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House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
2024-08-27 Daily Xml
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Regional Road Maintenance

Mr McBRIDE (MacKillop) (14:37): You never know what you might hear there. My question is to the Minister for Infrastructure and Transport. Is the minister going to cancel the contract held by Fulton Hogan to maintain the regional road network in the South-East? With the leave of the house, I will explain, Mr Speaker.

Leave granted.

Mr McBRIDE: On 5 June in parliament, I asked the minister about this contract. The minister said he would have more to say in coming days. I subsequently wrote to the minister seeking an update, and two months later, my office has not received a response. On radio last week, the minister said he was close to cancelling the contract.

The Hon. A. KOUTSANTONIS (West Torrens—Minister for Infrastructure and Transport, Minister for Energy and Mining) (14:38): That is true. I thank the member for his question and his constant advocacy on behalf of his constituents. All members of this place would be aware that the former government outsourced road maintenance in South Australia, and it had devastating results, particularly for our regional communities.

The Regional South, zone 2, road maintenance contract was awarded to Fulton Hogan by the previous government. It covers 5,800 kilometres of the state's 22,900 kilometres of road network. Zone 2 incorporates some of the oldest pavements and oldest bitumen seals in the some of the most challenging environments for road maintenance, particularly with the amount of rain received in that area. This area was previously managed by the department with departmental maintenance gangs, and it was considered a high-risk area. That is why it was an insourced program where we conducted this work ourselves.

Members opposite, since the commencement of that contract, Fulton Hogan, despite their assurances, have experienced significant challenges in meeting the contract level for service for the delivery of routine maintenance services. The member would know that, as would the member for Mount Gambier and anyone driving down in the South-East would see it in the pavement, that the contract is not working. Despite increased levels of investment by this government into that contract, the condition and performance of the network on the Limestone Coast has not improved.

Early in May 2024 the department advised Fulton Hogan of its concerns regarding its performance on the zone 2 maintenance contract. The department confirmed that the interim operating model cannot continue and it was considering all options. Since that time, the department has been working with Fulton Hogan on strategies to achieve an uplift in productivity and efficiency in the delivery of services.

It is fair to say that these road maintenance contracts across all zones, put in place by the former Liberal government, have not worked and are not delivering on expectations of the community, particularly on the Limestone Coast. The department has determined that the contract model is not appropriate for the services required and continues to undertake a comprehensive review of the contract and delivery model, including the performance framework, designed to incentivise positive network outcomes and behaviours.

I expect Fulton Hogan to continue to maintain the network in cooperation with the department while we develop this new framework. It is expected to be around for the next six months, after which consideration will then be needed around the possibility of re-tendering the contract or terminating it.

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