Restructuring partner at KordaMentha, Scott Langdon, has penned his thoughts on Australia's infrastructure delays and cost blow-outs, which have been published prominently in The Australian Financial Review.
Scott's opinion piece, entitled 'The dysfunctional contracts at the heart of our infrastructure boom', is a deep dive analysis of the problems plaguing infrastructure projects in Australia.
As Scott pointed out, Australia is in the midst of an infrastructure boom, and yet many of our mega projects are beset by delays, cost over-runs, and litigious threats.
Scott lays the blame with the style of contracts used in Australia — called EPC contracts — in which the risk of the project is passed on to the contractor who oversees design, construction and often incurs any additional financial costs.
As Scott notes: "I speak to contractors regularly and they find the contract process to be confrontational, litigious and dispute driven, as opposed to collaborative and outcome driven. This modus operandi is baked into our psyche in the way we build mega infrastructure projects and, unfortunately, generations of management in Australia only know this self-defeating, and expensive, way of operating.
Read the full opinion piece herehttps://www.afr.com/business/infrastructure/the-dysfunctional-contracts-at-the-heart-of-our-infrastructure-boom-20190708-p52578
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