The massive $1.2 billion blow out in the CopperString initiative is a warning sign. All the shiny promises from politicians are going to cost a fortune.

An uncomfortable truth of Queensland’s massive expansion over the next decade or so is that it will hurt. A lot –  unless some wise decisions are made.

If you are building a house, refitting a football stadium or maybe building a hideously expensive and questionable hydro-electricity project, your initial budget is going to look like a comically inspired guesstimate by the end.

Engineers have been warning about this for at least a year as infrastructure projects for the Olympics ramp up and coincide with a huge infrastructure program which just shrieks that someone inside William Street is suffering from an edifice complex.

Also likely to be affected are the renewable energy projects because although inflation is falling, the cost of construction is still hovering above 5 per cent and labour costs are the highest in Australia.

Politicians will say that everything is in hand and running to expectations and that they are confident that they can achieve their goals within the allotted budget. But they said that about Cross River Rail and look at that as an example.

The north Queensland CopperString transmission project will now cost $6.2 billion, a 20 per cent increase in 18 months. That might prompt questions about the due diligence that was carried out before the state moved in and bought the project from the O’Briens, but it also has significant meaning for other big projects.

It’s likely that it is a harbinger of a massive issue facing the Government – of whatever colour.

How does it pay for the likely escalation in costs like the $20 billion-plus for hydro projects, the $7 billion rail expansion to the Sunshine Coast, Bruce Highway upgrades, the tens of billions in energy infrastructure, the billions more in Olympic infrastructure as well as the usually hungry health budget in which $14 billion has been scheduled over the next four years and its Big Build of $107 billion?

The pressure on government to increase taxes or cut costs elsewhere or shelve and delay some projects will be enormous.

Adding to the woes is Queensland’s escalating labour costs. Brisbane is now the second most expensive market in Australia to build at $2800 a square metre, according to a report by Turner and Townsend.

It says the tendering market in Brisbane is running “hot’’ and was likely to increase. Labour costs per hour are the highest in Australia at almost $US70. Cuts to immigration were likely to mean that won’t fall much. Getting highly skilled workers is already difficult.

However, working at the other end, the Gold Coast apartment construction market has tanked with the Property Council expecting mass withdrawals of projects which may alleviate some of the pressure.

To pay for the infrastructure bill, it’s unlikely the next Government will be able to dip into coal royalties because, while the price remains relatively healthy, it is expected to drop as China’s once insatiable demand plunges.

India’s demand potential is sky high but it’s difficult to take Indian forecast with anything less than a bucket of salt. Forecasting coal demand hasn’t been their strong suit.

CopperString also had other issues to contend with. There were indigenous cultural issues and the need to relocate a planned power station at Cloncurry.

About 100km of the transmission line must be realigned between Mt Isa and Cloncurry, while at the other end, near Hughenden, “difficult terrain’’ led to construction challenges and safety concerns and meant that the substation at Mulgrave, near Townsville, had to be shifted and the realignment of about 60km of transmission line.

The Government-owned Powerlink, which now controls CopperString, pointed to increased costs, some of which related to labour, but also to materials and logistics.