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Queensland’s Infrastructure Crossroads: Controlling Costs, Securing Supply, and Delivering the Pipeline
The 2025 Queensland Major Projects Pipeline Report (QMPPR) shows a record $127.5 billion in projects on the horizon — a 22.7% rise on last year, driven by major investments in roads, rail, and transport infrastructure, as well as energy and industrial projects, including the infrastructure for the 2032 Games.
But as the value of projects grows, so too does the cost of delivery. Escalating materials prices, tightening supply chains, and a persistent productivity decline are testing the sector’s ability to deliver projects efficiently and sustainably.
For Ryan O’Neill, the challenge is clear:
“We’ve got one of the strongest pipelines in the country — but we’re building in the toughest conditions in a generation. Costs are rising faster than budgets can adapt, and unless we rethink how we plan and deliver, the gap between ambition and delivery will only widen.”
The Price of Progress
The QMPPR costs section forecasts construction cost escalation of 7.1% in 2025, with annual increases expected to rise steadily, exceeding 37% by 2029, which predicts Queensland to have the highest cost growth rate in Australia.
According to the report, the predicted cost growth will be driven by a mix of global factors including materials and transport and local constraints, including limited manufacturing capacity, project overlap, and chronic workforce shortages.
In the transport sector alone, the 5-year outlook identifies $27 billion (rail and harbours – $8.5 + roads and bridges – $19.2) in funded work, with road and rail projects forming the backbone of Queensland’s growth. From the M1 and Bruce Highway upgrades to Cross River Rail, Logan and Gold Coast Faster Rail, and regional network renewals, these projects are essential to mobility, productivity and resilience.
“As we have seen in recent tender packages and contract awards, escalation costs have stabilised and contract provisions for escalation largely removed following the significant increases we saw post-COVID,” O’Neill says. “Regardless of predicted cost increases, and there are many models suggesting varying outcomes, meeting the challenge of delivering $127 billion of projects, will require stronger forecasting, smarter supply management, and more collaborative delivery models that allow flexibility without compromising accountability.”
Labour Supply, Skills and Workforce Capability
CSQ’s analysis predicts difficulties with outsourcing skilled labour, with a current shortfall of more than 41,600 workers. The report highlights a growing risk of delivery bottlenecks, as the current demand of 26,000 workers is expected to rise quickly to 41,000 roles that need to be filled by 2030. Anecdotal evidence is seeing increased wage pressure for regional projects as workers demand increases salary and improved conditions to relocate or work away from home.
Layered on top of this are predicted global material shortages, electrical components, aggregates, and precast products, that could lengthen lead times and increased costs.
O’Neill says these compounding issues make will scheduling and staging critical.
“The pipeline shows the projects across the next 5 years and there is always the risk that it is interpreted as a tsunami. What this year shows is a more balanced approach to sequencing and a more predictable pipeline that will enable for greater project certainty and subsequent planning and investment”.
“Future project success will depend on sequencing work properly, securing supply early, and ensuring that clients, contractors and consultants are aligned on risks and timeframes as early as possible. In a labour market overlapping with housing, healthcare, and other sectors for people and resources, that level of coordination will be critical.
He adds that Civil Project Partners is already seeing success with clients who adopt an integrated early works approach, allowing better visibility of materials, labour and cost exposure before major delivery begins.
“Early alignment between design and delivery is key. The more we understand up front, the better we can manage cost and material risks before they affect delivery timeframes.”
Productivity and Procurement Reform
The QMPPR also points to structural issues, including declining workforce productivity and overly complex procurement frameworks, as barriers to delivering the pipeline efficiently.
Worker productivity has fallen almost 60% since 2000, from $544,000 to $227,000 per worker per year. Reversing that trend will be essential to meet demand without blowing out workforce numbers or costs.
“Productivity isn’t driven by a single factor,” O’Neill says. “It relies on disciplined procurement, effective planning, and consistency in contracting and delivery. Too often, variability between projects creates inefficiencies before construction even starts.”
He supports the report’s call for greater alignment between governments, clients and contractors, focusing on standardised delivery frameworks and more transparent escalation mechanisms for cost recovery and supply disruption.
A Path Forward
Despite the challenges, O’Neill remains optimistic about the state’s ability to deliver.
“Queensland has an extraordinary opportunity, not just to build more, but to build better. The transport and infrastructure investments we’re making now will shape the state for generations,” he says.
“But we can’t take the old approach and expect a new result. The projects that succeed in this environment are the ones that value collaboration, flexibility, and clear-eyed cost control.”
For Civil Project Partners, that means helping clients plan smarter, procure stronger, and deliver confidently, even in volatile market conditions.
“We have the people, the projects, and the purpose,” O’Neill says. “Now it’s about capability, capacity building and execution, making sure that every dollar spent delivers value, every project adds value, and every kilometre built strengthens Queensland’s future.”