by Dr Bradley Hastings
The recent curtailing of the Inland Rail project is an example of Australia’s infrastructure delivery challenge. Looking forward we are aspirational. Yet, looking backward, our ability to deliver on these ambitions is poor, with eighty-six of major transport projects either blowing their budget, their schedule, or both. This gap between aspiration and ability is a cold reality check – communities waiting on projects to improve their lives will inevitably be disappointed.
It’s a system design problem
Recently, our Institute hosted a dinner for seven Chief Executives from across Australia’s infrastructure ecosystem. Unfolding during the conversation, an exchange illuminated our infrastructure delivery problem. A senior government infrastructure chief executive opened with a reasonable proposition.
“We are spending millions per day. There is tremendous value in coming together and collaborating to optimise.”
“Why should we?” Said a delivery executive “Each of us in the system are already incentivised to do our own part.”
Another chief executive observed “And there is the client-contractor divide – getting worse.”
This exchange illustrated an infrastructure ecosystem operating in what behavioural economists call scarcity mode. When entities within such a system perceive – rightly or wrongly – that resources are in short supply, they narrow focus. The contractor defends scope. The client defends authority. The regulator defends procedure. The project managers defend the plan. Individually rational, collectively ruinous.
Here is the uncomfortable truth the infrastructure sector has not yet fully absorbed: we have designed a system to generate these scarcity behaviours. Like the delivery executive noted at our dinner, the present approach packages up responsibility into unique parcels then incentivises performance at this sub-level – not the whole. With each entity fighting their corner, friction increases. When uncertainty and change are encountered, calls for collaboration are silenced by a system architecture that makes collaboration irrational.
Scarcity and abundant system design
Behavioural economists term this type of system scarcity mode: which is akin to a group of siblings fighting over who should get the bigger piece of the pie. The alternative – one worth taking seriously – is abundance mode: the deliberate redesign of projects so that collaboration, honest feedback, and decisive execution become the rational choice across the system, not an exception.
Three considerations underpin the structural shift from scarcity to abundance.
Start with shared incentives. Every major project ecosystem should ask one question of its contractual and performance architecture: does this incentive reward whole-system success, or just part of it? Shared gain-and-pain mechanisms, where client and contractor jointly absorb overruns and jointly benefit from early delivery, are not novel. They exist and they work. But they remain the exception rather than the rule in Australian infrastructure procurement.
Then make the system visible to itself. Scarcity mode ecosystems are information-rich at the organisational level and information-poor at the system level. Each organisation knows their piece well, but nobody sees the whole. The result is duplicated effort, invisible friction, and a chronic inability to surface problems before they become crises. Abundance thinking means installing a feedback architecture including shared dashboards, cross-organisational transparency, and genuine psychological safety for those who raise bad news early.
Finally, create an execution rhythm. One of the most consistent pathologies of major project ecosystems is that when things go wrong, action is substituted by inquiry. Scarcity mode produces risk aversion that masquerades as rigour, for instance more reviews, more sign-offs, and more committees, while actual progress stalls. Abundance thinking biases the system toward action and learning over planning and approving. Short cycles of commitment and delivery, with clear accountability and learning loops, make problems visible fast, build trust, enhance collaboration and generate momentum. For more insights on collaborative behaviours, refer to our Major Projects Collaboration Toolkit.
At that same dinner, another chief executive described the innovative possibilities that open up when delivery organisations are engaged earlier in design. Abundance means our system is structured to draw on what each participant knows, rather than wall it off. That is not a utopian vision, it is a practical choice that Australia needs to consider.
With hundreds of billions of infrastructure dollars on the table and a delivery record that should alarm every taxpayer, the time for aspiration is over. As this dinner conversations suggests, there is a need for our infrastructure ecosystem to stand back and take stock of itself – our choice is to change it or continue being beholden to it. My hope is for change, because Australia cannot afford another generation of projects that are individually rational but collectively ruinous.