A joint venture between Duratec and Ertech will carry out $10 million worth of infrastructure planning work for the Department of Defence at HMAS Stirling on Garden Island.
A joint venture between Duratec and Ertech will carry out $10 million worth of infrastructure planning work for the Department of Defence at HMAS Stirling on Garden Island.
Duratec and Ertech will be paid $8.1 million to plan fit-for-purpose, nuclear compliant facilities as the base scales up for a regular rotational nuclear submarine presence from 2027.
The subs are courtesy of the nation’s strategic partnership with the US and UK under the Aukus arrangement, and the facilities required to support them are slated for delivery the same year.
Planning will run for 10 months, with a delivery phase – which would be covered by a separately awarded, larger contract – expected to begin in 2025.
The JV has also won a $1.9 million contract to upgrade infrastructure in support of future submarines at the base.
That work will also lead in to a delivery period from 2025, with completion slated for 2027.
The contract announcement comes a day after the Defence Minister Richard Marles revealed the nation’s plan to make Henderson a defence industry hub.
The full scale of investment at Henderson is to be decided, but it will complement a $738 million work program at HMAS Stirling in preparation for Aukus’ arrival.
Around new 550 homes are also planned for construction on the base over the years ahead.
Speaking to Business News this morning, Duratec managing director Chris Oates said the defence activity in the region was encouraging for the business.
Defence makes up around 40 per cent of the diversified contractor’s work, and the company hoped to continue its strong relationship in the sector.
“It’s coming up on 10 years of work for us at HMAS Stirling,” he said.
“It’s always marine type work, we’re fixing assets or doing new construction work – we’ve worked with the customer for a long time.
“Base capability is a big thing for defence, so you need to make sure you’ve got it all right.”
The award of planning contracts today follows a $54.7 million contract won by Duratec’s 49 per cent owned associated defence business in the Northern Territory last month.
That delivery-phase work involves building refurbishment, engineering upgrades, the construction of a new receive site, installation of new fibre optic link cables and decommissioning of high-frequency communications infrastructure.
Defence work delivered $220 million worth of revenue for Duratec last financial year, and a gross profit of $23.6 million.
Mr Oates said increased defence activity has potential to reflect in the contractor’s work pipeline in the years ahead, as projects head away from planning towards the delivery phase.
“It’s absolutely got our attention,” he said.
“The one thing with defence for us, is that you use a lot of local subcontractors as well, so you can scale a little bit better.
“In mining, it’s more our people, more direct blue collar workers.
“Defence might creep above 50 per cent of our [work], and it’s probably likely to.
“That doesn’t worry us.”
Outside of defence, Duratec has recently secured contracts with resources sector majors including Rio Tinto and Woodside.
Duratec’s share price was flat this afternoon, at $1.60 per share.