telecommunications
C-
C
Not Rated
Not Rated
Fifteen recommendations were made to improve the infrastructure of the Northern Territory so as to
meet the needs of its community in the future including:
1. A co-ordinated long-term transport infrastructure plan be developed that involves the Australian,
Northern Territory and local governments as well as the private sector.
2. The recent increase in road maintenance continue and provision be made for replacing aged road
assets.
3. Road, marine and air access to regional and remote communities be progressively upgraded.
4. Local governments build asset management systems for all assets, and the maintenance and
renewal information from these systems become a key input into financial allocations to local
governments.
5. The Northern Territory Government plays a greater role in facilitating infrastructure expansion by
coordinating demand from multiple commercial activities and governments with infrastructure
providers.
6. Ports focus on improving their environmental outcomes and the Port of Darwin implements its
forward plans to meet and encourage demand.
7. Darwin Airport addresses capacity issues and facilitates airline hubbing and economic growth.
8. The Australian and Northern Territory Governments keep regional and remote airstrips viable.
9. The Power and Water Corporation and the Northern Territory Government implement demand
management strategies to reduce potable water consumption, and develop water source expansion
plans for areas where water consumption will exceed supply in the medium to long-term.
10. The water quality health issues for all water supplies be addressed.
11. The wastewater upgrade and expansion works be completed to allow the closure of the Larrakeyah
outfall that discharges raw sewage into the Darwin Harbour.
12. The Power and Water Corporation implement the remedial asset management program and longterm action plans as recommended in the Independent Enquiry into Casuarina Substation Events
and Substation Maintenance across Darwin report to improve security of service.
13. Electricity and water/wastewater tariffs be set at a level that will ensure financial sustainability.
14. The Australian and Northern Territory Governments to continue to invest in the development of
alternative energy sources such as solar technology and wind generation.
15. Telecommunication shortfalls be addressed by rolling out the National Broadband Network across
the Territory and eliminating mobile phone black spots in urban and fringe areas, and along heavily
trafficked roads like highways.
The full Infrastructure Report Card for the Northern Territory can be viewed through the following link:
https://www.engineersaustralia.org.au/infrastructure-report-card/northern-territory. The next Infrastructure
Report Card is due to be released in 2015.
4.2. Infrastructure Investment Progress since 2010
The quality of Australia’s infrastructure is both a reflection of our economic prosperity and an indicator
of our potential for future growth. Since Engineers Australia last published our Infrastructure Report
Card (IRC) series in 2010, there has been significant investment in Australia’s infrastructure, especially
across the resources sector. This report also revealed a staggering amount of economic infrastructure
and engineering construction work yet to be completed across the country. With the backlog of
engineering construction estimated at over half a trillion dollars, it is clear that engineering remains a
key driver of Australia’s economy.
While overall engineering construction is at record levels, a large amount of this work is specific to the
resources sector. This tends to obscure the wide variability in infrastructure investment across the
various asset classes, states and territories. This variation is particularly noticeable in Western Australia
and Queensland where spending on resource-related infrastructure, such as ports and railways, masks
the lack of attention given to non-resource projects. Figure 1 following illustrates a similar disparity
between economic infrastructure and all Engineering construction in the Northern Territory in recent
years, driven largely by resource projects.
Until the year 2000, there was only a small gap between economic infrastructure and total engineering
construction in the NT. In 2001, there was a sudden increase in activity levels to $1.14 billion from $39.1
million the year before. Activity levels continued to grow for several years but experienced a partial
collapse in the three years from 2005 to 2008 before increasing once more to a new peak of $2.07
billion in 2008-09 from $768.3 million the previous year. In subsequent years there have been large
fluctuations in activity at a relatively high level for the Territory.
Figure 1: Trends in NT Economic Infrastructure compared to all engineering construction, 1988-2012.
While investment in infrastructure may be at record levels, analysis shows that spending has not
necessarily been directed to public assets such as water and transport infrastructure. Spending on these
public assets has grown only minimally during the period, and as such some would be expected to have
fallen further behind expected levels of service.
4.3. 20 Year Overview of NT Infrastructure Investment
An important feature of smaller jurisdictions is that projects often regarded as ‘normal’ in larger
jurisdictions can overwhelm activity trends. The components of economic infrastructure delivered in the
Northern Territory since 1988 are illustrated in Figure 1, and details of activity levels and growth rates
are provided in Table 2.
