Infrastructure SPECIAL REPORT Key takeaways • State government addressing congestion with record Infrastructure transport spend • Future works providing confidence for contractors FEATURE • Competition fierce to win work • Labour squeeze, industry capacity loom as major challenges Contracting concerns as workflow expands

Unprecedented transport infrastructure spending and an uptick in mining investment

have buoyed the spirits of WA’s MIXED BAG: Rob Monaci is upbeat about the pipeline of potential WA projects, but ackn owledges major contractors. there are still many challenges facing the contracting sector.

fraternity instead remains firmly 40 per cent, a faster rate than by $415 million to upgrade level ultimately win work, remained as focused on exploiting upcoming car. crossings along the Armadale high as ever. opportunities. “This mode shift is a positive line, and $146 million in new “People’s order books are filling And while an expected revival development, but congestion on cycling infrastructure the high- up, but they’re not full yet,” he said. in the resources sector, particu- ’s roads will still be a chal- light initiatives. “It’s still very competitive – for larly from the state’s iron ore lenge as the city grows.” “Another key priority from resources projects, to secure giants, has helped boost business, She said in WA’s rapidly chang- our perspective is working with manpower and equipment is it is the state government’s record ing environment, selecting the industry and creating a pipeline going to be tough in the future. commitments to upgrading trans- right infrastructure projects was of work,” Ms Saffioti told a recent “You need to be strong in order port infrastructure across WA that a complex task, but possibly the Committee for Economic Devel- to shortlist and hopefully you get Dan Wilkie has had the most marked effect most critical one facing the state opment of Australia event. the right price.” [email protected] on industry sentiment. government. “By having an agreed plan in Georgiou Group is one of Infrastructure Australia chief In that regard, the implemen- relation to investment for our rail the leading players in the newly 6-PAGE FEATURE executive Romilly Madew, in Perth tation of Infrastructure WA, a lines and investment in roads, we established Australian Contrac- recently to present at a Property key election commitment by the give industry the opportunity to tors Association, a representative ESTERN Australia’s civil Council of Australia event, painted McGowan government, repre- participate over a longer term. body dedicated to promoting a contractors remain a picture of a rapidly changing sents a crucial step to getting the “Working with industry, we sustainable contracting sector. W an optimistic bunch, environment for infrastructure in project mix right. believe over the next six years we One of the association’s big- despite many in the sector only WA, particularly in roads and rail. Planning Minister Rita Saffi- can create a pipeline of work that gest concerns is the structure of managing to hang on from con- “We continue to see a strong oti said much of the state creates investment certainty and the WA contracting sector, and tract to contract. pipeline of business case submis- government’s transport infra- also creates new freight routes the capacity of WA-owned com- In recent years, the sector sions from WA, certainly the most structure spending was focused and reduces congestion across panies to win work among the has felt the brunt of the cyclical, number of submissions from any on addressing the challenges of the metropolitan area.” state government’s upcoming list resources-focused nature of the state or territory, reflecting the growth – reducing the costs of However, despite the increased of high-value projects (see list, WA economy, with civil contrac- scale of infrastructure investment congestion as well as ensuring confidence and improved senti- p23). tors facing an uncertain outlook as and planning currently under way that communities were well con- ment, Georgiou Group chief “The whole idea is trying to get the overall value of construction in WA,” Ms Madew said. nected to the centre of the city executive Rob Monaci told Australian-owned contractors work dropped from a 2013 peak “Over the next decade, the and other employment hubs. Business News civil contractors to have some share of those big of around $20 billion, to its current number of trips on Perth’s Ms Saffioti described the state were not without significant projects, because most of those level of approximately $7 billion. transport network is forecast to government’s commitment as challenges. projects in Australia are being But while many would be for- increase by more than 30 per cent unprecedented, with $4.1 billion Mr Monaci said while it was delivered by international com- given for adopting a pessimistic to up to 7 million daily trips. committed in recent state budg- clear the overall levels of work panies,” Mr Monaci said. stance, or packing up and moving “Trips by public transport are ets for Metronet, $2 billion to go were picking up, competition to interstate, WA’s contracting expected to grow by more than towards regional road upgrades, secure a place on tender lists, and Continued on next page FEATURE

