Marc Allen, Executive Advisor at RP Infrastructure, on why Australia’s contracting market lacks sufficient depth to support the pipeline ahead, why collaborative contracts don’t guarantee collaborative behaviour and the case for a coordinated, cross-state transport infrastructure strategy.
How would you describe the overall health of Australia’s transport infrastructure market right now?
Australia’s transport infrastructure market remains active, but the outlook varies considerably across the states.
Queensland is entering a significant period of investment as it prepares for the Brisbane 2032 Olympic and Paralympic Games, with projects including The Wave and Logan to Gold Coast Faster Rail contributing to a strong pipeline. New South Wales continues to progress major programs such as Sydney Metro, while Victoria is transitioning from an intensive period of transport investment to a more measured pipeline.
The challenge is balancing these different investment cycles across a national market with a relatively concentrated contracting and specialist workforce base. Contractors, engineers and skilled workers move to where demand is strongest, which can create capacity pressures when several major programs peak at the same time.
For clients planning major transport programs, understanding these market dynamics early is critical. Greater visibility of upcoming investment across jurisdictions can help clients plan procurement timeframes, test market capacity and develop delivery strategies that attract the right capability. It can also give government and industry greater certainty to invest in the people and resources needed to deliver the pipeline.
Competition during the bidding stage was rated high or very high by 72% of Asia-Pacific respondents in our latest survey. Does Australia have the right balance between competitive tension and a sustainable contractor market?
Competitive tension remains an important part of achieving value for money, but it needs to be considered alongside the long-term health and capacity of the market.
Following the pandemic, inflation and supply chain disruption placed considerable pressure on contractors delivering fixed-price contracts. This has contributed to a shift towards more collaborative models, including alliances, Incentivised Target Cost contracts and other approaches that allow risk to be allocated to the parties best placed to manage it.
For clients, the procurement and award phases are critical opportunities to establish realistic pricing, allocate risk appropriately and align participants around shared project outcomes.
A strong procurement process looks beyond the lowest price. It considers capability, capacity, commercial sustainability and the behaviours needed to deliver the project successfully. This helps clients attract credible bidders, maintain competitive tension and establish a stronger foundation for delivery.
Infrastructure procurement efficiency has improved significantly over the past year, according to our survey respondents. Is that consistent with what you’re seeing on the ground?
There is a clear and welcome focus across the industry on making procurement more efficient.
We are seeing clients streamline requirements, avoid unnecessarily lengthy processes and focus submissions more closely on the information that will genuinely inform their evaluation. This is important because every requirement carries a cost for both the client and bidders. Asking only for relevant information can reduce effort, improve the quality of responses and support continued market participation.
Earlier shortlisting and paid Early Contractor Involvement phases are also becoming more common. These approaches allow clients and bidders to develop solutions together, test assumptions and gain a clearer understanding of risk before moving into delivery.
At RP Infrastructure, we work alongside clients to develop procurement strategies suited to the project, market conditions and desired outcomes. Considering these factors early can reduce unnecessary effort, improve the quality of submissions and give clients greater confidence in their procurement decisions.
Financial risk-sharing incentives are now the most commonly cited ingredient of effective risk allocation. Is the shift towards collaborative, alliance-style contracting actually changing how risk gets shared in practice?
Collaborative models can support better risk sharing, but their success depends on how they are established and governed but importantly, for them to work, they need to be supported by collaborative behaviours and an embedded culture to collaborate.
In an alliance, for example, costs are generally reimbursed, while margin and performance incentives are linked to agreed outcomes. When the commercial model, governance arrangements and key performance indicators are carefully designed, this can create strong alignment between participants.
For clients considering a collaborative model, the priority should be creating alignment from the outset. Clear culture, expectations, transparent governance, balanced commercial arrangements and meaningful performance measures all help encourage the behaviours the contract is intended to support.
No contracting model removes the potential for disagreement. A well-designed model gives clients and delivery partners a stronger framework for resolving issues early, maintaining momentum and protecting the project’s overall objectives.
ESG has become far less important in discussions around risk allocation over the past 12 months. What do you make of that?
The role and visibility of environmental, social and governance considerations vary across clients, sectors and projects. In many cases, these considerations have become more integrated into broader procurement, governance and delivery requirements rather than being treated as a separate workstream.
Sustainability, environmental performance and social value remain important considerations in infrastructure delivery. The opportunity for clients is to translate these priorities into clear, measurable requirements that are relevant to the project.
Embedding them in evaluation criteria, governance arrangements and delivery measures gives bidders greater clarity and enables performance to be assessed throughout the project lifecycle. When expectations are established early, environmental sustainability and social value can support better decision-making, more resilient infrastructure and stronger outcomes for communities.
What would you identify as the defining challenge for transport infrastructure procurement over the next three to five years?
One of Australia’s greatest opportunities is to improve coordination across jurisdictions.
Each state has its own legislative, regulatory and investment environment, including different approaches to security of payment and compulsory acquisition. For major programs delivered across state boundaries and over multiple political cycles, navigating these differences can add considerable complexity.
At the same time, the market itself does not operate neatly within state borders. Contractors, consultants and specialist workers move across Australia in response to demand. When major programs peak concurrently, this can place pressure on market capacity and make it more difficult for clients to secure the right resources at the right time.
Greater coordination does not require every jurisdiction to take the same approach. It means creating better visibility of the national pipeline, understanding where major programs may overlap and giving clients and industry greater certainty to plan and invest ahead.
With greater visibility and earlier coordination, clients can plan procurement more confidently, while contractors and consultancies can invest in their people and build the capacity needed to deliver Australia’s future pipeline. This will help address the geographic peaks, market constraints and workforce challenges the industry has faced for decades, creating a more sustainable infrastructure market and stronger, lasting outcomes for communities.
Read more in the Ansarada Transport Infrastructure Outlook 2027.
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Planning a major transport infrastructure project or program?
Whether you are developing a procurement strategy, considering the right delivery model, navigating market capacity or looking to strengthen risk allocation and collaboration across your project, our team can help you plan with confidence from early strategy through to delivery.
Reach out to Marc Allen to discuss your project or connect.
Marc Allen is an Executive Advisor at RP Infrastructure, based in Melbourne. He works on major transport and infrastructure projects nationally, bringing more than 40 years of experience across commercial leadership, transaction management, procurement and contract management.