News
Procuring Utilities Infrastructure in a Constrained Market
Infrastructure demand is outpacing market capacity
Australia’s infrastructure sector is experiencing sustained growth in project pipelines.
Across Queensland, infrastructure activity is expected to increase significantly over the coming decade as projects across transport, energy and utilities sectors move into delivery.
The Queensland Major Projects Pipeline Report estimates that annual engineering construction activity could reach $27.2 billion by 2027–28 and $29.4 billion by 2029–30 if the full pipeline proceeds.
These levels would exceed historical construction peaks.
For infrastructure clients, this growth presents a fundamental challenge: project demand is expanding faster than contractor capacity.
Utilities infrastructure projects are particularly affected by this dynamic.
Pipeline construction, treatment plant upgrades and complex underground services require specialised contractors with highly skilled technical teams.
Rethinking procurement strategies
Traditional procurement approaches may not always align with current market conditions.
Projects that allocate excessive risk to contractors, or fail to reflect the technical complexity of the work involved, can struggle to attract competitive bids.
“Procurement strategies need to reflect the realities of the construction market,” says Civil Project Partners Director Ryan O’Neill.
“When procurement models don’t align with market capability or project complexity, projects can struggle to attract bidders.”
The QMPPR also highlights broader productivity challenges affecting the construction sector. Cultural and productivity issues across the industry have been estimated to cost the Australian construction sector around $8 billion each year.
For utilities infrastructure projects — where productivity can already be constrained by site conditions and underground construction — these pressures can significantly affect delivery timelines.
Aligning procurement with delivery reality
In this environment, procurement strategies increasingly need to consider contractor input earlier in the project lifecycle.
Early contractor involvement can provide valuable insights into construction methodology, staging strategies and delivery risks.
“Contractors bring practical delivery experience that can significantly improve project planning,” O’Neill says.
“When they’re engaged early, that experience can help identify risks and improve delivery strategies.”
For utilities providers managing complex infrastructure programs, procurement strategies that balance technical complexity, market capability and realistic risk allocation will play a critical role in successful project delivery.