WESTERN AUSTRALIA’S TRANSPORT CHALLENGE 800,000 MIXED BAG: Rob Monaci is upbeat about the pipeline of potential WA projects, but ackn owledges NEW HOMES REQUIRED BY 2050 there are still many challenges facing the contracting sector. CONGESTION COSTS 2017 $2.1bn 2030 $5.7 bn STATE GOVERNMENT INITIATIVES METRONET $4.1bn + 246 NEW RAIL CARS 72km PROPOSED NEW RAILWAYS $2bn 25 REGIONAL ROADS PROJECTS Source: Department of Planning

INFRASTRUCTURE INVESTMENT IN WA

Source: ABS data, supplied by Department of Treasury FEATURE INFRASTRUCTURE

businesses have the financial “I believe the federal Infrastruc- Challenges for contractors capacity to bid for contracts up ture Minister Alan Tudge was in to around $150 million. Perth a few weeks ago saying % as work pipeline fills “Once you get over that mark, things along the same lines – he’s there are very few companies that working to get more $10 million, +40 INCREASE IN TRIPS BY can bid.” $20 million and $30 million pro- From previous page is leading a joint venture with Mr Graham said CCF had urged jects onto the pipeline, which is PUBLIC TRANSPORT locally based NRW Holdings, the state government to explore good news.” NEXT DECADE while at Northlink stage two, ways it could de-bundle pro- A relative newcomer to WA’s “More than 85 per cent of pro- United Kingdom-headquartered jects and split them into smaller transport infrastructure space is “Every new request for tender jects worth greater than $500 Laing O’Rourke is leading a JV projects. civil and structural engineering that comes across my desk has million in the last five years in with BGC Australia. Main Roads Western Australia consultancy Pritchard Francis, the requisite probity checks Australia have been delivered by Mr Graham said while the pro- applied that thinking with its $1 which pivoted towards the sector attached, so we need to think multinationals. ject mix in recent years had been billion Gateway WA roads upgrade, in 2016 to insulate itself from carefully about proceeding. “We’re not saying we don’t want reflective of the capacity of local requiring tier one contractors to declining levels of activity in its “On the other side of the fence internationals, the internationals industry, the burgeoning pipeline joint venture with smaller firms to more traditional markets of land are the resourcing constraints are important, they bring a lot of of big ticket jobs was a mounting be eligible to win the works. development and resources. within client organisations that experience. concern. “Smaller projects are commonly Pritchard Francis transport can lead to bottlenecks and “But how do we keep Australian “You have to look at the struc- regarded as more shovel-ready, principal Mike Rathbone said delays. content in there?” ture of the WA contracting because a smaller project is easier he saw the pipeline of transport “A lot of people will say there Civil Contractors Federation industry,” Mr Graham told Busi- to get going than a large one,” Mr infrastructure being pursued by is too much red and green tape, WA chief executive Andy Graham ness News. Graham said. the state government as ambi- but my own personal view is shared Mr Monaci’s concern. “This state government, and “With a road, it’s not so hard to tious, with procurement proving that most of it is necessary and The two largest projects under we applaud them for it, they break it into smaller pieces, but to be a major challenge. important. construction in WA currently – are committed to WA jobs, they it’s a little bit harder with rail of “The number and diversity “If we can find efficiency and the $1.9 billion Forrestfield Airport have an industry participation course. of projects that are being ten- still achieve the objectives for a Link and the $417 million North- strategy that says you’ve got to “But the federal government dered at any one time raises healthy society, then that would link stage two – are being rolled provide opportunities for local can help there, too, with the pro- issues around conflict and pro- be the right balance.” out by joint ventures headlined by businesses. ject mix. bity that are inevitable in what is In terms of resourcing, Mr international groups. “The reality is that WA has a “It is the major funder of big still a really small pool of suppli- Graham said CCF remained For Forrestfield, Italian infra- large and healthy civil construc- transport projects, and of course ers,” Mr Rathbone told Business concerned around the state gov- structure group Salini Impregilo tion industry but most of the WA has some influence. News. ernment’s ability to roll out its INFRASTRUCTURE FEATURE

