Australia Infrastructure Report Q3 2008

The first Australian federal budget (2008-2009) that the new government of Prime Minister Kevin Rudd will submit to the parliament allocates AUD41bn (US$38.2bn) for infrastructure spending on transport, utilities, telecoms, healthcare and education infrastructure.

Under the Auslink programme, the Australian government is planning to embark on the second stage of an infrastructure upgrade. According to a white paper detailing the program, the government announced that AUD12.7bn worth of road and rail projects would be funded between 2004 and 2009 in the first stage of Auslink. In the second stage of the program, scheduled for 2009 to 2014, AUD22.2bn has been budgeted for the improvements.

In May, government officials reported that a new highway overpass on Tumbarumba Road was now open to traffic. This construction is part of US$1.8bn duplication of the Hume Highway in New South Wales.

Overall, 67km of road will be laid during the project, undertaken by a consortium of contractors, including the RTA, Leighton Contractors, Maunsell Australia, SMEC Australia, Coffey Geotechnics, Abigroup Contractors and Sinclair Knight Merz. The project is expected to be completed by 2012.

Australia is also undertaking several major projects which would allow it to greatly expand its coal export capacity. In May 2008, The Australian reported that Xstrata Coal is considering AUD1-1.5bn worth of upgrades to the coal handling facilities at the Port Alma terminal. It is hoped that upon completion, the port could handle up to 30mn tonnes of coal annually. The project would require dredging of the harbour to increase the tonnage of ships that it could handle from 35,000 to 90,000.

Queensland Gas Company and ANZ Bank plan to undertake a feasibility study to build a gas-fired power station in the New South Wales Hunter Valley. The project is budgeted at AUD600mn. The study is expected to be completed in 2009.

In BMI's Q308 Australia Infrastructure Report we forecast that the construction sector real growth will be 3.71% in 2008 and will average 3.39% annually over the period 2008 and 2012.