The Pulse | 12 February 2026

Fast Tracks and Tightened Screws: Infrastructure Accelerates as Planning Reform and Regulatory Enforcement Intensify

This edition of The Pulse tracks a NSW construction sector moving under two consistent forces: sustained government investment and a tightening regulatory environment. 

Major infrastructure programs continue to progress, including the designation of pumped hydro projects as critical infrastructure to support the energy transition and ongoing works on complex transport projects such as the Western Harbour Tunnel [6, 9, 11]. In parallel, planning settings are shifting through the Transport Oriented Development program, with state-led controls intended to streamline approvals and support delivery of more than 31,000 homes around key transit hubs [14, 17].

Alongside this activity, delivery risk remains a live issue. Recent reporting has again highlighted significant cost escalation across large infrastructure projects [15]. At the same time, the Fair Trading and Building Legislation Amendment Bill 2026 is set to expand regulatory powers, increasing the scope for enforcement action and professional accountability across the sector [13]. Together, these settings reflect an environment where project volume remains strong, but regulatory oversight and execution risk are becoming more prominent features of delivery. 

Infrastructure Pipeline: Energy and Transport Megaprojects Advance 

The NSW Government continues to progress a large infrastructure pipeline, with energy and transport projects moving through key delivery stages. Two pumped hydro projects, Western Sydney and Yarrabin (Phoenix), have been declared Critical State Significant Infrastructure, positioning them as priority assets within the state’s energy transition framework [4, 11]. Together, the projects are valued at more than $7 billion and are intended to supply power to over one million homes during periods of peak demand [4, 11]. 

The focus on energy infrastructure is occurring alongside forecasts of sustained growth in electricity demand. National projections indicate Australia’s data centre capacity could reach 4.7GW by 2035, requiring an estimated $15 billion in additional power generation investment [8]. NSW Renewable Energy Zones have been identified as key supply sources for this demand, with delivery dependent on the sequencing and completion of associated transmission infrastructure [8]. 

In transport, construction activity is advancing on the Western Harbour Tunnel, where assembly works are underway for the Southern Hemisphere’s largest tunnel boring machines ahead of the 1.5 kilometre harbour crossing [16]. The NSW Government has confirmed the asset will remain in public ownership [16]. Progress is also continuing on Sydney Metro West, which has awarded a contract for a private 5G communications network, marking the first deployment of this technology on an Australian rail system [9, 10]. 

Alongside this activity, recent analysis by Deloitte has highlighted ongoing commercial risk across major infrastructure delivery. The review found that 13 large Australian infrastructure projects, including Sydney Metro components, have recorded combined cost overruns of approximately $130 billion, with contributing factors including early stage cost estimation and labour constraints across the sector [15]. 

Planning Overhaul: Government Fast-Tracks Housing Supply 

The NSW Government is progressing a significant planning reform agenda through its Transport Oriented Development (TOD) program, aimed at accelerating housing delivery in established urban areas [14, 17]. Planning controls have now been finalised in 35 of the 37 nominated TOD precincts, enabling development capacity for more than 31,000 new dwellings within 400 metres of key train and metro stations [5, 14]. 

The reforms introduce a standardised planning framework that removes the need for site-specific rezonings in designated areas. In precincts including St Marys, Belmore and Lakemba, development controls now permit buildings of up to 18 storeys, allowing applications to proceed directly under state settings rather than through local planning amendments [17]. The approach represents the continued focus on centrally managed density outcomes tied to transport infrastructure. 

Recent proposals outside TOD precincts illustrate the infrastructure considerations that continue to shape delivery. At Sylvania, a proposed nine storey redevelopment of existing public housing into 159 social and 325 market dwellings has drawn objections from council and state agencies over water capacity, flood risk, and traffic impacts, underscoring the role of utilities and network constraints in residential uplift proposals [3]. 

Notwithstanding, public attitudes appear to be shifting alongside these reforms. Recent polling indicates that close to half of Sydney residents now support increased housing density within their own suburbs, a change from previous opposition to local intensification [18]. 

