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Critics blame wasteful spending on poor knowledge, planning

Australian governments are wasting $6 billion a year on infrastructure projects because they lack basic technical know how, according to a leading  Engineers group.

Australian governments are wasting $6 billion a year on infrastructure projects because they lack basic technical know how, according to a leading Engineers group. Photo: Supplied

Australian governments are wasting $6 billion a year on infrastructure projects because they lack basic technical know-how, according to a leading engineers group.

And the National Audit Office says simple planning failures are to blame for many of the budget blow-outs and delays in Australia's big Defence and security purchases.

The claims are part of several stinging critiques made in submissions to a multi-party Senate committee examining the federal government's procurement policies

Professionals Australia, the union for many engineers working in state, local and federal government, says up to 20 per cent of the nation's $33 billion spending on infrastructure is being needlessly thrown away.

The group's chief executive, Chris Walton, says governments are skimping on the initial scoping and design of projects leading to inevitable delays, disputes and cost escalations after construction begins.

"The facts are that governments around Australia lack the requisite expertise to deliver projects on budget and on time," Mr Walton wrote. "There just aren't enough engineers in government to scope, design and manage projects.

"That's leading to waste right across the Commonwealth and as states cut staff to trim costs, they're cutting their engineering expertise further and further. It's penny wise and pound foolish."

Mr Walton argues for a reversal of the public sector trend to outsource its engineering expertise to private firms. "Public sector capability to act as an informed purchaser and adequately scope and oversee large infrastructure and construction projects has been severely eroded over the past decades," he wrote.

The Australia National Audit Office was equally frank in the assessment it sent to the committee, arguing that many high-profile failures in the past decade had their origins in poor planning.

"In some cases, procurement processes examined by the ANAO were not adequately supported by a planning process which was appropriate to the scale and risk profile of the procurement," Auditor-General Ian McPhee wrote.

"Insufficient planning and scoping for major capital works projects has resulted in unreliable estimates and delivery timeframes."

Mr McPhee cited the Christmas Island detention centre, budgeted at $210 million with an end cost of $410 million, as an example of the price of poor planning.

The then Howard government blamed the blowouts on inflationary pressures in the building industry but the Audit Office placed the responsibility elsewhere.

"Often the procurement process commenced prior to the completion of planning," the submission reads.

"For example, the construction contract for the Christmas Island Detention Centre was signed prior to the completion of the design of the facility."

Mr McPhee also noted the performance of the Defence Materiel Organisation which has had well-documented problems getting equipment into service on time and on budget.

"The ANAO concluded in the 2012-13 major projects report that the reasons for schedule slippage vary but primarily reflect the underestimation of both the scope and complexity of work," he wrote.

The Senate inquiry is due to report in March.

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