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Expert point of view: how can the Australian construction industry restore confidence after the dangerous building incident?

 
[Economic News]     25 Jun 2019
After Mascot Towers, near Sydney airport, became a dangerous building, owners set up a "Mascot Towers Emergency Fund" on the GoFundMe page to raise A $1 million.

After Mascot Towers, near Sydney airport, became a dangerous building, owners set up a "Mascot Towers Emergency Fund" on the GoFundMe page to raise A $1 million.

Expert point of view: how can the Australian construction industry restore confidence after the dangerous building incident?

ACB News, June 24 / PRNewswire-Asianet / after Mascot Towers near Sydney Airport became a dangerous building, owners set up a "Mascot Towers Emergency Fund" on the GoFundMe page to raise A $1 million. On the page, they reprimanded that they had "fallen victim to government`s huge failure to protect the sovereignty benefits of the property industry."

Many residents of Mascot Towers now face an uncertain future, not only homeless, but also rising costs of renovating buildings.

The Owners Corporation Network, a non-profit organization for sovereignty in the maintenance industry, believes that at the end of the construction boom, people own their new homes or investments, but they should budget more than just mortgage loans. With the exception of a handful of lucky new apartment owners, everyone else will face additional costs to deal with inevitable building inspections, disputes with builders and the bankruptcy of builders.

"this happens every day, and owners and tenants encounter unknown and terrible conspiracies. But it wasn`t until the last two emergency evacuations that it was made public. It`s time for state government to take action to protect citizen."

In six months, two dangerous building incidents in Sydney, Opal Tower and Mascot Towers, have dealt a huge blow to the market for new apartments, especially high-rise apartments.

Geoff Hanmer, a part-time lecturer in architecture at the University of New South Wales, said that while New State Governor Gladys Berejiklian has said he is investigating the cause of Mascot Towers`s quality accident and is prepared to hold everyone responsible, government`s regulatory responsibility should be to prevent quality accidents, not ex post facto responsibility.

In an article, he analyzed loopholes in the regulation of high-rise building construction and how confidence in the construction industry should be rebuilt.

Expert point of view: how can the Australian construction industry restore confidence after the dangerous building incident?


Building codes since the London fire

Since the London fire in 1666, preventing construction quality problems has been the cornerstone of building codes. Since then, Britain`s government has realized that ex post facto accountability is of little use, with "an ounce of prevention better than a pound of treatment." Parliament passes regulations to prevent the spread of fire between buildings.

Government in developed countries keep the lessons of the fire in mind. Their common goal is to take the initiative to ensure that the building is built in the right way and is safe after completion.

This is a very successful effort. Since 1666, a more comprehensive and effective regulatory system has been established after a series of major construction quality accidents.


Major building quality accidents occur more frequently

Before the cracking of Opal Tower, only one residential building in Xinzhou had been evacuated on a large scale due to structural problems, that is, when the gas explosion occurred in Eastgate Towers, the residential building of Bondi Junction in 2009.

However, according to the study, 72% or 97% of apartment buildings will have serious defects when completed.

There are a series of other problems with the recently built buildings. Including: lead in water caused by imported brass pipes; imported cables do not meet quality requirements; fire doors, firewalls and fire door frames are not installed.

Expert point of view: how can the Australian construction industry restore confidence after the dangerous building incident?


Why is this happening?

The Australian building code (now the national building code) was gradually introduced by the Australian states in the 1990s, and as part of the agreed agreement between the state and the federal government, the standardization of the building code was reduced.

The purpose of the agreement is to reduce construction costs by supporting "innovation", replacing the conservative "perceived satisfaction" rule. In some ways, innovation means finding ways to make buildings cheaper.

The move was formed during the globalization of the building materials supply industry and the boom in high-rise apartment buildings in Australia.

Some innovations are harmless and even beneficial, such as the introduction of various lightweight interior wall systems, but some innovations incur significant repair costs, and flammable outer layers are the best example. The import material is too much, carries on the consummation inspection and the responsibility to carry on the consummation inspection and the responsibility actually is in vain.

As a result, the cost of construction accidents fell entirely on owners, many of whom were owners of high-rise apartments.

It is difficult to estimate the total cost of remedial works for high-rise apartment buildings over the past 25 years, but may exceed the savings estimated by the Productivity Commission for the introduction of national building codes.

Expert point of view: how can the Australian construction industry restore confidence after the dangerous building incident?


"kick ball" and invalid regulation

Federal minister Karen Andrews, which is in charge of building codes, says states should be held accountable. Some states, including the new states, have taken tough steps to crack down on "unscrupulous" building certificators and builders.

But in practice, the problem is that neither federal government nor state government regulation is in place.

Federal and state government already have preliminary plans to address these problems. The Shergold-Weir report was submitted to the Building minister Forum in February 2018.

"after reviewing the matters we have referred to, we have concluded that the nature and scope of [building defects] are important and cause for concern," the report said. "these issues have led to declining public confidence in buildings that are able to provide compliance, safety and long-term compliance with expected standards in the construction and construction industry."

But since then, the state and federal government have done little to implement the report`s recommendations, despite the cracking of Opal Tower on Christmas Eve 2018 and the ensuing fire in Neo200, Melbourne, in February.

The report also states: "these recommendations are aimed at forming a holistic and structured framework to improve compliance and law enforcement systems throughout the country (national building codes). They form a coherent whole, preferably fully implemented."

In the new state, the published response to Shergold-Weir is "pieced together", focusing on accountability after construction quality accidents. This is contrary to the active approach formed after the London fire.

The new state government will appoint a construction commissioner to oversee qualifications and review construction documents. But this may not make much difference unless government promises to improve the skills of workers across the industry and step up on-site direct inspection. But none of these matters seem to be under plan.

All government must actively improve the defective regulatory system they have established. Otherwise, we will need another Royal Commission to solve the problem.


New state government provides interest-free loans to Mascot Towers residents

At the very least, what Berejiklian government should do right now is to treat Opal Tower and Mascot Towers in a way that treats natural disaster and provides housing assistance to residents who are not displaced by their own mistakes.

At a Mascot Towers news conference on Sunday, the new state regulator minister Kevin Anderson announced an emergency rescue "loan" program to help homeless Mascot Towers residents.

Mascot Tower residents who evacuated on June 14 can now apply to NSW Fair Trading for a room fee of A $220 to A $400 a night based on the number of bedrooms. After any successful claim or lawsuit against building insurance or law, the money has to be repaid, but it is an interest-free loan. The new state government is funding the loan through interest already earned on the Mascot Towers lease deposit.

Kevin Anderson said government is keen to restore confidence in the construction industry, and the building committee will focus on the industry as a whole, study accountability and transparency, and consider future building quality. We are taking action quickly, and you will see something soon.

In the new state, according to the relevant regulations, the legal warranty period for the main quality problems of the building is six years, Kevin Anderson revealed that government needs to conduct a large number of investigations to determine whether the insurance of buyers can be extended to more than six years.

The New State owners` Association has suggested that the six-year warranty period is insufficient and that it be guaranteed for at least 10 years, in line with states such as Victoria. Moreover, if house is defective, there should be specific regulations to deal with it, and the loss of rent should also be included in the owner`s insurance compensation.

However, no matter what change regulations government has in the future, there is no track back nature, so owners of completed buildings will not benefit.


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