Industry award for BER builder Hansen Yuncken

A CONSTRUCTION company behind cost blowouts on the Building the Education Revolution program has received an industry award.

A GIANT construction company behind millions of dollars of cost blowouts under the $16.2 billion Building the Education Revolution program has received an industry award for its work on the scheme.

Hansen Yuncken has been given a project management award by Engineers Australia for achieving an "outstanding result" in delivering BER projects to 203 NSW schools at a cost of $488 million.

The praise of Engineers Australia contradicts the $14m inquiry into the BER, headed by former investment banker Brad Orgill, which found NSW had been the worst-performing state under the program.

NSW public schools were charged on average 27 per cent more for buildings under the BER than their Catholic school counterparts, and 60 per cent more than NSW independent schools, despite being delivered buildings of no better quality.

The cost blowouts were driven by high fees charged by Hansen Yuncken and other managing contractors, with such fees roughly double those paid by NSW independent schools.

"The taskforce view is that the very high total project costs for NSW government reflects in part the relatively high fees paid to managing contractors (at) 20 to 24 per cent," the taskforce said.

Hansen Yuncken and Engineers Australia both declined to comment on the award yesterday. But federal opposition education spokesman Christopher Pyne criticised the presentation.

"It beggars belief that an award could possibly be given to a NSW contractor," Mr Pyne told Ray Hadley's 2GB program.

"Brad Orgill and everyone who has had anything to do with this $16.2bn lemon has found NSW was the worst state in terms of its performance."

The issue of NSW managing contractors' fees under the BER came into focus last year when The Australian revealed they were charging at least three times more than the 4 per cent "project management fees" cap suggested by the federal government.

According to a schedule of pricing documents between the NSW government and Hansen Yuncken, for each building delivered the company charged a site supervision fee of 8 per cent, a profit margin of 2 per cent, an incentive fee of 2.5 per cent and other fees of 3.5 per cent. The site supervision fee of 8 per cent equates to $39m.

In April last year, Hansen Yuncken said work was conducted by three site managers and nine foremen across its BER projects.

According to Engineers Australia's website, the project manager award was for projects that achieved "client requirements in harmony with the environment, business and community considerations, while meeting time, cost and quality targets".

NSW public school projects were the fastest delivered, drawing praise from the BER taskforce. However, the Orgill inquiry found the BER's underlying stimulus objective "is not inconsistent with the need to obtain value for money".

A key criticism of the BER delivery in NSW was that the prices the former state government contracted to pay for buildings were substantially above market rates.