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Tuesday, 23 August 1994
Page: 14

Senator MURPHY —My question is directed to the Minister for Small Business, Customs and Construction. Last week the minister announced details of a program designed to assist Australia's construction industry to compete for major infrastructure projects in the Asia region. I see that this program will provide significant government financial and diplomatic support for specific project bids. Is the minister able to provide any specific information or details about the program and its long-term benefits to the Australian construction industry, and can he provide examples of projects where this program might be of assistance?

Senator SCHACHT —I thank Senator Murphy for his question. It has been estimated that over the remaining part of this decade in the Asia region there will be a demand for $600 billion worth of infrastructure expenditure.

Senator Cook —How much?

Senator SCHACHT —Six hundred billion—not million—dollars will be spent between now and the end of the decade on infrastructure programs in the Asia-Pacific region, which of course reflects the region's extraordinary growth and development. The Australian construction industry is well placed to bid for many of those projects, and if we got only a small percentage of the $600 billion, it would be a major boost for the export potential of this country and would create jobs for the Australian construction industry at all levels.

  In the white paper Working nation released earlier this year the government announced the Asia infrastructure initiative which was to provide $12 million over four years to assist consortiums of Australian construction companies to come together to make one Australian bid for infrastructure projects in Asia. Last week I announced the details of that program and how it would work, after consultation with the construction industry. The construction industry itself was a major supporter of this initiative through discussions on preparing the white paper.

  We anticipate that the average investment by the government under this program will be between $250,000 and $750,000 per bid on a dollar-for-dollar basis towards the cost of feasibility studies, bid development and marketing activities. Larger loans will be considered if, for example, there is the potential to generate Australian exports of high value. If the bid is successful the money will be repaid and put into a revolving fund so that further consortiums can be established to bid beyond the four years. If the bid is unsuccessful it is expected that a repayment of only 15 per cent of the government's contribution will be required.

  Recently I visited Laos as minister for construction. In Laos I saw examples of Australian companies already working towards bidding for major construction projects. For example, Australian companies—John Holland, Transfield, the Snowy Mountains Engineering Corporation, the Tasmanian Hydro-electric Commission and others—are bidding for up to $3 billion worth of hydro power stations to be constructed in Laos to supply electricity to the booming economy of Thailand. The Thai minister for energy told me, for example, that it is estimated that Thailand will need an extra 1,000 megawatts of power over each of the next 15 years. Further, Thailand will have to invest anywhere up to $US2 billion or $US3 billion a year to meet that demand for electricity. Australia's construction industry is well placed to help Thailand and Laos develop those projects.

  Also in Thailand we have Australian companies such as Thai Leighton developing residential developments. An Australian architectural firm, Nation Fender, is the project developer of a $1 billion residential development at Muang Thong Chaeng just outside Bangkok. This is one of the biggest residential developments in Asia—organised, run and built by an Australian architectural consortium. These are examples of a major initiative of the Australian government. It is an initiative supported by the construction industry, and one that will return economic benefits to Australia.

Senator Gareth Evans —Mr President, I ask that further questions be placed on the Notice Paper.