Timing was ripe for our industry breakfast on Tuesday morning focused on the planning and delivery of essential infrastructure. As our industry knows all too well, the challenges associated with cost escalations, materials delays and skills shortages continue to have a significant impact on the industry’s ability to respond to current housing demand.
This is by no means ‘new news’. Indeed, UDIA has been working hard with stakeholders behind the scenes for many months now to look for the opportunities and both short- and long-term solutions to these issues.
There is no doubt that infrastructure planning and delivery is integral to our ability to get homes on the ground. We need fast, effective and affordable solutions to the challenges we are facing.
While many foresee light at the end of the tunnel in the next 12-18 months as we start to clear the back log of work, there are ongoing challenges that need to be addressed.
It was very useful for our event guests to hear directly from four of the organisations at the coal face of infrastructure delivery as we all as a frank and informative summation of the environment our civil contractors are facing from Shane Wormall.
Pat Donovan, Chief Executive Officer at Water Corporation provided an insight into Water Corporation’s key challenges including managing water services sustainably and delivering strategic infrastructure to support housing affordability.
Mr Donavan specifically referenced the Urban Development Advisory Committee (UDAC) of which UDIA WA is an active member as an excellent source of support and best practice industry advice to land developers. The committee provides an opportunity to bring builders, developers, local government and other stakeholders together to collaborate on issues and identify priorities.
Following Mr Donavan’s presentation, Tamara Brooker, Executive Manager Business and Customer Service at Western Power addressed challenges including infrastructure delivery timeframes.
Ms Brooker advised that the main challenges facing Western Power, like many organisations, currently are in relation to infrastructure delivery timeframes due to material procurement delays, resourcing (especially engineers), more complex applications and capacity including civil contractor lead times extending out to 12 weeks.
Western Power has experienced a significant increase in demand since the beginning of 2020, however Ms Brooker provided a range of examples of how Western Power is working to meet the challenges.
Firstly, Western Power has a big focus on staff resourcing including a Candidate Referral Program, an increase in entry level programs, targeted recruitment campaigns and identifying future workforce capacity and capability.
In terms of supply chain planning, the organisation is proactively placing larger orders with suppliers to meet projected demand and ensure safe stock levels moving forward. There are also contracts in place to expedite material ordering.
Finally, overall process improvements are in train including up front technical support for customers prior to submitting an application for distribution products and services; and increased coordination of Dx projects.
Russel Godsall, General Manager Network Operations from ATCO, outlined the gas providers focus on moving to a net zero future as well as addressing current challenges.
He said the main challenges impacting ATCO now include clarity of design and scope of works, managing scope changes, visibility and priority of project overlaps and availability of critical resources.
He said that ATCO is implementing several actions including project coordination through the Office of Major Transport Infrastructure Delivery, an established ATCO Project Management Office and a portfolio approach to their work.
Specifically in relation to greenfield development, Mr Godsall said that ATCO has expanded their Common Trench contractor panel, introduced bespoke gas training and improved pre-construction design as well as post construction alternation processes.
Dion Ljubanovic, Executive General Manager Build of NBN, rounded out the service providers presentations with a comprehensive overview of NBN’s extensive business and innovation roadmap.
Shane Wormall’s presentation provided a comprehensive overview of the current market conditions that civil contractors are working within. He used UDIA’s latest Urban Development Index figures to show how sales trebled in a very short period of time following the government building stimulus measures, with civil contractors basically expected to build 50% more in half the usual timeframes.
Wormall responded to the challenges by prioritising work for key clients, providing advice about time-saving measures such as minimising the design of retaining walls, and sending regular update letters to their client base.
Mr Wormall also said that residential building costs and labour have escalated dramatically, such as for steel, timber and electrical equipment and forecasting these increases has been almost impossible. This has introduced significant risk elements into the business in relation to cost and delivery.
While the pressure in recent months has eased as sales and construction activity settles, Mr Wormall said that there are still challenges in relation to pricing jobs accurately, control costs and delivery.
Solutions to these challenges include a focus on workforce attraction and better training and up skilling of the existing workforce; a more strategic approach to the supply of basic raw materials; early ordering of some materials such as transformers and switchgear as well as a consideration of designs to minimize features such as walls; better coordination between state and federal government in relation to grants, approvals and infrastructure funding; and better coordination between government infrastructure projects and civil works; and encouraging government to “build through the cycle” and better use its demand and supply levers to help moderate the peaks and troughs.
An insightful panel session followed the presentations with many questions from the audience.
One of the key takeaways from the session was the need for higher-level infrastructure coordination. This could be achieved through a group like UDAC being established within the Department of Planning and Lands, similar to the former Infrastructure Coordination Committee. This would allow greater coordination and prioritisation of works and help all relevant stakeholders to understand each other’s priorities and work flows.
A huge thank you to event sponsor NBN for supporting this fantastic event.
We look forward to our next Industry Breakfast event on Wednesday 26 October focused on delivering a mid-tier transport strategy for Perth with special guest speakers the Hon. Rita Saffioti, MLA and Manager City Planning at the City of Canning Sergio Famiano.
More details and to register here.