REGIONAL BREAKDOWN

This year’s Report provides a more detailed focus on the regional implications of the Queensland Major Projects Pipeline.

One of the key findings of the 2018 MPPR was how disparate the growth in major project work was by broad region, the high volatility and variability of work in regions, and large differences in each region’s share of funded and unfunded work which adds to pipeline uncertainty.

INDUSTRY AND GOVERNMENT CAN USE THESE REGIONAL PROFILES TO BETTER PLAN FOR THE COMING PHASE OF MAJOR PROJECT WORK

For the 2019 MPPR we have examined this issue more closely by moving away from the existing “5 region” perspective in past MPPRs to a more detailed and systematic regional analysis based on the ABS SA4 regions. While there are 19 SA4 regions in Queensland, we have condensing the 5 Brisbane SA4s (East, West, North, South and Inner City) with two Moreton Bay SA4s (North and South) into a Greater Brisbane category. We have also combined Toowoomba with Ipswich and Logan-Beaudesert. The Queensland Outback SA4 region combines Outback North, Outback South and Far North Queensland – essentially an area that covers the bulk of non-coal base metals and minerals mining, and the townships of Mt Isa, Cloncurry and Weipa.

Under such an approach, the regional analysis is now more detailed and includes the following areas:

  • Greater Brisbane
  • Sunshine Coast
  • Gold Coast
  • Toowoomba-Ipswich-Logan
  • Darling Downs and Maranoa
  • Wide Bay
  • Fitzroy
  • Mackay-Isaac
  • Townsville
  • Cairns
  • Outback

In this Section, separate major project pipelines are provided for these 11 diverse regions of the state, with commentary on the outlook for each region. This regional analysis shows that there are significant regional winners and losers in terms of major project activity over the next five years, with some regions, particularly, set for substantial volatility in work. Industry and government can use these regional profiles to better plan for the coming phase of major project work – and also use the pipeline to see where any emerging latent industry capacity may be tapped.

FIGURE 13: FUNDED MAJOR PROJECT WORK OVER THE NEXT 5 YEARS BY REGION7

NORTHERN GAS PIPELINE

THERE ARE SIGNIFICANT REGIONAL WINNERS AND LOSERS IN TERMS OF MAJOR PROJECT ACTIVITY OVER THE NEXT FIVE YEARS.

KEY POINTS

As may be expected given the concentration of the Queensland population in the south east corner, the majority of funded major project work is located here over the next five years. Major projects in Brisbane, the Sunshine Coast, the Gold Coast and Ipswich-Toowoomba-Logan account for $13.2bn or 48% of total funded major project work.

Meanwhile, the fastest growing regions in terms of funded major project work are also located in South East Queensland, and include Brisbane, Gold Coast, Sunshine Coast, Ipswich – Toowoomba – Logan, and Wide Bay. These regions are all expected to see average levels of funded activity over the next five years 150% higher than that of the past five years.

Conversely, unfunded projects are more concentrated in the central and northern regions. Two thirds of the major project pipeline in the Outback region remains unfunded, along with 68% of the pipeline in Townsville, 51% in Cairns and around 47% in both the Wide Bay and Mackay regions.

By contrast Darling Downs-Maranoa, Fitzroy, and Outback regions are facing much lower levels of funded major project work over the next five years compared to the average level of activity between 2012/13 and 2017/18 as previous large projects have moved to completion.

DARLING DOWNS-MARANOA, FITZROY, AND OUTBACK REGIONS ARE FACING MUCH LOWER LEVELS OF FUNDED MAJOR PROJECT WORK OVER THE NEXT FIVE YEARS COMPARED TO THE AVERAGE LEVEL OF ACTIVITY BETWEEN 2012/13 AND 2017/18

OVERVIEW

By our analysis, funded major project work will average around $5.5bn per annum over the next 5 years, lower than the estimated $7.7bn per annum of the previous 5 years.

This spending is spread across 11 diverse regions each with different drivers and outlooks.

