Kingaroy Transformation Project Minimises Budget Increase to Meet Impacts of Construction Industry Inflation, Supply Shortages and Heavy Rainfall Events

The increase is anticipated to be approximately 6.4% of Council’s project budget, with a value of $900,000. Construction prices across the country continue to skyrocket with Australian Bureau of Statistics today announcing it is now tracking inflation as the highest rises on record since the introduction of the GST.

Council was provided with a comprehensive report detailing the impact to construction across the country of the past 18 months caused by government stimulus and heavy activity in building and infrastructure sectors combined with the short supply impacts across the economy caused by COVID-19. Since the completion of the estimate for the KTP construction, the Australian Bureau of Statistics reports that inflation across building construction and civil industries has increased between 7% and 16%, along with significant delays in product availability. As a comparison, inflation on residential building costs were tracked escalating some 27% over the same period.

Council also has been impacted by ongoing wet weather events with the region disaster declared three times in recent months. The BOM registered some 509mm of rainfall from October to December 2021 which was a peak construction period and required the project to adapt its construction methodology to remain on schedule.

Considering the impact of market and weather conditions, the KTP Project Team advised Council that the cost increase to the project could be some $1.5M to $2M. However, due to current efficiencies and acceleration of the KTP program it is anticipated that this be limited to approximately 6.4% of Council’s budget with an increase of $900,000. With significant budget of the project still remaining, the forward forecast was provided to give Council early consideration regarding the project’s future.

Council’s decision to approve additional budget as part of its available funds in 2022/23 infrastructure budget ensures that the Kingaroy Transformation Project will deliver high-quality infrastructure to support community liveability and the economy objectives long into the future.

The project’s civil construction schedule continues to accelerate with final landscaping, lighting and footpath surfacing expected to commence in the coming weeks.

The Kingaroy Transformation Project is a jointly funded project between the Australian Government's Building Better Regions Fund and South Burnett Regional Council.

For further information regarding the project, please contact Council’s KTP team on (07) 4189 9100 or email KTP@sbrc.qld.gov.au.