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Public Works—Parliamentary Standing Committee—1st Report of 2018—Referrals made December 2017


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March 2018 CANBERRA

PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

Report 1/2018

Referrals made December 2017

Parliamentary Standing Committee on Public Works

© Commonwealth of Australia

ISBN 978-1-74366-777-4 (Printed Version)

ISBN 978-1-74366-778-1 (HTML Version)

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License.

The details of this licence are available on the Creative Commons website: http://creativecommons.org/licenses/by-nc-nd/3.0/au/.

iii

Contents

Committee Membership ....................................................................................................................v

List of Recommendations ................................................................................................................vii

The Report

1 Introduction...............................................................................................................1

2 Engine Test Cell 1 Upgrade Project, RAAF Base Amberley ............................5

3 Joint Health Command Garrison Health Facilities Upgrade Project...........13

4 JP157 Replacement Aviation Refuelling Vehicles Infrastructure Project...23

5 SEA1654 Phase 3 Maritime Operational Support Capability Facilities Project .......................................................................................................................31

Appendix A. List of Submissions ..................................................................................41

Appendix B. Public Hearings and Witnesses ..............................................................43

v

Committee Membership

Chair Mr Scott Buchholz MP

Deputy Chair Mr Tony Zappia MP

Members

Mr David Coleman MP (until 20/12/2017)

Senator Alex Gallacher

Mr Ian Goodenough MP

Ms Justine Keay MP

Ms Joanne Ryan MP

Senator Dean Smith

Senator John Williams

vi

Committee Secretariat

Committee Secretary Pauline Cullen

Inquiry Secretary James Bunce

Senior Researcher Emma Banyer

Phillipa Blackwood

Researcher Belynda Zolotto

Office Manager Tanya Pratt

vii

List of Recommendations

Recommendation 1

2.37 The Committee recommends that the House of Representatives resolve, pursuant to Section 18(7) of the Public Works Committee Act 1969, that it is expedient to carry out the following proposed work: Engine Test Cell 1 Upgrade, RAAF Base Amberley.

Recommendation 2

3.37 The Committee recommends that the House of Representatives resolve, pursuant to Section 18(7) of the Public Works Committee Act 1969, that it is expedient to carry out the following proposed work: Joint Health Command Garrison Health Facilities Upgrade Project.

Recommendation 3

4.37 The Committee recommends that the House of Representatives resolve, pursuant to Section 18(7) of the Public Works Committee Act 1969, that it is expedient to carry out the following proposed work: Joint Project 157 Replacement Aviation Refuelling Vehicles Infrastructure Project.

Recommendation 4

5.41 The Committee recommends that the House of Representatives resolve, pursuant to Section 18(7) of the Public Works Committee Act 1969, that it is expedient to carry out the following proposed works: SEA1654 Phase 3 Maritime Operational Support Capability Facilities Project.

1

1. Introduction

1.1 Under the Public Works Committee Act 1969 (the Act), the Parliamentary Standing Committee on Public Works is required to inquire into and report on public works referred to it through either house of Parliament. Referrals are generally made by the Minister for Small Business.

1.2 All public works that have an estimated cost exceeding $15 million must be referred to the Committee and cannot be commenced until the Committee has made its report to Parliament and the House of Representatives receives that report and resolves that it is expedient to carry out the work.1

1.3 Under the Act, a public work is a work proposed to be undertaken by the Commonwealth, or on behalf of the Commonwealth concerning:

 The construction, alteration, repair, refurbishment or fitting-out of buildings and other structures;  The installation, alteration or repair of plant and equipment designed to be used in, or in relation to, the provision of services for buildings and

other structures;  The undertaking, construction, alteration or repair of landscaping and earthworks (whether or not in relation to buildings and other

structures);  The demolition, destruction, dismantling or removal of buildings, plant and equipment, earthworks, and other structures;  The clearing of land and the development of land for use as urban land

or otherwise; and

1 All public works that have an estimated cost exceeding $15 million must be referred to the Committee and cannot be commenced until the Committee has made its report to Parliament and the House of Representatives receives that report and resolves that it is expedient to carry out the work.

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 Any other matter declared by the regulations to be a work.2

1.4 The Act requires the Committee to consider and report on:

 The purpose of the work and its suitability for that purpose;  The need for, or the advisability of, carrying out the work;  Whether the money to be expended on the work is being spent in the most cost effective manner;

 The amount of revenue the work will generate for the Commonwealth, if that is its purpose; and  The present and prospective public value of the work.3

1.5 The Committee pays attention to these and any other relevant factors when considering the proposed work.

Structure of the Report

1.6 The Minister for Small Business, the Hon Michael McCormack MP, referred the following proposed projects to the Committee in December 2017:

 Engine Test Cell 1 Upgrade Project, RAAF Base Amberley;  Joint Health Command Garrison Health Facilities Upgrade Project;  JP157 Replacement Aviation Refuelling Vehicles Infrastructure Project; and

 SEA1654 Phase 3 Maritime Operational Support Capability Facilities Project.