  • Large transport projects, notably Cross River Rail and Inland Rail, underpin activity in the more densely populated south east corner of Queensland. These large projects are fully funded and secure a significant level of major work into the medium term. However, the central and northern regions have a significant number of unfunded projects in the pipeline. These projects reflect an upside to activity if they were to secure funding.
  • Around 24% ($6.7bn) of the funded major project work in the pipeline over the five years to 2022/23 will be centered in Greater Brisbane, with the major project driving this being Cross River Rail.
  • The next biggest region in term of major project work is Ipswich-Toowoomba-Logan, which is responsible for around 15% ($4.1bn) of funded work in the pipeline over the next five years. In 2018/19, the Toowoomba Range Second Crossing is the largest project here, but from the early 2020s this region is heavily supported by work on the Inland Rail project.
  • Work in Darling Downs-Maranoa will also be underpinned by work on the Inland Rail project, as well as ongoing coal seam gas work. This region accounts for 8% ($2.3bn) of all funded work.
  • The announcement of a smaller scale mine by Adani, as well as other resource, roads and renewable projects is supporting the Mackay-Isaac region. This region has the third strongest funded pipeline in Queensland, valued at $3.4bn, over the five years to 2022/23.
  • The Fitzroy region will be supported by Defence spending in Shoalwater Bay, and also water and renewables projects. While accounting for 10% ($2.7bn) of the funded pipeline, average activity over the five years to 2022/23 will remain far lower than the previous five year average.
  • Major project work in the Sunshine Coast and Wide Bay regions will be centered around roads and renewables. Together, these regions account for 8% (or $2.3bn) of the funded major project pipeline.
  • The Gold Coast region is principally supported by roads activity, as well as a small number of water and sewerage projects, and comprises 3% ($903m) of the funded pipeline to 2022/23.
  • Renewables also underpin work over the short run in the Townsville region, but there is also support from a number of roads, water and harbors projects. Funded work in the Townsville region makes up 4% ($1.2bn) of the funded pipeline.
  • Activity in the region of Cairns will be supported by a significant amount of renewables work, notably the Kidston project, as well as roads activity. Altogether, the Cairns region has $770m in funded work in the pipeline.
  • The Outback region has only one funded project in the pipeline, which was completed in 2018/19 (Amrun), yet there is upside here given that two thirds of the pipeline in this region represents resources-related projects which are currently unfunded.

CHART 14: FUNDED MAJOR PROJECT WORK OVER THE NEXT 5 YEARS BY REGION, $BILLION8

CHART 15: AVERAGE GROWTH IN MAJOR PROJECT WORK OVER THE NEXT 5 YEARS BY REGION9

CHART 16: ANNUAL FUNDED MAJOR PROJECT WORK OVER THE NEXT 5 YEARS BY REGION8

GOLD COAST

With a fast growing population, major project activity over the next five years is centred around water, sewerage and transport infrastructure

POPULATION 622,095
Population growth has averaged 2.3% per annum over the last 10 years.

SECTORS DRIVING GROWTH
Roads, water and sewerage. Funded work to average $181m per annum over the next 5 years.

UNFUNDED SHARE

PIPELINE HEALTH

100%

OUTLOOK
The Gold Coast region has one of the fastest growing populations in Queensland. The State Government has responded to this growth with investment in Gold Coast Light Rail and with an expansion of the region’s water and sewerage infrastructure. While Stage 3 of the Gold Coast Light Rail project remains unfunded, major project activity in the region will be supported by road works along the Pacific Highway. At present there is an average of $181m of funded project work per annum over the next five years, a 207% increase from the past five years average.

KEY UNFUNDED PROJECTS

Jabiru Island Bridges (Hope Island Road (Oxley Drive) road duplication – stage 4, $136m), Gold Coast Light Rail Stage 3 ($500m).

CHART 18: FUNDED MAJOR PROJECT PIPELINE BY SECTOR & FUNDED AND UNFUNDED PIPELINE

IPSWICH – TOOWOOMBA – LOGAN

VERY LARGE ROAD AND RAIL PROJECTS TO SUPPORT
ACTIVITY IN THE REGION, BUT WITH A STRONG CYCLE.

