One of Rio Tinto's camps in the Pilbara.

Shortlist to run Rio facilities

Thursday, 26 November, 2015 - 14:15
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Sodexo has been shortlisted with two other companies to manage all of Rio Tinto’s camps and other facilities in the Pilbara, in the same week it has been awarded a contract to run Shell’s Prelude Floating LNG facility.

Rio is understood to have selected Sodexo, along with ISS Facility Services and Spotless Facilities Services, to enter a final round of negotiations for the lucrative contract.

A Rio spokesperson said the miner expected to issue a letter of intent to the successful service provider in December or January, with a staged implementation taking effect from the second quarter of 2016.

Compass Group’s ESS Support Services Worldwide, which currently has a joint venture with indigenous business Eastern Guruma to help it manage some of Rio’s camps in the Tom Price area, was not successful.

Listed company Transfield Services, which participated in the tender process, also failed to make the shortlist.

The winner of the Rio tender will move up the ranks of catering and facilities management companies in Western Australia in the BNiQ database managed by Business News.

Spotless is currently the largest firm on the BNiQ list with 3,300 staff in WA, followed by ESS (3,261 staff) and ISS (2,000 staff).

The tender process is part of a wider change Rio is introducing to its facilities maintenance, accommodation and associated support services for towns and mine-site villages across the Pilbara.

Rio is understood to be seeking greater consistency across its Pilbara operations, which are spread across five towns, 15 mine sites, three ports and associated railways.

The tender process will result in Rio dealing with one facilities management company, rather than four at present.

It is anticipated the successful tenderer will employ many staff currently employed by the incumbent providers.

Rio is believed to be planning separate initiatives to engage directly with indigenous businesses in the Pilbara.

Rival iron ore miner Fortescue Metals Group took a different approach in 2013, when it awarded $500 million of facilities management contracts to Morris Corporation and five indigenous partners.

The five-year contracts covered 10 FMG villages across the Pilbara.

Business News understands Morris has picked up a new contract this month covering Rio Tinto’s Argyle Diamonds operation in the Kimberley.

The contract was previously held by Spotless.

Meanwhile, Shell Australia announced today it has awarded Sodexo a contract for the provision of offshore facilities management services for its Prelude FLNG facility.

Prelude FLNG is the largest floating facility ever constructed and will be moored 475 kilometres north-east of Broome.

Sodexo will oversee accommodation management, waste management, house-keeping and laundry services for the 600,000-tonne facility.

It will also provide commissioning support in South Korea, where the facilty is under construction, to ensure the living quarters are comfortable and to Australian safety standards.

Sodexo will take care of Helideck administration, and maintenance in the galley, dining, accommodation and recreation areas.

It will also provide a wellness program “to support and encourage workers to make changes to their life habits”.

Shell said the potential for Sodexo to deliver improved outcomes was underpinned by long-term relationships with indigenous communities and local businesses across Broome and Darwin.

The contract also marks Shell’s first outsourced solution to feature positive gender diversity targets.