WA’s most important infrastructure projects SEARCHENGINE HIGH PRIORITY ...your key to WA business businessnews.com.au/index/project Metronet: Yanchep rail extension Major project pipeline PRIORITY PROJECTS Myalup-Wellington Water project Project Value Status Metronet: Thornlie to Cockburn link Metronet Rail Cars $1.6bn Tender assessment HIGH PRIORITY INITIATIVES Morley-Ellenbrook Line $1bn Business case development Perth CBD to north corridor capacity Bunbury Outer Ring Road $700m Project planning Mitchell and Kwinana Freeways upgrade HMAS Stirling Hunter Class training centre $670m Project planning PRIORITY INITIATIVES Thornlie-Cockburn Link $536m Consortia shortlisted Armadale Road Bridge Yanchep rail extension $520m Consortia shortlisted Swan River crossing capacity Stage 3 $505m Project planning Perth rail network capacity Ocean Reef Marina $500m Project planning Transport connectivity - Morley to Ellenbrook Byford rail extension $481m Business case development crossing capacity and interchance Armadale line boom gates upgrade $415m Buisness case development Bunbury Outer Ring Road Myalup-Wellington water project $396m Project planning Perth Airport new runway Tonkin Highway interchanges $366m Project planning Perth container terminal capacity and land transport access New Traffic Bridge $230m Project planning Tonkin Highway corridor capacity Midland Station upgrade $165m Business case development Land transport access - Karratha to Tom Price Bayswater Station upgrade $146m Tender assessment Improve road access to remote WA communities High Street upgrade $118m Tender assessment Source: Infrastructure Australia Source: BNiQ projects list

WA’s 10 biggest infrastructure jobs - under construction WA’s 10 biggest infrastructure contracts awarded 2018/19

Project Value Head contractor Project Value Contractor

Forrestfield Airport Link $1.9bn Salini Impregilo/NRW Holdings Main Roads electrical infrastructure maintenance $230m Ventia/Tyco Northlink Stage 2 $417m Laing O'Rourke/BGC Australia Rain network radio systems $205m Huawei/UGL HMAS Stirling Infrastructure $367m Doric Armadale Road to North Lake Road bridge $134m Laing O'Rourke/BG&E upgrade $344m WBHO tunnel maintenance $53.2m Lendlease Northlink Stage 3 $175m CPB Contractors -Joondalup Drive intersection $50m CPB Contractors Armadale Road upgrade $145m CPB Contractors/Georgiou - Kalamunda Road interchange $51m Georgiou Group Armadale Road to North Lake Road Bridge $134m Armadale Access Alliance Smart Freeways () $47m BMD/Ventia/Arup Minor Wheatbelt roadworks $129m Lendlease upgrade $46m Decmil Onslow marine support base $125m Maritime Constructions Wanneroo Road - Ocean Reef Road interchange $41.6m WBHO/SRG Global Murdoch Drive connection $100m CPB Contractors/Georgiou Onslow Road upgrade phase two $27.6m Highway Constructions Source: BNiQ Source: BNiQ massive pipeline of projects in a public infrastructure, so imagine “Sometimes the agencies just workers to be in hot demand to east coast, attracting those work- sufficiently timely manner to sat- what a boost to the economy that struggle to get the projects out carry out major infrastructure works. ers would likely be difficult. isfy industry’s needs. would have been.” the door on time. Business News recently “There are big concerns, and Mr Graham said in the 2018-19 Mr Graham said he believed “We need to invest in the capa- reported that WA companies were we’re already seeing it in some financial year, the state govern- one of the biggest challenges bility of those agencies, give them likely to need to find an additional skills,” he said. ment had budgeted to spend about facing the state government all the people they need to procure 9,000 workers within a year to “Labour is a perennial problem $4.5 million in infrastructure pro- was to keep those projects on projects and manage them effec- carry out approved expansions in because construction is a cyclical jects, but only managed to invest track. tively and keep them on track. WA resources, placing considera- industry and in many ways WA is a about $3.6 billion. “That can be achieved in part by “The federal government can ble pressure on civil contractors. cyclical state. “That’s a significant under- giving the infrastructure agencies, help, because one of the major Mr Graham said many work- “So understandably it’s hard to spend,” he said. particularly Main Roads and PTA, causes to delays on projects is ers had migrated from the plan and certainly there is no easy fix. “In the context of the economy, the resources to manage their getting Commonwealth environ- eastern states in WA’s previous “But I think there is an acknowl- the Chamber of Commerce and workload effectively,” he said. mental approvals signed off.” construction boom, however, with edgement that government and Industry came out with its outlook “What we’ve seen over the The other major challenge for hundreds of billions of infrastruc- industry can work together and recently, which showed state final past decade is the agencies keep industry, according to Mr Graham, ture projects under way on the do more in the short term.” demand declined in 2018-19, so getting handed massive capi- was labour. Civil Contractors Federation WA the WA economy shrank last year. tal budgets, but their operating With WA’s resources sector once SEARCH “Yet at the same time, there was budgets have either stayed the again on an upswing of activity, Mr There are 33 results from our index of 99,405 articles, a $900 million underspend on same or been reduced. Graham said he expected skilled 9,843 companies and 36,160 people FEATURE INFRASTRUCTURE Economics, environment weigh on Westport A key component of WA’s future economic growth lies in the hands of the agency tasked with determining the best location for imports and exports.

