Chapter 3: Infrastructure
The Public Governance, Performance and Accountability Rule 2014 requires this annual report to include a report on the Department's performance during 2015–16. A core element of this is the inclusion of an annual performance statement which demonstrates performance in relation to our purpose and programs.
Annual Performance Statements
|Purpose||One program contributes to the Infrastructure outcome (Outcome 1) set out in the Portfolio Budget Statements: Program 1.1 Infrastructure Investment.
The purpose of this program is to promote, evaluate, plan and invest in infrastructure and regional development
|Result||Table 3.1 details the performance criteria which relate to this purpose, and the result against each. Each criterion is published in both the 2015–16 Corporate Plan and the 2015–16 Portfolio Budget Statements against Program 1.1.|
Table 3.1 Results Against Performance Criteria—Program 1.1 Infrastructure Investment
|Performance Criterion||Australian land transport networks are safer|
|Result||Achieved (also rated as achieved 2014–15, 2013–14 and 2012–13)
Projects funded by the Australian Government are designed to the highest safety standards and improve overall safety of the nation's road and rail network.
The Black Spot, Heavy Vehicle Safety and Productivity, and Bridges Renewal programs were established to address dangerous locations on the nation's road network.
During 2015–16, 119 Black Spot projects, 13 Heavy Vehicle Safety and Productivity Program and 26 Bridges Renewal Program projects were completed.
|Performance Criterion||Australian land transport networks are more efficient|
|Result||Achieved (also rated as achieved 2014–15, 2013–14 and 2012–13)
The efficiency of the land transport network has been enhanced with well targeted investments to upgrade roads and rail. This includes projects such as the continuation of upgrading and duplicating the Bruce and Pacific highways, and commencement of projects such as works on the Midland Highway in Tasmania, the Tullamarine Freeway Widening in Victoria and the Gateway Upgrade North in Queensland.
The Department continued its work on the delivery of an inland rail. This included independent confirmation on key parts of the business case being developed by the Australian Rail Track Corporation, to ensure that the Australian Government's investment is efficient and effective.
|Performance Criterion||States, territories and local governments are appropriately funded for infrastructure investment projects |
Target: payments are within five per cent of forecast
|Result||Achieved (also rated as achieved 2014–15, 2013–14 and 2012–13)
The Department achieved payments of 98 per cent of funding allocated for 2015–16.
Projects can be put forward by the jurisdiction's priority lists or by an individual project proponent. Any projects seeking $100.0 million or more in Commonwealth funding are assessed by Infrastructure Australia, an independent statutory advisory body. Once selected, projects receive funding based on milestones which are agreed by jurisdictions and the Commonwealth.
|Achieved||All milestones for 2015–16 were met or exceeded|
Analysis against the Purpose
Promote, evaluate, plan and invest in infrastructure and regional development (Program 1.1)
Over $5.3 billion was provided to state, territory and local governments in 2015–16. This was for projects designed to improve the performance of land transport infrastructure by targeting activity which will reduce the risk of car accidents at identified crash sites, upgrading deteriorating bridges, accelerating works on key freight routes and national highways, and upgrading and widening roads.
Well targeted investment in transport infrastructure is an enabler of productivity and economic efficiency. The Australian Government's Infrastructure Investment Program is a key economic arm of Government in addressing the decline in our national productivity by lifting the capacity of our regions and major cities to connect people and products to employment and markets safely and efficiently.
With the release of the Principles for Innovative Funding in February 2016, the Australian Government has set goals for investing in land transport infrastructure including how projects are selected and alternative funding and financing is being considered. Investing in the right infrastructure at the right time, while realising the best value for the taxpayer, requires clarity of purpose and effective partnerships between governments and investors. This publication enables a holistic approach to infrastructure investment, ensuring a safer, more efficient land transport network. It will guide the future assessment of state and territory government project proposals submitted for consideration of Australian Government funding support in the lead up to the Federal Budget annually.
