Civil contractors have “significant capacity” to support economy

Civil contractors are prepared to make significant investments in employment, if government infrastructure projects are fast tracked.

According to a new survey from the Civil Contractors Federation (CCF), Australia’s civil construction industry has the capacity to restart the nation’s economy following restrictions imposed to limit the spread of coronavirus (COVID-19).

According to Chris Melham, CEO of CCF, there is an opportunity for smaller companies to get involved.

“The survey results demonstrate civil construction companies, particularly those operating at the tier 2, tier 3, and below have significant capacity to assist the federal government achieve its goals of supporting the economy and to keep people employed during these unprecedented economic conditions,” said Melham.

The survey gained responses from 228 companies across each state and territory, and while respondents noted that COVID-19 had a negative effect on their business, 74 per cent said they had a capacity for projects of up to $10 million. 17.5 per cent indicated a capacity to start projects between $10 and $50m, and 8.3 per cent said they were ready to begin projects worth more than $50m.

The CCF highlighted that this meant there was a great capacity for firms to begin work on smaller projects, or larger ones broken down into separate works packages. In its recommendations, the CCF encourages the federal government adopt a procurement policy that disaggregates major project to allow tier 2 companies to tender through joint venture arrangements.

The CCF also recommended that the federal government bring forward the 10-year $100 billion infrastructure investment fund and use debt to increase the fund’s size.

“It is important however that these projects are spread across as many tier 2, tier 3 and below companies across Australia to ensure widespread benefits can flow from any stimulus investment, particularly in rural and regional communities where infrastructure investment can deliver a significant multiplier effect to those local economies in the form of employment, training and community spending,” said Melham.

“The survey sends a powerful message to the federal government that the civil infrastructure sector is ready to lead the economic recovery if governments inject more money into the sector for new projects.”

The survey and recommendations follow the CCF calling upon the federal government to do more to support the smaller tier 2 and 3 civil construction companies, who have sat above the financial threshold measures announced so far. In a statement on April 3, Melham noted that in the absence of worker retention measures, civil contractors need to have their outstanding claims paid.

“The industry’s viability and that of its workers during COVID-19 relies on prompt payment by public procurements agencies and I therefore urge the federal government to develop a ‘supplier payment policy’ for all public bodies involved in federally funded civil infrastructure projects and to impose that policy as a matter of urgency.”

CCF recommended that the policy involve the immediate payment of invoices, the continuation of normal payments even if service delivery is disrupted until June 30, supporting supplier cash flow, and reviewing tender requirements.

Compliance strengthened in Cross River Rail project

A new governance structure for the Cross River Rail project will ensure that contractors deliver on time and to budget, announced Minister for Cross River Rail, Kate Jones.

Lead contractor, CPB Group, has been caught up in controversy in delivering the West Gate Tunnel in Victoria, and the Queensland government is attempting to avoid similar contractual disputes.

“It is clear to me and to Cabinet that now we have moved from the procurement phase to the construction phase of the project we need to beef up compliance,” said Jones.

In a statement, Jones and the Queensland government outlined that the Delivery Authority will report to the Minister directly, a compliance unit will oversee contractor commitments, and the board will be restructured in April, when their current term expires.

“While the construction project is currently on track and on budget, it is early days,” said Jones.

“I want to ensure I have the right people with the right skills to deliver this project and hold CPB and Pulse Consortium to account.”

Jones also announced that local businesses will be able to get involved in the Cross River Rail project, with the Queensland government announcing a new website will go live today, February 27.

200 local companies are already providing goods and services to the rail project, however the new website hopes to provide further opportunities at various stages across the project.

The next wave of subcontractor opportunities will be in tunnelling and station works, said Cross River Rail minister, Kate Jones.

“This will be the one stop shop for anyone who wants to work on Cross River Rail,” she said.

“If you’re a local subby with the right expertise, we want you to apply to work on the biggest project in Queensland’s history.”

Jones visited the worksite at Woolloongabba to inspect progress on the rail project. Already, 140 piles have been sunk to stabilise the station box, 5m out of a total 32m have been excavated, and 8 of 132 piles have been sunk to build the ramp for the tunnel boring machines to access the site.

“Construction will ramp up in 2020 and locals will see more workers on Cross River Rail sites throughout the city,” said Jones.

Contractors already involved in the project include local construction company Wagners, which won a $40 million contract to supply precast concrete segments.

Another company, Multhana Property Services, will provide cleaning and maintenance services at project worksites.

“Multhana is a great example of a proud Queensland company benefiting from Cross River Rail,” said Jones.

“They’re doing a great job and already have eight staff working on the project, with that number set to grow as more worksites are established.”

Work on the Cross River Rail project is expected to be completed in 2024.