The infrastructure boom: how the law is helping to shape our cities

By Melissa Stewart

Australia’s infrastructure boom is showing no signs of abating. We asked MLS community members what this means for the construction law landscape.

Major infrastructure projects are designed to have a significant, lasting impact on the community. Image credit: georgeclerk, iStock.

In recent months, the view from Melbourne Law School’s windows has been the changing face of the city as the Metro Tunnel project gets underway. This $11 billion project, expected to be completed by 2025, will allow for 39,000 more passengers on Melbourne’s rail system at peak times.

Huge projects like this are taking place across Australia.

The Sydney Light Rail project will provide sustainable transport from the CBD to Sydney’s south-east and help cater for growing public transport demand. In Queensland, the 10-year Bruce Highway Upgrade Program continues.

Major infrastructure projects are designed to have significant, lasting impacts on the community, and they involve many people across multiple government and private organisations. But the legal considerations that go into their design and delivery can be complex.

Wayne Jocic (BCom 2002, LLB(Hons) 2002, GDipArts(Phil) 2002) is the Co-Director of Studies for the MLS Master of Construction Law. He describes the way construction law operates in Australian jurisdictions as a “house of mirrors”.

“There are familiar images but they’re distorted,” Jocic says.

“For example, all jurisdictions have legislation governing the same sorts of things – such as how contractors are paid and what happens when multiple people are responsible for some loss – but all the jurisdictions deal with those things differently.

There are inconsistencies in every imaginable detail, which makes advising on projects costly and makes it hard for construction companies operating in multiple states.

Richard Foster (BSc 1991, LLB 1991, LLM 2000), Director of Foster Infrastructure, offers an international perspective. His company provides commercial, policy and risk management advice and training to public and private organisations in Australia and overseas. Foster acknowledges the differences between Australian jurisdictions but he sees greater differences globally.

Richard Foster
Richard Foster. Image: supplied.

Foster says civil law countries operate within inflexible frameworks that often require them to choose the lowest-cost bidder in a tender process even if that bid will not offer the best outcome, while governments in common law countries deliver projects under a flexible and policy based framework.

“Governments can actually choose the right approach to deliver the best project outcomes,” Foster says.

He adds that this framework in common law countries allows for clearer definitions of “what the roles and responsibilities of different government agencies and the private sector will be on a project by project basis, rather than the one size fits all approach often seen in civil law countries”.

Chitra Rajalingam (BCom 2007, LLB 2007, LLM 2015) is the Managing Principal Lawyer at Rail Projects Victoria, the Victorian Government authority leading the delivery of Melbourne’s Metro Tunnel project. She has seen first-hand how the Victorian Government and private sector have adapted their operations within pre-existing and new legislative frameworks.

“We have one of the biggest infrastructure programs in Victoria,” Rajalingam says.

“The public sector has had to become more sophisticated and agile in the way it conducts itself in order to protect the State’s interests but also to make our projects competitive.

We’re in a fairly tight market where we are all competing for the same resources, expertise and contractors.

Chitra Rajalingam
Chitra Rajalingam. Image: supplied.

“There’s definitely a more commercial approach [in public sector professionalism] but at the same time [it is] being underpinned by public sector values.”

Rajalingam says increased collaboration between the public and private sectors is “the right way forward”.

Reflecting on the complexities that define the construction industry today, compared with a few decades ago, Jocic observes that community consultation has become critical.

“If you look at an old construction textbook, there are three risks: time, cost and quality,” he says.

“The problem is that didn’t consider aspects such as the environment or Indigenous participation.

Community consultation, making sure that everybody is broadly happy with the project – that’s absolutely essential.

Foster says including consultation and environmental and heritage considerations in a construction project plan is critical.

“It’s important we address those considerations because they’re there for a good reason.

“They can have time and cost implications and even project design implications, and if there’s not a focus from early on, they’ll be issues down the track.”

Wayne Jocic
Wayne Jocic. Image: supplied.

Rajalingam says projects like the Metro Tunnel go through a rigorous environmental assessment that covers the environmental, social and business impacts of the construction, and contractors must also consider opportunities for community involvement.

“There’s so much money being invested in infrastructure within Victoria that it’s only right that Victorians get a share of that in opportunities from training and jobs,” she says.

Rajalingam notes that initiatives such as the Victorian Government’s Major Projects Skills Guarantee and the Aboriginal employment target make projects more inclusive in their delivery.

“Now is the time we’re really seeing how sophisticated we can be in addressing these imbalances within construction.”

And as to the future of the infrastructure boom?

Jocic says the scale and complexity of multi-billion-dollar rail, road, oil and gas ventures will add to the challenges of delivering infrastructure.

“Traditional risk allocation and the traditional ways of delivering projects won’t necessarily work,” he says.

Foster says continued population growth puts pressure on infrastructure but is ultimately an opportunity to build thriving cities and enhance liveability.

He believes Australian governments have a good handle on infrastructure priorities but will need to ensure they can manage unsolicited proposals from industry.

“To some extent … government is open to the private sector bringing innovative ideas more generally, rather than just [responding to] individual projects,” Foster says.

But it becomes very challenging for governments, of course. Do they spend time and work evaluating a whole lot of private sector ideas, or do they focus on doing what they already have in train, what they already have planned?

For Rajalingam, building capacity and expertise in the sector will be critical to continue meeting the demands of the construction boom.

“Construction brings in so many different aspects and different arms of the legal profession that you need to have well-experienced, well-trained people who have the fundamentals of their expertise and then the overlay of infrastructure over that,” she says.

"I have the privilege of being part of the delivery of some really exciting projects and I think people should be thinking about it more [as a career]."

With so much to look forward to within the infrastructure and construction law landscape, Jocic encourages those outside the industry bubble to consider its impacts on daily life.

“Think about the complexity of the built environment in a city, and just take a moment to reflect on how that came about and to understand how construction and construction law are important parts of society,” he says.

This article originally appeared in MLS News, Issue 20, November 2018