Job losses loom as SA government tender rates hit record low

Thousands of people may lose their jobs as the South Australian government's tender rates continue to fall, warns the Civil Contractors Federation (CCF).

The organisation says tender rates have hit a "valley of death", a reference to the uncertainty faced by the state's shipbuilders over the last few years due to inconsistent workloads. Unfinished bridge representing South Australia's construction downturn.

"There is some $13 billion worth of state and federal government committed contract spends in the pipeline for SA over the next 10 years right now,” says CCF chief executive Phil Sutherland.

"Yet the actual number of tenders out in the market currently for this work, has trickled to an all-time low. It is both the lowest number of government infrastructure contracts and the lowest estimated value of those contracts."

Sutherland says that the issue was raised two years ago following the release of the South Australia Infrastructure Outlook Report 2017. Produced by industry and research group BIS Oxford Economics, the report warned that about 10,000 jobs would be lost if new work didn't enter the pipeline at a faster pace in order to bridge the gap between projects. Sutherland says the report went unheeded.

"This is a double construction whammy and skills loss South Australia can ill-afford. Sadly, this government thinks it is mission accomplished simply because forward project funding and priority lists have been announced and promptly dropped into a DPTI contracts filing cabinet somewhere for future attention.

"This snail-pace attitude could not be further from the realities facing the sector right now."

The contracts referred to by the CCF are managed by South Australia's Department of Planning, Transport and Infrastructure. With the exception of SA Water and local government contracts, the department is responsible for all government infrastructure works, including hospitals, schools, bridges and major roadworks.

Sutherland says there's an easy solution for avoiding what is currently an inevitable crisis - a loosening of the government's tender purse strings.

"The government can move rapidly if it wants to, to turn this into a real win-win game-changer in the civil construction space, because right now it is nothing but a lose-lose scenario."

The CCF South Australia branch has 600 company members representing 20,000 construction industry employees.