MUA says workers not to blame for cost blowouts in Chevron’s Gorgon LNG project

December 12, 2013

The MUA wants to make it clear that workers are not to blame for the repeated blowouts in the cost of Chevron’s Gorgon LNG project.

The company estimated in 2009 the project would cost $US37 billion; that was revised to $52 billion a year ago. The company has now revealed the cost has risen again, to $US54 billion.

When the project was first proposed in 2003, the estimated cost was $13 billion.

In explaining the repeated cost blowouts, the company has often sought to focus the blame on high labour costs.

But MUA State Secretary Christy Cain said research undertaken by BIS Shrapnel proved workers were not to blame.

“The research found that labour costs made up less than one per cent of the total cost of the Gorgon project,” he said.

“It also found that the biggest opportunities for cost savings could be found in the improvement of management practices.

“For example, a KJV report showed that it takes 132 days to load and unload a barge on the non-­‐unionised Barrow Island wharf,
but it takes 95 days to load and unload the same barge at the fully-­‐unionised wharf at the Australian Marine Complex.

“Instead of blaming workers for the cost blowouts on Gorgon, Chevron management should be taking a good look at themselves
and their management practices.

“And instead of always questioning the wages of the hard working men and women, who spend months away from home building
the project, public debate should focus on the salaries and perks of Chevron’s St George’s Terrace management.”

The BIS Shrapnel report can be downloaded at:

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