In 1988-89, economic infrastructure in the Northern Territory was $305.1 million in real terms (2.1 % of
national activity) and total engineering construction was $352.9 million in real terms (2.0 % of national
activity). Over the 25 years examined, these percentage shares decreased but the amounts involved
increased substantially. In 2011-12, economic infrastructure activity was $533.0 million and total
engineering construction had increased fivefold to $1.88 billion.
Table 2: Changes in Economic Infrastructure and Total Engineering Construction in NT
Asset Group
Activity
1988-89
Activity
2011-12
Average Growth Rates (%)
(2009-10
prices)
Past 23
Years
Past 10
Years
Up to 2010
IRC
Since 2010
IRC
(2009-10
prices)
$113.3m
8.0
10.0
6.6
21.9
$224.1m
Bridges, Railways and Ports
$0.5m
160.1
-6.6
175.4
-0.3
$30.6m
Electricity and Pipelines
$99.5m
154.1
330.5
154.7
148.7
$82.7m
Water and Sewerage
$17.5m
36.4
17.6
36.4
36.3
$100.1m
Telecommunications
$74.3m
5.0
5.1
5.6
-1.2
$95.5m
Economic Infrastructure
$305.1m
11.0
4.6
9.9
22.5
$533.0m
Population
161,179
1.6
1.6
1.7
0.9
234,796
Resources and Heavy Industry
$42.2m
151.1
18.7
161.2
46.0
$969.1m
Recreation and Other
$5.6m
41.4
50.1
34.3
115.6
$373.0m
Other Eng. Construction
$47.8m
94.4
21.2
97.8
58.9
$1,342.1m
Total Eng. Construction
$352.9m
32.2
10.7
31.3
41.5
$1,875.1m
Roads
Source: Estimate from Australian Bureau of Statistics: Engineering Construction, Australia (8762.0) and Australian Demographic Statistics
(3101.0).
Figure 2 provides a visual representation of the trends in sectors of engineering infrastructure
investment in the Territory from 1988 to 2012. Economic infrastructure activity was very low up to
about 2001 when it was $14.5 million in real terms. The construction of the Alice Springs to Darwin
railway resulted in an extraordinary activity spike in the three years 2001-02 to 2003-04, with activity
levels of $337.7 million, $498.3 million and $105.5 million, respectively. In the peak year all other
Territory infrastructure activity was $253 million combined. Following the completion of the railway
there was an accentuated level of activity averaging over $60 million per year from 2005-06 to 2008-09,
most likely on port facilities, but activity then fell back to more ‘normal’ levels and was $30.6 million in
2011-12. In this context it is pointless to discuss activity growth rates.
The higher levels of activity mentioned were taken into account in the 2010 IRC assessment and the
lower level of recent activity leaves open the question of what is being done to deal with IRC
reservations raised in 2010.
Figure 2: Trends in components of economic infrastructure in the NT, 1988-2012.
4.4. Territory Roads
In the IRC 2010 NT, national roads were assessed as ‘B’, Territory roads as ‘C-‘ and local roads as ‘D+’
recognising the considerable disparity between road types and between urban and non-urban areas,
with a backlog of sealing and resealing work to provide all weather access. The figure above shows that
roads activity in the NT is one of the few areas with steady activity over a relatively long period.
Average annual growth leading up to the IRC 2010 NT assessment was 6.6% per annum and accelerated
to 21.9% per annum since. These figures suggest that activity has improved and if sustained could lead
to a better future assessment.
4.5. Territory Rail Infrastructure
In 2010, NT rail infrastructure was assessed as ‘C+’ with some reservations expressed about the
interface of Port Darwin and rail, and about track conditions south of Alice Springs. Ports were also
assessed as ‘C+’ with caveats about maintenance, capacity and bulk handling issues at the East Arm
Wharf. The trend for this asset category illustrates the difficulties for infrastructure managers in a small
jurisdiction.
4.6. Territory Electricity Infrastructure
In 2010, the NT’s electricity infrastructure was assessed as ‘C-‘, recognising improvements in generation
capacity but expressing reservations about the distribution infrastructure. Gas infrastructure was
assessed as ‘A-‘, one of the few asset groups in the country to be assessed this well. The energy activity
trend shows similar characteristics to the rail and ports trend. Until 2003-04, with the exception of
isolated years, annual activity was typically under $40 million in real terms. In 2003-04 and 2004-05
there was an extraordinary two year burst of activity; $707.5 million and $176.9 million, respectively,
with subsequent activity returning to previous levels. There was a strong year in 2008-09 with $107.6
million in activity but by 2011-12 this had abated to $82.7 million.
