The first $1.96 billion tunnel contract for the new metro has been awarded to Spanish groups Acciona and Ferrovial, while a second $2.16 billion tunnel contract has been awarded to Malaysia’s Gamuda and Britain’s Laing O’Rourke.
While foreign companies have Australian subsidiaries and employ local workers, profits from the projects end up flowing overseas.
Clearer political positions are needed
Federal and state governments have attempted to break large projects into smaller pieces to make them more manageable for small businesses. But even when this is done, Tier 1 groups often end up winning a lot of the work.
The construction of the runway and terminal at the new Western Sydney Airport was split into five contracts, but a joint venture between Cimic subsidiary CPB Contractors and Acciona won three. BMD and its partner Seymour Whyte (owned by the French group Vinci) have won a contract for civil engineering and landside building works. The Canadian company Multiplex won the fifth contract.
While BMD is pleased to have secured the airport works, Mr Power said governments should do more to involve local businesses in major projects.
“They actually have to express their desire to have mid-level contractors in these packages by making it a requirement of the selection criteria,” he said. “We would like to see clearer political positions.”
Australian firms such as BMD, which expanded overseas five years ago, have the potential to bid for multibillion-dollar infrastructure projects if given the opportunity to expand their abilities and their abilities, Mr. Power said.
John Georgiou, chairman of the Perth-based Georgiou Group and director of the Australian-Owned Contractors lobby group (which includes BMD as a member), said that while projects could not be split into smaller sizes due to requirements technical, then the Commonwealth should require Tier 1 and Tier 2 companies to be included in the main contract.
“Unless you ask them to have a non-tier 1 at the top table, most of the time they’ll be fine with a joint venture with another tier 1,” he said.
The federal government has the power to be strategic and use its funding decisions to shape the construction industry, Georgiou said.
As some small businesses win contracts on projects such as Sydney’s new M12 motorway (which Georgiou Group will help build in a joint venture with CPB), more government agencies need to reassess their management practices. supply, he said.
“The federal and state governments have been very supportive in principle. However, this has not translated into consistent or effective agency-level practices,” Georgiou said.
Australian contractors hold meetings with government officials about three times a year to raise concerns. While the office of Deputy Prime Minister Barnaby Joyce, who is Minister for Infrastructure, has shown interest, the AOC has not seen “a proactive approach to making changes”, he said. .
“I think the Morrison government is interested in this, but not much has happened.”
The lobby group also held talks with the office of Anthony Albanese, who indicated his support for breaking big contracts.
But Mr Georgiou was unsure whether the Leader of the Opposition would follow through if Labor won Saturday’s federal election.