August 6, 2021
Welcome to the August edition of Projects & Construction Monthly.
Brisbane is ready to welcome the world in 2032
It’s time to don your best green and gold as Brisbane celebrates the International Olympic Committee’s (IOC) decision for the river city to host the world’s greatest sporting event, the Olympic and Paralympic Games (the Games), with 72 votes to five.
On 21 July 2021, the IOC handed down their historic decision and has initiated Brisbane’s plans to transform Greater Brisbane, the Gold Coast, the Sunshine Coast, Toowoomba, Townsville, and Cairns over the next 11 years. Brisbane is expected to push current construction projects to reach completion and a push for many other projects to commence construction. The Brisbane Organising Committee says it will spend $690 million on existing and new venues, and temporary infrastructure of various venues.
Olympic Construction
South-East Queensland is forecast to grow by 1.5 million people by 2041 and transport infrastructure is already feeling the pinch. The following transport projects are set to be completed well before the Games which will unlock bottlenecks and connect communities:
The Cross River Rail: a new 10.2 km rail line from Dutton Park to Bowen Hills, which includes 5.9 kilometres of twin tunnels under the Brisbane River and CBD with construction expected to be completed in 2024 and commissioning to commence in 2025.
Brisbane Metro: a new rapid transit system of a 21 kilometre long turn-up-and-go service with two lines from Eight Miles Plains to Roma Street, and Royal Brisbane Women’s Hospital to the University of Queensland. The project’s expected cost is $1.244 billion and scheduled for completion in 2023.
Coomera Connector: is a $1.53 billion corridor between Loganholme and Nerang and is set to be an alternative to the M1. The construction of Stage 1 is expected to start with early works from mid-2021 and progressively open to traffic from late 2024.
Northshore Hamilton will become the main Athletes’ Village for the Games and is set for a ‘spectacular transformation’, according to Deputy Premier Steven Miles. The Breakfast Creek Bridge and the $190 million Kangaroo Point Green Bridge were both fast-tracked last year under the $550 million program to boost the industry during the pandemic. The Breakfast Creek Bridge will be a key link between the planned Hamilton Athletes Village and the city for the 2032 Brisbane Olympics.
The Gabba is due for a $1 billion rebuild that will increase it to a 50,000-seat stadium to serve not only as the Olympic hub for the opening and closing ceremonies but will also serve Queenslanders for generations to come while any new infrastructure will have long lasting community benefits.
There are also some new major venues in the pipeline, including a 15,000-seat aquatic centre in the CBD to host swimming and waterpolo.
COVID-19 UPDATE
In response to the recent COVID-19 lockdown in New South Wales (NSW), the Government announced a Public Health Order (Order). The Order was effective from Monday, 19 July 2021 and provided that all non-urgent construction works (commercial and residential) were to be put on hold across the Greater Sydney Area for a fortnight. Only ‘urgent’ works were to proceed.
This disruption has added to the difficulties already being faced in the construction industry with respect to shortages of materials and labour. This lockdown may also pose additional risks of insolvency, particularly if COVID cases remain high and restrictions continue to get extended.
Construction work was able to recommence on Saturday, 31 July 2021 on non-occupied building sites, provided a COVID-safe plan was in force.
Affected participants in the industry should carefully review their construction contract to ascertain what relief is available, and any steps they are required to take in order to obtain said relief. Specifically, parties should consider any relevant force majeure clauses, variations, extension of time and change of law provisions, and any applicable notice requirements, as well as considering the possible operation of any default or sunset clauses, or legal principles such as frustration.
TIMBER SUPPLY VS DEMAND
The federal government has been encouraged to intervene in the national timber industry, as the construction and forestry union forecasts the sector will not be able to meet demand fuelled by the construction boom in Australia.
This high demand and consequently the shortage has been collectively spurred on by the following:
- Morrison government’s HomeBuilder Program;
- People investing in home renovation instead of an overseas holiday; and
- Bushfires’ destruction of softwood plantations in 2019 and 2020.
