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Men at work: The Australian construction boom

From the Sydney metro to the Victoria desalination plant and Brisbane’s Clem 7 road tunnel, Australia is working its way through a £295bn construction boom. NCE reports.

By 2018 Australia will have invested £295bn in roads, bridges, ports, water and sewerage infrastructure, railways and electricity networks. So it is no surprise that UK firms are excited about the growth prospects in the Australian market, and UK engineers are wondering if the grass is greener down under.

Consultant Hyder has been operating in Australia for over 70 years and carried out the detailed design for Sydney Harbour Bridge. “One of the things that is recognised in Australia is that it did not fall deeply into recession, it spent just one quarter in recession and in 2009 it actually grew 0.9%,” explains Hyder chief executive Ivor Catto.
“That growth was definitely helped by the government stimulus, through the £42bn nation building plan.”

“Growth was definitely helped by the government stimulus through the £42bn nation building plan”

Ivor Catto, Hyder Consulting

The Nation Building Economic Stimulus Plan was launched by the Australian Government in December 2008 and centres around building new infrastructure and creating jobs. The majority of investment will be made in the first three years.

By December 2009, £14.4bn had been spent and 34,853 projects had got underway, ranging from 4,500 school refurbishments to 17 major rail projects.

“There is a lot of new infrastructure required, mainly driven by population growth,” explains New Zealand-based consultant Beca section manager Stuart Yalden: “We are seeing significant growth in roads, airports, water and power.”

Brisbane

Brisbane is a growth area for transport

According to the Construction Forecasting Council, a total of £36.3bn will be spent on bridges, railways and harbours over the 10 years to 2018. Projects include the Sydney Metro and the Gold Coast rapid transit system. In the roads sector a massive £90.2bn will be invested in the same period. Not surprisingly the transport sector is earmarked as a key growth sector for most firms.

To deliver its schemes the government has increasingly been turning to PPPs, the most prominent being the £2.5bn, 6.7km Brisbane Airport Link, which will connect the central business district to the airport.

The contract was awarded to BrisConnections, which in turn has contracted two of the country’s biggest contractors, a Theiss/John Holland joint venture, for the design and construction. The design team is a Parsons Brinckerhoff joint venture with support from Halcrow. Scott Wilson did the temporary works design.

Two 5.1km road tunnels will be bored to house the new link road and Australia’s largest earth pressure balancing machines (EPBMs) are being used to bore the road. Both are 12.48m diameter.

“It is very different to the UK where the emphasis is on maintenance. Here there is a lot of new infrastructure required”

Stuart Yalden

“Challenges have included complex and difficult geology, the world’s largest steel fibre reinforced segmental lining, and implementing a highly complex verification procedure required by Brisbane City Council,” says a Halcrow spokesman.

Another PFI road project in Brisbane is the £1.1bn CLEM 7 tunnel, named after long serving Mayor Clem Jones. Australian consultant Golder has been designing the project for the contracting joint venture of Leighton Contractors and Baulderstone Hornibrook Bilfinger Berger. Twin bore 4.8km tunnels of 12.4m diameter will carry the new road under Brisbane’s city centre and reduce the congestion that plagues commuters.

But, questions are being asked over the use of PPP in road projects after Sydney’s 3.6km toll route, the Lane Cove tunnel went into receivership in January 2010. Over optimistic forecasting has been blamed for the financial failure of the scheme, which has experienced around 62,000 users per day, rather than the 100,000 expected.

Selected consultants working in Australia

SKM

Annual turnover: £522M

Staff: 4,700

Aecom

Staff: 3,800

Hyder

Annual turnover: £72M

Staff: 786

Halcrow

Annual turnover: £30M

Staff: 200

Scott Wilson

Annual turnover: £3.3M

Staff: 25

Mott McDonald

Annual turnover: £3M

Staff: 15

Royal Haskoning

Annual turnover: £1M

 

Beyond the transport sector, one of the biggest challenges for Australia is in the water sector and each of the six states has its own strategy for dealing with the country’s water shortages.

In Victoria the government has let a PPP contract for a new desalination plant worth £2bn to the Aquasure consortium. This is made up of Degremont, Theiss and Macquarrie Capital supported by designers Beca and Parsons Brinckerhoff with Hyder as financial engineer.

The plant will become one of the largest reverse-osmosis desalination plants in the world supplying 150bn litres of water a year, which is over a third of Melbourne’s annual water need of around 375bn litres per day. “Desalination is an emerging trend in Australia,” says Catto. “It is expensive but it shows how great the need is.”

Perhaps the largest investment in the sector has been the £5bn South East Queensland Water Grid. The project involved construction of over 450km of pipeline, a new dam, dam upgrades, a desalination plant and three advanced water treatment plants. Consultant Halcrow was involved in this scheme. Its engineers produced detailed designs for shafts, tunnels and marine seabed risers for the Gold Coast Desalination Plant.

Why Australia needs engineers

The 55Ml per day plant was built under an alliance arrangement of John Holland, with Veoila Water Australia. Despite some teething problems when it opened in February 2009, the plant is now working at 100% capacity. When it first opened corroded pipe couplings, leaking pipes and valve bolt failures reduced its output to 33%.

One major area of opportunity specific to Australia is in the mining sector and the country’s economy is driven by its exports of natural resources. Consultant SKM is involved in a range of schemes aimed at expanding production.

“In the short term, the mining, metals and power sectors continue to perform strongly, on the back of demand for Australia’s resources, particularly from China,” says an SKM spokesman. BHP Billiton Iron Ore and Rio Tinto are the country’s largest clients with a series of growth projects from port expansions to new mining facilities.

Construction of new infrastructure is a trend that engineers in the country says makes the market particularly exciting as population growth and major government investment plans drive the need for new roads, railways, water treatment works and ports. With £295bn to spend it looks as if the boom is only just getting started.

Case study: Stuart Yalden

Stuart Yalden

Civil engineer and section manager at New Zealand-based consultant Beca tells NCE about moving from the UK to Australia.

“I moved over to Australia in 2009. The effects of the downturn were beginning to take effect.

I was working for a consultant at the time that was exposed to a lot of private sector projects. I have a number of friends who also made the move.

Now I work for New Zealand-based Beca. It has 1,500 staff in New Zealand and another 400 in Australia. I am section manager for a team of 25 to 30 engineers, mainly working on road projects.

It is very different to the UK where the emphasis is on maintenance, here there is a lot of new infrastructure required, mainly driven by population growth. We are seeing significant growth in roads, airports, water and power.

In the roads sector there is a lot of duplicating, known as duelling in the UK, especially around Victoria and on the roads to Adelaide. Most of the A-roads are single track and these are being widened as part of the Victoria travel plan.

In terms of new roads Melbourne is about to build the new 27km Peninsula link, which is another part of the outer ring road.

The economy is led by the mining industry and there is a lot of wealth generated by GDP exports. This translates into a need for more infrastructure. House prices are similar to the UK but it does seem that engineers’ salaries go slightly further. You still face a commute if you work in big cities, but overall the lifestyle is terrific.”

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