Optimised infrastructure investments drive economic, environmental and social value
South Australia has an ambitious forward program of infrastructure, with infrastructure spend estimated to reach $25.6 billion over the four-year period to 2027–28. However, our program is competing with a national pipeline and demand from the energy, mining, and defence sectors.
Limited market capacity is creating competition for skills, labour, and materials. When combined with fiscal constraints, it is clear that we need to maximise the value of our existing infrastructure through strategic asset management, provide industry with improved visibility to plan further ahead, lift our productivity and prioritise our investments to get best value-for-money and deliver on the infrastructure pipeline.
With growing net debt, we also need to plan sustainably, funding our infrastructure through alternative funding and financing options.
Explore the 4 recommendations:
Getting the most from our investments
Lead agency: Department of Treasury and Finance
Timeframe: Policy 5 to 10 years
The case for change - In brief:
- The South Australian Government’s asset base is increasing in value and is estimated to reach $114 billion by 2027–28. We need to maximise the value of our existing infrastructure by taking a whole-of-lifecycle, strategic approach aligned to agreed service levels and better managing demand.
- Asset management approaches are inconsistent across the South Australian Government. Mixed maturity levels mean maintenance planning is often reactive, which can reduce asset lifespans, resulting in increased expenditure over the life of an asset and diminished asset performance due to downtime. It can also lead to unplanned service disruptions for the community.
- Experience from other jurisdictions indicates benefits can be achieved through improved asset management, including operational budget savings of up to 15% within 5 years, enhanced asset resilience and more informed prioritisation and decision making, including on the basis of asset capacity and risk.
- Assurance of asset management plans could help improve capability and inform a whole of government view on the performance of our assets.
Lead agency: Infrastructure SA
Timeframe: Policy 0 to 5 years
The case for change - In brief:
- The South Australian Government’s asset base is increasing in value and is estimated to reach $114 billion by 2027–28. We need to maximise the value of our existing infrastructure by taking a whole-of-lifecycle, strategic approach aligned to agreed service levels and better managing demand.
- Asset management approaches are inconsistent across the South Australian Government. Mixed maturity levels mean maintenance planning is often reactive, which can reduce asset lifespans, resulting in increased expenditure over the life of an asset and diminished asset performance due to downtime. It can also lead to unplanned service disruptions for the community.
- Experience from other jurisdictions indicates benefits can be achieved through improved asset management, including operational budget savings of up to 15% within 5 years, enhanced asset resilience and more informed prioritisation and decision making, including on the basis of asset capacity and risk.
- Assurance of asset management plans could help improve capability and inform a whole of government view on the performance of our assets.
Improving the visibility of our pipeline
Lead agency: Infrastructure SA
Timeframe: Policy 0 to 5 years
The case for change - In brief:
- In a competitive national market with a large pipeline of work, South Australia needs to provide visibility for industry to invest in the necessary skills, equipment, and technology to improve productivity to help deliver our pipeline.
- The South Australian Government currently publishes information across a number of platforms. The Forward Work Plan published by the Department for Infrastructure and Transport is informative but by its nature excludes projects being completed by SA Water, SA Housing Trust and Renewal SA – worth an estimated $3.8 billion over the next four years.
- A consistent, whole-of-government view that includes non-government, public infrastructure projects would provide improved visibility, and in future could include targets for infrastructure investment beyond the forward estimates period.
Delivering projects well
Lead agency: Department of Treasury and Finance
Timeframe: Policy 0 to 5 years
The case for change - In brief:
- The scale and complexity of infrastructure projects is growing, with the emergence of new types of projects that do not fit neatly within the remit or expertise of existing infrastructure delivery agencies.
- Given market capacity constraints and productivity challenges, South Australia needs to ensure we have the skills needed, that we apply leading practice approaches to project planning, delivery, procurement, and governance and that we leverage innovation to support improved productivity.