Vic: Docklands residential project stalled

AAP General News (Australia)
02-11-2000
Vic: Docklands residential project stalled

By Trevor Chappell and Leigh Murray

MELBOURNE, Feb 11 AAP - Unrealistic demands from building unions have forced the postponement
of a $1 billion residential project in Melbourne's Docklands precinct, a major property
developer said today.

But the Construction, Forestry, Mining and Energy Union (CFMEU) dismissed the complaints
by the developers, the Mirvac Group, claiming the company merely had a "stalled" investment
because it was unfamiliar with market conditions.

The Victorian government also rejected Mirvac's reasoning, instead blaming the previous
state government under Jeff Kennett and the industrial relations system put in place by
federal Workplace Relations Minister Peter Reith.

Mirvac Victoria chief executive Kevin Hunt said the company would be delaying the construction
of 2,500 apartments in the three-stage Yarra Edge project in the Docklands "indefinitely".

Mr Hunt said the Yarra Edge development would have provided 1,000 full-time jobs for
10 to 12 years.

"The reason we're doing that (postponing the project) is because we have received unrealistic
industrial claims by the unions, and it has certainly made the project unviable," Mr Hunt
told reporters.

Building unions are demanding an industry-wide 36-hour week and a 24 per cent pay rise.

Mr Hunt said if a 36-hour working week were implemented on residential developments,
within 18 months there would not be a single construction crane to be seen on the Melbourne
skyline.

Mirvac had offered the unions a five per cent wage increase for each of the next three
years, and other entitlements, without demanding productivity improvements in return.

Mr Hunt said the decision to postpone the residential development did not represent
a vote of no confidence in the Docklands precinct, and Mirvac would proceed with the Yarra
Edge project if building unions "came to any sort of industrial rationale".

CFMEU Victorian secretary Martin Kingham said Mirvac had been talking about pulling
out of the Docklands since well before Christmas last year.

He said Mirvac was a New South Wales-based corporation which had been "experimenting"

in the Victorian residential market for only a short time.

"They've got a stalled investment ... because they're nervous about the over-exposure
on that site," Mr Kingham told reporters.

"There are many other more long-term players that have been building units around Victoria
for some time who tell us that the market is still very buoyant."

Victorian Major Projects Minister John Pandazopoulos said the Mirvac decision was "another
mess that we've inherited from the Kennett government".

Mr Pandazopolous said the building unions' claim for a 36-hour week flowed from Mr
Kennett's agreement to a 36-hour week on the Federation Square project in Melbourne.

He also blamed the demands made by building unions on the industrial system built by
federal Workplace Relations Minister Peter Reith.

"The system at the moment allows for a free-for-all and it means that employers (and)
unions are all taking their own sets of extreme action," Mr Pandazopolous said.

"It's Peter Reith who must intervene to fix this."

Mr Pandazopolous urged all parties to "tone it down" and consider the long-term interests
of Victoria.

Investor confidence in the $6 billion Docklands project appeared to be flagging earlier
this week when the public share float for the $485 million Studio City movie theme park
collapsed.

Mr Hunt said under contracts signed with investors, Mirvac would retain money already
paid for Yarra Edge apartments for three-and-a-half years.

AAP tsc/imc/ej/de

KEYWORD: DOCKLANDS NIGHTLEAD

2000 AAP Information Services Pty Limited (AAP) or its Licensors.