Projects which received Australian Government funding were subject to assessment through the Assurance and Compliance Program. This helps ensure that investment in infrastructure is achieving policy objectives and projects are delivered efficiently and effectively. The 2015–16 Assurance and Compliance Program assessed the delivery of the Roads to Recovery and Black Spot Programs as well as a selection of Major Infrastructure Projects in relation to their planning, implementation, budgeting, reporting, risk management, legislative compliance and evaluation. No major issues were raised, with the assessments demonstrating compliance with Australian Government infrastructure objectives and Infrastructure Investment Program guidance.
In relation to program management, the Department was subject to three audits conducted by the Australian National Audit Office (ANAO). These audits were:
- Delivery and Evaluation of Grant Programmes. The findings can be found in the report, published on 15 March 2016, at www.anao.gov.au/work/performance-audit/delivery-and-evaluation-grant-programmes
- Design and Implementation of the First Funding Round of the Bridges Renewal Programme. The findings can be found in the report published on 20 January 2016 at www.anao.gov.au/work/performance-audit/design-and-implementation-first-funding-round-bridges-renewal-programme, and
- Approval and Administration of Commonwealth Funding for the East West Link Project. The findings can be found in the report published on 14 December 2015 at www.anao.gov.au/work/performance-audit/approval-and-administration-commonwealth-funding-east-west-link-project.
Table 3.2 provides a summary of the results achieved by each of the administered items under Program 1.1. Administered items are administered in accordance with relevant legislation, approved guidelines, and guidance by the Australian National Audit Office.
Table 3.2 Administered Items—Program 1.1 Infrastructure Investment
|Administered Item||Infrastructure Investment Program|
|Result||Investment||A total of $3.4 billion was provided to plan and construct road and rail projects on the National Land Transport Network.|
|Result||Black Spot Program||The Department administered $26.5 million supporting projects to improve road safety at identified crash sites. The program has reduced the risk of crashes through measures such as traffic lights, roundabouts, signage and edge sealing at dangerous sites around Australia.
During the year, a total of 119 Black Spot projects were completed and 403 were underway.
|Result||Bridges Renewal Program||A total of $35.7 million was provided to upgrade deteriorating bridges to improve productivity, safety and community access.
In 2015–16, 26 projects were completed and 28 were underway.
|Result||Heavy Vehicle Safety and Productivity||A total of $13.9 million was provided to improve safety and productivity for the Australian heavy vehicle transport industry.
In 2015–16, 13 projects were completed and 32 were underway.
|Result||Improving the National Network||The Department provided $1,820.0 million as prepayments to NSW, Queensland, WA, South Australia, Tasmania and the NT to accelerate works on 10 National Network highways in 2006. The jurisdictions report on progress each month.
Total expenses to 30 June 2016 were $3,636.
|Result||Off-Network—supplementary||The Department provided $250.3 million to state governments and local councils in 2006–07 to plan and construct 102 projects.|
|Result||Roads to Recovery||$652.8 million was provided to 561 out of 575 councils for road work, bridge work and installing traffic lights. Councils lodged audited financial statements showing how they had spent the funds.
In 2015–16, 4,774 projects were completed and about 1,800 were underway.
|Administered Item||Infrastructure Growth Package|
|Result||Black Spot Projects||A total of $100.0 million was provided for Black Spot projects under the Infrastructure Growth Package.|
|Result||New Investments||The Department provided $252.2 million for new investments under the Infrastructure Growth Package.|
|Result||Roads to Recovery||A total of $35.0 million was provided for Roads to Recovery projects under the Infrastructure Growth Package.|
|Result||Western Sydney Infrastructure Plan||A total of $141.7 million was provided for projects under the Western Sydney Infrastructure Plan. Construction is well underway on the first stage of the Bringelly Road Upgrade and Werrington Arterial Road Upgrade. Four of the seven projects under the Local Roads Package are now complete with a further 11 new projects announced in January 2016.|
|Administered Item||Building our Future campaign|
|Result||A total of $18.0 million was approved by the Minister for Finance for the Building our Future campaign.|
|Administered Item||Plan for the Future (Building Australia Fund)|
|Result||The Department provided $6.9 million for projects under the Building Australia Fund.|
Note: The budget and actual expenditure for each administered item is listed in Appendix A.
