November 5, 2021
Welcome to the November edition of Projects & Construction Monthly.
This edition addresses:
- the actions currently being undertaken by the Australian Government to address structural timber shortages;
- Australia’s commitment to achieving Net Zero Transport;
- the impact of wharf strikes on the construction industry;
- the commencement of Stage 6 of the Building Our Regions Queensland Government program;
- LPC Lawyers’ recent ‘Tunnel Vision’ series; and
- LPC Lawyers’ current ‘Dispute Resolution’
Government Addressing Structural Timber Shortage
The Federal Government has announced an investment of an additional $15.1 million to address the shortage of structural timber currently being experienced by the housing and construction industry.
This is an expansion of the previous $15 million Forestry Salvage Transport Measure adopted by the Federal Government which looked to support the forestry industry after the bushfires in 2020.
This additional funding has been allocated to specifically target timber on Kangaroo Island and support the transportation of bushfire-salvaged softwood to timber mills. It is expected this investment will result in the unlocking of timber supplies for up to 10,000 new houses in Australia.
This investment comes in light of increasing growth in residential dwelling investments, which has exacerbated shortages being experienced as a result of skyrocketing global demand and the bushfires impacting local suppliers. Current structural timber prices continue to increase as a result of these factors, though it is hoped the Government’s investment will go some way to easing such monetary pressures.
Australia Aims for Net Zero Transport
On 7 September 2021, the partnership between Roads Australia, the Australasian Railway Association, and the Infrastructure Sustainability Council was established to help reduce the climate change impacts of new and existing transport infrastructure.
The partnership will:
- focus on showcasing best-in-class initiatives and making policy recommendations to help Australia achieve net zero emissions by 2050 in accordance with the Paris Agreement (a legally binding international treaty on climate change); and
- produce a report later this year which focuses on identifying ways government and industry stakeholders can accelerate decarbonisation through a transport asset’s lifecycle, by reducing embodied, operating and enabled emissions.
If you would like to know more about green energy, the transition to renewable energy and how it might impact future projects, our Going Green series published across September highlighted these considerations.
Wharf Strikes Impacting Construction Industry
The Maritime Union of Australia is taking industrial action and causing significant delays of imported materials across Australia. The spike in industrial action is understood to increase union control over manning levels and hiring.
The delays are expected to impact the construction industry as container ships that are transporting construction materials are required to wait for extended periods of time in berth.
It is expected the actions may result in delays of up to 12 weeks for the supply of materials required in connection with construction projects. Some expect the action will result in further delays to the supply of timber trusses and frames, where current lead times are already more than 15 weeks.
Stage 6 of Building Our Regions
The Queensland Government has commenced Stage 6 of the Building Our Regions program.
Stage 6 of the program offers $70 million over three years, for local governments in regional areas to submit expressions of interests for construction projects focusing on priority water supply and sewerage system projects.
The program intends to provide support to regional local governments for necessary projects that would otherwise face funding challenges.
Local governments can apply for up to $2 million in funding to support construction and works project over a three-year period.
The Queensland Government has also signaled an intention that later this year eligible local governments may apply for funding of up to $300,000.00 for planning projects that help determine the proper solution to address water or sewerage service issues in their area.
The Building Our Regions project has seen more then $348 million in funding be approved with respect to 271 projects across 67 local government areas. The net result has leveraged over $539 million in additional funding from other sources for a total capital expenditure of over $887 million, supporting an estimated 2,770 construction jobs.
LPC Lawyers’ Tunnel Vision Series
LPC Lawyers recently published a three-part series which took a deep dive into Australian tunneling projects, including the common risks associated with tunneling projects and the pertinent contractual consideration which should be assessed prior to contract execution.
‘Tunnel Vision’ – Part 1 – Tunnelling Projects in Australia
The first part of the series explores the current state of tunneling projects in Australia, including the key projects currently underway and the importance of legal support given the unique challenges such projects face. Read more here.
‘Tunnel Vision’ – Part 2 – Budget Blowouts and Cost Overruns
Part 2 undertakes an analysis of the key reasons that tunneling projects are subject to budget blowouts, cost overruns and how measures can be taken to avoid or mitigate such issues. Read more here.
‘Tunnel Vision’ – Part 3 – Common Risks and Contractual Considerations
Part 3 details the common risks associated with tunnelling projects and how these feed into relevant contractual considerations which should be addressed during initial contract drafting stages. Read more here.
LPC Lawyers’ Alternative Dispute Processes Series
LPC Lawyers is currently mid-way through the publication of a three-part series on potential alternative dispute processes which can be adopted to avoid commencing litigation in Australia. The series provides a detailed breakdown of such alternatives processes and relevant considerations to determine which is best for a given project or dispute.
Dispute Resolution – Part 1 – Avoid the Bull Pit through Expert Determination
Part 1 provides an overview of the benefits and weaknesses offered by expert determination as a method for resolution of disputes in construction contracts. Read more here.
Dispute Resolution – Part 2 – Dispute Avoidance Boards: Balancing Power
Part 2 undertakes a detailed analysis of the utility of a dispute avoidance board on construction projects and the potential drawbacks associated with its use. Read more here.
Dispute Resolution – Part 3 – COMING SOON
Part 3 will explore the value in utilising a tiered dispute resolution process during construction projects. COMING SOON.