The Commonwealth’s HomeBuilder program, which provides grants for people building or renovating homes, is being cited as one of the main drivers of construction activity across the country. This stimulus has been found to be more popular than anticipated and subsequently more homes than ever are being built in Australia. This shortage has led to costly delays for renovations and new homes and is adding thousands of dollars to the cost of work, and it is often worn by the builder.
ACCELERATED BUILDER/CONSUMER DISPUTE PROCESS NOW AVAILABLE
In response to the shortage of materials and cost increases, the QBCC has launched a new Accelerated Building/Consumer Dispute (‘ABCD’) process to help address the challenges currently being faced by the residential construction industry.
This was introduced to open the lines of communication and equip builders and consumers with the right information to discuss reasonable and realistic solutions to time delays.
If you still have concerns following an agreement trying to be reached with your clients on material/labour shortages, you can consider mediation.
The ABCD framework may be an option if you have first attempted to resolve the dispute with your clients and meet the following eligibility requirements:
- must be either a QBCC licensee or property owner;
- must be a party to a domestic building contract for a new home or a major renovation over the value of $150,000;
- Work on the contract must have commence;
- The dispute must be as a result of industry materials or labour shortages; and
- You must have made an attempt to resolve the dispute.
See here for the full eligibility criteria and Mediation Intake Form.
QUEENSLAND POSTPONES REMOVAL OF HEAD CONTRACTOR LICENSING EXEMPTION
The provisions of the Building Industry Fairness (Security of Payment) and Other Legislation Amendment Act 2020 (‘Amendment Act’) removed an important exemption to hold a Contractor’s licence under Schedule 1A, section 8 of the Queensland Building and Construction Commission Act 1991 (Qld) (‘QBCC Act’). This exemption allows an unlicensed person to carry out building work if the work was performed by an appropriately licensed person and was scheduled to commence on 24 July 2021. This exemption allowed developers to carry out developments for which they would otherwise require a licence, provided that the building works were carried out by an appropriately licenced builder.
On 8 July 2021, the Queensland Government issued the Building Industry Fairness (Security of Payment) and Other Legislation Amendment (Postponement) Regulation 2021 postponing the commencement for another 12 months. The postponement of this exemption, inter alia, is likely to allow the industry to complete the review into the role of developers in Queensland. If Queensland adopts a licencing regime for developers, we will likely see further reforms to the QBCC Act.
LPC LAWYER’S INITIATIVES
Children’s Health Queensland Hospital and Health Service
Last month, LPC Lawyers made a small donation to the Children’s Hospital Foundation. The foundation raises much-needed funds to help the Queensland Children’s Hospital and Children’s Health Queensland provide life-changing care for the State’s sickest children. We hope the toys help put a smile on the faces of the amazing children having to spend time in hospital and away from their families.
Bridge to Brisbane 2021
This year, LPC Lawyers are joining forces with The Eye Health Centre to participate in the 2021 Bridge to Brisbane Fundraising event set to take place on Sunday 29 August, 2021. We have chosen to donate to Mates4Mates to help raise funds for our incredible Veterans and the Centre for Eye Research Australia to help a work free from vision loss and blindness.
If you would like to join us in showing your support to our chosen charities please donate here.
AUSTRALIAN WATER SERIES
LPC Lawyers presents, ‘What’s Up in Water?’
This four-part series discusses the Federal Government’s commitment to water infrastructure, the immediate and longer-term pressures on Australia’s network and water industry, and the unique challenges faced by Principals and Contractors in the water industry.
What’s Up in Water? – Part 1 – Infrastructure and Expenditure
The first part of the series provides an introduction to the importance of the water industry and the current and planned water infrastructure projects and expenditure. Read more here.
What’s Up in Water? Part 2 – Immediate and future challenges in Australia’s water industry
Part 2 focuses on the on the unique challenges faced by Australia’s water industry that are the driving force behind new (and expedited) solutions to challenges that have long been considered by the water industry. Read more here.
Part 3 highlight’s different contracting models being used in water infrastructure projects across Australia, and also identifies contract clauses of particular importance when drafting (or amending) construction contracts in the water industry. Read more here.
The final part to the series will identify common areas of dispute in construction projects, as well as considerations for an effectively (and appropriately) drafted dispute resolution clause. Read more here.