Northern Australia Beef Roads Program—roundtable discussions and CSIRO modelling
The cattle industry has long been a pillar of the northern Australian economy. Moving cattle in the north, from farm gate to market, involves some of the longest land transport distances of any Australian commodity. These long distances increase costs for both producers and consumers. They also increase risks to northern producers as floods and seasonal road closures can isolate them from markets for extended periods of time.
The $100.0 million Northern Australia Beef Roads Program was announced as part of the 2015–16 Budget and forms part of the White Paper on Developing Northern Australia. The aim of the Beef Roads Program is to make targeted upgrades to key roads necessary for transporting cattle, with the objective of improving the reliability, productivity and resilience of cattle supply chains in northern Australia. This, in turn, will reduce freight costs and strengthen links to cattle markets.
Harnessing local on-the-ground expertise is critical for identifying effective and sustainable investment priorities under the Beef Roads Program. Recognising this, the Department hosted three roundtable discussions with key stakeholders including representatives of the transport and beef industries operating within northern Australia, along with state and local governments. Over 100 stakeholders attended roundtable discussions held in Rockhampton, Kununurra and Darwin.
The priorities established during the first two roundtable discussions were then modelled by the CSIRO using its Transport Network Strategic Investment Tool (TraNSIT), which analysed and provided data on the effect of different transport investment options. The CSIRO findings were presented at the final roundtable held in March 2016.
Jurisdictions were then asked to submit proposals for projects which would address the priorities identified through the roundtable discussions. The Department is currently assessing project submissions from the jurisdictions for funding under the Beef Roads Program.
The Department plays a facilitation role to assist the Australian and state governments to work together to build world-class infrastructure. This unlocks greater economic capacity and creates global cities. Gateway WA is one such infrastructure project.
Completed in April 2016, almost a year ahead of schedule and under budget by some $60.0 million, the $923.0 million Gateway WA project received $633.0 million in Australian Government funding. The project now provides commuters and businesses with safer and better access to Perth International Airport and nearby industrial areas. Gateway WA also facilitates Perth's growth with the number of passengers travelling to and from Perth Airport expected to double in the next decade.
The Department worked closely with a range of stakeholders, particularly the Western Australian Department of Main Roads, in developing Gateway WA's initial project master plan. During the construction phase, strong governance by the Department through the project's steering committee also allowed potential funding and delivery issues to be identified and resolved early.
The Gateway WA project involved widening the Tonkin Highway to six lanes, upgrading the Leach Highway to an expressway standard and constructing several major interchanges. Around 21 kilometres of shared path and local connections for pedestrians and cyclists were also constructed, as well as approximately seven kilometres of screen walls and a major landscaping program. The project also made use of intelligent transport system technology, such as variable messaging systems and vehicle detection sites.
Inland Rail—implementation group report and budget commitment
Australia's freight transport will experience significant growth over the next several decades. An inland rail freight line connecting two of Australia's largest cities—Melbourne and Brisbane—would facilitate this growth while easing the burden on already congested roads. Specifically, Inland Rail would deliver a transit time for freight of less than 24 hours between Melbourne and Brisbane with a 98 per cent service reliability which is competitive with freight movement by road.
In September 2015 the former Deputy Prime Minister released the Inland Rail Implementation Group Report to the Australian Government. The report is a key step towards realising Inland Rail, assessing the planning, construction and economic needs behind developing this major infrastructure asset. The report also outlines a 10-year delivery plan and illustrates that the project will provide over $20 billion of benefits for Australia. The Department provided a key support role for this report, including organising stakeholder forums to ensure their views were considered during the development of the report.
The report, in conjunction with the Inland Rail Business Case developed by the Australian Rail Track Corporation, informed the Australian Government's 2016–17 Budget measure committing an additional $594.0 million to acquire the land for Inland Rail and, to continue pre-construction works such as environmental approvals. The Australian Government also endorsed the Australian Rail Track Corporation as Inland Rail's delivery body, in partnership with the private sector. The Department will continue its role in representing the Minister for Infrastructure and Transport as one of the two shareholder ministers for the Australian Rail Track Corporation, along with the Minister for Finance.