Dean Smith (WA, Liberal Party) Share this | Link to this | Hansard source

On behalf of the Parliamentary Standing Committee on Public Works, I present the 4th, 5th and 6th reports of 2016.

Ordered that the reports be printed.

by leave—I move:

That the Senate take note of the reports.

Report 4 addresses four projects referred to the committee in February and March 2016. The first project is the fit-out of the new leased premises for the Australian Taxation Office in Gosford, New South Wales. The estimated cost of the project is $20.8 million. The ATO will lease the new building in Gosford consisting of approximately 7,350 square metres and occupying around 27 per cent of the site of the former Gosford School of Arts and the Gosford Primary School. The new building will be constructed by DOMA, with the ATO responsible for the internal fit-out only. At the public hearing, the ATO reassured the committee that the tender process for the project had been rigorous. The ATO also outlined some of the benefits for the local community, including the creation of jobs during the construction and fit-out works and employment opportunities for around 600 staff delivering ATO services when the offices are operational. The committee notes that the ATO has a reputation of leadership and excellence in property portfolio management and has a sound track record of delivering projects on time and within budget. This is ably illustrated by fit-out works in Dandenong, Box Hill, Melbourne Docklands, Albury and Wollongong. The committee is satisfied that the project has merit in terms of need, scope and cost and recommends that it proceed.

Two of the proposed projects considered by the committee in report 4 are to be delivered by the Department of Defence. The first Defence project is the upgrade of the Puckapunyal Military Area high-voltage power supply. The committee heard that the existing electrical distribution network at Puckapunyal has been developed in a piecemeal fashion over many years. In the event of a partial system failure, the network does not provide an alternate power supply route, and some parts of the network have now reached end of life. Also, looking forward to 2028, Defence has predicted that the demand for electrical power will exceed the available power. The estimated cost of the project is $32.7 million.

The second Defence project is the Air 5428 Phase 1 Pilot Training System Facilities Project. The main objective of the project is to deliver fit-for-purpose facilities to support a new pilot training system. The works will be conducted at RAAF bases in East Sale, Edinburgh, Williamtown and at Pearce and Gin Gin in my home state of Western Australia. The estimated cost of the project is $329.8 million.

The committee is satisfied that both these Defence projects have merit in terms of need, scope and cost and has recommended that both projects proceed. The committee made two additional recommendations for the Air 5428 Phase 1 Pilot Training System Facilities Project, requiring the Department of Defence to, first, provide updates in relation to the contamination levels detected at any sites associated with the project and, secondly, to provide an update on the outcome of the Australian Noise Exposure Forecast conducted at RAAF Base East Sale.

The final project in report 4 addresses the Australian Nuclear Science and Technology Organisation and its waste management facilities extension upgrade. Increasing domestic and international demand for the nuclear medicines produced at ANSTO as well as the need to decommission end-of-life nuclear facilities mean that ANSTO's available waste storage will be at capacity in early 2017. This is well before the new national radioactive waste management facility is expected to be completed in the year 2020. The proposed works will provide additional temporary storage of both low- and immediate-level solid waste at ANSTO's Lucas Heights campus. The estimated cost of the project is $22.3 million. Submissions from the Australian Conservation Foundation, the Medical Association for the Prevention of War and the Public Health Association of Australia supported the allocation of funds for extended interim storage capacity at Lucas Heights pending site selection for the new national facility. The committee is satisfied that the project has merit in terms of need, scope and cost and recommends that it proceed. In addition, the committee requires that ANSTO provide it with an update on any regulatory requirements, as sought by the Australian Radiation Protection and Nuclear Safety Agency and the Australian Safeguards and Non-Proliferation Office, which may affect the scope and cost of the project.

I commend report 4 of 2016 to the Senate.

Report 5 of 2016 addresses the proposed fit-out of new lease premises for the Australian Federal Police at 45 Commercial Road, Newstead in Queensland. This project was referred to the committee in March 2016. The lease for the AFP's Queensland state headquarters at 203 Wharf Street expires on 31 March 2017 and will not be renewed. The AFP intends to fit out newly leased premises at Commercial Road, Newstead, at an estimated cost of $25 million.

At the public hearing the committee queried the procurement process that led to the final selection of the Commercial Road premises. The committee was told that the process had started in May 2013. By May 2014 the AFP had shortlisted six of the 14 proposals received. This shortlist was further reduced to two options, and in September 2014 the Commercial Road site building was selected as the preferred site. In 2015 the project was suspended to reassess risks associated with a heightened security environment. Additional mitigations to the works were required, including the construction of bollards and treatments to the building perimeter and facade. These mitigations escalated the estimated costs of security treatments from $1.2 million to $9.1 million, representing a 650 per cent cost increase. The committee was told that the building security considerations had not been given significant attention until the later stages of the procurement process. The committee considers that earlier consideration of security needs could have led to a different outcome in terms of selection of the preferred building and may have reduced the security measures' cost escalation.

As lease approval has been finalised, the committee understands continuing with the Commercial Road premises, albeit with enhanced security, is the most appropriate way forward. The committee is satisfied that the project has merit in terms of need, scope and cost and recommends that the project proceed. The committee requires that the AFP review and amend as necessary its procurement processes to ensure the early identification and assessment of security requirements. The review should include consideration of site selection processes to ensure that it is not unnecessarily constrained.

I commend the report No. 5 of 2016 to the Senate.

Finally, report 6 of 2016 addresses the C17 maintenance facility, aircraft apron and associated infrastructure project at RAAF Base Amberley in Queensland which was referred to the committee in March of this year. Thirty-Six Squadron is located at Amberley and is responsible for operating eight C17A aircraft. These heavy aircraft assist with strategic air transport, military operations and humanitarian efforts conducted both domestically and abroad. The Department of Defence is seeking approval to supply new facilities at RAAF Base Amberley in order to support the C17A aircraft. The estimated cost of the project is $219.4 million.

Defence advised that Amberley's existing heavy aircraft maintenance facilities, which are currently shared, supporting both the C17A and KC30A aircraft, are insufficient. Acquisition of additional aircraft will place further pressure on existing facilities. New facilities, including a new maintenance hangar, aircraft apron and explosive ordnance and countermeasures facility, would improve efficiency. The committee is satisfied that the project has merit in terms of need, scope and costs and recommends that it proceed.

As this is likely to be the last report of the committee for the current parliament, I would like to take a moment to reflect on the work of the committee since I became its chair in March 2015. 2015 was an extremely busy year for the committee, which held more meetings and dealt with more referrals than in any of the proceeding five years. During 2015 the committee reported on 22 referrals, with a combined value of $3.1 billion. By comparison, in 2014 the committee dealt with 13 referrals an in 2013 just 14 referrals. In addition, in 2015 the committee approved 37 medium works, with a combined value of $253.3 million. The committee held a total of 44 meetings, comprising private meetings, inspections, and public and in camera hearings. Of these meetings, 26 were in Canberra and 17 were interstate, with the remaining meetings conducted via teleconference. The first part of 2016 is shaping up to be another very busy year for the committee. In the first four months of 2016, the committee has reported on 10 referrals, with a combined value of $1.37 billion, and approved 29 medium works, valued at $130 million.

In closing, I would like to extend my thanks and those of my fellow committee members to committee secretary Alison Clegg and all the staff in the committee secretariat for their continuing hard work, professionalism and dedication to the ongoing work of the Public Works Committee.

Question agreed to.