Welcome to the September/ Djilba—season of conception 2019 newsletter that shares unique and original commentary on WA infrastructure. It's been a very busy couple of months for InfraNomics, and I'd like to share some thoughts on issues across some relevant sectors in WA.
Subcontractors caught AGAIN in corporate collapse
On 21 August 2019 administrators were appointed to Kwinana-based Electrical Contractor EC&M. HMAS Stirling had a contract with Doric Group, that subcontracted EC&M to provide DC power supplies for the base. On the recommendation of HMAS Stirling, Magellan Power was engaged by EC&M to provide DC power supplies for a defence project at Garden Island. EC&M subcontracted Magellan to manufacture and deliver this equipment. With the administration of EC&M, milestone payments for amounts due have not been made and it is questionable whether they ever will. Apart from questioning whether EC&M were trading while insolvent, why should quality subcontractors continue to be punished for deficiencies in procurement processes, especially Federal defence engagements?
Managing Director of Magellan Power Masoud Abshar said “They drilled us down for every cent, reducing our margins to very little, with unrealistic time pressure. Then they took the completed equipment, and repeatedly lied to us for months when we sought payment. The last we heard from them was that payment would be in our account by Monday, and after that the phones were cut off, and no one could tell us anything.”
The WA state government is in the process of improving protections for subcontractors on government projects, by placing payments in secure bank accounts to ensure they flow down the subcontracting chain. Legislation to improve the protection of subcontractors is expected to become law later in 2019.
Good men, jail and boar semen
Torben Soerensen, Henning Laue from GD Pork Pty Ltd (In External Administration) were sentenced to jail for illegally importing Danish boar semen into Australia between May 2009 and March 2017. I’m completely supportive of Australia’s biosecurity laws as they provide a competitive advantage for local producers in terms of quality, disease free status and reduced use of medicines. However, Australia needs to continue to be at the forefront of development to ensure continuing international competitiveness and that there are benefits of genetics in animal husbandry. Newspaper reports stated that WA Pork Producers Association and Australian Pork called for the destruction of the herd to eliminate the competitive advantage of these Danish genetics. Since 1995, no permit to import pig genetics has been granted because of the biosecurity risk. Danish pig genetics are more fertile and productive than Australian pig genetics, with Danish sows averaging 32 weaned piglets per year, compared to the Australian average of 26 piglets per year (https://www.abc.net.au/news/rural/2019-08-14/semen-smugglers-sentenced-to-jail-for-importing-pig-semen/11407864). Testing by the Agriculture Department has found no traces of exotic disease and the herd has not been destroyed.
This is important because agricultural producers shouldn’t need to resort to nefarious actions to import genetics with the intention of boosting international competitiveness. There is an argument that there should be processes and procedures in place to ensure the biosecurity risks are addressed, like they are for other animals, so genetics can be imported. The main beneficiaries of this are Westpork, which bought the advanced GD Pork facilities and captured the genetic advantages. What is ironic is that pork is already imported from around the world - (cheaper, consumer quality and volume) and is widely available in shops. Fresh pork is not permitted to be imported to Australia and pork imports must be cooked at a prescribed temperature to render any diseases inactive. Hiding behind Australia’s biosecurity laws ultimately will not protect Australian producers from international competition as there is a strong incentive to improve local competition. How can all WA producers improve their herds through international genetics so that WA animal husbandry remains competitive and consumers benefit not only by lower costs? This should hopefully result in tastier bacon, which is locally raised.
This article was reviewed by the Western Australian Pork Producers Association Inc.
Collie beats South Australia
In a previous newsletter I spoke about how South Australia excelled in attracting overseas business to that State. We were recently in Collie with a client regarding a local project and I’m pleased to advise that the approach by WA’s government departments was professional, friendly, informed and positive. The impression left with us and our client, was so effective that the company switched its focus from Whyalla to Collie. A goal for the home team. Giving credit where credit is due, well done David Blurton – Collie Shire CEO, Bec Woods CEO Collie Chamber of Commerce and Industry and Mat Lewis - South West Development Commission.
Breaking the gender pay gap barriers
Regarding the ongoing debate about the gender pay gap, our company InfraNomics, pays women engaged as employees or sub-consultants substantially more than males, not because of their gender, but because each individual is more productive, delivers more and is usually better educated. That they happen to be women is irrelevant. Nicole Lockwood’s interview also highlights that contribution rather than gender is, and should be, the defining trait.
Pyrolysis is recycling that can change the world
Pyrolysis is the process of heating combustible material at high temperatures in the absence of oxygen to produce biochar, bio-oil and bio-gas. There is much discussion around the potential for the Landfill Levy to be renamed a Waste Levy, which may allow waste to energy to be subject to a charge in future. According to the Department of Water and Environmental Regulation under the Environmental Protection Regulations pyrolysis is considered to be chemical recycling under Categories 31, 37 and 39. As a recycling process, this would be an important selling point as pyrolysis has many benefits compared to traditional combustion of municipal waste. South West Regional Waste Group has a process underway that could fast track modern waste treatment in WA. Pyrolysis can change the world because it is perhaps the lowest cost carbon sequestration (biochar/charcoal), produces a bio-oil that contains valuable fractions, produced bio-gas is reused with no dioxins being produced, the biochar is a super soil improver and conditioner, it is a cheap and simple process, is modularised and finally can be used for all combustible materials including plastics.
The nascence of Infrastructure WA!
The inaugural Board for Infrastructure WA was announced by the Premier on 29 July 2019. The non-government members are Mr John Langoulant AO (Chairperson), Ms Nicole Lockwood (Deputy Chairperson), Mr Terry Agnew, Ms Kerryl Bradshaw, Ms Andrea Sutton and Mr Wayne Zekulich.
The four board members appointed from State Government agencies are Mr Darren Foster Director General Department of the Premier and Cabinet, Mr Michael Barnes Under Treasurer, Ms Gail McGowan Director General Department of Planning, Lands and Heritage, and Mr Richard Sellers Director General of the Transport Portfolio. Mr Lance Glare was appointed as Acting Chief Executive Officer while recruitment for the permanent CEO occurs.
This is excellent news for infrastructure development, financing, operations and recycling in WA. In the past there has been an emotional approach to infrastructure, which is incorrect. The focus has now swung back to a logical approach which is more in harmony with the industry.The initial focus of Infrastructure WA will be the development of a 20-year State Infrastructure Strategy. Globally, WA is in a real sweet spot and the next couple of years from our perspective look fantastic. WA is the land of second chances.
Boorda
Cameron