POPULATION 854,939
Population growth has averaged

SECTORS DRIVING GROWTH
Roads, rail, water and defence.

KEY UNFUNDED PROJECTS

PIPELINE HEALTH

100%

OUTLOOK
Major project activity in the Ipswich-Toowoomba-Logan region is expected to suffer a setback over the next 2 years with the completion of several significant projects including the $1.6bn Toowoomba Second Range Crossing, defence-related works at RAAF Amberley and a range of renewable generation projects. Funded major project work is anticipated to rise again from 2020/21 as work on Inland Rail ramps up – involving complex engineering and tunneling through the Toowoomba Ranges – as well as ongoing water and sewerage activity. Work done is unlikely to surpass 2018/19 levels, however, unless currently unfunded projects proceed. Overall major project work is set to average $817m per annum, more than double the previous five years.

KEY UNFUNDED PROJECTS

Somerset Dam Upgrade, Pacific Motorway; Section (C) Daisy Hill to Logan Motorway at Loganholme, Wyaralong Dam WTP Stage 1.

CHART 20: FUNDED MAJOR PROJECT PIPELINE BY SECTOR & FUNDED AND UNFUNDED PIPELINE

GREATER BRISBANE

POPULATION GROWTH HAS UNDERPINNED THE NEED FOR PUBLICLY FUNDED TRANSPORT INFRASTRUCTURE.

POPULATION 1,764,220
Population growth has averaged

SECTORS DRIVING GROWTH
Publicly funded transport infrastructure works, notably Cross River Rail.

KEY UNFUNDED PROJECTS

PIPELINE HEALTH

100%

OUTLOOK
There is a strong pipeline of secured publicly funded infrastructure work for Greater Brisbane through the next five years. Funded major project work is expected to average $1.3bn per annum during this period, with the bulk of work expected to be done between 2020/21 and 2022/23. The Cross River Rail is the key project underpinning future activity. While work on road projects is expected to decline in the short term as the Gateway Motorway Upgrade North (GUN) and Kingsford Smith Drive Upgrade projects wind down, road activity will be supported in the medium term by works on the Pacific Motorway and the Metro Busway.

KEY UNFUNDED PROJECTS

There is no unfunded work in the pipeline.

CHART 17: FUNDED MAJOR PROJECT PIPELINE BY SECTOR & FUNDED AND UNFUNDED PIPELINE

SUNSHINE COAST

Transport investments to support a lift in major project activity on the Sunshine Coast.

POPULATION 346,520
Population growth has averaged 2.3% per annum over the last 10 years.

SECTORS DRIVING GROWTH
Roads (including airport works) and rail.

KEY UNFUNDED PROJECTS

PIPELINE HEALTH

100%

OUTLOOK
Strong population growth in the region, as well as rising tourism activity, is driving a wave of new investment in transport infrastructure through the next five years including upgrades to roads, rail and airports. Funded work is on track to average close to $290m per annum over the next five years, more than double the average of the previous five years. Work is largely supported by projects along the Bruce Highway, but also by the $780m Beerburrum to Namboor rail upgrade.

KEY UNFUNDED PROJECTS

Sunshine Coast Light Rail ($500m).

CHART 19: FUNDED MAJOR PROJECT PIPELINE BY SECTOR & FUNDED AND UNFUNDED PIPELINE

DARLING DOWNS – MARANOA

Upstream sustaining works on gas projects and the Inland Rail to underpin activity

POPULATION 129,067
Population growth has averaged 0.7% per annum over the last 10 years.

SECTORS DRIVING GROWTH
Gas developments, renewables and rail.

KEY UNFUNDED PROJECTS

PIPELINE HEALTH

20%

OUTLOOK
Work in this region was underpinned by very large coal seam gas projects in the Surat Basin. Activity in 2018/19 is expected to be less than half the annual average level of work for the past five years, with funded work expected to decline further in 2019/20 and 2020/21 as several renewable energy projects move towards completion. While upstream gas related activities should provide a floor to work, the next phase of growth for the region will likely be driven by the Inland Rail project – and in particular, the substantial NSW/QLD Border to Gowrie section. Activity could be higher if currently unfunded projects in renewables, coal and gas were to proceed. Overall, funded major project work is expected to average $468m per annum through the five years to 2022/23, well below the resources-boom fueled average of the previous five years.