These high levels of activity were subsumed into the 2010 IRC assessment and activity since then leaves
open whether issues raised in the IRC are being addressed.
4.7. Potable Water
Potable water infrastructure facilities were assessed as ‘C-’ in 2010, recognising that improvements had
occurred but that there were still concerns about water quality in many locations. Waste water
infrastructure was also assessed as ‘C-‘ with concerns expressed about sewage entering Darwin harbour
and inadequate facilities in remote communities. Until 2000-01, annual activity was typically less than
$25 million. Since then activity levels have steadily increased with two strong years, including a new
peak of $100.1 million in 2011-12. Whilst increased investment in remote communities has occurred in
general, it is unclear what proportion of this investment has gone into improving the potable water
quality and security. There are positive indicators here but the level of activity needs to be sustained to
warrant reassessment.
4.8. Telecommunications
The IRC 2010 NT assessment for telecommunications in the Territory was’ C-‘, commenting on the
number of urban broadband black spots and poor mobile coverage. Average growth in the years prior to
the IRC was 5.6 % per annum and has since become negative 1.2 % per annum. These figures suggest
the status quo is barely being maintained with improvement requiring higher activity levels.
3.
Engineering Contribution to Developing the North
Engineering services are critical to the Territory’s economy and prosperity. Developing the North will
require significant engineering capacity to deliver the objectives and proposed infrastructure
investment. All infrastructure is dependent upon the provision of engineering services by highly skilled
professionals at the highest level of competence and integrity. Design, delivery and operation of all
infrastructure in the Territory cannot occur or function without the broad spectrum of the disciplines
and skills that engineering provides. Public and private sector engineering teams work together to
provide the Territory roads, bridges, buildings, wharves, marinas, power and water and more.
Recommendations made by Engineers Australia in the latest National Infrastructure Report Card relate
to the planning and procurement of large engineering infrastructure. Similar commentary and proposals
have been articulated in a recent McKinsey Report on infrastructure. Central to change is infrastructure
planning and governance arrangements. These matters have been addressed in some detail in the
recent Draft Report by the Productivity Commission on Public Infrastructure. Engineers Australia has
consistently advocated improved infrastructure planning, particularly in respect to integration of
planning with land use and urban planning and planning for population growth. The Productivity
Commission recommendations go to the core of problems in this area and are strongly supported by
Engineers Australia.
The Commission also proposes a set of integrated recommendations intended to reduce infrastructure
project bid costs and to put aside prevailing risk aversion to open the way for the adoption of new
technologies. Engineers Australia also strongly supports these recommendations, but adds an important
caveat. Effective implementation of the Commission’s recommendations depends on some restoration
of the loss of public sector engineering and technical expertise. Engineering structures in all levels of
government have been radically down-sized over the past two decades in favour of outsourced
resources, to the point where the public sector’s ability to manage engineering contracts and capacity to
adequately assess the engineering competencies of contractors and sub-contractors has been severely
compromised. The consequences manifest themselves in higher costs and in a growing list of failures
chronicled by auditors-general.
For many years, Engineers Australia has argued that the information base for infrastructure decision
making is inadequate. While replicating the capital accounts of business entities may not be feasible,
this cannot be said about basic information relating to the stock of infrastructure, its age profile and
how it compares to the economic lives of assets, location of assets, attention to maintenance and the
current condition of assets. This information should be available in transparent form and be the baseline
for future decisions. The Productivity Commission has recommended the establishment of an
infrastructure cost benchmarking framework to assist planning and procurement processes. Engineers
Australia strongly supports this recommendation.
The responsibility for infrastructure planning lies with government, irrespective of which sector
ultimately constructs and/or owns infrastructure assets. The corollary is that infrastructure planning and
procurement agencies require the competence, skills and experience to make the most effective
infrastructure decisions. However good, economists, accountants and lawyers do not make good
engineering decisions. Our earlier point about the de-engineering of the public sector is critical.
Effectively dealing with this problem does not entail reversing history and restoring past structures.
Rather it means that agencies with engineering and technical responsibilities implement procedures to
identify the most appropriate mix of in-house and external engineering resources required to discharge
their responsibilities. Engineers Australia has proposed a framework to enable such assessments to
proceed.
