The $54.1 million contract for the pedestrian bridge near Perth Stadium is a colourful highlight in an uncertain market. Click through to see more on our Infrastructure feature.
The $54.1 million contract for the pedestrian bridge near Perth Stadium is a colourful highlight in an uncertain market.
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The state’s biggest infrastructure players have formed alliances to slug it out for billions of dollars in contracts for upcoming works, including road, rail and telecommunications.
They’ll be competing in an increasingly crowded market, as international players attempt to secure a footing in Western Australia, and companies previously focused on mining turn to Perth as resources work dries up.
The internationals have brought global expertise, from tunnelling to world-class architecture, lifting expectations across the market.
Meanwhile, new opportunities are being created in utilities.
Horizon Power has saved money and improved flexibility through outsourcing, and the Water Corporation is among a number of agencies with big capital budgets.
However, the sector remains concerned about the pipeline of work after this latest round of projects, due to the state government’s financial malaise.
This is adding fuel to the fire in the debate over funding, with some saying excess capacity in the sector and low interest rates mean the government has a rare opportunity.
Georgiou executive general manager John Galvin said his company would be bidding for two $1 billion road projects.
For Northlink, worth $1.1 billion, the Perth-based company will team up in a joint venture with York Civil, while for the $1.6 billion Perth Freight Link it has bid with members of the existing Gateway WA consortia.
For Gateway, the partners had been AECOM, Leighton Contractors, GHD and BG&E, while WA Limestone has joined for the latest venture.
Mr Galvin said the Gateway team had been highly successful.
That project, which is many months ahead of schedule, had provided the company with an opportunity to gain experience in its largest ever infrastructure contract, he said.
Mr Galvin warned that the market was very competitive, however, with pressure on margins from increase competition and a gap at the end of the infrastructure pipeline.
“If you don’t secure some of these things that are out there now, it’s going to be a tough couple of years,” he said.
The company is also doing a couple of jobs with the Public Transport Authority.
These include its early involvement at the Aubin Grove train station and the Edgewater station car park project.
Mr Galvin said the company’s strategy was to get away from the construction-only jobs, focusing instead on getting shortlisted in expressions of interest.
AECOM director (WA) Abra DeKlerk said tenders for a range of projects would close before the end of this year, creating a feast or famine situation for design consultants.
He said competition was rising as players moved into infrastructure from resources. Mr DeKlerk said finding the right partner was vital for alliance projects, with a good cultural fit and a mutual understanding of priorities.
BGC is another that has lodged an alliance bid for the Freight Link, in tandem with Laing O’Rourke, Arup and Jacobs Engineering.
Its bid will include only phase one, an extension of Roe Highway.
Clough and Brierty will lead another alliance, bidding for the project, too.
Upbeat
Brierty chief executive Peter McBain said the contracting environment wasn’t as gloomy as people thought.
He said spending in the infrastructure and mining sectors was returning to a sustainable level from record highs, meaning the outlook wasn’t necessarily spectacular either.
Population growth would drive demand around Perth, he said, while the state government’s roads program was good news.
“The government is getting great value building infrastructure out of cycle with business investment,” Mr McBain said.
One steady stream of jobs for Brierty is coming from the airport, where it has been involved in more than 20 projects over time.
Construction Contractors Association of WA chief executive Chris Fitzhardinge said there was some concern among big builders about future business.
“The major contractors are happiest when their order books are full over an extended period of time,” he said.
“There needs to be some certainty about government expenditure for more than the budget period.”
Mr Fitzhardinge called for a WA body akin to Infrastructure Australia to establish a much longer-term plan for the sector.
On the east coast, Infrastructure NSW was formed in 2011, while the new Victorian government is making its own moves in that direction.
Further work was also needed to improve transparency of planned expenditure in government departments, Mr Fitzhardinge said.
That would enable players to have a better idea of work that would come up in future.
The thing about football
Precast concrete manufacturer PERMAcast was one of seven local businesses to win from the construction of the new Perth Stadium, with others including Civmec, Wagstaff Piling and CASC.
PERMAcast managing director Alberto Ferraro said the company’s larger storage capacity gave it an advantage in its bid, which will have it creating almost 25 multi-tonne concrete plats per day at its peak.
Mr Ferraro said the company, which had been very fortunate over the years supplying the resources sector, would now focus on Perth.
SOLID GROUND: Alberto Ferraro at Permacast's Cardup facility. Photo: Attila Csaszar
Based in Cardup, Permacast has been involved in bridgework for Gateway, and now plans to target the two major road developments set to get under way.
A highly publicised, albeit comparatively small, contract recently went to York Civil, with a $54.1 million pedestrian bridge over the Swan River to the stadium.
It will undertake the job as part of a partnership with Italian contractor Rizzani De Eccher, which is working with Leighton Contractors in Sydney on part of the WestConnex motorway project.
York is an example of an interstate player that has been attracted to the WA market, setting up shop here in 2012.
The Adelaide-based company has completed a $31 million extension of the North Quay freight terminal and is now working on a $25 million strengthening of the Fremantle bridges with Marine & Civil.
The biggest winner from the project has been Brookfield Multiplex, which will design and construct the $918 million stadium itself, as part of the Westadium consortium.
Brookfield Johnson Controls will manage the facility for 25 years.
Operations work is out to tender, with an award expected in early 2016.
Four companies are on the shortlist, including AEG Ogden, which is operating Perth Arena and formerly ran venues for the Perth Theatre Trust.
Another contender is Perth Stadium Management, which features catering giant Delaware North and the Western Australian Football Commission, among others.
Players in that group currently operate Domain Stadium in Subiaco.
All the small things
There’s plenty of small work, too, particularly in engineering, including general engineering services for Busselton Water, communications towers for WA Police, and building transportable classrooms for the Department of Education.
The Water Corporation has an asset investment budget of more than $713 million in the coming financial year.
Highlights include: a $14 million contract to start construction of a water storage tank in Ellenbrook; $8 million to complete the $108 million East Rockingham wastewater treatment plant; and $6 million for a pipeline to supply Greenbushes, a spokesperson said.
AECOM, which is one of the world’s largest design companies, recently won the $100 million stadium railway station tender with Laing O’Rourke, and already has ongoing work.
It is one of the design consultants for Main Roads’ bridge design support panel, where it is involved in, among other things, inspecting the state’s large timber bridge network.
Mr DeKlerk said that work covered everything from asset management to design.
“WA has one of the most extensive networks of timber bridges in the world, especially in the South West,” he said, adding it gave an important balance to some of its other work.
It represents a pathway many other contractors might be seeking to emulate as construction work slows down.
Downloading
By far the nation’s largest infrastructure project is the National Broadband Network, the multi-billion dollar federal government plan to upgrade internet connections across the country.
In recent weeks the company has announced a new contracting strategy, now performance based and with a lower administrative burden.
Three contractors have recently won work in WA – Downer EDI, Fulton Hogan, and WBHO – with the firms reportedly building in Cannington, Geraldton and Bunbury respectively.
The Network will be sure to provide more work in WA, with around 95,000 premises covered as at June 18.
