According to The Australian Financial Review today, taxpayers could be hit by cost blow-outs from the simultaneous construction of massive new transport projects around the country in Australia as construction groups are forced to compete for engineers which has pushed up salaries by 30 per cent.
Construction groups have warned state governments they need to carefully plan the development of future multibillion-dollar transport projects like Sydney Metro and Melbourne Metro – each estimated to cost around $11 billion – as labour shortages start to emerge.
Construction groups – which did not budget for wage inflation when they bid for projects – say the states could manage infrastructure development better to make sure projects don't hit the market at the same time.
Sydney's $15 billion WestConnex motorway project is already fighting for engineers, given other projects already under construction, such as the city's $3 billion NorthConnex motorway and the $2.1 billion CBD and South East light rail line.
Junior engineers on salaries of around $100,000 are being offered higher pay packets of around $130,000 to move to other projects, contractors say.
The labour shortage is expected to worsen when other big projects start construction, including the Sydney Metro – which requires highly skilled engineers to design and build a tunnel under Sydney Harbour – and the Badgerys Creek airport.
In Melbourne, planning for the $5.5 billion Western Distributor tollroad and the Melbourne Metro is underway, with both projects expected to get underway within the next two years.
One contractor estimates at least six engineers have left one major transport project over the past six months and says dozens more engineers are moving between projects, particularly in Sydney and Melbourne.
BIS Shrapnel forecasts publicly funding engineering construction work will rise by 5.4 per cent in 2015-16, and by 36 per cent in the years to 2018-19 due to a surge in telecommunications, road and rail projects.
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