The provision of infrastructure services is not just about the construction of infrastructure assets. It is
also about the operation and maintenance of these assets over their economic life cycles. In all stages of
this process, particularly cost optimisation, the role of fully competent engineers is critical. Like other
professions, engineers complete a period of professional formation following the completion of
essential educational qualifications. During this period, engineers specialise in specific areas of
engineering practice. Engineers Australia regards a fully competent engineer as one who has necessary
educational qualifications, who has completed the necessary period of professional formation and who
has demonstrated attainment of 16 defined areas of competency consistent with international
benchmarks. Within Engineers Australia fully competent engineers are recognised with Chartered
Status. However, a mechanism to verify that comparable standards prevail among non-members is
essential. Engineers Australia favours a national registration system for engineers to achieve this.
5
Charles Darwin University’s Faculty of Engineering, Health and Information Technology delivers several
engineering courses at Diploma, Bachelors and Masters levels as well as a wide range of Vocational
Education and Training (VET) courses in Business & IT, Electrotechnology, Construction, Drafting &
5
Extract from: Infrastructure Planning and Procurement – Submission to the HRSC on Infrastructure and Communications April 2014.
http://www.engineersaustralia.org.au/sites/default/files/shado/Resources/house_of_representatives_standing_committee_on_infrastruc
ture_and_communications_10.4.14.pdf
Industry skills training. The engineering degree courses delivered by the University are accredited by
Engineers Australia, and as such meet Australian and International standards for learning outcomes,
ensuring graduates meet the demands of modern industry. Additionally, Charles Darwin University is
the first University in Australia to introduce a formal Professional Development Program with Engineers
Australia in recognition of the importance of continuing professional development for academic staff
towards Chartered status. The University has pioneered this approach in recognition of the need to
attract and retain high calibre teaching staff, and attract a growing number of students from across
Australia and overseas to increase the pipeline of engineering.
Charles Darwin University has significantly expanded capacity over the past decade to meet local
demand for professional engineers with student numbers increasing from 64 in 2004 to 517 in 2014.
Disciplines diversified over the same period from Electrical and Electronics to Civil (2005), Mechanical
(2005) and Chemical Engineering (2013).
Distance learning was introduced in 2010. This mode of delivery was specifically developed to meet the
demand of mature age part time students who are not able to attend the University on a regular basis.
Currently 41% of the engineering students at Charles Darwin University study via distance learning.
The University’s new Structural Load Test Facility represents a major advance in research and technical
support for northern Australia and beyond, complementing the research and training provided by the
North Australian Centre for Oil and Gas (NACOG) located on campus.
The combination of engineering courses, VET skills training, leading initiatives and facilities introduced
by the University represents a growing contribution to developing the engineering capacity of the
Northern Territory.
4.
Engineering Profile in the Northern Territory
A capable and skilled engineering workforce is necessary to underpin economic development of North
Australia. Infrastructure development in Australia has followed an intermittent course and at times
there have been prolonged gaps between projects. This has severe consequences, including increased
costs and availability of engineering skills when they are needed. Engineers are like everyone else facing
unemployment - they look for any work that is available to sustain their lives. Intermittency means this
is not always in engineering. Research by Engineers Australia has shown that about 62% of Australians
with engineering qualifications work in engineering. Intermittency is an important contributor because
many engineers who resort to work in other fields do not return to engineering, with consequent long
term reductions to the skilled engineering workforce critical to developing infrastructure and the
economy. The costs of their training and the costs of replacing their expertise increase the costs of
subsequent infrastructure development6.
The 2011 Census provides a picture of the profile of the engineering workforce in the Northern Territory
and some areas for consideration in northern development planning to ensure adequate skills and
supply.
4.1. Engineering workforce
The supply of engineers in the Northern Territory increased from 1,368 in 2006 to 1,881 in 2011, an
increase of 513 or 37.5%. This change was less than 1% of the increase in the national supply of
6
Infrastructure Planning and Procurement – Submission to the HRSC on Infrastructure and Communications April 2014.
http://www.engineersaustralia.org.au/sites/default/files/shado/Resources/house_of_representatives_standing_committee_on_infrastructure_a
nd_communications_10.4.14.pdf
engineers and was equivalent to annual compound growth of 6.6% above national growth of 5.6% per
annum. In comparison, the fastest growth in the supply of engineers occurred in Western Australia with
compound rate of 9.1% per annum and in Queensland with compound growth of 7.1% per annum.
