Billions In Infrastructure Projects Face Delays Amid Inflation Concerns
In a bid to combat rising inflation, numerous infrastructure projects worth billions of dollars across the nation are at risk of being delayed or potentially scrapped.
The International Monetary Fund (IMF) has advised governments to slow down their substantial construction projects.
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Treasurer Jim Chalmers, told ABC’s Insiders program that the government would make difficult decisions.
“I do think we’re going to need to make some difficult decisions about the infrastructure pipeline, which factor in those $33 billion of blowouts from projects announced by our predecessors and which factor in our inflation challenge,” he said.
State officials indicated significant projects worth billions might face delays rather than outright cancellation.
The projected delays could potentially push project initiation dates to the late 2020s or even the 2030s.
The current inflationary climate has led to cost overruns in both minor and extensive projects due to combined factors such as labour shortages, supply chain disruptions, and escalations in labour and construction material expenses.
States collectively engage in more than $100 billion of road and rail ventures, with many additional projects committed or under consideration.
Among all the plans, projects in New South Wales and Victoria are valued at $36 billion and almost $85 billion, respectively.
Victoria’s $35 billion Suburban Rail Loop project and New South Wales’ ongoing $5.3 billion Western Sydney airport construction continue to progress.
Additionally, Queensland and Western Australia are involved in infrastructure projects worth $24 billion and $12 billion, respectively.
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