KEY UNFUNDED PROJECTS

Western Surat Gas Project ($1.5bn), Bulli Creek Solar Farm (>1000 MW, $1.5bn), New Acland Stage 3 Expansion ($350m).

CHART 21: FUNDED MAJOR PROJECT PIPELINE BY SECTOR & FUNDED AND UNFUNDED PIPELINE

WIDE BAY

Road works to drive major project activity across the next five years

POPULATION 297,153
Population growth has averaged 1.1% per annum over the last 10 years.

SECTORS DRIVING GROWTH
Roads, defence, water and renewables.

KEY UNFUNDED PROJECTS

PIPELINE HEALTH

80%

OUTLOOK
While large renewable energy projects are driving the bulk of major project activity in 2018/19, large roads projects along the Bruce Highway should see activity sustained at relatively strong levels through the next five years. There is potentially a large upside to major project work in the early 2020s if currently unfunded projects across roads, water and coal proceed simultaneously.

KEY UNFUNDED PROJECTS

Mooloolah Road Interchange ($450m), Paradise Dam Spillway Improvement Project ($200m), Aramara Solar Farm (140 MW, $280m), Maryborough coal ($300m).

CHART 25: FUNDED MAJOR PROJECT PIPELINE BY SECTOR & FUNDED AND UNFUNDED PIPELINE

FITZROY

Defence, water and renewables projects will underpin major project activity looking forward, but to a level well below that seen during the LNG-related construction boom

POPULATION 226,455
Population growth has averaged 0.9% per annum over the last 10 years.

SECTORS DRIVING GROWTH
Defence, water, renewables, mining and heavy industry.

KEY UNFUNDED PROJECTS

PIPELINE HEALTH

30%

OUTLOOK
The Fitzroy region boomed during the first half of this decade on the back of a plethora of major projects across LNG and coal. However, the completion of these projects has seen major project activity fall by over 85%. In 2018/19, funded major project activity is expected to be $539m, driven mainly by coal expansions, upstream oil and gas works as well as renewable energy projects. Funded work is expected to oscillate around these levels for the next few years as the completion of coal-related projects is balanced by new initiatives across defence (Shoalwater Bay) and water (Rookwood Weir). However, there is a substantial volume of unfunded work (mostly in coal) which could provide upside to this outlook.

KEY UNFUNDED PROJECTS

Rockhampton Ring Road ($950m), Port of Gladstone – Second Shipping Lane ($280m), Wandoan South Solar Project (1000MW, $1.2bn), Columboolan Solar Farm (310MW, $300m).

CHART 22: FUNDED MAJOR PROJECT PIPELINE BY SECTOR & FUNDED AND UNFUNDED PIPELINE

MACKAY – ISAAC

‘Mini’ Adani coal project and other resources developments should support activity

POPULATION 174,034
Population growth has averaged 0.7% per annum over the last 10 years.

SECTORS DRIVING GROWTH
Resources, roads, rail, renewables.

KEY UNFUNDED PROJECTS

PIPELINE HEALTH

80%

OUTLOOK
Major project activity in the Mackay-Isaac region is traditionally supported by significant resources projects, but has been supplemented in recent years with a burst of renewable energy projects including the Daydream, Hayman, Collinsville and Moranbah solar farms. Looking ahead, funded work in the pipeline is now heavily influenced by Adani’s announcement to construct a ‘scaled down’ Carmichael coal mine (10mtpa) and related infrastructure across rail, water and electricity transmission. There is potential upside to major project activity in the early 2020s if coal prices are sustained.

KEY UNFUNDED PROJECTS

Shell / Arrow Water Treatment Facilities Bowen ($250m), Urannah Dam ($250m), Arrow Bowen Pipeline ($450m), Eagle Downs coking coal ($1.25bn), Peak Downs coal expansion ($460m).