In 2006, there were 110 female engineers in the Northern Territory; 8.0% of the total supply of
engineers in the area. Growth over the five years to 2011 increased the number of female engineers in
the Northern Territory to 201 or 10.7 % of the supply. By comparison, by 2011 women accounted for
11.8% of the total national supply of engineers. Locally and nationally women continue to be under
represented in the engineering work force.
The changes in the Territory followed the national trend where about three-quarters of the increase in
the supply of engineers was from overseas born sources, primarily from recent skilled migration, and
one quarter was from Australian born sources.
4.2. Industry distribution of engineers
Territory engineers were employed in every industry in the ABS classification system in both 2006 and
2011. The two largest employers of engineers in 2006, public administration and safety (includes
defence) and professional, scientific and technical services (engineering consulting for short) retained
their relative standing but with quite different experiences over the five years examined. Five main
industries accounted for over 80% of the increase in the Territory’s employment of engineers including:
1. engineering consulting
2. the electricity, water, gas and waste utilities
3. construction
4. transport
5. postal and warehousing
6. manufacturing.
Table 3 provides the full breakdown on the employment sectors for engineering in the Northern
Territory.
Table 3: Industry Distribution of NT Engineering Employment
2006 Census
2011Census
Change 2006-11
(%)
Agriculture, Forestry and Fishing
24
17
-29.2
Mining
79
111
40.5
Manufacturing
105
150
42.9
Electricity, Gas, Water and Waste Services
32
143
346.9
Construction
62
128
106.5
Wholesale Trade
16
23
43.8
Retail Trade
42
60
42.9
Accommodation and Food Services
25
52
108.0
Transport, Postal and Warehousing
189
253
33.9
Information Media and Telecommunications
16
19
18.8
Financial and Insurance Services
6
11
83.3
Rental, Hiring and Real Estate Services
6
14
133.3
Professional, Scientific and Technical Services
193
299
54.9
Administrative and Support Services
30
48
60
Public Administration and Safety
413
351
-15.0
Education and Training
38
59
55.3
Health Care and Social Assistance
26
48
84.6
Arts and Recreation Services
17
15
-11.8
Other Services
20
36
80.0
Inadequately described & not stated
17
9
-47.1
1,356
1,846
+36.1
Industry
Total
Source: Australian Bureau of Statistics: 2006 & 2011 Census
4.3. Increasing local workforce participation
Engineering qualifications, as previously mentioned, are not a guarantee that individuals are actually
employed in engineering occupations or roles. Research by Engineers Australia indicates that in 2006,
65.9% of men with engineering qualifications were employed in engineering work compared to 53.6% of
women. Similarly, 67.8% of Australian-born engineers were employed in engineering work compared to
60.4% for overseas-born engineers.
By 2011, the proportion of male engineers engaged in engineering work had fallen to 63.8% and the
proportion of women to 52.7%. This result can be attributed to the higher proportion of overseas-born
engineers; among Australian born engineers 70.4% were engaged in engineering work with almost
identical figures for men and women; among overseas-born engineers 56.4% of men were engaged in
engineering work and only 36.8% of women.
Strategies to attract and retain engineers back to the profession, and employer inclusion programs could
strengthen the existing resident engineering pool through re-engagement in the profession.
5.
Challenges in Developing the North
There are a number of challenges in Developing the North, outlined in the IRC 2010 NT results and from
the collective experience of Engineers Australia’s membership. These challenges are outlined below.
Undertaking significant planning to ensure co-ordinated, strategic and well-managed infrastructure
investment.
The lack of sealed roads, adequate water supply, sewerage systems and power supply networks
significantly reduce the capacity for development of towns and remote communities in the Northern
Territory. Tourism, Mining, Pastoral and Agricultural developments in the Northern Territory are
likewise hampered by the lack of an adequate sealed road network, the lack of expansion of the rail
network, and also of the Gas Pipeline reticulation network.
Inconsistent development guidelines, service levels, town planning and approvals processes between
cities and towns and remote areas stifles economic growth for remote areas. Development on
Aboriginal communities is largely treated differently for developers, investors, and the public at large,
due in part to the different underpinning land ownership structures. This not only prohibits those
communities getting access to markets and benefiting from greater economic activity, but relegates
them to lower levels of services and infrastructure that other Australians can take for granted.
Local Governments are not financially viable due to a non-rateable land base. Government needs to resolve these
issues in consultation with Indigenous owners to ensure they also have access to more diverse economic
development on their land. This would enable Indigenous people to enjoy improved services that underpin
economic development, and have a greater opportunity to diversify from the few major ‘boom-bust’ industries of
mining and pastoralism. A range of related reforms are suggested to unlock an economic base in these locations:
1.