The state-led approach contrasts with ongoing challenges at the federal and local government levels. The federal Housing Minister has publicly criticised higher-income Sydney councils for resisting additional housing supply and failing to meet targets under the National Housing Accord [19]. At the same time, the Commonwealth’s affordable housing program has delivered 2% of its 5-year target of 40,000 homes, drawing attention to delivery constraints within federally funded housing initiatives [12].  

Taken together, the current settings reflect a divergence in housing delivery mechanisms, with NSW relying on streamlined planning controls and state intervention to advance high-density development, while federal and local programs continue to face structural and implementation challenges [12]. 

Regulatory Scrutiny Intensifies: Expanded Powers for Regulators 

Regulatory oversight across the NSW construction sector is set to increase following the introduction of the Fair Trading and Building Legislation Amendment Bill 2026, which expands the enforcement powers of NSW Fair Trading and Building Commission NSW [2, 13]. 

The Bill broadens regulators’ ability to refuse, suspend, or cancel licences where qualifications are invalid or have been obtained through misrepresentation [2, 13]. It also addresses a previously identified enforcement gap by allowing disciplinary action against certifiers for misconduct even where the individual has surrendered their licence or left the industry, enabling fines and disqualifications to be imposed retrospectively [2, 13]. This change removes the ability for practitioners to avoid regulatory consequences by exiting the profession [2]. 

Further amendments refine the operation of licensing powers by allowing regulators to cancel or restrict specific authorities held under a licence, rather than requiring cancellation of the licence as a whole. This enables more targeted enforcement where particular competencies or qualifications are found to be deficient [13]. 

The Bill also clarifies aspects of Decennial Liability Insurance (DCI), which is intended to provide long-term consumer protection against serious building defects. The reforms reference past high-profile building failures, including Opal and Mascot Towers, as context for strengthening accountability and post-completion protections [2, 13]. 

Taken together, the proposed amendments expand the scope of regulatory intervention across licensing, certification, and post-completion liability. For practitioners, the reforms increase exposure to enforcement action tied to qualifications, conduct, and ongoing compliance, regardless of current registration status [2, 13].  influencing where development is proceeding and the scale at which projects are now being proposed [6, 10, 12].

Final Thoughts

Current conditions across the NSW construction sector reflect simultaneous expansion and constraint. Large-scale investment in energy and transport infrastructure is progressing, supported by planning reforms intended to accelerate housing delivery and unlock development in established corridors. At the same time, recent reporting on major projects highlights ongoing exposure to cost escalation, delivery risk, and labour pressure. 

Regulatory settings are also shifting. Expanded enforcement powers under new legislation, increased scrutiny of qualifications and conduct, and tighter compliance mechanisms are reshaping the operating environment for practitioners across the sector. Together, these factors are influencing how projects are approved, delivered, and regulated. 

As activity continues across infrastructure, housing, and energy, outcomes are increasingly shaped by the interaction between planning settings, regulatory oversight, and delivery capability, rather than demand alone. 

