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Issue #1624      January 29, 2014

Workers not to blame

The Maritime Union of Australia (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 Gorgon gas project is a natural gas project in Western Australia, involving the development of the Greater Gorgon gas fields, subsea gas-gathering infrastructure, and a liquefied natural gas (LNG) plant on Barrow Island. The project also includes a domestic gas component. It is currently under construction and once completed, will become Australia’s fourth LNG export development.

The company estimated in 2009 the project would cost $US37 billion; that was revised to $US52 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 percent 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.”

Next article – Congress calls meetings in wake of cuts

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