BALANCE: The Westport Taskforce is considering Fremantle’s future as the state’s main container facility. Photo: Gabriel Oliveira

Dan Wilkie At time of writing, Westport had how we either unlock those [email protected] whittled its options down to 25 – supply chains and get them to We are really thinking about an four in Fremantle, four in Bunbury perform to the best of their AS far as infrastructure projects and 17 in Perth’s main industrial ability; bearing in mind that the end state of what the demands of the go, they don’t get much bigger, strip in Kwinana. Westport project is not a 10- year or have a wider-reaching impact, Westport project director Tim or 15-year project, we are looking than a new port. Collins told a recent Property at issues 50 years and beyond. import and export trade are likely to The state government’s West- Council of Australia event that “Whereas some people might port Taskforce is weighing up a a shortlist of five options would suggest that is be like in 50 years - Tim Collins delicate balance between eco- soon be released, and a final okay or the rail network is working nomics, governance, land use and recommendation presented to okay, we are really thinking about detract from the environment, is the Water Corporation’s desal- environmental issues as it grap- government in November. an end state of what the demands in fact we are even trying to add ination development that sits ples with the significant task of Mr Collins said Westport of the import and export trade are some value to the environment smack bang where we would like choosing where to build the next was working on a conservative likely to be like in 50 years, and down there.” to build.” generation of port infrastructure assumption of 3.25 per cent therefore what we need to do At Cockburn Sound, a new port Mr Collins said the location of in Western Australia. annual growth at Fremantle Port, between now and then to actually aligned with Rowley Road would Beeliar Regional Park, between Established in 2017, Westport taking annual trade from its cur- serve the customers of the port.” be constrained by seagrass and the coastline and industrial pre- has since evaluated 300 options rent level of 800,000 container Mr Collins said moving the port residential development, which cinct Latitude 32 (which the for port upgrades in the metro- movements (TEUs) to 3.8 million to Kwinana, and the environmen- would limit the speed of road government is seeking to lever- politan area, largely focused on over 50 years. tally sensitive Cockburn Sound, trains along the freight route. age), was also a major constraint the future of the Port of Fremantle One of the key points of con- was also not without challenges. Another option would be to for a port at Cockburn Sound. as a container import and export tention at Fremantle is the port’s “We are very much trying to locate the port in line with Anke- “Clearly, through our environ- facility. future capacity. look first with an environmental tell Road, but Mr Collins said that mental lens we cannot drive an The task of upgrading port While Mr Collins said the port lens. Cockburn Sound is not only would also be subject to certain eight-lane superhighway through infrastructure, and its access itself could handle a substantial delicate and valuable, and it has issues. Beeliar Regional Park, and we points, has not been without upgrade, access was a crucial factor. been given a pretty rough ride “While the main freight route can’t run a rail corridor through contention, with the former Lib- “The road network, the heavy over the last 50-odd years,” he serving a port precinct of Anket- that park,” he said. eral government’s preferred plan vehicle supply chain and the rail said. ell is fantastic, the last mile rolling “It would make the environ- of extending Roe Highway to Fre- chain are really beginning to “It’s starting to recover, and if through the Kwinana industrial mental stoush that we all saw a mantle becoming a key election struggle with the growth that’s Westport moves to a port down area is quite challenging,” he said. couple of years ago look like a issue and an environmental bat- occurring,” he said. in Cockburn Sound, we want to “There is about a kilometre walk in the park. tleground in the southern suburbs “In trying to come to grips with make sure that we’re not doing of industry we need to navigate “We are trying to think about of Coolbellup and Bibra Lake. the issues at Fremantle it’s about that in a way that is going to through, not the least of which how technology can solve that.” INFRASTRUCTURE FEATURE

