Partnering to advance Australia’s critical infrastructure development ambitions

In April, the government announced a partnership with Raytheon Australia and Lockheed Martin Australia to deliver a $1 billion Sovereign Guided Weapons and Explosive Ordnance (GWEO) Enterprise. A few weeks later, the PM promised $50 million to create a new business and research partnership with the University of Adelaide.

But there is one partnership approach that has been largely overlooked to date. And it’s with the industry that will deliver the physical assets to build, train, maintain and house our Defence capability.

It’s easy to get excited about the manufacturing of weapons and training future scientists but building the physical infrastructure to support this capability is not so exciting and a much bigger task than anyone might expect.

Having just completed two Defence projects, including a new Naval Guided Weapons Facility at Orchard Hills, BESIX Watpac knows firsthand how challenging and complex these projects are likely to be, and the gaps we are likely to see in delivery.

To meet the targets for increased capacity in defence infrastructure, there needs to be a strategy.

The budgets and goals may change with the political winds, but expectations for how and when infrastructure will be delivered need to change in the face of unprecedented challenges being experienced in every corner of the building industry.

We are experiencing wide-reaching supply chain shortages of materials, including raw steel and silicon chip shortages affecting appliances and building management control units. The upward pressure on construction pricing is being influenced by several factors and price rises have occurred across the board and continue to move daily.

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The raw material prices such as iron ore and copper have reached record levels, and we are experiencing major concerns around price validity periods across most trades.

In the past 18 months, we’ve seen shipping costs increase by more than 100 per cent, up to a 40 per cent increase in steel prices and timber costs jump 35-40 per cent.  Additional staffing costs have been incurred by pandemic responses, domestic activity in the single dwelling market funded by government stimulus has strained the labour force further and migration has been restricted during COVID.

On future projects, particularly in areas where the government plans to spend the most, we’ll also see rising costs associated with securing housing stock, managing the “big resignation” and the increased cost of living.

When countries can shut their borders overnight, empty containers sit stranded on the wrong side of the world and prices change hourly, the rules of the game will no doubt continue to change and so should our relationship with Defence. 

The answer is simple, to deliver the required infrastructure, a partnership approach is needed.

There are no quick fixes for the current escalation of risk and cost.

But there is a long game afoot to build the capacity of our industry to deliver to Defence standards. To source, manufacture, train and increase the capacity of local people, suppliers and industries.

Our recent experience with the Naval Guided Weapons facility was a case in point. Without investing our time and effort in local trades and authentically partnering with our suppliers, we simply couldn’t have got this over the line.

Steel blast-proof doors, usually sourced from a supplier in Austria, were designed and manufactured in Australia for the first time. Experienced contractors from interstate were persuaded to create local hubs and train local staff to deliver at Orchard Hills.

Buying local and using local trades, it reduced our risk on this project considerably, but it required some flexibility and a partnership approach with Defence to move forward.

Historically, building contracts have been approached with a simplistic order and deliver. But BESIX Watpac has demonstrated that we have more to offer.

As a builder who thinks innovatively, actively looks for new solutions and finds answers to complex challenges, flexibility in the “order” has proven to deliver better outcomes to our clients.

Defence has already started to embrace this partnership approach in some areas and is seeing the rewards.

There are more gains to be made. Engaging with experienced players like BESIX Watpac and supporting them to build their networks, understanding and offering flexibility to solve supply chain challenges will be critical for the delivery of Defence infrastructure in the future.

This is the largest Defence growth in recent history and the industry is still coming to terms with how to support it with the resources currently available and in the foreseeable future.

We encourage and applaud Defence for its commitment to building and securing our nation’s defences and look forward to partnering with them to collectively build our nation’s capability.

Richard Stead is the national defence manager at construction and civil engineering company BESIX Watpac.