Consulting firms plead for capital works

18/12/2008 - 14:44

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Perth’s design professionals have appealed directly to the state government not to pull the funding rug from under it, as some projects are halted amid rumours of billions of dollars being slashed from the capital works program.

Consulting firms plead for capital works

Perth’s design professionals have appealed directly to the state government not to pull the funding rug from under it, as some projects are understood to have been postponed amid rumours of billions of dollars being slashed from the capital works program.

It is understood the soon to be split Department of Housing and Works has this week been advising firms involved in designing tens of millions of dollars of projects which of those will be going ahead and which will be postponed.

These include sizeable building contracts, understood to be worth $20 million or more, for health, emergency services and education which don't necessarily receive the headlines of the huge promised capital works such as the sports stadium and WA Museum.

However, a spokesman for the Treasurer denied that any decisions have been made ahead of a report due from a capital works audit committee's own findings.

The spokesman said that every project over $20 million was being looked at as the government tried to rein in spending and reduce debt due to the changing economic circumstances.

"If its over $20 million, its on the table," the spokesman said.

The issue arises as the Western Australian government releases its mid-year economic report and continues an economic audit of the state’s expenditure.

Several professional associations are understood to have written to the state’s leaders, Premier Colin Barnett and Treasurer Troy Buswell, urging them to continue the capital works program as projects from the private sector dry up.

Australian Council of Built Environment Design Professionals WA chairman Warren Kerr said he was aware of projects not proceeding due to the government review which was raising bigger concerns in the sector.

The BEDP represents sectors from architecture through to engineering involved in the building and construction.

Mr Kerr said the concern was not only that the government may want to postpone some expenditure but that delays in the normal process of design caused by the review process may severely hamper the ability for consulting firms to retain staff they have worked hard to recruit in the recent boom period.

“There has to be some consideration given to the fact that you can’t suddenly stop and then suddenly start these projects,” he said.

Mr Kerr said the sector understood that the new government had the right to determine its priorities but that should not bring the whole sector to a halt.

He also noted that capital works restraint flew in the face of federal efforts to revive the economy by spending in infrastructure.

Association of Consulting Engineers Australia WA chairman David Porter confirmed that he had written to the Treasurer and Premier to urge them to maintain the budget adopted earlier in the year.

“Those (projects) in the middle of construction should continue and those in the middle of design should continue,” he said.

“We have all been trying hard to build up a skills base, if they stop these projects we’ll lose those people.”

However, the government has yet to shed light on whether any projects have been shelved yet.

"We have commenced a thorough audit of the capital works program, which is examining every major project that has yet to proceed to tender to determine whether they remain a priority for the State,” Mr Buswell in a statement regarding the mid-year report.

"We are also aiming to achieve stronger overall control of the capital works program by transferring the 'works' function from the Department of Housing and Works into the Department of Treasury and Finance."

The sector’s concerns also follows revelations that WA missed on an equitable share of the federal governments infrastructure spending package to help the country avoid recession.

Last week, the federal government announced a $4.7 billion nation building plan infrastructure package designed to help combat the affects of the global financial crisis, which included $195 million for the Ord River Irrigation Scheme but has very limited contributions for other projects in Western Australia.

WA will receive a total of $317.9 million from the federal government for three specific projects and for a contribution to the teaching and learning capital fund. The federal report states that the total federal investment will be $7.52 billion, which means that WA is getting 4.2 per cent of the total.

Mr Buswell is also Minister for Housing and Works and the department directly under his control has seen a rapid rise in projects under its control.

According to the 2008-09 budget papers, Housing and Works was to be responsible for some $4 billion in projects (up from $2.5 billion the previous year), including:

  • AK Reserve Basketball and Athletics Stadiums;
  • Department of Education and Training – including Primary and Secondary schools scheduled for delivery in 2008-09 from Bunbury to Fitzroy;
  • six major Police, Corrective Services and Fire and Emergency Services Authority facilities (including four in the North West and Kimberley);
  • Health - the construction of the Rockingham Kwinana Hospital Redevelopment;
  • Albany Convention Centre; and
  • Perth Performing Arts Centre – construction commenced October 2007.

The department is also managing the contract to commence the construction of the $1.7 billion Fiona Stanley Hospital. This project is the largest building construction project in the history of the state.

In the nine months up until the end of March 2008, the department had entered into 207 capital works contracts valued at $600 million, compared with 133 contracts valued at $365 million for the same period in 2006-07.

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