Forrestfield - Airport Rail Link project risks repeat of problems at Perth Children’s Hospital

Tuesday 13 Jun 2017

The Electrical Trades Union (ETU) has condemned the former State Government’s decision to award the Forrestfield-Airport Rail Link project tender to the cheapest bidder, Salini Impreglio - NRW Joint Venture.

While $1.96 billion was originally budgeted for the construction of the key Forrestfield-Airport Rail Link project, the cheapest tenderer, Salini Impreglio - NRW Joint Venture (SI/NRW), was awarded the contract in 2016 at a significantly reduced bid of $1.3 billion.

SI/NRW Joint Venture has now started engaging the project workforce, with many of the workers (including electricians/electrical contractors) employed on Fair Work Commission registered Single-Enterprise Agreements.

Single-Enterprise Agreements (SEA) can be approved by a very small number of employees at a project’s commencement, and then applied across the entire workforce as it grows or expands to meet project requirements. SEA’s can effectively bind future project workers to an agreement initially made by just a handful of workers.

As a result workers will cop the brunt of SI/NRW’s attempts to reduce the costs associated with such a low tender bid, with the non-union SEA agreements resulting in a pay cut of up to 25% for workers.

ETU WA Branch senior official Peter Carter slammed the “cheapest is best” approach, saying the past experience of the Perth Children’s Hospital project had clearly exposed risks.

“By going with the cheapest option on this project, the previous State Government has created a scenario that is likely to see a repeat of the same disastrous outcomes we’ve seen at the Perth Children’s Hospital, including sourcing building material and fixtures of dubious quality.

“We’re seeing the same approach from SI/NRW on this project that we saw at the Perth Children’s Hospital, from non-union agreements that have slashed pay and conditions, to procurement practices that are resulting in cheaper materials and components of a questionable standard being sourced from overseas.

“This sub-standard wage agreement was endorsed by no more than a handful of workers, who would have not understood the consequences of what they were voting for, before a spade was even in the ground.

“SI/NRW is also clearly snubbing their nose at the new State Government’s commitment to increase apprenticeship opportunities on State Government projects, with not one electrical apprentice having been hired on the whole rail link project,” said Mr Carter.

“Having under-bid by more than $500m, SI/NRW are cutting costs, whilst making project workers and the WA taxpayer foot the bill.

“This is just another example of how a flawed Fair Work Act and the failings of the previous state government have opened the door to a foreign multi-national company to come in drag the pay and conditions of WA workers to the bottom,

“The ETU are seeking discussions with the new State WA Labor Government and call on them to step in, and stand up for WA workers to ensure that we don’t have a repeat of what happened at the Perth Children’s Hospital.”