Good Saturday middayish NRW ...
Kind thoughts to the Victorians.
The Australian reported today on a topical subject for NRW;
Infrastructure.
- Infrastructure spend, rollout, and the best way forward according to various experts.
The story appears to have been engendered by the impending
(??) five year update to the 2016 Infrastructure Plan
[Australian Infrastructure Plan 2016].
.....And I have to say after reading it, I wonder if this update has already been tabled or not, and if it will be of benefit to NRW or not.
As a reminder, as of March 2021;
“NRW group size and capability across multiple sectors (is)
second only to Australia's largest diversified contractor CIMIC” [ref],
.. and in both the half yearly presentation
[link] and the March 6 Euroz Conference report
[link], Jules said the outlook for our Civil division was great and would be helped by stimulus packages and urban renewal
“NRW Group Civil delivery platform now strategically and strongly placed to participate across the Resources, Defense and also the Public Infrastructure sectors through Goldings R5/B4 rating and NRW Civil R5/B4 rating acquired through BGC Contracting” (H1report).
He said significant opportunities were out there.
https://hotcopper.com.au/documentdownload?id=uOMxKKzFkiWRTLKhOROKAxjvTDYL4wy/zxPyv/lu97FiGug=View attachment 3230051But will this benign environment continue?
As I read the story by John Dusevic (in the spoiler below), as a prelude (or comment on?) the update, Infrastructure Australia has reported to the PM there is no way Australia can roll out its proposed $225billion infrastructure spend due to lack of skilled contractors and proper planning therefore it will all end in disaster.
It blames the 2016 infrastructure policy as being inept.
Leading into whatever updates it intends to implement this time round, Infrastructure Australia says governments must
“lift their policy game, work with industry to better price risks, achieve value for money for taxpayers, and stimulate competition in a sector dominated by a few large local players, otherwise productivity will sag and costs rise inexorably.”- So it wants cheaper projects rolled out, but also wants to stimulate competition because it don’t like the way a few ‘large local players’ have become dominant by cuttung prices to the bone and so drive others out of the market?
And NRW now counts as a ‘large local player’!
How is this not a Catch 22?
Peter Colacino, the chief of policy and research at IA, effectively said (to my reading) that, seeing as big teams of contractors had not been cryogenically parked in some underground bunker, it therefore behove government to incentivise more
global players whilst rolling out projects more slowly so as to curb massive inflation in regards building materials and housing prices?
Is he wanting these global players to import their contracting teams as well?
What about the Australian businesses?
The Grattan Institute director, Marion Terrill also wants more business to go to international players.... but at the same time breaking projects into smaller chunks to foster competition amongst the smaller locals.
“ “To get high quality infrastructure at a sharper price, governments should foster competition as much as possible by breaking down mega projects into sizes where more firms have the expertise and balance sheet to take on the work, and make sure international firms don’t face undue barriers to entering the Australian market and winning work,” Ms Terrill said.”And she didn’t like political agendas being part of the current equation.
The Australian Constructors Association chief executive, Jon Davies, seems to me to have been the clearest.
Rather than wanting more overseas contractors whilst squeezing local ones ever tighter he opined things had been ballsed up in the past by governments forcing contractors ..... “
“ to price and accept unpriceable risk that ultimately results in contractual claims where the only winners are the lawyer.”.
“Government and industry need to collaborate to ensure project objectives are clear, information provided is accurate and can be relied upon, the right delivery models are adopted, risk is appropriately managed, and waste is reduced through productivity-enhancing processes and technology such as digital engineering,” he said.He said the Federal Government needed to be more active in .. “incentivising the states to adopt best practice procurement and delivery”.
“The processes state governments use predominantly favour lowest price over best value,” he said. “They work to political deadlines rather than construction schedules.
“They assume risk can be transferred with no comeback and promote a focus on winning short-term commercial battles rather than developing long-term partnerships that foster innovation and improved outcomes.
Project cost and time overruns are commonplace.”
spoiler: See here
Thoughts welcome.
cheers
(20min delay)