The Queensland Construction Portal, which launched last week, provides a snapshot of public and private construction projects worth more than $50 million across Queensland, along with expected demand for labour, skills and materials. Founded and owned by BEDA, Property Council and the Better Brisbane alliance, the portal brings together major transport, infrastructure, energy, transmission, housing and private development projects, alongside the construction programme for the 2032 Olympic and Paralympic Games. The scale of this pipeline provides greater visibility of what is coming, but it also highlights a practical issue for project owners, how and when projects are taken forward may be just as important as the project itself.
Queensland’s construction market is already experiencing pressure on capacity, costs, labour and materials. As more major projects compete for the same resources, decisions about when and how a project is taken forward could produce materially different outcomes. This has implications not only for construction pricing and programmes, but also for contractor engagement, project structuring, funding and delivery strategy.
The traditional project sequence is changing
Major projects have traditionally progressed through a relatively linear sequence: planning and approvals, funding, contractor engagement and then construction. The current market is challenging that sequence.
Where construction capacity is constrained, project owners may need to consider contractor availability, delivery models and market conditions much earlier, sometimes while other elements of the project are still being developed. This does not mean every project needs to engage a contractor early. Rather, the decision about when and how to engage the market should be made deliberately, having regard to the project’s risk profile, funding position, programme and broader objectives.
For developers and investors, this means delivery strategy and contractor engagement need to be considered early as part of the broader project strategy, rather than as a step that occurs once development approvals and funding are in place. We are already seeing developers engage contractors earlier to secure their involvement in projects. Early contractor engagement can provide greater certainty around buildability, cost and timing, but it also raises questions around how that engagement is structured, what commitments are being made and how risk is allocated before a project reaches construction.
What does this mean for major projects?
For project owners, increasing competition for construction capacity means that some decisions may need to be made earlier than they traditionally have been. In particular it will require:
- an understanding of the construction market and availability of capacity before committing to a delivery strategy;
- consideration of whether early contractor engagement is appropriate and, if so, how it should be structured;
- aligning project timing and contractor engagement with planning, funding and investment milestones;
- allocating key construction, cost, programme and other project risks appropriately between the parties; and
- maintaining sufficient flexibility to pivot should market conditions or project requirements change.
Key takeaways
Queensland’s major projects pipeline is creating greater competition for construction capacity, labour and materials. The timing and delivery strategy for a project can affect cost, programme and contractor availability. Early contractor engagement may provide greater certainty, but it needs to be carefully structured and aligned with the broader project strategy.
Project owners should consider contracting, funding, planning, project structuring and risk allocation together rather than in isolation. Early legal and commercial advice can help identify issues before they become barriers to project delivery.
How we can help
Decisions around contractor engagement and project delivery are just part of successfully delivering a major project. They need to be considered alongside planning and approvals, project structuring, property and development issues, funding, contracting, risk allocation and the requirements of investors and other stakeholders.
McCullough Robertson works with developers, project owners, investors, government and other project stakeholders across the project lifecycle, from planning and approvals through to structuring, delivery and operation. We bring together the legal and commercial expertise needed to identify issues early, manage risk and help keep complex projects moving.
For projects entering an increasingly competitive construction market, getting the right strategy in place early can make a material difference to the successful passage of a project from development through to project delivery.