1.  Intentionally left blank
2. by Mathew Williams. (6 February 2026, 7:15am AEDT). Defects and disqualifications: Watchdogs given more licensing powers. https://www.realestatebusiness.com.au/industry/31326-defects-and-disqualifications-watchdogs-given-more-licensing-powers 
3. by Murray Trembath. (6 February 2026, 6:39am AEDT). Infrastructure, water, traffic, flooding: Sylvania housing plans under fire. https://www.theleader.com.au/story/9168666/council-raises-concerns-over-sylvania-housing-plan/ 
4. Paul Scully. (6 February 2026, 1:00am AEDT). $7 billion pumped hydro projects declared critical for NSW. https://paulscullymp.com.au/news/media-releases/7-billion-pumped-hydro-projects-declared-critical-for-nsw/ 
5. Paul Scully. (6 February 2026, 1:00am AEDT). Transport Oriented Development unlocks more than 31,000 homes. https://paulscullymp.com.au/news/media-releases/transport-oriented-development-unlocks-more-than-31-000-homes/ 
6. Green Review. (6 February 2026, 1:00am AEDT). NSW government fast-tracks two hydro energy projects. https://greenreview.com.au/energy/nsw-government-fast-tracks-two-hydro-energy-projects/ 
7. Global Travel Media | by Anne Keam. (6 February 2026, 1:00am AEDT). Sydney Airport Names Design Duo for Transformational T2–T3 Link. https://eglobaltravelmedia.com.au/2026/02/06/sydney-airport-names-design-duo-for-transformational-t2-t3-link/ 
8. by Tom Parker. (10 February 2026, 1:46pm AEDT). Australian data-centre fleet to swell to 4.7GW by 2035. https://www.energymagazine.com.au/australian-data-centre-fleet-to-swell-to-4-7gw-by-2035/  
9. Rail Express | by Kayla Walsh. (5 February 2026, 3:44pm AEDT). BAI Communications awarded major Sydney Metro West contract. https://www.railexpress.com.au/bai-communications-awarded-major-sydney-metro-west-contract/ 
10. TelcoNews Australia | by Kaleah Salmon. (5 February 2026, 3:24pm AEDT). BAI to build 5G radio network for Sydney Metro West. https://telconews.com.au/story/bai-to-build-5g-radio-network-for-sydney-metro-west 
11. EcoGeneration | by Lavinia Hulley. (10 February 2026, 11:17am AEDT). NSW declares $7B pumped hydro projects critical. https://www.ecogeneration.com.au/nsw-declares-7b-pumped-hydro-projects-critical/ 
12. Switzer Daily | by Peter Switzer. (10 February 2026, 9:07am AEDT). Albanese Government Housing project on shaky foundations. https://switzer.com.au/the-experts/peter-switzer/albanese-government-housing-project-on-shaky-foundations/ 
13. Smart Property Investment | by Mathew Williams. (10 February 2026, 7:01am AEDT). Misrepresentation and defects: Watchdog powers extended to protect consumers. https://www.smartpropertyinvestment.com.au/tax-and-legal/27436-misrepresentation-and-defects-watchdog-powers-extended-to-protect-consumers 
14. PS News. (10 February 2026, 1:00am AEDT). NSW Government partners with local councils and streamlines development process to unlock 31,000 homes. https://psnews.com.au/nsw-government-partners-with-local-councils-and-streamlines-development-process-to-unlock-31000-homes/172878/ 
15. Sound Telegraph | by Matt Mckenzie. (9 February 2026, 5:00am AEDT). Deloitte warns 13 major infrastructure projects have blown out about $130 billion combined. https://www.soundtelegraph.com.au/business/economy/deloitte-warns-13-major-infrastructure-projects-have-blown-out-about-130-billion-combined-c-21567703? 
16. AFN Daily | by miraitowayu. (8 February 2026, 1:00am AEDT). Last look before the bore: Giant machines take shape, ready to tunnel under Sydney Harbour. https://afndaily.com.au/2026/02/08/last-look-before-the-bore-giant-machines-take-shape-ready-to-tunnel-under-sydney-harbour/ 
17. Inside Local Government. (Date not provided). Housing masterplans signed off for Penrith, Canterbury-Bankstown and Burwood LGAs. https://insidelocalgovernment.com.au/housing-masterplans-signed-off-for-penrith-canterbury-bankstown-and-burwood-lgas/ 
18. Brisbane Times | by Megan Gorrey. (6 February 2026, 4:00am AEDT). What Sydneysiders really think about more housing in their own suburb. https://www.brisbanetimes.com.au/national/nsw/what-sydneysiders-really-think-about-more-housing-in-their-own-suburb-20260203-p5nz6q.html 
19. Government News | Christopher Kelly. (10 February 2026). Affluent councils blocking housing growth. https://www.governmentnews.com.au/affluent-councils-blocking-housing-growth-says-minister/