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There are warnings the construction industry could be facing lay-offs and project delays due to supply chain shocks caused by the Iran war. The head of the Civil Contractors Federation Nicholas Proud says the diesel price spike is part of the problem.

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00:01seeing the cost of diesel for the civil construction industry increasing significantly
00:07as we all have at the bowser but it's a little bit different our industry is the most intensive
00:12requirement for diesel and we can only source really our energy from diesel as a source so we
00:20have this challenge that we also have is our industry is the most we have the highest rate
00:25of insolvencies all industries in this country today so it's a perfect mix for a crisis and a
00:32challenge for us is to be able to get the fuel to sites keep these projects operating if we're
00:37talking about a billion dollar project there's about 50 million dollars worth of extra costs
00:41around the fuel in particular around that diesel and that's not in the contract that's not paid for
00:47in some of those contracts large-scale government contracts we have got rise and fall provisions we
00:52have learned from covid if there's one good thing that came out of that we realize we need to have
00:57flexibility around contracts and some state governments have those in place for those large
01:02projects it's the ones that are stuck in the middle of the government to contractor contracts that we
01:08have where there's not the details just not there in the contract we need to make sure there's cost
01:15recovery so those projects can continue and then we can ensure that that staff aren't laid down and
01:21that workers aren't going off those jobs we get them done and get them completed but we need a hand
01:26work place for them they need to answer back then we need to say with the cost of that diesel
01:28you
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