australia 2016 construction outlook-infrastructure megaprojects opportunities and challenges may...

Australia 2016 Construction Outlook: Infrastructure Megaprojects Opportunities and ChallengesBRIKSTATS CONSULTING

May 2016

SAMPLE PAGES

REPORT KEY HIGHLIGHTS

Australia Infrastructure Projects By Status i.e. Pre-Construction, Construction and Operations Stage; Australia Construction Spend 2016-2020; Construction Spend By Provinces In Australia; Australia Public-Private Partnership (PPP) Projects, Regulations, Growth And Trends; Australia Infrastructure Projects With Cost Overruns (Budget Overrun); Australia Infrastructure Projects With Time Overruns (Schedule Overrun); Reasons For Overruns; Australia Infrastructure Project Financing Methods, Project Debt Equity Ratio, List Of Top Financiers; Australia Infrastructure Project Target Internal Rate Of Return By Sectors; Australia Infrastructure Greenfield And Brownfield Investments; Increasing Megaprojects Complexity In Australia.

Sector Deep Dives – Australia Mining Sector Overview, Top Mining Project Owners, Mining Spend By Ownership Type, Top Mining Projects By Status, Mining Projects In Australia With Overruns, Australia Mining Sector Internal Rate Of Return (IRR); Australia Railway Projects Overview – Ownership Landscape, Top Upcoming And Ongoing Railway Projects, Railway Forecasted Spend, Railway Sector Internal Rate Of Return (IRR), Railway Projects With Cost Overrun, Railway Projects With Time Overrun; Australia Real Estate – Mixed Use Sector Overview- Market Share Of The Top Developers, Top Mixed Use Projects In Australia And Forecasted Spend In Real Estate

BRIKSTATS CONSULTING

Table of Content

1: Megaprojects Infrastructure Upcoming Opportunities in Australia: Microscopic View1.1: Overall Megaprojects Spend in Australia: Historically and Future1.2: Megaprojects Spend in Australia By Main Sectors: Real Estate ; Transportation ; Energy, Industrial & Utilities ; Social Infrastructure1.3: Megaprojects Spend in Australia: By Province

2: Historical Megaprojects Construction Spending in Australia2.1: Historical View of Megaproject Spending in Australia on Yearly Basis2.2: Historical View of Megaproject Spending in Australia - On Hold and Troubled Projects

3: Future View of Megaprojects Construction Spending in Australia3.1: Future View of Megaproject Spending in Australia on Yearly Basis3.2: Deep Dive into Megaprojects spending in 2016 and 2017

4: Sector Level Megaprojects Construction Spending in Australia4.1: Historical View of Australia Megaprojects Construction Spending - By Top Sub-Sectors4.2: Future View of Australia Megaprojects Construction Spending – By Top Sub-Sectors

5: PPP in Megaprojects in Australia: Detailed Overview5.1: Overall PPP Growth and Development in Australia: Historical and Future view5.2: PPP Growth in the Australia: By Sectors5.3: PPP Growth in the Australia: By Province/ State5.4: PPP Implementation Models (Concession Type) in Australia5.5: PPP Effectiveness and Efficiency in Australia: Compared to Other Countries

6: Public and Private Ownership Share in Australia Megaprojects development6.1: Overall Ownership Trend6.2: Private Sector involvement and the Development Model6.3: Private and Public Ownership: By Sectors (Excluding PPP)

7: Assessing Project risks in the Australia Megaprojects landscape7.1: Megaprojects Cost Overruns/ Variations in Australia7.2: Megaprojects Cost Overruns/ Variations in Australia: Reasons and Factors7.3: Megaprojects Time Overruns/ Variations in Australia7.4: Megaprojects Time Overruns/ Variations in Australia: Reasons and Factors


Table of Content (cont..)

