Alan Joyce’s final tour of the country as Qantas chief executive wouldn’t be complete without a trip to the town where the carrier makes most of its money and, sure enough, Joyce’s victory lap of Canberra is nearly upon us.
Qantas is throwing a shindig in Parliament House’s private member’s dining room next Wednesday for its most important stakeholders – only MPs and senators allowed – to allow Joyce to gladhand the good and the great one last time, and to help incoming chief executive Vanessa Hudson get a feel for how it’s done.
Catering will be provided by the Ponytail Express himself, Neil Perry – who is, for those who have allowed themselves to forget, not only a chef, restaurateur, author and TV celebrity, but also Qantas’s director of “food, beverage and service”.
“We would be delighted if you could attend to meet our executive and incoming CEO, and talk about Australian aviation and the many sectors it touches,” the invitation says.
No doubt there will be plenty to talk about, given Transport Minister Catherine King is still under a fair bit of pressure to explain her decision to knock back Qatar Airways’ application to operate more flights into Australia – with Qantas being one of the few opponents of the idea.
Speaking at a tourism event in Brisbane on Thursday, Joyce denied Qantas has a lock on the direction of government policy, saying the airline has a “mature relationship” with government, but gets no political favours.
Margin Call will be interested to hear feedback on the length of the line of MPs wanting to petition Joyce – or Hudson, as his heir apparent – to allow their children to join Nathan Albanese in enjoying the Qantas chairman’s lounge largesse.
There was, sadly, no response to Margin Call’s query to Anthony Albanese’s office to see whether the Prime Minister would be attending the shindig hosted by “great mate” Joyce, nor from King’s office.
Qantas is also at some risk of a slightly more hostile reception at the dinner than it traditionally receives in the ministerial corridors, judging from an email response to the invitation from one grump MP that is currently doing the rounds of Canberra.
“Can’t afford to pay their workers properly, can’t afford to invest in capex to refresh Qantas’s tired and ageing fleet, can’t get flights to run on time, can’t get passengers’ baggage to land at the same place and time as they do, can afford to piss bucket loads of cash schmoozing politicians,” the missive says.
Snowy clock ticking
Also on the hook for a round of conversations with government is Snowy Hydro – although these are likely to be a bit more difficult than the Qantas swim-through of Parliament House next week.
Snowy has already missed a self-imposed deadline to update the government on the costs and timeline for its troubled Snowy 2.0 expansion by the end of July, and is rapidly running out of time to get the information into its new Corporate Plan – required by law to be published by the end of August.
The fundamental issue is the cost of a revised contract with Italian construction giant Webuild, which has now been dragging on for months, as Snowy tries to get the project back on track through abandoning the old fixed-price contract in favour of a cost-plus-margin model.
But the real issue at stake is how much Snowy – and the government, as its sole shareholder – will have to pay from the estimated $2.2bn in overrun claims already submitted by the company and its former partner (and now subsidiary), Clough.
The fundamental problem, of course, is that Webuild now effectively has Snowy over a barrel.
Snowy chief executive Dennis Barnes signalled as much when he told a Senate estimates committee the company was looking to move to an “incentivised target cost” with Webuild in order to motivate a return to better performance on the expansion job.
“The current contact structure is obviously not one which is driving stellar performance. An incentivised target cost model is likely to form a more collaborative venture with us as a client, and probably save the taxpayer money,” Barnes said.
The underlying implication of the latter being, of course, that without a significant variation, Webuild might just pack up its toys and go home to Italy, leaving Snowy to find another contractor prepared to take on a massive mess.
Particularly if industry rumours are true and the liquidated damages and non-performance clauses in Snowy’s original contract with Webuild only have recourse to the balance sheet of its locally registered entities rather than the offshore ones that have actual assets and cash and that sort of thing.
Rumours that a deal is close have been swirling for weeks, but without any resolution – and there is talk a new problem may well have cropped up at the last minute, delaying conclusion of negotiations further.
Still, there is some good news. Snowy’s latest project update, delivered in late July, says that Webuild is in the final stages of commissioning the slurry plant that will finally allow tunnel boring machine Florence to get back to work.
Florence has been stuck in soft ground since December, 70m into the drilling of a 15km tunnel required for the completion of Snowy 2.0.
The positive news about the slurry plant – assuming nothing else goes wrong – is it might be able to move further than its great rival in inertia, the tectonic plate on which Australia sits. The Australian Plate due to move the country (and Antarctica) 6.9cm north this year, for those playing at home. The race is on.
Burrowes in deeper
And lastly, 14 days into his tenure as new PwC Australia boss, Kevin Burrowes has clearly signalled his intent to fix the firm’s reputational troubles – one LinkedIn comment at a time, if necessary.
On Tuesday PwC director of deals strategy and operations (essentially M&A consulting) team Genevieve Lobo threw up a post about why she stays at PwC despite all the recent “negativity”.
The post, for those who care, is pretty much the usual guff trotted out in these circumstances – all about loving the company, loving the clients, and loving her colleagues who are a big fluffy (if occasionally dysfunctional) family etc, yada, yada.
Those things may be true. And, to be fair to Lobo, there will also be plenty of PwC staff just as angry about the situation as the rest of the real world.
But you might expect an incoming CEO to also have the insight to recognise that, right now, PwC is also a trash fire that has allowed some of its most senior staff to torch its reputation, along with the ethical precepts their profession is supposed to uphold in their pursuit of the mighty dollar.
But for Burrowes, Lobo’s LinkedIn glurge was “ brave and heartfelt”.
“Thank you for your voice and the sentiment but also reflecting the passion 10,000 hardworking colleagues also feel for our firm,” he said.
LinkedIn has always been an atrociously shallow vat of stupidity, but you might think the boss of a firm in this much trouble might reflect a little on that before adding to the froth.
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