There are at least 3 pairs in the area but one if more accepting of humans. They are drilling further in an existing nesting hole. You can see mud on his bill. The perch is in line with their nesting hole and their favourite tree perch.
He is calling to his mate. Call can be heard here http://www.youtube.com/watch?v=cLLpEM61Yzk (some Peacocks calling in this too)