Lean on NSW for infrastructure expertise, states urged

By Harley Dennett

August 27, 2014

The sacrosanct pecking order of public service infrastructure expertise — which puts engineers at the top — is failing Australians, the Productivity Commission has cautioned.

Commission chair Peter Harris was invited to explain his public infrastructure report, released last month, to federal politicians in Canberra today. He ended up giving some frank advice to state public services: even if you’re about to lose the furniture, keep your economic analysts — or at least rent good ones.

“We haven’t seen that many failures of engineering in infrastructure, just the occasional bit of bridge that falls down in Canberra,” Harris told the public hearing on infrastructure planning and procurement this morning.

“Where we do see failure is in the inability to link the economics of the project to the commerce of the project. Something that might appear to be great economics, some of the larger tunnels in urban road transports for example, turn out to be very poor commerce in the sense that people aren’t prepared to pay for them.”

As an area of competence and expertise, Harris says the public sector can and should retain those commerce skills as they are usable not just on infrastructure projects but other parts of government.

Harris acknowledges that what he’s asking is tough, when governments can and do buy in expertise.

“Its very hard to say to the Tasmanian government, for example, that you should acquire and have in-house for your occasional infrastructure projects the same capability that, for example, the NSW government might be able to use because they’re continuously involved in large projects,” he said.

“That’s not to say de-skill the public sector. You can buy in, and you should buy in. If the project is of significance, you need to have the capability made available to you one way or another for you to perform this analysis.”

Paul Lindwall, acting commissioner and fellow contributor to the report, added that some procurement agencies — unnamed — weren’t doing as well as they should and have demurred commerce skills. He offered a solution when budgets are tight.

“That’s perhaps where smaller jurisdictions could liaise with larger jurisdictions to share some of the services,” he said. “Tasmania could purchase or contract from Victoria or NSW in certain circumstances.”

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