2.
3.
4.
5.
6.
7.
Right of access to all Australians to access Aboriginal communities as with any other town.
Provision for Individual home ownership to enable greater economic growth on Aboriginal.
Communities (currently mostly public and community housing in Aboriginal communities).
NT Town Planning and Development Consent Authority requirements to be applied to all Aboriginal
Communities.
Local Government Rates be applied to Traditional Owners of Land as Identified by the Aboriginal Land
Rights Act.
Community Service Obligation on all levels of Government to provide the same level of service to
Aboriginal Communities as that provided to similar size towns elsewhere in Australia.
Consideration should be given to what is a ‘fair price’ for the extraction of materials and the payment of
royalties to the Central Land Council/Northern Land Council (CLC/NLC) in relation to Infrastructure
Development. An issue with the development of public infrastructure on aboriginal lands is that due to
the Aboriginal Land Rights Acts, all of the public assets become part of the Aboriginal land. This question
regarding the tenure of public assets on aboriginal land, combined with royalty costs can act as an
inhibitor to development. Satisfactorily addressing these issues would go some way to encouraging the
viability of future infrastructure development.
As identified in previous IRCs produced by Engineers Australia, especially with respect to wastewater
and ports, environmental legislation and approvals are already weak in urban areas of the Territory, and
even weaker or non-existent in remote areas. Environmental protection legislation looks set to further
weaken with proposed changes to hand over responsibility of policing federal environment legislation to
the states and territories. As the trusted voice of the profession, Engineers Australia recognizes the
importance of developing infrastructure and the economy and the role that engineers play in shaping a
sustainable future. We believe that a robust and considered approach to environmental legislation and
approvals should be maintained.
Building the Territory’s capacity to design, deliver and operate infrastructure.
The improvement of infrastructure planning capacity by Government and within the Public Sector is a
key factor in improving the delivery and outcomes from major projects. Implementing a framework for
identifying the appropriate mix of in-house and external engineering resources to ensure delivery of
cost-effective, quality engineering infrastructure is a must. Recognition and provision for issues of
"scale" in delivery of large engineering projects needs to be appreciated and understood. Engineering
consulting practices in the NT are small by national standards and the skills required of a more general
rather than specialist nature. Whilst there are 7 or 8 nationally- and internationally-based engineering
consultancies operating in the Northern Territory, the tendency for these businesses is to transfer the
more specialist work interstate. There is little or no knowledge transfer in this process, and often a lack
of understanding of the unique remote and challenging environments of the Territory in which these
projects will be delivered is evident. Also, there is often little or no follow up by clients to ascertain
whether there was any local benefit.
Providing a sustainable release of projects to break the boom-bust cycle and subsequently build
resilience in the Territory’s economy.
The development of a long-term planning approach for engineering and infrastructure projects that will
sustain and build local business participation is essential.
The Darwin and wider Northern Territory economy in the past has been cyclical to the wider National
economy. One consequence of this cyclical pattern is that when business and development
opportunities reduce in the large developed urban economies lying south of the Tropic of Capricorn,
individuals and engineering companies naturally seek access to alternative business streams that may
exist in Northern Australia.
Whilst in the short term this understandable business behaviour may perhaps bring an influx of skilled
workers, these companies generally speaking do not have a long-term vested interest in developing
Northern Australia, nor are they committed to a sustainable business presence that grows engineering
capacity and the economy in the area over the longer term. When business picks up elsewhere in the
country, history and experience demonstrates that people and assets are withdrawn. In the meantime,
locally based companies have often had to lay off staff, reduce fee rates to attempt to remain
competitive and delay or cancel business growth plans. Essentially the size of the pie doesn't change it
is simply divided into smaller slices.
This issue is not peculiar to engineering businesses with parallels experienced in the building, surveying,
concrete supply and allied building trades. Clients may enjoy reduced prices during these times but
often tend to have little or no corporate knowledge of the situation and impact on local businesses at
the time, nor of what ensues afterwards. There exists little belief amongst local firms that concepts of
growing local business’ improving the knowledge base, or matrix analysis methods of assessment have
any real affect in the face of price cutting when budgets are tight.
Engineers Australia believes that this situation impacts negatively on all engineering businesses, there
are no real winners, only losers. A considered strategic approach that delivers infrastructure investment
in a measured and consistent manner will sustain and grow businesses located both north and south of
the Tropic of Capricorn, to the long term benefit of the whole economy.
