Stephen Parry (Tasmania, 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, Facilities for project single living environment and accommodation precinct – Phase 2. I seek leave to move a motion in relation to the report.

Leave granted.

I move:

That the Senate take note of the report.

In moving this motion, I will make some brief remarks and then seek leave to incorporate a tabling statement in Hansard. The Public Works Committee, of which I am a member, has been tasked with this parliamentary inquiry. It is a $1.2 billion inquiry into the suitability and the value for money for the Commonwealth for the Defence department concerning accommodation for Defence Force personnel around Australia. In fact, every single state and territory, with the exception of Tasmania, has been included in receiving new facilities or refurbished living facilities for Defence Force personnel. There are 17 sites in Australia. This has been a very complex and difficult inquiry. In relation to the financial matters, it was a public-private partnership arrangement. In addition, we had to visit many places in all states of Australia—and some were not easily accessible—with the exception of Tasmania.

I particularly want to commend the efforts of the parliamentary Joint Standing Committee on Public Works, the staff and the committee members, for dedication in what has been a complex inquiry over the last few months and one that has involved a large amount of travel and time away from electorate offices and home. I now seek leave to incorporate a tabling statement in Hansard.

Leave granted.

The speech read as follows—

This project, involving the provision of 3,535 single rooms at seventeen 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 market-place.

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, Gallipoli Barracks Enoggera, both of which are in Queensland, and Holsworthy Barracks, NSW.

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 an extent that many of 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.

But 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 lay persons perspective it is by no means clear why in the planning process, there is no clear separation of precincts 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.

Mr President, 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 both in the context of this proposal and others by Randwick City Council continue 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. In regard to the current proposal, the 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.

The Committee acknowledges that Defence has sought to address some of the issues raised by Council, and this is a continuing dialogue. But Defence should recognise that while it may not share the concerns of Council’s views, they do need to be attended to.

The Committee has recommended that in addition to addressing the concerns of Randwick City Council, Defence also follow up the 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.

Mr President, as you would be aware the issue of water management is attracting nation-wide interest. Recently both Federal and State 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, areas most affected by water shortages. Regrettably there appears to have been no consideration by Defence on 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 the water infrastructure.

Mr President 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.

Mr President, 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.

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 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, Mr President, the Committee is not privy to any preliminary costs associated with the delivery of the project which goes 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 a need to implement an improved on-base water storage infrastructure.

Mr President, 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 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, 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 Mr President, I should like to thank all those who contributed to this Inquiry, including my fellow Committee Members, and officials of the Department of Defence.

That said, Mr President, I commend the Report to the Chamber.

Question agreed to.