CHART 27: FUNDED MAJOR PROJECT PIPELINE BY SECTOR & FUNDED AND UNFUNDED PIPELINE

TOWNSVILLE

Funded defence, water and renewables projects will continue to support the Townsville region, however there is a very large volume of unfunded work in the pipeline.

POPULATION 238,369
Population growth has averaged 1.2% per annum over the last 10 years.

SECTORS DRIVING GROWTH
Defence, water, renewables and harbours.

KEY UNFUNDED PROJECTS

PIPELINE HEALTH

50%

OUTLOOK
Major project work in 2018/19 has been underpinned by nearly $300m in renewable energy works, but funded pipeline activity eases in coming years as many of these projects wind down, despite strengthening roads, rail and water works. The key upside for the region remains electricity, with $873m of the $2.4bn in unfunded work in the pipeline associated with further electricity projects, including the credibly proposed North Queensland Power Station. Apart from electricity, there is also over $1.2bn in unfunded minerals and other heavy industry major project work in the Townsville region over the next five years, as well as $180m in unfunded road works (Townsville Ring Road).

KEY UNFUNDED PROJECTS

Sarina to Cairns – Saltwater Creek Upgrade ($103m), Townsville Ring Road Stage 5 ($180m), Townsville Port Expansion Project – Outer Harbour Expansion (Berths 14+15, $200m).

CHART 24: FUNDED MAJOR PROJECT PIPELINE BY SECTOR & FUNDED AND UNFUNDED PIPELINE

CAIRNS

Roads activity will continue to support Cairns, but this region has a very high proportion of unfunded work in the pipeline

POPULATION 253,202
Population growth has averaged 1.3% per annum over the last 10 years.

SECTORS DRIVING GROWTH
Roads and renewable electricity generation.

KEY UNFUNDED PROJECTS

PIPELINE HEALTH

60%

OUTLOOK
Funded work is anticipated to be strong in the Cairns region in 2018/19 – well above the average for the past five years – supported by a myriad renewable energy projects. However, major project activity in the Cairns region is easing right through the next five years, despite a pickup in funded roads works, as the current mix of renewables projects wind down to completion. If the Kidston hydro project and transmission link were to proceed, this could result in a large upswing in regional activity in 2019/20 and into 2020/21. The upswing during this period could be even stronger if the $250m Nullinga Dam were to go ahead.

KEY UNFUNDED PROJECTS

Red Dome Mungana gold ($330m), Kidston Stage 3 Wind Project ($250m), Kidston Pumped Hydro Storage Project ($330m), North Queensland Transmission Line ($150m).

CHART 26: FUNDED MAJOR PROJECT PIPELINE BY SECTOR & FUNDED AND UNFUNDED PIPELINE

OUTBACK

The resource construction boom in the Outback region is now over and, after 2018/19, all of the major project work in the pipeline is unfunded.

POPULATION 81,753
Population growth has averaged -0.2% per annum over the last 10 years.

SECTORS DRIVING GROWTH
Resources and water.

KEY UNFUNDED PROJECTS

10%

OUTLOOK
The Outback region covers approximately two thirds of the Queensland land area. While it represents only a very small fraction of the Queensland population, it does encompass significant minerals resources areas and waterways. After 2018/19, with the completion of the Amrun bauxite project, there are no funded major projects in the pipeline, although there are a significant number of unfunded prospective resources projects across molybdenum, copper, silverlead-zinc, phosphate and graphite. These projects need to clear hurdles regarding financing and financial viability, remoteness, and the environment. However, while some projects may proceed, it is highly unlikely that total activity over the next five years will match that of the previous five years, which were driven by the very large Dugald River zinc ($1.5bn) and Amrun bauxite ($2.1bn including port works) projects.

KEY UNFUNDED PROJECTS

Merlin Molybdenum-Rhenium Phase 2 ($345m), Cannington Expansion ($400m), Roseby Copper (Little Eva, $320m), Ardmore Project -Phosphate Project ($120m).

CHART 23: FUNDED MAJOR PROJECT PIPELINE BY SECTOR & FUNDED AND UNFUNDED PIPELIN

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