FUTURE IS IN YOUR HANDS
State urged to fast-track big projects to beat Far North’s construction gap
THE Far North’s construction industry is hammering to the beat of a ticking timebomb as major private construction jobs near completion.
The State Government is being urged to bring forward major projects to complement the start of the $176 million convention centre expansion next month and to offer rejuvenation and hope after the death of the Global Tourism Hub.
Two important deadlines for a winning proponent to be announced have now passed for the long-winded and tedious project meaning a blackhole of hundreds of millions of dollars on the Far North’s economic landscape.
The industry is about to feel the pinch with private investment about to dry up.
FAST-TRACKING major government works will be critical to the Cairns construction industry’s COVID-19 survival – particularly in light of the Global Tourism Hub’s slow death.
Building firms across the city are looking closely at their overheads as the final few major private construction projects near completion.
The start of the $176 million Cairns Convention Centre expansion next month could not come at a more crucial time but continuity of work will become a headache before long.
The Global Tourism Hub is kaput. The winning proponent was due to be announced in the last quarter of 2019 or the first quarter of this year.
Both deadlines have passed and the scheduled construction start before the end of the year will not occur.
That leaves a hole worth hundreds of millions of dollars – even as much as a billion dollars, if 2016 pre-election spruiking was to be believed – in the construction pipeline.
The State Government has worked to fill some of the gap by bringing forward $42 million upgrades to Ergon depots in McLeod St and Edmonton, but more is needed.
Private investment is drying up as business confidence hit record lows last month.
Residential building approvals are also down significantly with trend approvals “well below those seen even in 2014-15, and nothing like those from the pre-GFC period”, according to the latest Conus March quarterly report.
Everyone is about to feel the pinch, including Bryant Building and Construction.
The firm has played its cards right and made competitive bids to secure several large State Government jobs to keep its staff in work.
Among other projects, it is currently building 42 singlebedroom social housing apartments at Water St in the city and another 14 single-bedders at Tills St in Westcourt.
Bryant has also picked up a share of the $42 million Ergon depot upgrades.
Bryant Cairns manager Dan Fragg said the only major private construction project the company was currently working on – the new Oaks hotel above McDonald’s on the Esplanade – would be finished in a few months.
Social distancing rules are also diluting the workforce and slowing progress.
“It’s a very tight pipeline for at least the next 12 months,” Mr Fragg said.
Tourism Minister Kate Jones is still not declaring the Global Tourism Hub dead – only that the government is “examining the process”.
Cairns MP Michael Healy went a step further.
“I’m yet to be officially notified, but I think it’s fair to say it is dead in the water,” he said.
Advance Cairns CEO Nick Trompf said governments could pull the trigger on a wide range of projects – not least $359 million in upgrades to the Captain Cook Hwy and the $481 million Edmonton to Gordonvale Bruce Hwy works.
Either of those projects would kickstart the industry.
“The pipeline of new projects is going to be the concern, both because of the confidence of private enterprise but also the willingness of banks to lend,” he said.
“Banks are being flexible on existing debt at the moment, but they are extremely cautious on any new lending.”
Mr Trompf said there was room for lapsed funding programs to be revived to allow governments to co-invest in private infrastructure projects.
“There are people out there seeing opportunity out of COVID-19 who want to invest and grow,” he said.
“In a time of challenging private enterprise financing … the established processes for these funds makes them relatively easy to navigate, and every government dollar spent is materially value-added by private enterprises.”
Mr Trompf urged the State Government to acknowledge the Global Tourism Hub’s demise so it could move on to the next investment opportunity.
“There wouldn’t be a willing party at any price,” he said.