Olympic Dam expansion cancellation hits construction hard

SOUTH Australia's share of the construction market has halved in recent months because of the Olympic Dam expansion cancellation.

SOUTH Australia's share of the national construction market has halved in the past three months because of the cancellation of the proposed Olympic Dam expansion.

In its latest Investment Monitor, Deloitte Access Economics said SA was responsible for just 3 per cent of national investment projects in the September quarter, down from 6 per cent in June.

In dollar terms, current and proposed investment in the state dropped from $51.2 billion in June to $28.7 billion in September.

Deloitte Access Economics partner David Rumbens said the decline was driven almost entirely by BHP Billiton's decision to cancel the Olympic Dam expansion, which it valued at around $20 billion.

"The Olympic Dam can has been kicked down the road and with it goes any prospect for South Australia's engineering pipeline joining the likes of Queensland or WA in the near future," he said.

Deloitte Access estimated there was $926.7 billion in projects under way or in the planning stages around Australia at the end of September. Queensland and Western Australia were responsible for around half of that total between them through their mining activity. This was a 0.7 per cent jump on the previous quarter.

However, the collapse in prospects for SA has raised fears that job losses and company closures are inevitable unless more investment is found locally.

Civil Contractors Federation chief executive Phillip Sutherland said yesterday the picture was especially worrying after 2014 when big-ticket Government-funded projects such as the duplication of the Southern Expressway, the new Royal Adelaide Hospital, the Adelaide Oval redevelopment and the South Rd superway would be either completed or almost completed.

Mr Sutherland, whose federation has 500 members employing 20,000 people, called on the State Government to be bold in considering new infrastructure spending beyond 2014.

"The state Labor Government needs to be talking to its federal counterparts about investing a lot of money in infrastructure in SA to get the state through the current economic malaise," he said.

He nominated the Port Bonython deep sea port and an upgrade of South Rd as candidates for investment.