8: Recent and Strategic Trends in the Australia Megaprojects8.1: Greenfield versus Brownfield Megaprojects Investments in Australia8.2: Increasing Average Megaprojects Size in Australia

9: Australia Megaprojects Financing: Prime Sources of Project Financing and Project Debt and Equity Ratios9.1: Australia Megaprojects Financing: Project Financing Debt to Equity Ratio at Sector Level9.2: Australia Megaprojects Financing By Type of Institutions

10: Australia Megaprojects Returns (IIR- Internal Rate of Return) and Impact Analysis10.1: Australia Megaprojects Return Analysis using Internal Rate of Return (IRR): By 'Main' Sectors10.2: Australia Megaprojects Return Analysis : Economic and Social Impacts

11: Australia Megaprojects Construction : Key Sector Deep Dives11.1: Australia Megaprojects Sector Deep dive: Mining Sector Assessment

11.1.A: Mining Sector - Historical Megaprojects Construction Spending in Australia11.1.B: Mining Sector - Future View of Megaprojects Construction Spending in Australia11.1.C: Key Owners and Investors in Australia’s Mining Sector

11.2: Australia Megaprojects Sector Deep dive: Railways Sector Assessment11.2.A: Railways Sector - Historical Megaprojects Construction Spending in Australia11.2.B: Railways Sector - Future View of Megaprojects Construction Spending in Australia11.2.C: Key Owners and Investors in Australia’s Railways Sector

11.3: Australia Megaprojects Sector Deep dive: Mixed Use Sector Assessment11.3.A: Mixed -Use Sector - Historical Megaprojects Construction Spending in Australia11.3.B: Mixed -Use Sector - Future View of Megaprojects Construction Spending in Australia11.3.C: Key Owners and Investors in Australia’s Mixed -Use Sector


Table of Figures (cont..)

Figure 1: Australia Breakdown of Megaproject Spending - By Project StatusFigure 2: Australia Historical Megaprojects Spending - By SectorFigure 3: Australia Upcoming Megaprojects Spending - By SectorFigure 4: Australia Megaprojects Investment - By ProvinceFigure 5: Australia Split of Historical Megaprojects Investment: By Province and By Main SectorsFigure 6: Australia Split of Upcoming Megaprojects Investment: By Province and By Main SectorsFigure 7: Australia Split of Troubled Megaprojects Investment: By Province and By Main SectorsFigure 8: Australia Projects Awarded Value On Yearly Basis: From 2010-2015Figure 9: Australia Troubled Projects (On Hold or Cancelled) Value On Yearly Basis: From 2010-2015Figure 10: List of Key Projects Put on Hold or Cancelled with project detailsFigure 11: Australia Projects Awarded Value On Yearly Basis: From 2016- 2020Figure 12: Australia Megaprojects Spending by Key Sectors from 2016-2020Figure 13: List of Top Projects To be Awarded in 2016 and 2017 with project detailsFigure 14: Australia Projects Awarded historically : Split by Top 6 Sub SectorsFigure 15: Australia Projects to be Awarded in Future : Split by Top 6 Sub SectorsFigure 16: Australia PPP Megaprojects Construction: By Project StatusFigure 17: Australia Ongoing and Planned PPP Megaprojects Construction: By Award YearFigure 18: List of top Ongoing and Upcoming PPP ProjectsFigure 19: Australia PPP Versus Non-PPP Megaprojects Construction: By SectorsFigure 20: Australia PPP Historical and Upcoming Megaprojects Construction: By SectorsFigure 21: Australia PPP Versus Non-PPP Megaprojects Construction: By Province/ StateFigure 22: Australia PPP Historical and Upcoming Megaprojects Construction: By Province/ StateFigure 23: Australia PPP Megaprojects Construction – By Concession TypesFigure 24: Australia PPP Megaprojects Construction – By Concession Types and By SectorsFigure 25: Australia Upcoming PPP Megaprojects Spending along the PPP readiness index: Compared to Developing CountriesFigure 26: Australia Historical, Troubled and Upcoming Megaprojects –By Ownership Type (i.e. Public and Private companies)Figure 27: Australia Private Sector Owned Megaprojects by Status: Split by Ownership Model (JV / Partnership/ Standalone)Figure 28: Australia Megaprojects By Ownership Type and By SectorsFigure 29: Australia Share of Megaprojects Undergoing Cost Overrun: Compared to other countries


Table of Figures (cont..)

