Judi Moylan (Pearce, Liberal Party) Share this | Link to this | Hansard source

On behalf of the Parliamentary Standing Committee on Public Works I present the fifth report for 2007 of the committee relating to the proposed provision of facilities for Project Single Living Environment and Accommodation Precinct Phase 2.

Ordered that the report be made a parliamentary paper.

by leave—This project, involving the provision of 3,535 single rooms at 17 Defence establishments in all of the Australian mainland states, is potentially the Commonwealth’s largest public-private partnership. The final decision as to the suitability of the project for this mode of delivery will be made when it has been tested in the marketplace. This project builds on an earlier project, Project Single LEAP Phase 1, that delivered a total of 1,295 single living-in rooms distributed between RAAF Base Amberley and Gallipoli Barracks at Enoggera, both of which are in Queensland, and Holsworthy Barracks in New South Wales.

The need for these works is largely based on a review undertaken by Defence that concluded, firstly, that the condition of the Defence estate had deteriorated to such an extent that many rooms were no longer appropriate for residential purposes and, secondly, many rooms were located on sites within bases that are now unsuitable for accommodation. In the case of the latter, Defence have acknowledged that the Defence estate has been neglected over the last decade. The review I referred to identified over 36,000 rooms that have deteriorated due to lack of maintenance. That the Defence estate has been allowed to become run-down to the extent that there is now a requirement to invest considerable Commonwealth funds in a rebuilding project is a disappointing reflection on the department.

The lack of maintenance of the Defence estate has been raised in previous reports of the committee. In the context of the current proposal, the committee has recommended that Defence ensure that, irrespective of whether the project proceeds as a public-private partnership or by traditional procurement, a maintenance plan be prepared and followed to ensure the whole-of-life viability of the project.

The second matter identified in the review of Defence accommodation relates to the location of buildings on sites now unsuitable for residential purposes. This goes to the heart of Defence planning. The committee understands the dynamics of the ADF. It recognises that the ADF, by definition, needs to be responsive to issues affecting Australia’s security—that includes new technology, improved equipment, the training of its members and so on—and that the Defence estate needs to reflect these imperatives. At the same time, Defence needs to be conscious of the requirement for adequate planning to ensure both the integrity of the operational needs of the ADF and the needs of its members, reflected in the facilities it provides. From a layperson’s perspective it is by no means clear why, in the planning process, there is no clear separation between those precincts needed for operational purposes and those precincts used for recreational and accommodation purposes so that there is no overlap between the two.

I turn to the quality of community consultation undertaken by Defence. While the department has engaged in dialogue with local councils and other interested community groups, overall community consultation is not a Defence strongpoint.

For example, issues raised in the context of this proposal and others by Randwick City Council continue to be unresolved. Of particular concern is an ongoing problem of remediation works at the Randwick Barracks site that was the subject of a committee report in 2004. There is considerable work needed to remediate that site. In regard to the current proposal, the Randwick City Council has expressed concerns over traffic arrangements, the anticipated population density of Randwick Barracks on completion of these works, drainage of surrounding streets, and the anticipated increase in road traffic when the new accommodation is occupied. Randwick is an old estate. We know that demands on Defence are growing. I conducted the inspection of this particular site and I have to say that I was concerned about the density of the proposed development. I hope there will be further discussion about that with Randwick City Council and with Defence. It would be a great shame to see that land disposed of and then find there is a requirement for further land in the future.

The committee acknowledges that Defence has sought to address some of the issues raised by council. This is a continuing dialogue, but Defence should recognise that, while it may not share the concerns of the council, they do need to be attended to and dialogue needs to continue. The committee has recommended that in addition to addressing the concerns of Randwick City Council, Defence also follow up a range of similar matters that are of concern to other local government agencies.

In a similar vein, the committee felt that Defence had not given appropriate recognition to water sustainability. This is now a big issue in most communities. Mr Deputy Speaker, as you would be aware, the issue of water management is attracting nationwide interest and attention. Recently both federal and state governments agreed, through COAG, to formalise a National Water Initiative. Many of the bases that will be the subject of this proposal are located in rural and regional Australia in areas most affected by water shortages. Regrettably there appears to have been little or no consideration given by Defence to the impact these proposed developments will have on an already fragile water infrastructure.

The committee would urge the department to examine on a ‘good citizen’ basis how it can be self-sustainable in terms of water by elevating the priority of the National Water Initiative as these proposed works move forward. In the committee’s report, it has been recommended that, against the background of the current difficulties facing Australia, Defence seek guidance from both federal and state agencies as to how it can minimise its impact on water infrastructure.

