All current major construction projects in the ACT will be completed by next year “leaving a stark pipeline beyond the next two years”, according to a report published on Thursday.
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The gloomy forecast by the Deloitte Access Economics Investment Monitor coincides with the brake applied to the territory’s economy by the reduction in the federal public service in Canberra by 6000 jobs over the next two years.
“Engineering construction in the Australian Capital Territory remains subdued … commercial activity may slide further over 2014,” the report says. It says six of the eight major planned projects are already under way.
“All these projects are to be completed by 2016, leaving a stark pipeline beyond the next two years."
However ACT Treasurer Andrew Barr said the report omitted some major projects and that the ACT government's record $2.5 billion infrastructure investment in the 2014-15 ACT budget was driving construction in Canberra.
"The ACT government recognises that now is the time to invest in infrastructure and create jobs and offset the contraction from the Commonwealth," he said.
The Investment Monitor report acknowledges the role of territory and state budgets but says the ACT has the smallest engineering pipeline in relative terms, that is, the ratio of pipeline to current engineering work.
“Current projects are led by the $480 million upgrade to Canberra Airport but most investment has already occurred, with the project expected to finish in the coming months,” it says.
“Construction of the Majura Parkway has been delayed due to weather, with final road works to extend into 2016, while the Royalla solar farm should finish up by the end of the year.
“The Capital Metro light rail project may provide some support to engineering construction beyond 2016 however the $600 million investment is only a possibility at this stage, with some uncertainty over its cost."
Mr Barr said construction was an important driver of economic growth in the territory.
“[That is] why it is so critical for the government to take an active role in building infrastructure and to support and facilitate the private sector to do so,” he said.
"Recent private sector investment in projects like Campbell Section 5 and Lawson demonstrate the confidence in our economy in the long term.
"Earlier this month the Chief Minister announced $10 million worth of ‘ready-now’ construction contracts and made further cuts to red-tape for the construction industry as part of a new package to reforms the way that capital works are procured in the territory.
"The Investment Monitor database does not include some key projects currently being pursued by the government, such as the ACT Courts project.
"In addition there are significant projects totalling billions of dollars in the pipeline such as, Northbourne corridor redevelopment, Capital Metro, University of Canberra Public Hospital and City to the Lake including convention and stadium facilities."
The report says there is little new activity in commercial construction.
“As the $130 million upgrades to the Belconnen Markets and the $100 million ‘One Canberra’ office development approach completion, commercial activity may slide further over 2014," it says.
“The pipeline may benefit from plans for an IKEA store near Canberra Airport and a $54 million upgrade to the Alexander Maconochie Correctional Centre in the form of an additional 110 beds.
“Another project in the pipeline comes from the Walker Corporation’s $170 million office development.”
In its national outlook, the Investment Monitor says the value of major projects across Australia is in a holding pattern.
"The total value of all projects has barely budged since June 2013, predominately due to the relatively static value of resources projects under construction," it says.
"Non-resources projects will carry a larger burden of the investment agenda going forward, including work funded by the public sector.
"Indeed, public sector transport projects are shaping as a key driver of future investment activity.
"State budgets which have been released in recent months contained notable capital expenditure plans, particularly in NSW which has announced infrastructure spending of more than $61 billion over the next four years."
A report earlier this month by the same company said Canberra faces more tough years ahead as the "bitter pill" of delayed cuts to the public service take effect.
However, the blocking of some budget measures by the Palmer United Party may ameliorate the impact of program cuts on the territory's economy, the Business Outlook report said then.
Another report, published earlier this month, the CommSec State of the States, said the ACT and the Northern Territory had the strongest job markets in the nation.