Infrastucture needs big payback

WHEN the first big construction project gets underway at the Australian Marine Complex, the Premier of the day (whoever he is) is sure to hail it as a big success.

He will wax lyrical about the benefits to the State, no doubt quoting a generous multiplier effect to suggest that numerous jobs will be created in other parts of the economy as a direct result of the Government’s $200 million investment in infrastructure.

But securing some big supply contracts will not be enough to make the new infrastructure a success.

West Australian companies al-ready win big supply contracts for major oil and gas and resource projects.

To be judged a success the new facility must underpin a significant increase in the volume of work flowing to local companies – over and above the work that would have been performed here anyway.

The quality of the facilities at Cockburn Sound will certainly help local companies be more competitive when tendering for big supply contracts.

Local companies also have a natural advantage.

Project proponents such as Woodside find it a lot simpler and cheaper to work with suppliers who are in Kwinana rather than distant locations such as North America or Asia.

The new purpose-built facilities at the Australian Marine Complex will be much more efficient than ‘brownfield’ sites such as those on the Burrup.

There is also an important social dimension to the new facilities.

To the extent there is a steady flow of contracts, workers will be able to live permanently in Perth with their families instead of being in socially dysfunctional work camps in remote locations.

This could help attract a stable pool of skilled workers to WA.

Having invested $200 million in new infrastructure (including $80 million of Commonwealth money), the State Government should focus on what it can do to maximise opportunities for local companies.

Reviewing the industrial relations changes of the past two years would be a good starting point.

The changes have made WA workplaces less flexible, making it harder for local companies to work smarter.

That, in turn, makes it harder to compete against suppliers from low-cost Asian countries.

Upgrading key roads to create ‘high wide load’ corridors would be another useful step.

Since being opened last June, the ‘high wide load’ corridor between Kwinana and the Australian Marine Complex has been used many times to transport over-sized loads.

This confirms the success of the concept, according to Chamber of Commerce and Industry director industry policy Bill Sashegyi.

Spending $3 million would improve the existing corridor and allow it to be used more frequently.

A further $6.5 million would create a corridor between the coast and Kewdale, while an extra $19.5 million would link Kewdale to Perth’s northern boundary.

There is currently no provision in the State Budget for these improvements, yet they would be a real boost for local companies trying to compete against overseas suppliers.

They would help companies around Perth supply construction projects at the Australian Marine Complex.

They would also give companies the option of transporting their completed modules or other equipment by road.

Many of the fabricated modules to be built at the AMC would be transported by sea to the Burrup and other destinations.

But land transport would be the preferred option for many others – if the road system was adequate.