Boston, MA -- (SBWIRE) -- 01/26/2013 -- BMI View: Many major miners in Australia slammed the brakes on investment over 2012 and, as a result, our real growth estimate for the Australian construction sector remains unchanged at 2.1%. For 2013, we are maintaining our construction real growth forecast of 3.0%. This is because we believe conducive monetary conditions for construction, a mild-recovery in homebuilding activity and the enduring demand for Australia's energy commodities, could lead to a mild construction recovery.

Key developments in the sector:

- In September 2012, the Australian federal government announced that it will not be offering financial support to close highly emissions-intensive power plants (mainly coal-fired power plants) under the Contract for Closure (CFC) programme and has ceased negotiations with electricity utilities involved. The programme, a key part of the government's Clean Energy legislative package, was originally scheduled to complete negotiations by June 30 2012. According to Australian resources minister Martin Ferguson, the government ended negotiations because it was unable to find common ground with the affected utilities regarding the level of compensation for the plant closures.
- In September 2012, three consortiums were short-listed to tender the tunnelling contract for the US$8bn North West Rail Link in the Northwestern region of Sydney, New South Wales. The tunneling contract is the first of three remaining contracts to be awarded for the North West Rail Link, and involves the construction of 15.5km of tunnels between Bella Vista and Epping. The tunneling contract is expected to be awarded in H213, and if completed, would be the longest and deepest rail tunnels ever constructed in Australia.
- In mid-October 2012, India-based GVK, which owns power plant operator GVK Power & Infrastructure, signed a US$2bn contract with South Korea-based Samsung C&T and Australia-based Smithbridge Group for the construction of the T3 terminal at the port of Abbot Point. This deal came about after GVK received all of the Tier 1 approvals for the AUD10bn (US$10.2bn) Alpha coal mining project in early-October. The terminal is expected to have a handling capacity of 60mn tonnes per annum (mtpa) and is the first of several EPC contracts to be released for the Alpha project. The other construction contracts include mine infrastructure, a wash plant and a 500km railway line linking the mine to the T3 terminal. According to GVK, these contracts are expected to be announced in the next few months, with the entire Alpha project scheduled to start delivering coal in early-2016.

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