Attracting and retaining skilled workers, with a real opportunity to ensure migrant and Indigenous
segments of the local population are attracted to and retained in engineering, construction and
economic development projects.
Indigenous workers:
Employment growth on Aboriginal Communities must be included as part of a North Australia
development plan.
The lack of continuity of employment for Indigenous workers is a real problem. In the Northern Territory
Indigenous peoples could potentially make up 30% of the workforce. Most, if not all, publically funded
housing, education and medical programs in the Northern Territory during the past thirty years have
started out with high ideals for engaging aboriginal workers. Generally programs have failed to deliver
and ended with poor outcomes.
An important step forward is enabling long-term objectives to be met above short-term goals. Members
of Engineers Australia with considerable experience of working in remote areas have previously
managed to engage 30% of the construction workforce as Indigenous labour in large infrastructure and
construction programs. It is important to be cognizant of the fact some/many recruits had never worked
before and were generationally unemployed. Teams of Indigenous employees can work well together
and in conjunction with experienced construction workers who have the time and willingness to
teach. However, such programs in the past have been deemed too costly, and the objectives too longterm for the political cycle. For example one program that started out with a four year time frame, to
allow time for training and development, was condensed to two years. Regrettably, shortened time
frames and cost constraints imposed on such programs can result in partly trained workers returning to
a life of little or no work, low self-esteem and poor economic activity.
Migrant workers:
Reflecting the multicultural population of the Territory, a large proportion of Territory engineers are
sourced from the migrant community. However they are less likely to be in full-time engineering
employment (56%) than Australian-born engineers (70%). The numbers are even lower for migrant
women (36%).
Strategies should be encouraged by all levels of government to attract locally resident engineers of
overseas-born origins to work within their field rather than in other sectors. This could assist with
improving the growth and retention of local engineering expertise engaged in infrastructure projects in
the North in the short term, as well as contributing to the sustainability and growth of engineering
businesses and the economy of the Territory in the mid to longer term.
Ensuring sound investment decisions through quality control of engineering projects.
The significant infrastructure investment requirements will require a significant engineering workforce
to implement the initiatives. Currently, there is no control over the quality of the engineering workforce
delivering projects for both the public and private sectors. Engineers Australia advocates for a National
Registration scheme to provide assurance to the public that the engineering workforce is not only
qualified as an engineer, but also competent to be carrying out such significant engineering works. Lack
of control on the engineering workforce may lead to poorly informed decision making leading to cost
overruns and rework to correct mistakes.
Remoteness and challenges of the higher cost profile – will continue until infrastructure is improved.
The "cost to build" is a significant problem in remote parts of Australia. It can quickly be forgotten that
this used to be the situation across large parts of the Nation including for example” the other side of the
Blue Mountains” or in Western Australia during the expansion of Perth. As the infrastructure has
improved, the relative cost of development there has also reduced. The Northern Territory, as with
most parts of Australia north of the Tropic of Capricorn simply does not yet have the infrastructure or
consistent labour force required to keep costs at levels comparable to those in more urbanized parts of
the country. Understanding remoteness is a challenge that policy makers must grasp if a considered
and long term strategy with appropriate budgets to invest in the development of the north is to deliver
sustainable results.
The cost of Fly-In-Fly-Out (FIFO), barging materials, little or no all-weather road access, temporary
workers camps, etc. can be significant. For instance, it can cost up to an additional $1000 per person,
per week to set up and run a workers camp in a remote area. Employing local labour under these
circumstances can therefore make economic sense. The cost of FIFO and temporary workers camps
needs to be assessed against longer term social, community and economic benefits, as well as against
the initial investments in training resources, education, medical needs, clothing, etc. that enables longterm unemployed people to develop into a reliable labour force.
The Northern Territory and Top End of Australia is recognized/perceived as one of the most expensive
places to live and work in Australia. For example, fuel in common with remote areas of WA, SA and
QLD, is more expensive, rents face continued upward pressure and the high cost of living (actual or
perceived) drives up wage demands and materials costs further. The cost of land and housing in the
Darwin area is out of sync with many comparable areas of Australia. The Northern Territory
Government’s Budget for 2014-15 recognises that the release of additional land for residential,
commercial and industrial activity is vital to meet demand, mitigate against rising costs and promote
investment. To promote sustainable growth in the longer term, a broad spectrum approach that
reduces costs across all aspects of living and business is a must to ensure a thriving community and
economy.