SEARCHENGINE WA’s LARGEST CONTRACTORS ...your key to WA business RANKED BY TOTAL STAFF IN WA

MAJOR WORK: Georgiou Group completed the $18.6 million Great Northern Highway - Roy Hill Bridge project in February. Photo: Georgiou Group

Change Offices from Year a) WA previous est. in Total staff b) inter- Ultimate holding Rank year Company name Senior executive and title WA in WA state Current clients + relevant WA projects for each client company

Mr Rob Velletri a) 8 BHP, Fortescue Metals Group, Rio Tinto, INPEX Operations Australia, Shell Australia, South Monadelphous 1 — Monadelphous Managing Director 1972 3,621 b) 12 32, Synergy, Woodside, Tronox Group Ltd

Mr Mike Sutton a) 10 BHP - South Flank HV Transmission & Distribution, BHP - South Flank LTE Communications, 2 — Downer Chief Operating Officer, 1968 3,000 BHP - South Flank Port Upgrade Works, Bechtel/Chevron - Wheatstone Sustaining Capital Downer EDI Limited Mining - West b) 40 Works, TechnipFMC - Prelude FLNG Offshore Services Mr Neil Sadler a) 3 Woodside-Karratha Gas Plant Life Extension, Shell-Prelude, BHP-Pilbara, Bechtel/Chevron- 3  Cape Australia 2007 1,807 Wheatstone; INPEX-Ichthys; BP-Kwinana; Newmont-Boddington; Alcoa-Kwinana, Pinjarra, Altrad Group Managing Director, APAC b) 2 Wagerup, Bunbury; Tronox-Kwinana, Pinjarra, Chandala; South 32-Iluka

Mr Luke Herbert Maintenance shutdowns, project management, capital works and labour hire for mining, 4  Linkforce Founder, Managing Director 2007 1,800 a) 1 construction and infrastructure sectors

Mr Jules Pemberton a) 1 BHP: South Flank Bulk Earthworks and Concrete; Rio Tinto: Koodaideri Mine Plant and 5  NRW Holdings 1994 1,554 Earthworks; FMG: Eliwana Rail Earthworks, Roadworks and Drainage; Altura Mining: NRW Holdings Ltd Managing Director b) 2 Pilgangoora Lithium Mining; Gascoyne Resources: Dalgaranga Mining

Mr Pat Tallon a) 2 BHP South Flank – Module, Fabrication and Assembly, Albermarle – Kemerton Lithium 6  Civmec Chief Executive 2009 1,500 b) 3 Hydroxide Plant Civmec Ltd

