All Trades Australia

THOUSANDS of Melbourne construction jobs are on the line, with major building projects in and around the CBD under severe threat.

Unions are bracing themselves for steep job losses, estimated by some to be as high as 10,000, as major commercial project and high-rise apartment projects are abandoned or delayed because developers are unable to obtain construction finance in the global credit crunch.

While Melbourne currently has more construction cranes than any other capital city CBD, Electrical Trades Union Victorian secretary Dean Mighell said the lack of new projects beyond the middle of next year was alarming.

"We're really starting to worry because major electrical contractors are telling us there's very little to tender on post 2008," he said.

Ironically, one of the threats to union members is the decision by their own industry super fund, Cbus, to delay the $700 million Bourke Junction development in the Docklands.

A consortium consisting of Cbus, the Industry Superannuation Property Trust and EPC partners had planned a start on the mixed-use project before the end of the year.

But the 150,000sqm mixed-use project was shelved earlier this month, with the consortium citing poor market conditions.

Suncorp had pre-committed to 35,000sqm in one of two towers.

Other project delays involve the $850 million Docklands office park planned by Walker Corp and the Kuok Group at 735 Collins Street and Mirvac's $1 billion Wholesale Fruit and Vegetable Market at Epping.

Grocon's $800 million CUB site project at the top of Swanston Street is not expected to start immediately.

There are also doubts about the $400 million Citta Property Group-Babcock & Brown St Kilda triangle development and Macquarie Office Trust's 171 Collins Street.

The ETU has between 3500 and 4000 members working on commercial projects in and around the CBD now, but there are more than double that number of CFMEU construction workers.

According to Mr Mighell, if the majority of his ETU members lost their CBD and inner-city jobs there would be a serious knock-on effect as electricians and plumbers were forced to the suburbs to find work.

Mr Mighell said it was the worst outlook since 2006, when training companies were on the verge of closure because they could not place apprentices in jobs. He said the Rudd Government needed to offer a stimulus to the building sector through funding for major infrastructure investment in projects such as railways and existing rail upgrades, schools and public housing.

Mr Mighell said the market downturn was also the right time to retro-fit commercial buildings to make them climate-friendly.

"Electricians are front-line warriors in climate change," he said.

"It makes sense to update old building systems to reduce energy consumption."

CFMEU Victorian assistant secretary Bill Oliver said he shared the ETU concerns, but there was still no clear picture on job losses, with finishing trades such as painters, plasterers and tilers likely to remain busy until the end of next year.

Mr Oliver said he was aware of many apartment projects not going ahead because banks were demanding that 75 to 80 per cent of apartments were pre-sold before building could start.

Wilhelm Harnisch, the chief executive of Master Builders Australia, said the MBA expected double-digit falls in building activity in NSW, Victoria and Western Australia in 2009.

It expected an Australia-wide figure of about minus 5 per cent.

However, market volatility meant the forecasts would probably be amended.