Backlash arrives for Snowy Hydro 2.0 steel fail

Brandon How

The federal government has come under fire for failing to support domestic manufacturing and breaching its own tender requirement to use Australian steel for the construction of the Snowy Hydro 2.0 project.

On Wednesday it was revealed that the $5.1 billion project will not use Australian made steel for its largest and critical components. Further, project joint venture Future Generation intends to sub-contract for 7,000 tonnes of steel from Italian manufacturer ATB Riva Calzoni.

The joint venture is between Italian firm Webuild (formerly Salini Impregilo), Australian-based Clough and US-based Lane Construction.

When Snowy Hydro 2.0 was announced in 2017, then-Prime Minister Malcom Turnbull described it as a “nation-building” project.

Advanced manufacturing
Under fire over offshore steel

The Australian Manufacturing Workers Union (AMWU) expressed their disappointment after years of calling for local content requirements on major infrastructure projects. A local content requirement would mandate a fixed proportion of inputs to a project to be sourced locally.

A local content requirement provides the opportunity to grow domestic industry and upskill young workers ensuring that manufacturing is a secure job, the AMWU says. By not utilising Australian steel for a majority of the project, the union accuses the government of overlooking the long-term impacts of Snowy 2.0 on working people and families.

AMWU state secretary Cory Wright said he foresaw a dismal outcome for national manufacturing if the government does not adopt local content requirements.

“We hear constantly that Australian industry doesn’t have the capacity to make things, and that’s why governments turn to offshoring. But what we see in this instance is that there is no will from governments or businesses to build the capacity of our industries to meet procurement demands,” Mr Wright said.

“We must put an end to the line of thought that the lowest-cost option is the better one. It stagnates opportunities and growth for industries, kills off innovation and starves working people and families of opportunities to gain skills that can support them for a lifetime,” he said.

“When government and business take the road that leads to profit, regardless of the cost on people, the impact is often dire. We’ve seen that offshoring and other so-called efficiencies have killed off whole industries, decimating communities.

“We need to get back to being a country that makes things, with strong supply chains and a skilled workforce.”

Shadow industry minister Ed Husic said the government was failing the Australian public.

“The Morrison-Joyce Government talk a big game about supporting Australian manufacturing, but it rarely backs it in reality. This decision is the result of Australian industry being slowly abandoned over a decade of this tired government,” Mr Husic said.

“Average Australians get we must be a country that makes things. They’ll be staggered to learn that the Coalition let two thirds of the steel going into Snowy 2.0 come from an overseas firm. That’s not good enough.

“At a time when quality Australian steel makers are under pressure, it’s stunning to learn that big government contracts went overseas rather than looking to open opportunities to local firms.

“The Federal Government spends billions in purchasing the goods and services it needs. Why can’t it use those dollars to make a massive difference in helping rebuild Australian manufacturing.”

Do you know more? Contact James Riley via Email.

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