Mr Josh Kember a) 1 Boddington - Shutdowns; FMG - Shutdowns; Chevron - multi services for WA assets, 7  UGL 1970 NFP Woodside - KLE Program; Alcoa - multi serivces; Raytheon - multi discipline refurb fuels CIMIC Group Limited GM Operations, West b) 9 project Mr Shane Kimpton a) 6 Chevron: Wheatstone, Woodside: Karratha gas plant, Shell: Prelude, Sumitomo: Bluewaters 8  AusGroup 1989 1,300 power station, JKC: Ichthys, Yara Pilbara: Yara Pilbara liquid amonia plant, Tianqui Lithium, AusGroup Ltd Managing Director b) 2 Talison Lithium, MSP Engineering Mr Tom Quinn a) 2 INPEX MSC, Department of Defence (garrison support), Department of Transport, BHP, 9  Broadspectrum 2012 979 Aroona Water, Department of Corrective Services WA (Court Security and Custodial Ferrovial Managing Director b) 6 Services), BP (Kwinana Refinery) Mr Rob Wallwork a) 3 Main Roads WA: NorthLink WA Central Section (Stage 2). Public Transport Authority: Laing O'Rourke 10  Laing O'Rourke Manager, Core Bids & 2006 820 Perth Stadium Station and East Perth Station Upgrade. Bechtel: Wheatstone LNG Project Tendering b) 8 Finishing Works. Defence: AIR 5428 (Pearce and Gingin). BHP: Low Level Bridges Australia Mr Greg Heylen a) 4 Main Roads (WA), Atlas Iron Ltd, Albermarle Group, Fortescue Metals Group; Northern Star BGC (Australia) 11  BGC Contracting Chief Executive 1992 NFP b) 4 Resources Ltd; BHP Pty Ltd

Mr Dwayne Finch a) 1 Fortescue Metals Group, BHP, Roy Hill Holdings 12  Goodline General Manager 1999 700 b) 4 Ribshire Pty Ltd

Mr Patrick Conway a) 2 Specialists in mobile and fixed plant equipment maintenance and support 13  Mader Group Chief Executive Officer 2005 650 b) 2 Mader Group Limited Mr Roberto Gallardo a) 1 Armadale Road upgrade, Wanneroo Road, Murdoch Drive Conection, Northlink Stage 3, 14  CPB Contractors Executive General Manager, 1971 NFP New Lord Street project Ellenbrook CIMIC Group Limited WA, NT & Broad b) 5

Mr Scott Criddle a) 2 BHP Mulla Mulla 15  Decmil Managing Director 1978 520 b) 3 Decmil Group Ltd Southern Southern Cross Mr Graeme Dunn a) 4 Rio Tinto, BHP, Sino Iron, Northlink Road Project, Health and education maintenance, 16  1978 500 commercial minor works and services, NBN Cross Electrical Electrical Engineering Managing Director b) 6 Engineering Limited

Mr Stephen Easterbrook FMG, Rio Tinto, Roy Hill 17  Breight Group Managing Director 2007 500 a) 2 Pilbara Access Pty Ltd

Mr John Georgiou a) 3 Perth Airport Skybridge (PAPL), (Main Roads WA), Great Northern Georgiou Group 18  Georgiou Group 1977 410 Highway Bridge (Main Roads WA/Roy Hill), Marina East Apartments (Blackburne), Executive Chair b) 2 Hollywood Hospital Expansion (Ramsay Health), Escalator Replacement Project (PTA) Pty Ltd 19 GET THE FULL LIST ONLINE businessnews.com.au/List/contractors 101 All information compiled using surveys, publicly available data and contact with industry sources. Other companies may be eligible for inclusion. If you believe your company is eligible, please email: [email protected] WND: Would Not Disclose, NFP: Not For Publication, N/A: Not Applicable or Not Available. SPECIALInfrastructure REPORT

Infrastructure news Infrastructure-focused articles published by Business News

Infrastructure WA board selected Infrastructure investment, marketing to grow Liza Harvey new Libs leader 29 Jul 2019 by Mark Beyer agribusiness 13 Jun 2019 by Mark Beyer 08 Apr 2019 by Matt Mckenzie Georgiou wins $51m infrastructure contract Getting up to speed on Metronet rollout 02 Jul 2019 by Adrian Rauso Langoulant to chair Infrastructure WA 18 Feb 2019 by Matt Mckenzie 19 Feb 2019 by Madeleine Stephens WA govt $900m behind on infrastructure AGIG to expand WA’s largest gas storage promises this year Another miner wins infrastructure funding facility 10 May 2019 by Adrian Rauso 20 Feb 2019 by Madeleine Stephens 30 Jan 2019 by Business News

Near-$2bn boost for WA infrastructure Feds, WA at odds over infrastructure Cost reduction focus for AGIG 15 Apr 2019 by Business News 14 Feb 2019 by Madeleine Stephens 17 May 2019 by Matt Mckenzie businessnews.com.au