How much does social distancing cost construction? John Holland boss Joe Barr puts the extra burden at up to 1 per cent of the total cost of a project, considering measures such as temperature checking equipment, on-site COVID-19 marshalls and providing extra space for distancing.
“It’s fair to say on most jobs the cost of implementing that sort of equipment and labour associated with controlling COVID conditions is something between 0.5 and 1 per cent of the project cost,” Barr says.
“The larger a job is, it would be a smaller percentage. On building jobs, which range from $300 million to about $700-$800 million, we’ve experienced costs of about $1 million to $1.5 million.”
In his final reflections after six months of publicly tracking the impact of the pandemic, John Holland’s chief executive says the unprecedented co-operation and trust seen to date between employers and unions will continue for as long as the virus remains a risk to operations of the construction industry worth almost $225 billion of work this year.
In November John Holland’s revenue dropped 32 per cent from a year earlier, largely a result of the comparison with November 2019 when the company sold its Glasshouse office building development in Sydney’s Macquarie Park to two Charter Hall entities for $331.3 million. In an industry characterised by lumpy earnings, revenue rose 8 per cent in November from October.
The ongoing need to make contact tracing as quick and effective as possible to curb future outbreaks on sites – such as John Holland experienced last year – will require employers and unions to stay close, Barr says.
“Everyone wants to keep working,” he says. “Generally there’s a pretty good understanding that ‘We have to do this’. That approach has been really good between workers, employers and unions, and therefore we haven’t seen a push-back on some of those things.”
The company has tried several contact-tracing solutions for its workers. One problem to overcome is the risk of mistakes in data capture from public apps that require users to repeatedly enter their contact information. John Holland has been trialling a bluetooth-enabled bracelet that connects users wearing them and alerts wearers if someone they’re in close contact with has tested positive for COVID-19.
So far, the results are good and he hopes workers will continue to support use of it.
“We’ve been very careful with the bracelet, the app, to maintain minimal information – what’s your name, what’s your phone number,” Barr says.
“The test will be – hopefully as we come out of this and things are turning more positive – that people are still mindful of the need to do that.”
A building-industry employer fitting workers with devices that track their movements is something that could make the country’s powerful construction unions wary. Barr says it’s a matter of trust.
“Potentially [they could be concerned] if it was used in the wrong way, but … all we want to do is understand if you’ve been in contact with someone with the virus,” he says. “We’ve been quite explicit to say that’s the only reason we can use that information and we’re not storing any other data. There’s a trust equation there.”
The biggest difference triggered on site by social-distancing requirements is timing of breaks and shifts, which previously happened at set times but are now staggered.
“On a lot of our sites we’re beginning earlier or later, depending on who you are and where you’re working on the job,” Barr says. “Instead of having 300 people come in for lunch at a certain time, you’ve got 100, 100, 100. You might stagger that lunch over 1½ or two hours, rather than having everyone come together.”
Extra costs accrue from cleaning these amenity spaces between shifts and employing COVID-19 marshalls on site to ensure precautions are followed. Further complications come from keeping teams, particularly skilled tradespeople, in bubbles that stay together and don’t mix with wider pools of workers.
While these create what Barr calls “relatively minor” costs, someone still has to pay them.
“This has been quite a conversation with clients,” he says. “But generally there’s been broad agreement that this is the cost of doing the work.”
As the company prices new work, it will factor in those extra costs. But over the past year they have arisen in the middle of projects already under way.
“The trick is when you’ve got existing contracts and you have to implement those,” Barr says. “We’ve had constructive conversations with our clients about the need to do that. In our case, most clients, government clients, probably look at it as an investment in the continuity of work.”
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