Queensland is delivering one of the largest and most complex transport infrastructure programs in its history. Investment is rising to support population growth, ease congestion, and prepare for the Brisbane 2032 Olympic and Paralympic Games. With this scale of investment comes delivery and financial risk.
In our earlier blog Understanding why budget overruns occur and how to prevent them, we explained some common causes of cost overruns in major infrastructure projects and shared strategies to help entities prevent them. This blog builds on that discussion by looking at risk management in major transport projects and outlines the practical steps entities can take using Queensland Treasury’s Project Assessment Framework.
Why are transport projects higher risk?
Large multiyear infrastructure projects carry higher financial risk because they are complex and take a long time to deliver. Transport projects in particular carry this risk. Road and rail corridors run over long distances and rely on many moving parts, including utility relocations, property acquisition, environmental approvals, traffic staging, and community impacts. If entities do not resolve uncertainties early, costs rise later when they have fewer options to make changes.
Further, when transport, energy, health, and Olympic-related projects go to market at the same time, demand can exceed industry capacity. This puts pressure on contractors and supply chains, and can increase costs and delivery risk across Queensland’s infrastructure program.
Risk management in today’s environment
In an earlier QAO report to parliament, Transport 2021 (Report 10: 2021–22), we highlighted the financial impacts of COVID-19 and the need to allow for uncertainty in investment decisions. That message remains relevant. Supply chain disruption, inflation, and volatile demand continue to affect project costs and time frames.
In a volatile global environment, strong risk management helps entities understand how exposed projects can be to external shocks. Geopolitical events can disrupt supplies of critical materials, lift energy costs, and slow global logistics. For projects that rely on imported materials and specialist contractors, these pressures can quickly drive cost increases and delivery delays.
How the Project Assessment Framework helps entities manage risk
As Queensland delivers more complex, higher risk infrastructure, entities need to identify risk early before key decisions on project scope, design, timing, and funding become limited. Queensland Treasury’s Project Assessment Framework (PAF) supports this by embedding risk management into each stage of a project.
- Identify risks early
The PAF prompts entities to identify service affordability, delivery, and market risks early when entities can still influence whether the project should proceed and how it should be delivered. Entities should clearly describe the key risks, assess how likely and how serious they are, and estimate the potential cost where they can. This helps decision makers understand the true risk before they approve funding. (Project Assessment Framework: Preliminary evaluation)
- Test assumptions as conditions change
Projects rarely go exactly to plan. The PAF requires entities to check the assumptions behind costs, time frames, and scope, and update them as conditions change. Simple checks, like asking ‘what happens if costs rise or work takes longer?’, and independent reviews help entities spot unsupported assumptions early and avoid decisions based on outdated or overly optimistic information. (Project Assessment Framework: Deliver service)
- Link risk to governance and decisions
The PAF provides guidance and tools to help entities consider risk as part of project decision making. When scope, costs, assumptions, or risk exposure change significantly, entities need to raise and seek approval for the revised project and whether it should continue. This keeps decision makers aware and able to act early. It means managing risk is not just the responsibility of the project team, but also those who approve and oversee the project. By doing this, entities can make better decisions and limit unexpected impacts on cost, timing, or results. (Project Assessment Framework: Deliver service)
Gateway reviews: independent checks at key decision points
For high-value or high-risk projects, the PAF requires gateway reviews. A gateway review is an independent health check that helps decision makers decide if a project should move forward. These independent checks give decision makers clear advice on whether a project remains feasible and deliverable, affordable, and ready to proceed before more funding is committed. This helps ensure decisions are based on evidence, not assumptions.
Gateway reviews reduce risk by identifying issues early – when they are easier and cheaper to fix. They focus on key areas such as governance, costs, procurement, and benefits, helping prevent delays, cost increases, and providing assurance on whether a project is ready to proceed. Entities should use gateway reviews as a practical tool to challenge assumptions, strengthen oversight, and support better project decisions. Stopping a project before it incurs unnecessary costs is better than stopping it when significant money has already been spent.
Conclusion
Strong risk management is critical to delivering Queensland’s transport program successfully. While uncertainty is unavoidable, entities can manage it by acting early, testing assumptions, and making risk part of every decision.
Resources:
Understanding why budget overruns occur and how to prevent them
Major infrastructure projects are increasingly complex, relying on contractors with specialised skills to deliver on time and within budget.