The flow of new projects may have halted, but for now, contractors in Western Australia continue to rake in new work associated with large scale resource construction projects, the Western Australian government says.
State Commerce Minister Michael Mischin says eight local firms have bagged separate contracts worth a combined total of around $387.6 million in recent months for work on Chevron’s $29 billion Wheatstone Gas Project.
The projects are expected to result in 628 jobs for work based predominantly either in Perth or onsite in the Pilbara Region.
In April, for example, a joint venture between the Australian subsidiary of US Fortune 300 construction, mining and engineering outfit Kiewit and Perth-based civil engineering contractor Ertech Holdings bagged a $296 million contract over up to four and a half years for general construction services including installation of underground and above ground facilities, building of roads, dewatering and excavation and pipe installation and testing.
In other big wins, the local arm of Canadian-based ATCO Structures & Logistics secured a $100 million contract to build 357 modular houses to accommodate the project’s workforce, while DBP Development Group inked a deal to build the domestic gas pipeline for the project earlier this month.
The flow of contracts does not stop at Wheatstone. Over at the Roy Hill Iron Ore project, for example, Leighton subsidiary John Holland last week secured a $257 million contract to build 350 kilometres of heavy haulage railway track linking the mine in the Pilbara with export facilities at Port Hedland.
Indeed, all across the state, Mischin says local firms have secured a whopping $53 billion in resource construction work over the past two years, with $10 billion of that having come since the government last published a report on local content in May.
He says Wheatstone alone has bought in $10 billion in local contracts and purchase orders and generated as many as four thousand jobs.
The latest figures come amid ongoing concern from unions in the building and manufacturing industries regarding volumes of work on large-scale resource projects going overseas, as well as the extent to which employment opportunities on these projects are going to foreign workers on 457 visas.
The Wheatstone project itself has been the subject of controversy and in the past. Last year, the Construction, Forestry Mining and Energy Union claimed significant portions of the work Chevron was claiming as local commitment was in fact largely performed offshore.
Such accusations have been denied by the company.
In a speech to a Chamber of Commerce and Industry conference in June, Chevron Australia spokesperson Colin Beckett said between them, Wheatstone and Chevron’s other massive project in Australia – the Gorgon project involving exploration of offshore gas off the northwest coast of Western Australia – had seen no fewer than 600 contracts awarded to Australian companies and the creation of more than 14,000 local jobs.
Furthermore, the company says Wheatstone achieved a local content level in the six months to March of 68 per cent.
The latest developments also comes amid concerns about an eventual slowdown in resource construction activity in Western Australia as the death of new projects coming in eventually feeds through into lower levels of construction activity.
In its latest forecast, the Australian Construction Industry Forum says it expects the overall value of construction work done in the resources sector in Western Australia to peak at $29.6 billion in 2013/14, with activity levels set to drop below $25 billion by 2017/18.