Thursday, 31 January 2013 09:23
Final decisions on $126 billion of planned resources projects during 2013 will determine whether the investment pipeline slows gradually or comes to an abrupt halt, an independent forecaster says.
Deloitte Access Economics expects the mega-resources investment projects that have been a major driver of economic growth in recent years will likely peak in late 2013.
In its latest Investment Monitor released on Thursday, partner David Rumbens said the top 10 planned projects worth $126 billion are due to get the final nod this year.
"A key question for the Australian economy over the next few years will be what sort of business investment profile we see after resources investment peaks?" Mr Rumbens said in the report.
"What happens to this top ten list will go a long way to answering the above question."
The list includes Woodside Petroleum's $43 billion Browse LNG project and Arrow Energy's $20 billion Arrow LNG project.
The total value of projects in the Investment Monitor data rose by 2.9 per cent in the December quarter and 4.5 per cent over the year to $953.6 billion.
Mr Rumbens said this was despite some high-profile cancellations and a number of large projects moving into the production phase.
"However, much of the rise in project values has again been from cost revisions, including a $9 billion blow-out for the Gorgon LNG project," he said.
The value of definite projects - those under construction or committed - fell by 3.6 per cent in the December quarter to $444.9 billion.
Planned projects - under consideration or possible - rose by $43.7 billion in the quarter to finish the year at $508.7 billion.
Mr Rumbens said there's a danger that as multi-billion-dollar resources projects eventually reach completion, they will only be replaced by multi-million projects in other sectors.
"The rollercoaster of commodity prices over the past few months and concerns over cost blow-outs in major projects underway means Australia's mega-projects may soon be an endangered species," he said.
Pic: The Gorgon Project in Western Australia.
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