Mega Projects – A Whole Lot More Than Construction

MEGA PROJECTS

A WHOLE LOT MORE THAN CONSTRUCTION

A CLOSeR LOOK AT THe RISe OF MeGA PROJeCTS ACROSS THe AuSTRALIAn COnSTRuCTIOn LAnDSCAPe AnD THe CHALLenGeS AnD OPPORTunITIeS THeY PReSenT FOR THe BROADeR SuPPLY CHAIn AnD eLeCTRICAL COnTRACTORS.

NECA and ECA WA’s Group Training Organisations can help electrical contractors meet minimum apprentice targets on mega projects.

Congestion busting, record breaking, transformational: these are the catch phrases of mega projects dotted across the Australian construction landscape. Roads, tunnels, rail, dams, hospitals, energy, defence services and now even high-rise school projects are all becoming bigger, and so are the price tags. The current national infrastructure pipeline lists more than 280 projects valued at over $100 million, with an eye-popping 70 valued at $1 billion and beyond.

Federal and state governments are funding the lion’s share of these projects, with nearly $225 billion of taxpayer funds forecast to be spent on infrastructure over the coming four years. The enormous increases in public spending on infrastructure projects is driving a need for governments of all colours to score political credit (and votes) for stimulating the construction industry. On time, on budget and built-to-spec is no longer enough for governmentfunded projects. As well as achieving the transport or service delivery objectives, projects must also create social benefits and a positive community legacy through delivery. For the most part, states are seeking to achieve social benefits through contractual targets and processes written into the Principal Contract. Some examples of minimum targets include:  Apprentice and trainee numbers;  Aboriginal and Torres Strait

Islander employment and business spend targets;  employment programs targeting disadvantaged groups and the long-term unemployed;  Sustainability (ISCA) ratings;  Opportunities in construction for veterans and refugees;  Local procurement and small and medium enterprise (SMe) engagement; and  Workforce gender and diversity targets. Increasingly, these targets are being transferred along the supply chain contractually. Principal contractors are self-performing less work, so the overall targets set by government can only be achieved through the work performed by major subcontractors and the goods provided by key suppliers. What might seem to be an inconsequential target or a minimum spend in a certain sector, can lead to major problems when written into contracts, if businesses don’t fully understand the requirements or the penalties for falling short. It’s important that electrical businesses understand the social impact deliverables in contracts, especially for government-funded projects. The targets should be designed to maximise local and community benefits, not punish subcontractors. So, if you’re having difficulty meeting a certain target or need clarification, engage early with the principal contractor and if need be, the government client directly. Many government agencies have databases and local procurement networks that can help with Aboriginal participation and disadvantaged employment groups in particular. The field of social impact is rapidly evolving and targets are becoming higher and more enforceable. In 2021 neCA will be surveying interested members on their social impact capability, diversity and procurement challenges, and investigating ways we can help members gain a competitive advantage in this area.

Peter McCabe

NECA Director Policy and Government Relations www.neca.asn.au

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