Lack of extractive construction materials challenges planned projects

Earthmoving excavator concrete construction

John Kilgour Civil Contractors FederationBy John Kilgour, CEO Civil Contractors Federation, Victoria

With Victoria’s fast-growing population, the race is on to deliver affordable infrastructure and skilled labour within the civil construction sector. Key to this is the maintenance of a robust and efficient supply chain of extractive construction materials. Demand for construction materials such as cement, concrete, stone and sand is ever-increasing, raising significant challenges to those responsible for ensuring responsive supply.

The massive demand for raw materials on major infrastructure projects such as the Melbourne Metro Tunnel, West Gate Tunnel and Level Crossing Removal Program are contributing to the draining of local supplies. Industry groups have warned we will soon need to start importing sand and other raw building material from interstate or overseas, dramatically increasing the cost of construction, if action isn’t taken now to address dwindling local supplies.

The further projects are from the quarry gate, the greater the cost of transport and logistics. Raw materials make up a third of construction costs and any rise in their price can dramatically impact a project’s bottom line.

For every 1km of highway built, 14,000 tonnes of gravel and raw materials are used.

The $9 billion Metro Tunnel alone needs more than 1.4 million tonnes of concrete to build its twin 9km tunnels, while a similar or greater amount would be needed for the proposed $16 billion North East Link.

In 2016, the Victorian Government launched a report assessing the state’s quarry resources, stating that, “Appropriately managing access to quarry resources and reducing future costs of transporting materials from quarries to market could have significant flow on effects to help deliver affordable infrastructure, including roads, bridges, rail lines, houses and hospitals in to the future.”

The report also found that 15 local government areas would be critical to efficiently supplying quarry materials to key growth area markets, which will also incur additional $2 billion in transport costs for every 25km that quarry materials must be transported over the 2015-2050 period.

It is essential to our members and the wider industry that we continue to manage and protect our key quarry resource areas to ensure a steady flow of unhindered residential and infrastructure works across Victoria.

The urgent need for reform

Major government studies have found under the current rate of use, by 2050 Victoria may need to have a third of its raw materials supplied from quarries not yet built or planned.

The industry’s key concern is the slow pace of reform to remove red tape and approve new quarries.

In order to deliver the 60 million-plus tonnes per annum of high-quality quarry products and the additional cement and concrete needed, there needs to be faster approvals for quarry and sand reserves.

CCF continues to engage with the Victorian Government, working as an advocate for civil contractors throughout the state to push for the reduction of regulatory constraints and redtape – the very factors that act as blocks to an effective and sustainable supply chain.

As a major procurer of infrastructure, the Victorian Government is responsible for recognising and implementing appropriate reforms to the policies and processes surrounding extractive materials.

Without these critical reforms the disparity between demand and supply will continue to grow.

The way forward

After his budget was released, Victorian Treasurer, Tim Pallas, admitted a shortage of raw materials were ‘weighing’ on the government’s $107 billion infrastructure program.
It is imperative that the required extractive materials are made readily available in order to successfully take projects from planning to reality.

A joint ministerial statement on extractive resources was recently released by the Victorian Government’s Resources and Planning Departments, outlining their commitment to take practical measures to address the issue:

“To assist quarries to keep operating and new sites to develop alongside growing suburbs and communities we commit to:

  • Streamline approval processes to expand production
  • Protect the continuity of supply from existing quarries
  • Apply the ‘agent of change’ principle to quarries
  • Provide better guidance to industry and local government
  • Identify and protect extractive resources of strategic importance
  • Reduce the environmental impact of quarrying and deliver landscapes for the community

“These actions are expected to increase the availability and affordability of extractive resources in Victoria, and we will closely monitor competition to ensure the market in operating efficiently.”

It has also been reported that the Victorian Government had almost doubled the amount of approvals for quarries and expansions this financial year.

Funding has been provided in the past three budgets, including $13 million this year to help industry meet demand for quarried materials. The government has also streamlined approvals so quarries can proceed with producing the critically needed materials, as well as identify new extraction sites.

CCF Victoria commends and supports these initiatives, recognising the beneficial impact they will have on Victoria’s civil construction industry for decades to come.

About the author

John Kilgour is the Chief Executive Officer for the Civil Contractors Federation Victoria. Known for his strong advocacy work and networks at local and state government levels, John joined CCF in February 2016 from the Committee for Ballarat where he was CEO. Prior to joining the Committee for Ballarat, John had a long and distinguished career in the downstream oil industry with BP. During his 34 years with the BP Group of companies, John delivered major investment projects in the oil and gas, retail, petrol and convenience sectors throughout Australia, New Zealand and South East Asia. In February 2017, John was appointed President of the Victorian Civil Construction Industry Alliance, which CCF is a member.

About Civil Contractors Federation (CCF)

Civil Contractors Federation (CCF) is the peak industry body representing Australia’s civil construction industry with more than 2,000 contractor and associate Members nationally and over 520 of these based in Victoria.

CCF members are responsible for the construction and maintenance of Australia’s infrastructure, including roads, bridges, pipelines, drainage, ports and utilities. Its members also play a vital role in the residential and commercial building industry by providing earthmoving and land development. services including the provision of power, water, communications and gas.

For more information on this issue, please contact the CCF Team on 1300 DIAL CCF or email [email protected].

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