Figure 30: Australia Share of Megaprojects Undergoing Cost Overrun: By Main SectorsFigure 31: List of Big 5 projects Undergoing Cost Revision with project detailsFigure 32: Australia Megaprojects Cost Overrun: Reasons for Cost Overruns and Corresponding Impact On Cost Change %Figure 33: Australia Share of Megaprojects Undergoing Time Overrun: Compared to other countriesFigure 34: Australia Share of Megaprojects Undergoing Time Overrun: By Main SectorsFigure 35: List of Big 5 projects Undergoing Time Revision with project detailsFigure 36: Australia Megaprojects Time Overrun: Reasons for Time Overruns and Impact On Timely Delivery, YearsFigure 37: Australia - Greenfield versus Brownfield Megaprojects Investments – Historical, Troubled and UpcomingFigure 38: Australia Greenfield versus Brownfield Megaprojects Investments – By SectorsFigure 39: Australia List of Big Greenfield Projects Planned in 2016, 2017Figure 40: Australia List of Big Brownfield Projects Planned in 2016, 2017Figure 41: Australia Megaprojects Average Project Size: By Sub-Sectors (Granular sector level)Figure 42: Australia Megaprojects Projects Financing - Debt to Equity Ratio By SectorFigure 43: Australia List of Projects with Key Sponsors, Lending Institutions, Debt & Equity valueFigure 44: Australia Megaprojects with Average Internal Rate of Return (IRR): By SectorsFigure 45: List of Key Upcoming Megaprojects with Target IRRFigure 46: Australia List of Key Ongoing and Upcoming Megaprojects: With Social and Economic ImpactsFigure 47: Australia Mining Project Contracts Awarded : From 2011-2015Figure 48: Australia Share of Spend By Mining Projects On hold and Cancelled ProjectsFigure 49: List of Key Mining Projects Put On Hold with project detailsFigure 50: Australia Mining Project Contracts To Be Awarded : From 2016- 2020Figure 51: List of Top Mining Projects To be Awarded in 2016 and 2017 with project detailsFigure 52: Share of Public Versus Private Sector in Australia Mining SectorFigure 53: Market Share of Top Key Project Owners of Australia Upcoming Mining ProjectsFigure 54: Australia Railways Project Contracts Awarded : From 2011-2015Figure 55: Australia Railways Project Contracts Awarded From 2011-2015 : Split by Type of RailsFigure 56: Australia Share of Spend By Railways Projects On hold and Cancelled Projects


Table of Figures

Figure 57: List of Key Railways Projects Put On Hold with project detailsFigure 58: Australia Railways Project Contracts To Be Awarded : From 2016- 2020Figure 59: Australia Upcoming Railways Project Contracts To Be Awarded: Split by Type of RailsFigure 60: List of Top Railways Projects To be Awarded in 2016 and 2017 with project detailsFigure 61: Share of Public Versus Private Sector in Australia Railways SectorFigure 62: Market Share of Top Key Project Owners of Australia Upcoming Railway ProjectsFigure 63: Australia Mixed -Use Project Contracts Awarded : From 2010-2015Figure 64: Australia Share of Spend By Mixed -Use Projects On hold and Cancelled ProjectsFigure 65: Australia Mixed -Use Project Contracts To Be Awarded : From 2016- 2020Figure 66: List of Top Mixed -Use Projects To be Awarded in 2016 and 2017 with project detailsFigure 67: Share of Public Versus Private Sector in Australia Mixed -Use SectorFigure 68: Market Share of Top Key Project Owners of Australia Upcoming Mixed-Use Projects


Figure 1: Australia Breakdown of Megaproject Spending - By Project Status

X

X

X

His

tori

cal

Tro

ub

led

Up

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ing

Source: BrikStats Megaprojects Database, Team Analysis

BrikStats Consulting

FINANCING

DESIGN

STUDY

ANNOUNCED

CANCELLED

ON HOLD

CONSTRUCTION

COMPLETED

Australia has an attractive megaprojects market with a robust project pipeline of USD 282

billion, however, is challenged by a huge share of projects in distress

Value, USD Billion No. of projectsProject Status

USD billion

Energy, Utilities, Industry Transportation Social Infrastructure Real estate

Historical Projects – Sector Split

Historically, Energy, utilities and industry sector alone accounted for 58% of the spend



Figure 2: Australia Historical Megaprojects Spending - By Sector

USD billion

Regionally, Queensland and Victoria are the two biggest markets, together constituting to more

than 60% of the country’s capital investment

NORTHERN TERRITORY

SOUTH AUSTRALIA

TASMANIA

NEW SOUTH WALES

WESTERN AUSTRALIA

VICTORIA

QUEENSLAND

Total Project Value Split by Provinces


Figure 4: Australia Megaprojects Investment - By Province


USD billion

Western Australia and Queensland constituted to ~69% of total historical spending. It has also

been observed that there is a contrast in sector priorities set across the provinces

Historical Megaprojects Spending By Province and By Sectors


Figure 5: Australia Split of Historical Megaprojects Investment: By Province and By Main Sectors


WESTERN AUSTRALIA QUEENSLAND NEW SOUTH WALES VICTORIA SOUTH AUSTRALIA

Energy, Utilities, Industry Transport Real Estate Social Infra

Accounted for 63% of total country’s energy spending;

negligible share in other sectors

Accounted for 28% and 39% of country’s total transport

& energy spending resp.

