Downer just wants trains to run on time
Sydney Morning Herald
Tuesday March 1, 2011
The downgrade-prone rail contractor Downer Group confirmed yesterday what the market had long suspected. "Downer has got good people, good engineers, good project managers but not enough experience of how to build large numbers of trains in high output," said the recently appointed project director of the Downer-managed Waratah train project, Ross Spicer."I feel I am over the tipping point now with getting the right people with experience in," said Spicer, after his recent hiring of several people with train-building expertise.Spicer made his comments after Downer reported a $104 million half-year loss. The company has now booked $440 million in provisions on the delayed 626 rail car Waratah contract.Downer was less forthcoming about its lack of experience on large rail projects when it won the Waratah contract with its fellow Reliance Rail consortium partners in 2006. The media release which celebrated the winning of the contract in November 2006 was titled: "Experience wins contract for Reliance Rail.""This win is a sign of confidence from RailCorp and utilises our company's strengths and capabilities in terms of rolling stock design, engineering, manufacturing and maintenance," said Downer's former chief executive Stephen Gillies in the release.PAID IN FULLQBE Insurance chief executive Frank O'Halloran's base pay has remained well-protected from the ravages of Chilean earthquakes, Queensland floods and increased reinsurance costs.The insurance group's annual report shows that O'Halloran enjoyed a 14 per cent lift in base pay to $2.13 million last year, despite the company suffering a 17 per cent slump in net profits.O'Halloran's lift in pay and lift in share-based payments, however, could not make up for his cash incentive award dipping from $2.6 million to $1 million.His total pay fell from $6.6 million to $5.2 million.The overall remuneration paid to QBE's senior management team for the year rose $4 million to $31.1 million.O'Halloran has seen his base pay increase fourfold since 1999, his first full-year as chief executive. In the 1999 financial year, he received $876,800 in total remuneration.STAYING PUTThe managing director of the besieged property group Aspen was either doing his best impersonation of a North African ruler yesterday or was actually confident of seeing off an attempted board spill."Certainly I have had nothing but positive support from our institutional investors. So there is nothing at this stage that concerns me," said Gavin Hawkins.Hawkins, along with the chairman of Aspen, Reg Gillard, and two other directors will be subject to a shareholder vote this month calling for their removal.The requisitioner of the meeting, Entrust Funds Management's David Franklyn, hopes to have himself installed as a director, the Swans chairman Richard Colless taking over from Gillard and the ousted Angelo Del Borrello reinstated as the managing director.After reporting an "in line with forecast" 40 per cent fall in half-year profits, Hawkins said: "We're doing all the right things, we're on track, we're performing well. So I think that is recognised by our investor base." As for a comments from Entrust that they had sounded out the management of Aspen, Hawkins said: "Staff have never been more cohesive and never more motivated ... in all their lives. They are certainly very cohesive at the moment.""Clearly I speak to all the senior execs and I absolutely have their support. But it's a free world - who knows, they may have one or two that they are talking to," saidHawkins, noting he still hadthe overwhelming support of his senior managers.As for the sole dissenting director on the Aspen board. Hawkins would offer no indication whether Seng Fai Chan (who supports the spill of his fellow board members) would stay on if the coup was unsuccessful. "It is certainly not up to us. You certainly can't sack a director," he said. "Clearly it's not an ideal situation."BEDROOM EYESThe CEOs Union of Australia (aka the Business Council of Australia) has urged the Australian population to lift its productivity targets in the bedroom."Higher birth rates encourage family connections, which should help limit the call on government services later in life and offset any adverse consequences from a change in the nature of intergenerational ties from a population increasingly dominated by older cohorts," the CEOs Union said in a submission to the federal government, where it advocated "moderate" population growth.Got a tip? Use our online tips box or email srochfort@smh.com.au
© 2011 Sydney Morning Herald