Hospital works drive construction sector

IT is without a doubt the largest construction site in metropolitan Perth, sprawling over an area three times the size of Subiaco Oval.

Five cranes loom over the Brookfield Multiplex-managed site, while a plethora of bulldozers, graders, diggers and other earthmoving equipment kick up dust around the main hospital building, which is slowly rising out of the ground between the Kwinana Freeway and Murdoch Drive.

When complete, the Fiona Stanley Hospital will comprise enough floor space to take up 130 storeys in a high-rise tower on a conventional inner-city block.

But at the moment, the 350-strong workforce at the hospital is only a fraction of the 1,500 workers who will be constructing the hospital during the next three years.

Nonetheless, the $1.76 billion Fiona Stanley Hospital and $255 million State Rehabilitation Centre are poignant reminders that, in construction circles, public sector work is currently king and undoubtedly the crown jewel of government work is hospital infrastructure.

Master Builders Australia WA executive director Michael McLean said this was not about to change, with hospitals and other health infrastructure works continuing as the major driver of construction work for the foreseeable future.

“In the future, with an ageing population and additional demands on our health budget, we see that the building industry can only stand to gain from that sector,” Mr McLean told WA Business News.

“It may only be a small segment of the industry, but at the moment it’s a healthy addition to the portfolio.”

Brookfield Multiplex director of construction and development Chris Palandri agreed, saying that the future for major construction jobs in WA was in the health sector.

“For the past three or four years, as a builder we have been relying on the private sector, and a lot of the development has been taking place in the city,” Mr Palandri said.

“A lot of office towers, some residential buildings and the like, but moving forward we’ll be more focused on public sector works.

“Fiona Stanley is a prime example of that; if you look at our major projects, three are private sector projects – Claremont Quarter Stage Two, City Square and Leighton Beach – but they are all coming to an end, not shortly, but they are under construction and under way.”

According to Mr Palandri, it’s not only the Fiona Stanley Hospital that has put health infrastructure in the driving seat of construction demand.

“Health is a big area, and there are other opportunities around including the Midland Hospital, and the government is also tendering the Albany Hospital at the moment,” Mr Palandri said.

“That seems to be the biggest area that is getting focus at the moment.”

Other major hospital construction jobs include a new multi-storey carpark at QEII Medical Centre in Nedlands, which the government has just advertised for expressions of interest, and $108 million worth of new cancer and pathology facilities at QEII.

Both the cancer facility and the pathology centre are being built by BGC Constructions.

“Interestingly, most of those projects aren’t straight build projects; the car park for QEII, for example, is a build, own, operate and transfer contract, so there are consortiums getting together to deliver projects rather than the government developing its own projects,” Mr Palandri said.

“It will involve the private sector getting together to build, fund and then run projects for 20 or 30 years, then handing them back to the government.

“So in the public-private partnership space, the Treasury has been quite vocal in its desire to improve the infrastructure in Western Australia.

“PPPs have been very common in other states, particularly in Victoria, but less common in WA. That’s an area of growth, I would have thought.”

In the northern suburbs, national construction giant John Holland is well advanced in its construction of the $332 million Joondalup Health Campus.

The redevelopment of the Joondalup site will be undertaken in seven phases, with works expected to be complete by early 2013.

In the city, planning is also currently being undertaken for a 400-bed redevelopment of Royal Perth Hospital.

Elsewhere in the state, the $166 million Albany Hospital redevelopment is expected to be a hotly contested tender, as is the $55.8 million upgrade of Kalgoorlie Regional Hospital.

Expressions of interest are currently under consideration for a contractor to take on the first phase of the Albany Hospital development, while Cooper & Oxley Builders were appointed to complete the $2.7 million first phase of the Kalgoorlie Hospital upgrade in January.

In the state budget, $150 million was allocated for the rebuild of Nickol Bay Hospital in Karratha, while DORIC is well advanced in its construction of the $114 million Hedland Regional Resource Centre.

Probuild WA state director Eric Meyerowitz said his firm was responding to the large number of health-related construction work in the market by diversifying its operations.

“Health is going to be one serious field to watch,” Mr Meyerowitz said. “In anticipation of that we are having at look at opportunities to acquire a health-based engineering company.”