47% of province spending is channeled into transport;

followed by real estate

Accounted for 39% of Australia’s total real estate

investment

Energy was the only prime investment destination in

the province

2010 2011 2012 2013 2014 2015

Over the same period, X% of the average annual spend in the Australia’s infrastructure market

was made on projects that never got completed and have been delayed or cancelled



Figure 9: Australia Troubled Projects (On Hold or Cancelled) Value On Yearly Basis: From 2010-2015

USD billion

Troubled Project Awards - By Construction Start Year

Average = USD X B

-

5

10

15

20

25

30

35

2016 2017 2018 2020

Energy, Utilities, Industry

Transport

Real estate

Transport has the highest share of planned projects with key ones to be awarded in 2016 and

2018. Most projects in the energy, utilities and industry sector, to be contracted out by 2018



Figure 12: Australia Megaprojects Spending by Key Sectors from 2016-2020

USD billion

Un-Awarded Projects By Award Year and By Key Sectors

The year 2015 saw an exceptionally high value of projects awarded as PPP contracts. In

future, almost XX% of the PPP pipeline is expected to begin construction in 2016


Figure 17: Australia Ongoing and Planned PPP Megaprojects Construction: By Award Year


Historical Upcoming

PPP By Status

2011 2012 2013 2014 2015

Upcoming PPP By Construction Award Year

Historical PPP By Construction Award Year

2016 2017 2018

USD billion

USD billion

Across sectors, DFBOT continues to be an ideal concession type, only with an exception in

transport where we observed several other types of concession being tested


Figure 24: Australia PPP Megaprojects Construction – By Concession Types and By Sectors


PPP Split By Concession Type and By Sector

ENERGY, UTIL IT IES, INDUSTRY TRANSPORT SOCIAL INFRA REAL ESTATE

DFBOT DFBOM BOT BOM DBOT O&M BO LEASEHOLD DESIGN BUILD

Australia Megaprojects in Infrastructure are under high risk of cost overruns – stands highest when compared to few other geographies


Figure 29: Australia Share of Megaprojects Undergoing Cost Overrun: Compared to other countries


With Overruns Without Overruns

XX% of the total projects, is observed with budget increasing or decreasing from original estimates

Share of projects with cost overruns, %

Australia stands out in the spread of projects undergoing cost revisions

RUSSIA

CANADA

BRAZIL

CHINA

Of the multiple hurdles resulting in budget revisions, the most common factors are the local market conditions, construction and change in design


Figure 32: Australia Megaprojects Cost Overrun: Reasons for Cost Overruns and Corresponding Impact On Cost Change %


LOCAL MARKET MULTIPLE REASONS

CONSTRUCTION DESIGN/ PLANNING

REGULATORY FINANCING EXTERNAL FACTORS

Reasons for cost overruns and Impact on Cost Overruns

Brownfield spending is high in energy and transport sector, mainly due to capacity expansion

plans; also has a considerable amount allotted to real estate redevelopment projects


Figure 38: Australia Greenfield versus Brownfield Megaprojects Investments – By Sectors


Greenfield Brownfield

Energy, Utilities, Industry Transport Real Estate Social Infra

Total greenfield and brownfield spending by sectorUSD billion

From returns standpoint, Mining is the most attractive sector in Australia with average target

IRR of XX%



Figure 44: Australia Megaprojects with Average Internal Rate of Return (IRR): By Sectors

Target Internal Rate of Return (IRR) By Sector, %

MINING

PROCESS INDUSTRIES

WASTE & WATER

OIL & GAS

ROADS

RAILWAYS

POWER

XX%

Russia 2016 Construction Outlook:

Growing Market with USD 300

Billion of Infrastructure Mega-

Projects Pipeline

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