Loy Yang tightens belt

Power industry unions have flagged concerns about the potential for widespread contractor redundancies at AGL Loy Yang, as the company moves to shore up efficiencies in an uncertain energy market.

The heightened concern comes amid moves by AGL Loy Yang maintenance contractor Transfield Worley Power Services to shed 20 of its 90-strong station-based workforce within the month.

While further details of the redundancies are sketchy, the Electrical Trades Union claims the job cuts are a direct result of AGL’s controversial Rapid Cost Reduction program.

However, AGL has rejected the connection between the redundancies and the RCR, citing a wider push for efficiencies across the operation.

Unions slammed the RCR – a cost-cutting scheme aimed at slashing contractual costs by 22 per cent as “aggressive” and “heavy handed” earlier this year.

“Obviously we are pretty disappointed with what they (TWPS) are batting up here, but in the end its coming from unnecessary pressure from AGL to cut costs, which we frankly are concerned what implications this will have for the quality of ongoing maintenance at Loy Yang,” ETU Gippsland organiser Peter Mooney said.

A TWPS spokesperson told The Express late on Friday afternoon the company had been informed of work scope changes by AGL last Monday, which would require a “workforce reduction”.

“The workforce and unions have been advised and we will be working through a process in the coming weeks to identify and notify those employees specifically impacted. We will ensure they receive our full support,” the spokesperson said.

Mr Mooney said confirmation of the pending TWPS redundancies came after weeks of building rumours of job cuts at Loy Yang, however it still remained unclear which positions among the TWPS workforce would be targeted.

“The rumours have been coming in pretty thick for a couple of weeks now, and the unions had been asking TWPS management for the full story, but it wasn’t until last week that they indicated the actual numbers for us,” Mr Mooney said.

“We are talking about a quarter of their workforce here, but we don’t know which trades or semi-skilled people will be targeted.”

Concerns have also been raised about a separate TWPS contracting workforce within the Loy Yang mine, and employees 

at a range of other contractors which could also be forced to shed staff under AGL’s efficiency push.

Australian Manufacturing Workers Union organiser Steve Dodd said the

TWPS redundancies signalled a “concerning shift” from preventative to “risk based” maintenance.

“These guys are responsible for maintaining all their equipment in between shuts, so instead of doing regular maintenance on a mill, which pulverises the coal and shoots it into the boiler, they could be forced to push that out and maintain that at half the rate they do now,” Mr Dodd said.

While AGL Loy Yang head of generation John Stewart said the company had altered its “scope of work” for TWPS, he declined to provide further detail about the changes.

“TWPS has been with us for four years. They are a long term business partner and we’re looking forward to continuing a long term relationship, and as we drive for efficiency and productivity… there will be a requirement for a few changes,” Mr Stewart said.

Meanwhile AGL group general manager merchant energy Anthony Fowler said the changes were in line with a part of a “broader work practice” which was being put in place across AGL’s portfolio.

Citing “depressed” wholesale electricity prices, combined with rising labour costs and capital costs in managing an “ageing power station fleet”, Mr Fowler said now was the time for AGL to implement long term efficiencies.

“That’s the state that we are in now… we need to be very focused on management of plants in the most efficient way possible until suspected end life,” Mr Fowler said.

“It’s a long game for AGL, we want to make sure the power station lasts to 2048.”

Mr Fowler said despite ongoing moves to “manage costs appropriately”, AGL would focus on maintaining best practice maintenance, safety and accountability.