Out-Law Analysis 3 min. read

NSW government commits to infrastructure and energy in 2022-23 budget

Cityscape of Sydney Downtown and Harbor_78885729_LARGE seo

The New South Wales (NSW) government has demonstrated a welcome commitment to infrastructure and energy projects in its budget for 2022-23.

The budget, handed down on 21 June 2022, boasts a record A$112.7 billion (US$77.6bn) in infrastructure investment over the next four years along with impressive commitments to renewable energy, with a view to transforming NSW into a renewable energy superpower.

Commitments to infrastructure investment

Infrastructure has been singled out as a major winner in this budget, which includes a healthy pipeline of projects for the industry in the years ahead. Of the A$112.7bn in planned infrastructure investment over the next four years, A$76.7bn is allocated for transformative transport infrastructure, A$11.2bn for healthcare facilities and A$9.1bn for education infrastructure. There are a number of new projects in the pipeline that contractors will be able to get involved in, as well as additional funding for projects currently in procurement or delivery.

New funding for infrastructure projects currently in procurement or delivery includes A$12.4bn for Sydney Metro West, A$8.4bn for the Sydney Metro - Western Sydney Airport line, A$4.1bn for the Western Harbour Tunnel, A$2.3bn for the M6 Extension Stage 1 and A$680.5 million for Parramatta Light Rail Stages 1 and 2.  However, progress on certain anticipated infrastructure projects has slowed somewhat, with the M6 Extension Stage 2 and the Beaches Link road tunnel project postponed, due in part to large budget blow outs on the metro train line under Sydney Harbour and the central city and Paramatta Light Rail, and reflecting also a broader climate of economic uncertainty.

Projects still in the pipeline that have received new funding are:

  • A$3.2bn for the Great Western Highway upgrade;
  • A$1.5bn (including $220.1 million in 2022-23) on the Western Sydney Growth Roads programme;
  • A$478.2m from its A$5bn WestInvest Fund to support modernisation of nine schools in Western Sydney;
  • A$274.5m to continue planning of the Fast Rail program between Sydney, Canberra, Bomaderry, Newcastle, the Central Coast and the Central West;
  • A$216.4m to refine the pre-concept design for the redevelopment of Circular Quay;
  • A$123.7m to upgrade Epping Station Bridge;
  • A$60m to develop a final business case for a south-eastern extension of the Sydney Metro Western Sydney Airport project;
  • A$45.9m to repair and upgrade ageing Crown Lands infrastructure;
  • A$26.2m for maintenance and upgrades across the state’s property portfolio;
  • A$11.8m for repairs and upgrades to Meadowbank Bridge;
  • A$150m for a new Biomedical Accelerator Complex in Camperdown;
  • A$49.6m for a new Viral Vector Manufacturing Facility at Westmead;
  • A$460m for a new Integrated Mental Health Facility at Westmead Hospital Campus; and
  • A$261.9m for the Advanced Manufacturing Research Facility in the Bradfield City Centre.

Commitments to energy investment

To continue to support sustainable economic growth, the NSW government has included A$1.4bn in the budget to transform NSW into a renewable-energy superpower.

The budget includes several clean energy initiatives aimed at expanding and accelerating the development of sustainable energy production, transmission and storage in NSW. These initiatives will assist in addressing affordability and reliability with energy issues as NSW transitions to net zero carbon emissions.

The budget has allocated a maximum of A$1.2bn after recycling proceeds to accelerate the delivery of the new transmission projects required for the state’s Renewable Energy Zones (REZ). These REZs combine renewable energy generation from multiple different sources including wind, solar and storage in batteries to deliver energy to homes and business sustainably. The funding is part of a A$3.1bn total gross investment in REZs over the next 10 years.

There is A$250m in funding allocated to businesses to competitively manufacture components for renewable energy infrastructure, electrolysers, electrification of plant, and electric vehicles over the next five years. This will be of interest to developers and contractors alike for both onshore and offshore projects, as they may be entitled to a grant for the manufacturing or production of innovative renewable energy infrastructure. A further A$84m over the next 10 years will be allocated to accelerating the Electricity Infrastructure Roadmap to replace retiring power.

The budget also includes the following funding for climate change initiatives:

  • A$2.5bn investment from the Climate Change Fund over 10 years to reduce emissions;
  • A$300m over 10 years to provide grants for new business activities to competitively produce low emissions materials, green chemicals, hydrogen, power fuels, clean fuels and agricultural materials; and
  • A$93.7m over eight years for a whole-of-government response through the Climate Change Adaptation Strategy.

Co-written by Olivia Micalizzi and Tom Saggio of Pinsent Masons.

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