Bechtel pays $200,000 wages to end war of Curtis Island

The scheme to build three liquid natural gas (LNG) plants on an island off the coast of Queensland has become the central concern of the Bechtel engineering colossus. The total value of the work is estimated to be $62bn, which also makes it one of the largest construction and engineering schemes in Australian history. 

The island, which has tourist facilities but no permanent settlement, is only accessible by boat, so the accommodation and supply of up to 8,800 workers has proved a challenge for the US engineer. Even more challenging has been the increasingly poor industrial relations between the employer and its 8,800 workers. Since the scheme began in 2011, is has been subject to intermittent industrial action. 

The most recent wave of strikes began in July when the combative Construction, Forestry Mining and Energy Union (CFMEU) joined with the Electrical Trades Union and the Australian Manufacturers Workers to protest against the company’s four-week on, one-week off "fly-in, fly-out" (Fifo) roster. The workers are lobbying for three-week work postings on the island on the grounds that a longer period living in utility accommodation causes too much stress and disruption to their families.

Bechtel has argued that it has built its project management strategy around the four-week schedule, and has been trying to offer increased wages as compensation. 

There have been concerns over the mental health of Fifo workers in Western Australia, where nine have taken their own lives over a 12-month period.

It now seems that Bechtel has got its way – but at a cost. After a period in which the US company threatened to lock out and discipline the workers, the unions seemed about to spread the strike throughout the site and the Australian government, the Queensland state government and the Fair Work Commission became increasingly involved, peace has been restored. On Friday, Bechtel’s third offer to increase wages in return for retaining the four-week rota was endorsed by 54% of those who voted. 

In Australian dollars, tradesmen’s wages at the site have jumped from about $40,000 to about $200,000 a year (that is, US$186,000). Bechtel has also promised to give them  their own rooms at the camp and to bring an end to the hated practice of "motelling" in which workers get a different room every time they return to the island.

The vote by the 8000-person workforce is expected to bring an end to the strike action initiated by about 150 CFMEU members, which meant at one point 2,000 workers were either not working or unproductive.

The deal means that Bechtel will have a good chance of delivering its project on time. The owner of the site, the UK firm BG group, commented: "There remains no change to the current expected first LNG date from the Queensland Curtis LNG project in the final quarter of 2014," the company said. "BG Group will update the market if any potential industrial action, or other material event, is likely to negatively affect the current schedule for first LNG."

QCG’s LNG project on the island is nearing completion with the first gas to be exported to Asia in December.

The Curtis Island project is the world’s first to turn gas from coal seams into LNG. The aim is to make coal energy greener and more easily transportable. The coal gas will come from the Surat Basin in southern Queensland, be transported to the three facilities at Curtis island using a 540km pipeline, where it will be liquefied for export.