We need more than great sounding COAG communiqués

by Julie Abramson, CCF policy director

This month the CCF made a submission to Infrastructure Australia, on what our members see as the impediments to infrastructure development in Australia, and what can be done about them.

The submission was a response to an Infrastructure Australia discussion paper. State branches have been very active on these issues, and our national submission draws many of these concerns together, by calling for national uniformity and a national approach.

Strategic overview

The factors which either support or inhibit infrastructure development are complex and inter related. They arise both at a big picture level such as the slow down in economic growth, skills shortages and demographic changes, and some unknowns like how the proposed emission trading scheme will impact on infrastructure development generally.

At a more local or micro level, the key issues relate to lack of national uniformity and harmonisation in a range of areas such as procurement and tendering, prequalification and contract standardisation and licensing and registration.

The other relevant issues include the need for national, state and local government forward programs and planning, targeted incentives for training to address the skills shortages - such as a 1% provisional sum for training included in construction contracts - and continuing support for important reforms such as a strong building and construction regulator.

National uniformity

One of the critical issues we raise, is the lack of national uniformity and consistency of regulation across state boundaries, state agencies and local government.

We are looking to COAG to takes real steps to work on these issues and to produce concrete outcomes rather than communiqus which sound great but actually achieve little in practice.

It is critical that infrastructure feature heavily in the Local Government Summit that the government has announced for later this month.

The CCF would like to see individual working groups convened at that forum on:

Procurement and tendering;

Particular areas of work such as road and drainage design; and

Planning for forward and rolling programs.

We will be taking this up with the Federal Government.

Reforms to prequalification

CCF supports the prequalification system operating in a number of the states and their agencies and in local government. However, important and essential reforms include a nationally-consistent prequalification system focused on 3 core principles: consistency, transparency and flexibility.

At the very least there must be mutual recognition. For example, if a contractor prequalifies for certain work in one state, it would be a welcome reform if that was recognised in another state.

Forward planning

Forward planning and rolling programs are critical. The lack of ability to plan for future works is a major dampener on employment and skills training, investment and industry development.

Tendering

One of the consistent complaints of members is that contracts are awarded on the lowest price basis and other relevant factors such as sustainable construction methods, training and development commitments, third party endorsements are not taken into account.

Such an approach disadvantages small to medium contractors who because of their size might have unique expertise or innovative approaches which are not recognised in a price alone model.

The CCF has called for adoption of the principles in the 2007 Best Practice Guide for Tendering and Contract Management. A copy is available at CCF Victoria's website.

Depackaging capital works programs

Retaining the capacity of small to medium sized contractors, is critical if the big volume of infrastructure projects already in construction and those planned. are to be successfully undertaken.

Supporting small to medium sized contractors through ensuring a mix of contract size with equitable distribution of the construction workload is a key outcome sought in the submission.

Skills shortages

Our 2007 survey revealed very concerning results. 84.4 % of members responded that they were currently experiencing skills shortages and 91.2% reported that they had difficulty recruiting workers with the necessary knowledge and skill.

There is no quick fix for skills shortages. They are a combination of a whole range of factors including the ageing workforce, young people not seeing civil construction as a career path and unprecedented demand.

There are however, some systemic and structural issues which need to be fixed, such as how civil construction skills are recognised in the current ANZSCO system. Members will recollect that this has been an ongoing issue for us and we continue to advocate for a review.

We also believe that genuine training incentives be provided and have recommended that all construction contracts let by councils, water companies and government agencies, should contain a provisional sum for training of 1% of the project contract.

Other matters

Finally, we have again stressed the importance of harmonisation of OH&S legislation, standardisation of contracts and keeping a strong building and construction watchdog.

Members who would like more information can access the submission at www.civilcontractors.com or they can contact me on 03 9851 9900.