Cost Benchmarking for Infrastructure Investments

Lead agencies

BITRE and state and territory road transport agencies

Enduring question 3.3

How do infrastructure construction costs vary?

Gap addressed

Assessing value for money for road and other infrastructure investments.

Background

Careful evaluation of infrastructure construction costs is essential to ensure value for money in infrastructure investments, a fact noted by the 2014 Productivity Commission inquiry into Public Infrastructure.11

In response to the Productivity Commission Inquiry, Australian Government and state and territory governments committed to carrying out regular cost benchmarking for road projects through the Transport and Infrastructure Council (TIC). In cooperation with state and territory road agencies, BITRE subsequently completed a pilot cost-benchmarking study for TIC in 201512, which covered 65 separate road projects.

Objective

Expand and update cost-benchmarking work.

Project update

Cost benchmarking of road projects was updated in 2017 to include more-recently completed construction projects. The 2017 cost benchmarks were based on a sample of 34 road projects–28 recently completed and 6 in-delivery–from across seven jurisdictions. The main findings from the analysis include:

  • Average road project costs were around $5.1 million per lane kilometre-slightly less than measured in the 2015 cost benchmarking study.
  • Average costs vary most significantly with road standard–the average cost of urban and rural freeways/highways was around $5.7 million per lane kilometre, while average costs of lower-standard rural arterials were around $3.8 million per lane kilometre.

A summary report outlining the key findings was released in early 2018, with the next round of road cost benchmarking scheduled to be undertaken in 2019.

BITRE is also scoping possible expansion of the cost benchmarking work to water infrastructure projects.

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