The Australian Constructors Association (ACA) has responded to the New South Wales Government’s 2022 infrastructure Progress Report, tracking progress against the Government’s ten point commitment to the construction sector.
ACA CEO, Jon Davies, welcomes the changes that the New South Wales Government has made in creating a transparent project pipeline and improving skills and training, but proposes that further reform is needed.
“There is still a long way to go in procuring and managing projects collaboratively, adopting partnership-based approaches to risk allocation, standardising contracts and reducing the cost of bidding.
“Greater improvement in these areas is necessary to improve productivity and the financial health of the industry,” Mr Davies said.
Mr Davies said construction still accounts for more insolvencies than any other industry and improvements in risk allocation and industry liquidity will go a long way in reversing the growing trend.
“A true partnership-based approach does not see contractors delivering projects at a price less than what it costs to deliver through no fault of their own. Governments need to start compensating contractors for unquantifiable risks like material price escalation if they want to avoid more contractors going to the wall and projects and supply chains put at risk,” Mr Davies said.
Mr Davies said the ACA would like to see a greater focus on trials of innovative approaches to risk, such as those being trialled on Sydney Metro.
“We are calling on the government to commit to procuring projects based on best overall value to the taxpayer, not lowest cost at the tender box — as the two are rarely the same thing.”
