Business pushing for umpire to settle disputes on infrastructure projects

The Age: Business pushing for umpire to settle disputes on infrastructure projects. April 20, 2014 Farrah Tomazin The Sunday Age’s state political editor.

Business is pushing the state government to set up a new infrastructure umpire to curb costly disputes, warning that major projects must be built more efficiently if Victoria is to remain competitive.

With two weeks before the state budget, industry chiefs fear Victoria is at risk of falling behind and have presented the government with a wish list for further investment in road and rail, payroll tax cuts, and an overhaul of the vocational education and training system.

In its pre-budget submission to Treasury, the Australian Industry Group has also called for a new ”disputes resolution board” to review infrastructure projects and head off problems before they escalate into major stoushes.

Comprising an independent panel of experts, the board would be brought in to act as a circuit breaker whenever a dispute over a contract or construction work cannot be resolved by the parties involved, and would make decisions on how to take the project forward.

”Dispute resolution boards are in place in NSW and elsewhere, and they’ve proven to be very successful in ensuring disputes don’t become prolonged,” said Australian Industry Group state director Tim Piper.

”The DRB basically becomes the arbitrator on any disputes and both parties more or less accept the unbiased decision, rather than go through protracted litigation.”

The idea comes as the Coalition prepares to unveil an election-year budget designed to sway votes ahead of the November 29 poll, with transport high on the agenda.

Premier Denis Napthine laid the groundwork at the state Liberal council last Sunday, announcing he would build a long-awaited rail link to Melbourne Airport if re-elected, although the cost and deadline will not be revealed until the Treasurer hands down the budget on May 6.

The move comes on top of a $2.5 billion upgrade of the Dandenong/Pakenham/Cranbourne line; a $100 million pledge to scrap zone 2 fares and provide free trams in the CBD; and the $8 billion first stage of the East West Link.

But with so many new projects on the agenda – and the government facing GST write-downs and other challenges to its bottom line – it is expected some cutbacks will be necessary in order to maintain the surplus and Victoria’s AAA credit rating. Business, however, believes the government could afford to take on further debt to finance its major projects, arguing that current debt levels remain relatively low.

”Ai Group urges the government to adopt a long-term view in deciding on using debt to finance infrastructure investments,” the submission says. ”When infrastructure investments yield sufficient economic benefits for current and future generations of Victorians, debt financing can make good economic sense.”

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