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Steel solution can maximise local flow-on benefits from mega NSW pipeline

The ASI has welcomed the NSW Government’s announcement calling for steel-based bids for the 270km Murray River to Broken Hill pipeline that has potential to generate optimal local social and economic benefits.

An Options Analysis undertaken by NSW Public Works (2014) identified steel pipes as the preferred alternative for material choice based on a combination of individual pipe lengths (and thereby efficiency during the construction process), design flexibility, price, laying cost, product quality and service life.

ASI Chief Executive, Tony Dixon said that approach provides better opportunities to engage local industry as only the steel options amongst those in the study looked at can be sourced domestically.

“The local steelmaking and supply chain stands ready and fully capable to support any of the four prospective proponents for the construction of the pipeline, the largest project of its type ever undertaken in the State,” he said.

He said that work undertaken in conjunction with the ASI estimated the project would contribute up to $28.4 million to the NSW Gross State Product (GSP) and up to $127.1 million to Australian Gross Domestic Product (GDP), with potential to provide around 162 full time equivalent (FTE) jobs in NSW and 748 FTE jobs across Australia, when the domestic steel supply chain is used.

“And that would in turn help generate NSW Government revenues through payroll tax and Australian Government revenues through a combination of personal income, fringe benefits and company income taxes,” Mr Dixon said.

“Purchasing locally provides other significant savings for a project’s whole-of-life costing, like lower inventory to manage, reduced lead times and improved after-sales support. Continuity of work within the local industry helps ensure that the existing high skills base is available for ongoing maintenance.

“Onsite inspection costs can be significantly reduced where the personnel involved are resident in the region, particularly valuable for projects such as this that will straddle across remote areas of the State.

“With the NSW Government’s reforms to its procurement policies in consultation with industry announced recently taking more account of these factors, we look forward to the greater benefits flowing from these types of nation building projects going forward.”

Posted On: 19 May 2017

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