Infrastructure delivery 'too slow, over budget'

THE state's financial watchdog has slammed the way infrastructure is delivered in Victoria, saying too many projects are put at risk by insufficient leadership, poor management and bad advice.

With business leaders urging Ted Baillieu to revitalise the economy by boosting infrastructure around the state, Auditor-General Des Pearson has warned that Victoria must lift its game to ensure future projects are within budget and delivered on time.

In a submission to a parliamentary inquiry commissioned by Treasurer Kim Wells, Mr Pearson criticised the way some infrastructure has been managed in the past, with projects hindered by a lack of oversight or accountability, limited skills to deal with complex plans, or unreliable advice leading to costly budget overruns and delays.

''Unfortunately in Victoria, there is now close to $2 billion in known project cost overruns,'' Mr Pearson said. ''In an environment where public revenues are flat or decreasing, it is time to address these overruns through more project discipline, greater competence and by making sure that the public interest is at the forefront in all phases of project planning and delivery.''

Mr Pearson's warnings come amid growing concern about the pace of change under the Baillieu government. In recent weeks, business and political leaders have hit out at the Coalition for not doing enough to bolster the flagging economy and create more jobs through a long-term infrastructure plan.

On Friday, Bank of Melbourne chairwoman Elizabeth Proust urged the Premier to ''get on with decision making''.

Former premier Steve Bracks, now chairman of Cbus, the superannuation fund for the construction and building industries, told The Sunday Age the lack of momentum after ''continuous investment over the last 10 years'' would ''retard our economic growth'' and compound problems in manufacturing and retail.

Australian Industry Group state director Tim Piper said: ''We need to see the government taking proactive steps to assure industry that it is looking over the horizon, and despite there being budgetary difficulties, that there are infrastructure programs in the pipeline.''

The government said it was investing $6.5 billion in infrastructure this financial year, and has had to rescope and refinance projects mismanaged under Labor, such as the regional rail link and the Melbourne wholesale fruit and vegetable market.

The government revealed to The Sunday Age its top five priorities: an east-west road tunnel from the Eastern Freeway to the Tullamarine Freeway rail links to Avalon airport the Port of Hastings redevelopment duplication of the major freight highways and a new Melbourne metro rail tunnel.

But Mr Baillieu said that for its plans to go ahead, they needed to be properly financed - and this would take time because Labor had left the budget in an ''unsustainable'' position.

Part of the government's solution involves cutting 3600 public sector jobs, increasing motor registration fees, and siphoning almost $500 million from the Victorian WorkCover Authority - changes that will help provide an extra $3.1 billion.

''We are conscious that for further investment we are going to need to build budget capacity,'' Mr Baillieu said. ''There has been a decline in GST receipts, a decline in Commonwealth grants, and ? the Labor government left us with mounting debt and an unsustainable budget position to deal with.''

Infrastructure Partnerships Australia chief executive Brendan Lyon said it was understandable people felt there had been a loss of momentum in Victoria, but added: ''From what we can see, the government is going through a very robust process in trying to identify the very difficult reforms ? needed to underpin infrastructure investment.''

The Auditor-General's submission was provided to Parliament's public accounts and estimates committee, which will conduct hearings this week on how to improve infrastructure.

The submission highlights projects initiated under the former Labor government that were plagued with problems, such as public private partnerships in the prison system, the food bowl modernisation project, and Monash and West Gate freeway upgrades.

With MARK RUSSELL