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Tuesday, 28 March 2006
Page: 60

Mr BRENDAN O’CONNOR (5:43 PM) —On behalf of the Parliamentary Standing Committee on Public Works I present the following reports of the committee:  the 69th annual report; the fourth report for 2006, on the fit-out of an extension to leased premises for IP Australia in Woden, Australian Capital Territory; and the fifth report for 2006, on the redevelopment of post 1945 conflicts galleries and the discovery room for the Australian War Memorial, Canberra.

Ordered that the reports be made parliamentary papers.

Mr BRENDAN O’CONNOR —by leave—I present the committee’s fourth report of 2006, which addresses the fit-out of an extension to leased premises for IP Australia in Woden, Australian Capital Territory, at an estimated cost of $12.95 million. IP Australia expects that the proposed work will enhance operational efficiencies, reduce environmental impacts, improve amenities for staff and visitors and improve security arrangements.

The committee investigated all aspects of the work, paying particular attention to the impact of lease incentive arrangements on reported project costs and the proposed incorporation of a cafe and gymnasium, which had not been finalised at the time of the public hearing.

Following consultation with the Department of Finance and Administration, the committee was satisfied that the lease incentive obtained by IP Australia represents standard commercial practice and that any surplus funds would be returned to consolidated revenue. In respect of the gymnasium and cafe, it is recommended that IP Australia keep the committee informed as to the final decision regarding the inclusion of these facilities in the building extension. The committee recommends further that the project proceed at the estimated cost of $12.95 million.

The committee’s fifth report of 2006 presents findings in relation to the proposed redevelopment of the post 1945 conflicts galleries and the discovery room at the Australian War Memorial.

Mr Billson —Hear, hear!

Mr BRENDAN O’CONNOR —Indeed, the minister is quite right. It is a very important extension indeed. These galleries have typically rated low on visitor satisfaction surveys, so the proposed work aims to refurbish the displays to the world-class standard of the memorial’s other galleries. Specifically, the works will provide an additional 1,700 square metres of exhibition space and will allow for the display of iconic objects such as an Iroquois helicopter from Vietnam and the bridge of the HMAS Brisbane.

In reviewing the proposal, the committee took cognisance of:

  • the heritage issues attendant upon works undertaken in an iconic national building;
  • environmental factors, including airconditioning, energy conservation initiatives and local impacts;
  • access equity provisions;
  • consultation with staff, stakeholders and the public; and
  • funding issues.

Having satisfied itself in respect of these matters, the committee is pleased to recommend that the proposed works proceed at the estimated cost of $17.8 million.

Finally, in accordance with section 16 of the Public Works Committee Act 1969, I present the committee’s 69th annual report. This report gives an overview of the work undertaken by the committee during the 2005 calendar year.

In addition to its 68th annual report, the committee tabled 22 reports on public works, with a total estimated value exceeding $990 million. Throughout the year, the committee conducted 46 meetings, 26 of which were public hearings.

Issues of note arising from the committee’s deliberations in 2005 included:

  • the difficulties associated with the consideration of works delivered through Public Private Partnership, PPP, arrangements;
  • the committee’s increasing workload;
  • the need for changes to the Public Works Committee Act;
  • the timeliness with which works are referred to the committee; and
  • the quality of evidence supplied by referring agencies

The committee remains concerned at the absence of a legislative framework for the referral and scrutiny of Commonwealth works delivered through Public Private Partnership arrangements. As agencies are encouraged to explore non-traditional funding options, the committee expects that the referral of such projects will become increasingly common.

The first work of this type to be examined by the committee was the Headquarters Joint Operations Command project, which presented the committee with a number of challenges. Defence needed the committee’s approval of the HJOC project before proceeding to the tender stage, so the committee was required to examine the project and costs at a conceptual level only, as the design, construction and financing details were to be developed by the successful private tenderer. Effectively, the committee was asked to approve the project before all matters relevant to cost had been determined. In order to redress this problem, the committee requested that Defence reappear to provide a further briefing on the project following the selection of the joint venture partner and recommended that the agency provide progress reports and budget updates at each stage of project completion. The committee believes that the act should be amended to establish provisions for the optimum timing of PPP referrals and any additional progress reporting requirements.

The committee’s very heavy workload was a notable feature of 2005. Members are of the opinion that the continuing increase in the number of referrals can be attributed largely to the $6 million statutory limit for referral, which has not increased since 1985. The committee notes that the current equivalent of the 1985 figure would be between $12 million and $15 million and has requested that the act be amended to reflect this increase.

In December 2005, the committee welcomed advice from the Parliamentary Secretary to the Minister for Finance and Administration to the effect that a review of the act had been completed and had gone to ministers for response. Members were pleased to learn that the review covered issues of concern to the committee such as:

  • the consideration of works delivered under PPP arrangements;
  • consideration of accommodation leases;
  • service delivery contracts; and
  • the statutory limit.

The committee looks forward to learning the detail of the proposed changes and their expeditious implementation in 2006.

Throughout 2005, considerable pressure was placed upon the committee and its staff by agencies seeking early consideration of works on the grounds of ‘urgency’. The committee wishes to remind agencies that there is a legislative requirement for an inquiry to be conducted into any public work estimated to cost $6 million or more. Moreover, the committee cannot commit to a public hearing date until a work has been referred. It is, therefore, the responsibility of referring agencies to ensure that they have allowed sufficient time in their project schedules for the full and proper execution of the inquiry process.

The committee noted a high degree of variance in the quality of evidence submitted by referring agencies throughout 2005. The failure to supply adequate project cost information was a particular problem. In some cases, the financial information supplied was not sufficiently detailed to enable the committee to judge the true value for money of the work. In these instances, the committee was forced to request supplementary information in order to complete its deliberations, thereby delaying the scrutiny and reporting process.

On behalf of the chair and myself, I wish to express my gratitude to all of the members of the committee for their continued hard work and support throughout 2005. I would also like to thank the secretariat, Hansard and Broadcasting staff and those officers in the Department of Finance and Administration who play an integral role in facilitating references and expediency motions. I commend the reports to the House.