A strategic approach to developing infrastructure at all levels of Government is in the view of Engineers
Australia key to success. The cost of power generation and distribution, roads and infrastructure in
remote areas can seem excessive owing to the distances involved and the low population
density. Likewise this makes manufacturing, agriculture and transport expensive. If development in the
North is to be encouraged, short-term subsidies may need to be considered alongside sustained capital
investment in infrastructure projects to deliver increased economic activity and capacity.
6.
Sustainable development that considers triple bottom line - economic, social and
environmental returns, to avoid repeating costly mistakes of southern Australia
A wide range of economic, social and environmental factors are outlined throughout this paper. To ensure that
economic, social and environmental returns are realized, an investment criteria should be developed for projects
commissioned under the banner of ‘Developing North Australia’ that considers key social, economic and
environmental values. The following are suggested factors for inclusion:
6.1. Social
1. Agreed targets that identify the percentage of local and Indigenous people to be employed in all projects.
2. Commitment to offer trained and employed individuals opportunities on a pipeline of projects.
3. Pipeline of graduates from high schools through engineering study to engineering roles.
4. Commitment to offer cadetships and internships to graduates from local universities and neighbouring source
countries of migrant workers.
5. An ‘equity test’ on projects to determine their contribution to remote community, regional and Territory
development.
6. Identification of key Territory social issues, (e.g. Alcohol abuse, driver fatalities, gambling, etc.) that major
projects should take into consideration and demonstrate a positive contribution to.
6.2. Economic
1. A cost v benefit analysis on the efficiency of investment, e.g. dollars invested to likely social and economic
gains
2. Identification of opportunities for Indigenous business participation in projects, and where capacity does not
exist, opportunities to build that capacity are sought through engagement with community leaders and
businesses
6.3. Environmental
1. Establish and implement robust criteria to identify environmental impacts assessed effectively against Federal
legislation and EPA requirements.
2. A strategic review of key Territory environmental assets to be undertaken, utilising existing research by
Universities and relevant Commonwealth and Northern Territory Government departments. A register of
those key assets be developed for preservation and either additional controls or exemptions from
development corridors before developments are planned (e.g. Mangroves, wild rivers, endangered species,
important fisheries, etc).
3. All projects to have environmental management plans to ensure low impact to surrounding ecosystems, and
sites of historical or societal value.
7.
Conclusion and Recommendations
The Commonwealth, State and Territory Governments must:

Develop long-term infrastructure visions and plans that accommodate projected economic
growth and population increases as changes due to political opinion creates uncertainty for
future development and investment.

Establish independent planning infrastructure advisory groups to provide advice on
infrastructure priorities and provide infrastructure planning and funding advice.

Budget for sustained release of economic infrastructure projects independent of political cycles.
Infrastructure owners and managers must:

Improve the maintenance of existing assets, through adequate funding and asset management
plans.

Integrate climate change mitigation and adaptation into infrastructure plans.

Infrastructure Planning and Procurement Building Capacity Infrastructure
Table 4 provides a summarised list of recommended actions for Developing Northern Australia for the
various infrastructure types.
Table 4: Recommended actions for Infrastructure and Developing Northern Australia
Infrastructure Type
Roads
Rail
Ports
Airports
Potable Water
Wastewater
Stormwater
Irrigation
Electricity
Gas
Recommended Action in Developing the North
Greater investment in key remote roads to link remote areas with markets.
Investigate links which open investment opportunities.
Investigate links which enhance the social opportunities for access to health,
education and employment.
Investigate the feasibility of links to the east and west.
Plan for future growth and protect land and corridors for future export plans.
Capture the opportunities in the international market through the Top End
gateway to Asia.
Ensure a sustainable and suitable supply for all.
Ensure sustainable management systems for wastewater and recycling where
possible.
Investigate infrastructure upgrades consider future growth.
Design stormwater management systems for the fully developed conditions.
Investigate opportunities for capturing and retaining reliable wet season
supply.
Investigate sustainable agribusinesses.
Investigate and research opportunities for tropical and arid climate crops
Ensure a reliable supply.
Investigate further opportunities for renewable energies and possible export
Investigate further opportunities including a reliable local supply.
Telecommunications Investigate installation of an increased mobile and wireless network,
particularly in remote communities.
Sustainability
Application of a triple-criteria analysis to all planned large infrastructure
projects to ensure they contribute to the social, economic and environmental
prosperity of the North.