Industry figures claim that unions have dragging out construction projects as they draw to a close, in order to extract more money from companies.
Construction industry bodies in Western Australia are calling for the establishment of a new code of conduct by the state government in order to address the rising incidence of industrial disputes and associated cost blowouts within the sector.
The Master Builders Association and the Chamber of Commerce and Industry WA are leading calls for the creation of a code of conduct for the construction sector, with a view to stymieing the industry problems that have beset major projects with increasing frequency over recent years.
The code would apply in particular to companies in the running for public projects – a mainstay area for the construction sector in the near future given the state government’s plans to spend $24 billion on infrastructure over the upcoming four years.
Members of industry claim that cost blowouts and industrial action have become a serious issue for Western Australia’s construction industry, hampering productivity and the development of projects – particularly in the state’s resources sector.
According to a 2014 submission to the Productivity Commission costs have risen by 45 per cent on average for iron ore projects throughout the mineral-rich Pilbara.
Other segments of the resources sector in WA have also been severely affected by industrial issues, with a key example being the offshore LNG sector.
Chevron’s $54 billion Gorgon LNG project have been blighted by expensive delays due to industrial disputes, causing costs exceed original estimates by as much as 45 per cent.
Ken Phillips, executive director of Independent Contractors Australia said that WA’s construction has become grossly overpriced as a result of industrial issues, laying much of the blame at the feet of the unions.
Phillips claims that unions oftentimes wait until projects approach a close before staging industrial action, in order to extract more money from companies.
Gorgon is one such example, with Philips warning that the unions could drag the project into next year, serving as a severe deterrent to any other prospective investors in WA’s resources sector.