I turn now to the method of delivery for this project. From the standpoint of the committee, it is important that it have access to all matters impacting on the final cost of this project to the taxpayer in order to effectively discharge its legislative obligations. The committee was not confident that, in undertaking its role in examining this project, it had all the information available to be in the position of concluding that the project represented value for money and should therefore proceed. Rather, in a departure from normal practice, the committee has recommended that the works proceed subject to the relevant minister being satisfied as to the overall cost of the project and that the project represents value for money. The committee is well aware of the urgency of the need for improved living-in accommodation for our Defence Force personnel and has no wish to delay this project, but it thinks there should be some ongoing scrutiny, given the limited scrutiny the committee has been able to give this project.

The committee has found itself in this position because the relevant legislation does not take into account the evolving complexities associated with the delivery of projects under a public-private partnership. This is notwithstanding the great cooperation we have had with the government and particularly the Parliamentary Secretary to the Minister for Defence, who has been responsive to calls from the committee to amend the act. We saw amendments go through in recent times which were helpful, but they did not go far enough in allowing the Public Works Committee to properly scrutinise these large projects that are done on a public-private partnership basis.

The estimated cost of this project is $1.2 billion. However, that estimate relates only to the cost of the project were it to proceed by traditional means of procurement—that is, where the Commonwealth directly undertakes the work and assumes all responsibility for completing the project, including whole-of-life maintenance works. It does not take into account the situation where a successful bidder for the project takes full responsibility for delivering the project, including whole-of-life maintenance of the completed project and any risks that may be encountered along the way.

Under the current legislation, as I said, notwithstanding the changes that were made recently, that total figure—that is, the difference between the traditional procurement figure and the estimated project value including risk allocation—is not made available to the committee at the time the project is referred to the parliament. Similarly, the committee is not privy to any preliminary costs associated with the delivery of the project which go to the total financial commitment by the Commonwealth.

Furthermore, the committee is not privy to any adjustments to the costs of the project deriving from a public interest test, some of which I have previously referred to. In the context of water sustainability, for example, that may lead to additional costs arising from the need to implement an improved on-base water storage infrastructure. In summary, the delivery of projects by way of public-private partnerships is complex by virtue of the processes that these projects need to undergo—from inception right through to final delivery.

Further, there is the potential for the numbers of projects delivered by way of public-private partnerships to increase for the reason that the benefits they offer are attractive. However, as I have recounted, the committee found, during the course of giving consideration to the current project, that it was at a considerable disadvantage in terms of an opportunity to fully exercise its legislative responsibilities, which is an issue that should be addressed.

Finally, I should like to thank all those who contributed to this inquiry, including the deputy chair of the committee and my fellow committee members. I also acknowledge the tremendous work done by the secretariat and Hansard, and we also appreciated the cooperation and assistance of officials from the Department of Defence. I commend the report to the House.

Brendan O'Connor (Gorton, Australian Labor Party, Shadow Parliamentary Secretary for Industrial Relations) Share this | Link to this | Hansard source

by leave—I want to concur with the comments made by the member for Pearce but emphasise some of the issues that were raised in the chair’s report, because they are worth raising. I think it is very important when we are seeking to accommodate our Australian defence personnel that we do so expeditiously and properly. There is no doubt as a result of our inquiry into this particular matter—and the evidence by Defence made it very clear—that there had not been any maintenance on these barracks. We are talking about a project of up to $1.2 billion in value. There had not been maintenance on these barracks for over the last decade. Indeed, the evidence concluded that the Defence estate had been allowed to be run down to the extent that there is now a requirement to invest considerable Commonwealth funds in a rebuilding project, which, says the Public Works Committee, is a disappointing reflection on the department. I think it is not only a reflection on the department, but also a reflection on the government if they are not attending to such a significant matter. I think the Public Works Committee quite rightly highlighted that concern in this report and indeed in the comments made today.

I also want to add to the matter raised by the chair of the public works committee with respect to consultation. It is important for Defence to consult with affected or potentially affected parties when there is construction or refurbishment of accommodation or other construction that involves the defence department. It is not the first time that there has been some criticism of the defence department in not consulting with councils and other bodies. I certainly think in future the defence department would be wise to ensure that consultation does occur if they believe that there is some likelihood that parties will be affected by the proposals that are put before the Public Works Committee.

I want to finally say that it is true, as the member for Pearce indicated, that we have made amendments to the Public Works Act 1969 to take into account the changing arrangements in the way in which the Commonwealth goes about these particular projects. We now have a number of methods of constructing and refurbishing buildings and we are now looking more and more at delivering the projects in accordance with public-private partnership methodology. Whilst we have made amendments, I have to agree with the member for Pearce that the amendments have not gone far enough to ensure that public moneys are properly scrutinised for very large projects. I think that there should be a review in the very near future into the operation of the act and the capacity for the public works committee to undertake its important role, which is to ensure that millions and millions of taxpayers’ dollars are spent wisely and properly and that there is value for money for such expenditure.