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Monday, 27 June 1994
Page: 2037


Senator CALVERT —On behalf of the Joint Committee on Public Works, I present the committee's fifth report of 1994, entitled Construction of an Australian embassy complex in Hanoi, Socialist Republic of Vietnam. I seek leave to move a motion relating to the report.

  Leave granted.


Senator CALVERT —I move:

  That the Senate take note of the report.

The report which I have just tabled refers to the proposed construction of an Australian embassy complex in Hanoi, Socialist Republic of Vietnam. The proposal includes a new chancery, head of mission residence, staff apartments and recreational facilities. The estimated cost of the project is $23.605 million at March 1994 prices.

  The current Australian Embassy in Hanoi consists of a two-storey French style villa used as the chancery, adjoining villas on either side and a purpose-built block of staff apartments. There is also a swimming pool and a recreation area. One of the two adjoining villas is the ambassador's residence and the other contains staff apartments.

  The chancery was first occupied in 1978 and the two adjoining buildings were occupied in 1991 after extensive renovations. Although the chancery building has been extensively renovated by Australian tradesmen and completely rewired, maintenance of the building remains a constant problem. The chancery is unfortunately already too small for current requirements and will be converted into a senior staff apartment as part of this proposal.

  The Overseas Property Group has accorded the Hanoi project a high priority among proposed capital works projects because of the inadequacy of both the office and residential accommodation. The Department of Foreign Affairs and Trade endorses the construction of the new custom-built chancery and official residence as it believes it will make an invaluable contribution to promoting Australia's identity in Vietnam and will demonstrate Australia's firm commitment to developing a substantial long-term relationship with Vietnam.

  The lifting of the United States economic and trade embargos against Vietnam has opened the way for the resumption of lending to that country by the international financial institutions and major bilateral donors such as Japan. These developments will stimulate economic growth in Vietnam, and this will bring increasing commercial opportunities for Australian companies. This will place increasing demands on the Australian Embassy in Hanoi which is already operating at what can only be described as beyond full stretch in servicing the current level of relations.

  In addition to a new chancery and official residence, it is proposed to construct a four-storey apartment block. The existing staff accommodation is below standard and there is a lack of appropriate alternative accommodation available on the open market. Where residential accommodation is obtainable, extensive refurbishment is required. However, refurbishment costs are high and even the best accommodation may still be substandard after refurbishment has been completed.

  The construction of well-built accommodation within the chancery compound will enhance the physical security of staff while also providing for emergency power and filtered water supplies. There will also be significant savings in the long term to the Commonwealth resulting from rental savings and lower maintenance costs.

  Hanoi has few recreational facilities available for staff. There are no clubs and there are very few sporting facilities of a suitable standard for casual hire. The present chancery compound has a small recreational area with a swimming pool. The recreational facilities in the new complex will include a tennis court, swimming pool and squash court. The committee is satisfied that these facilities are fully justified in Hanoi which the committee was advised is an extremely difficult living and working environment.

  The site for the complex is located in an area of Hanoi which is being developed as a diplomatic enclave and already accommodates a number of diplomatic missions and their associated residential apartments. The committee was initially somewhat startled to discover that the site is currently part of a small freshwater lake, as indeed are all non-developed sites in this area. The site which will be reclaimed has an area of some 1.17 hectares and will be leased from the Vietnamese government for a period of 60 years.

  The committee sought an assurance from the Overseas Property Group that the construction of the embassy complex on reclaimed land would not present difficulties. The OPG advised the committee that it believed that the site would be suitable although further geotechnical advice would be sought and there would be a cost loading in terms of the extensive piling system required. While OPG advised the committee that the presence of unexploded ordnance on the site was not expected the committee however has recommended that a metal detector survey of the site should be undertaken before construction commences as a precaution against the possible presence of unexploded ordnance.

  While the committee welcomes the construction of this project, it is fair to say that the committee is somewhat disappointed with the design of the complex. The committee was advised by OPG that in large measure, the design was influenced by the characteristics of the local building industry in Hanoi which has a combination of comparatively cheap and unskilled labour with a high work ethic. The industry is labour intensive, with minimal mechanical equipment being available, therefore all proposed embassy buildings will be simple in form and structure to make allowances for the local building industry both in relation to short-term construction requirements and longer term maintenance factors.

  To achieve the necessary building quality it will be essential that expatriate trade and specialist services supervision form part of the construction program. All imported materials will come through the port of Haiphong, which could become an area of delay to the project as trade activity increases.

  While the committee understands and accepts the practical constraints which lead to the design solution for the Hanoi complex, it does not believe that the design reflects the positive and dynamic image which Australia should be projecting in Asia. The committee is of the view that OPG could hold a design competition when a project of this nature is being developed in future. The committee believes that OPG does not have an underlying design philosophy which would enable its architectural consultants to express a sense of an Australian identity in building projects. The committee has recommended that OPG should develop such an underlying design philosophy.

  Following recent construction experience in Beijing, Jakarta and Pnom Penh, and in order to achieve the desired project quality, it is envisaged that a considerable number of Australian trade and specialist supervisory personnel will be employed during the construction phase. The successful contractor will be required to specify and use Australian products wherever possible. Australian manufactured furniture will be used throughout all buildings. OPG expects that the material components will be 80 per cent Australian content.

  As I indicated earlier, the total cost of the project is $23.605 million. However, it is interesting to note that there will be no impact on the budget as funds will be made available from the sale of properties in Singapore. OPG advised the committee that the sale of the properties in Singapore will also finance the construction of a chancery in Islamabad, refurbishment of Australia House in London, the purchase of land for housing in Shanghai and also the construction of a modern residence for the Australian High Commissioner in Singapore.

  In view of the difficulties likely to be experienced in construction of the project, the committee sought an assurance from OPG that the cost of the project would not rise significantly as had been the case in Beijing. OPG stated that unlike the Beijing project, an Australian project manager would be appointed with OPG taking control of the project from the initial stages. In Beijing OPG was tied to a Chinese construction company and also did not have direct control of the project. I commend the report to the Senate.

  Question resolved in the affirmative.