Last week, the Industry Capability Network in Australia (ICN) released the second edition of its Northern Territory’s Construction Industry Mapping Report. As the Australian Department of Defence prepares to unleash a wave of construction projects on the area, both public and private sectors must understand the region’s construction industry landscape to deliver the major projects desired during this increasingly busy period.
ICN began with the simple goal of connecting buyers and sellers. Over time, it has developed into a network of state and territory-based analysts, managing thousands of transactions and substantial business volumes each year. ICN’s functions now include supporting major procurement programs through in-depth data analysis and capability mapping. This not-for-profit organisation, funded by government and industry, provides critical expertise in pre-qualification, procurement and supply chain analysis, underpinned by direct involvement in significant projects.
The construction industry in the Northern Territory is a cornerstone of the regional economy. Substantial infrastructure requirements and the demands of a globalised export market drive it.
ICN’s Report offers an essential tool for understanding and engaging with the Northern Territory’s construction sector, particularly in defence construction. It provides a detailed analysis of the local industry’s capabilities, capacity and qualifications. Its conclusions highlighted the region’s capacity to meet future project needs and emphasising the importance of tailored procurement strategies to leverage local expertise fully.
What distinguishes this report from others like it is its foundation in first-hand experience and the reassurance it provides through this approach. Unlike mere data aggregation from public sources or artificial intelligence models, ICN’s unique advantage lies in its deep-rooted, hands-on engagement with local industries and its involvement in early-stage procurement discussions. This approach ensures the report’s reliability and relevance to stakeholders.
ICN-NT has had extensive involvement in high-profile projects. The $40 billion Ichthys liquid natural gas project, one of the largest gas projects in the world, as well as the $550 million Larrakeyah/Coonawarra Facilities Upgrade and the $1.6 billion Tindal Air Force Base upgrade for Defence stand out as preeminent examples. This involvement provides it with insights into the Northern Territory’s construction landscape, enabling ICN-NT to map the region’s industry accurately.
Dick Guit, chair of ICN-NT, emphasises that capability mapping is vital for understanding market potential, which is crucial for planning new programs. This approach builds on broader economic analyses, such as the Billion Dollar Partnership Report by Master Builders NT from the previous year, which provides a comprehensive overview of the construction industry’s contribution to the Northern Territory’s economy.
Guit underscores the importance of structuring procurement processes to align with local business capacities. This strategy is crucial for ensuring project success, maintaining social license in 2024 and beyond, and making stakeholders feel included in the planning process. It ensures that the unique capabilities of local businesses are fully utilised, fostering a sense of collaboration and shared success.
ICN’s Report assesses local construction capacity relative to anticipated demand, including major Defence projects and other significant developments on the horizon. Its methodology involved scrutinising procurement structures for prominent projects like the Tindal Air Force Base program, HMAS Coonawarra, and the Charles Darwin University City Campus.
Procurement was segmented into 75 standard work packages across six categories: Building/Tier Contractors; Site Preparation and Early Works; Mechanical, Electrical and Plumbing (MEP); Structural Works; Fit-out and Internal Works; and Specialist Services. When Northern Territory businesses are mapped against these categories, the results are notable:
–68 packages had more than 10 capable businesses.
–Five packages had between six and 10 capable businesses.
–Two packages had one to five capable businesses.
Over 750 local businesses were identified as key players in the construction sector. The report concludes that the Territory possesses robust capabilities across all essential work packages. That robustness could start to falter, however, if procurement structures are not adapted to foster local competition.
It is for this reason that successful procurement depends on a nuanced understanding of the local market. If procurement is designed correctly, Territory contractors are well-equipped to deliver; a point well illustrated by the Territory’s proven track record in executing projects exceeding $500 million.
The Northern Territory’s construction industry is highly capable and ready to address the demands of the forthcoming works program. The ICN report offers Defence and other stakeholders a comprehensive understanding of the sector. Now, they need to utilise its findings to ensure that they enjoy further project successes.