Major construction firms frustrated after changes to Suburban Roads Upgrade
Construction firms who spent two years bidding on a $2.2 billion Melbourne road blitz have been left fuming after the Andrews Government made a backflip before the contract was due to be awarded.
Victoria
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Construction firms bidding for a $2.2 billion blitz on Melbourne’s roads are fuming after a long-running tender process was dumped just as the government contract was due to be awarded.
Businesses who spent two years on bids for the Suburban Roads Upgrade were caught off guard by the decision, with one company predicting it may have to lay off up to 200 staff.
The Andrews Government was this month due to pick between two consortiums to award the lucrative contract for upgrading major roads in the city’s north and southeast.
But last week it revealed it would instead use a “preferred tender” model, similar to those used on level crossing removals, in which work could be rolled out to businesses with proven track records.
The short-listed bidders are expected to receive some form of reimbursement.
In a statement online, Plenary Group said it was “naturally disappointed” by the decision after a two year bidding phase.
“We want to acknowledge the business implications of the decision for the dedicated members of the Plenary Roads consortium in this particularly tough economic environment,” they wrote.
“Hundreds of people, thousands of hours and countless millions of dollars were dedicated to these public-private partnerships (PPP) by the public and private sectors and we want to publicly thank our consortium partners for their good-faith participation.”
Infrastructure Partnerships Australia chief executive Adrian Dwyer said the Andrews Government would need to work over months and years to rebuild trust.
“Bidders have invested substantial time and resources preparing binding tenders for these packages of work only to have the rug pulled under them,” he said.
But Civil Contractors Federation Victoria chief executive John Kilgour said smaller companies would benefit.
He said the new model would break up big parcels of work to give Tier 2, 3 and 4 contractors a sustainable pipeline.
“It gives those contractors the confidence for employment and confidence to continue to invest in plant and equipment resources,” he said.
Transport Infrastructure Minister Jacinta Allan said the change meant smaller local companies would be given more work.
“Twelve new suburban road projects will slash travel times and $2.2 billion investment will go directly to smaller local construction companies and the thousands of Victorians they employ,” she said.
Opposition Transport spokesman David Davis urged the government to reveal how much money had been lost from the decision.
“Make no mistake these roads were within an ounce of sign off and will now be pushed back at a time when jobs are critical,” he said.
“It will also send a devastating signal to the private sector about Labor’s commitment to working with them on PPPs and large projects.
“Spend years responding to Labor’s request for tender and the rug will be pulled out from under you at the last minute.”