RIS ID
92281
Abstract
Australia's two biggest construction companies, Leighton and Lend Lease, control a significant share of construction - up to 75% in cases such as major rail projects. The recent Productivity Commission draft report on public infrastructure found their combined "market shares would appear sufficient to allow them to exercise market power to inflate prices and/or profits". At the same time, the Commission noted that no evidence exists to support such a proposition. A more important unanswered question remains - what conditions are necessary to attract foreign firms to help Australia deliver cheaper, faster and better infrastructure? Looking abroad for solutions can solve some problems, but in the case of infrastructure, Australia must first do some necessary and overdue housekeeping before multinational construction companies would be interested in pursuing a long-term presence in the country. The last two decades have seen a series of multinational infrastructure firms test the waters in Australia, but the reality is that few stay for long, and many are toughened by the experience without much reward. This is not to say that foreign infrastructure firms are fickle or lack the staying power to be successful in Australia. But if doing business and securing profits is easier elsewhere, then the decision to exit or not enter at all is a straightforward one.
Publication Details
Bowditch, G. (2014). How to attract foreign firms to do Australian infrastructure. The Conversation, (25 March),