1.7 In considering the works, the Committee analysed the evidence presented by the proponent entity, submissions and evidence received at public and in-camera hearings.

1.8 In consideration of the need to report expeditiously as required by Section 17(1) of the Act, the Committee has only reported on significant issues of interest or concern.

1.9 Mr Tony Zappia MP (Deputy Chair) was acting Chair for the inquiries into proposed Engine Test Cell 1 Upgrade Project, RAAF Base Amberley, Queensland and the Joint Health Command Garrison Health Facilities Upgrade Project.

2 The Act, Section 5.

3 The Act, Section 17.

INTRODUCTION 3

1.10 Mr Ian Goodenough MP was acting Chair for the inquiries into JP157 Replacement Aviation Refuelling Vehicles Infrastructure Project and SEA1654 Phase 3 Maritime Operational Support Capability Facilities Project.

1.11 Chapter 2 addresses the proposed Engine Test Cell 1 Upgrade Project, RAAF Base Amberley. The estimated cost of this project is $23.7 million (excluding GST).

1.12 Chapter 3 addresses the proposed Joint Health Command Garrison Health Facilities Upgrade Project. The estimated cost of this project is $212.5 million (excluding GST).

1.13 Chapter 4 addresses the proposed JP157 Replacement Aviation Refuelling Vehicles Infrastructure Project. The estimated cost of this project is $40.4 million (excluding GST).

1.14 Chapter 5 addresses the proposed SEA1654 Phase 3 Maritime Operational Support Capability Facilities Project. The estimated cost of this project is $220.5 million (excluding GST).

1.15 Submissions are listed at Appendix A, and hearings and witnesses are listed at Appendix B.

5

2. Engine Test Cell 1 Upgrade Project, RAAF Base Amberley

2.1 The Department of Defence (Defence) seeks approval from the Committee to proceed with the Engine Test Cell 1 Upgrade Project. The proposed works will enable efficient kitting and testing of the existing fleet of F/A-18F Super Hornet and EA-18G Growler engines and the new F-35 Lightning II engines at RAAF Base Amberley, Queensland.

2.2 In 2014, the Australian Government approved the acquisition of 72 F-35 Lightning II aircraft to replace the current fleet of 71 F/A-18 classic Hornets.1 The F-35 fleet was acquired under a Global Support Solution model. This means Australia shares the responsibility for providing access to spare parts, maintenance services and support equipment with eight other partner nations: United States (Project Lead), United Kingdom, Italy, Netherlands, Turkey, Canada, Denmark and Norway.

2.3 The proposed works will enhance the existing engine test cell at RAAF Base Amberley - so in addition to being able to continue to test F/A-18F Super Hornet and EA-18G Growler engines it can service the new F-35 engines. This will be the fourth location in the world where F-35 engine testing can occur and the only F-35 testing facility in the Southern Hemisphere until 2023.2 Engines will be interchangeable amongst the F-35 global fleet. Engine testing is part of the maintenance services that Australia is required to provide under the Global Support Solution.

2.4 The estimated cost of the project is $23.7 million (excluding GST).

1 Brigadier Matt Galton, Department of Defence, Transcript of evidence, 30 January 2018, p. 1.

2 Mr Andrew Sanderson, TAE Aerospace, Transcript of evidence, 30 January 2018, p. 7.

6 REPORT 1/2018

2.5 The project was referred to the Committee on 7 December 2017.

Conduct of the inquiry

2.6 Following referral, the inquiry was publicised on the Committee’s website and via media release.

2.7 The Committee received two submissions and one confidential submission.

2.8 On 30 January 2018, Defence conducted a site inspection for the Committee. On the same day, the Committee also conducted a public and in-camera hearing. A transcript of the public hearing is available on the Committee’s website.

Need for the works

2.9 Engine maintenance and testing is contracted out to industry by Defence’s Capability Acquisition and Sustainment Group. The engine test cell is currently used to test the RAAF’s fleet of F/A-18F Super Hornet and EA-18G Growler aircraft. The manufacturer of the Super Hornet and Growler aircraft is General Electric International Incorporated (GEII) who operates as the Prime Contractor for the engine test cell facility.3

2.10 GEII subcontract to TAE Aerospace (TAE) who performs the actual maintenance and testing of engines. However, the manufacturer of the new F-35 engines is Pratt & Whitney (P&W).4

2.11 In its submission, Defence explained:

…as the products from two competing [manufacturers] are to be tested in one facility, equipment and information categorised as Intellectual Property needs to be segregated whilst not hindering efficiency.5

2.12 In its submission, Defence states that in December 2014, the United States F-35 Joint Project Office (JPO) announced that Australia had been successful in securing the opportunity to host an Asia-Pacific regional F-35 Engine Maintenance, Repair, Overhaul and Upgrade Depot.

2.13 It was later realised that without modification, the existing engine test cell at RAAF Amberley would not be able to support F-35 engine work due to the

3 Department of Defence, Submission 1, p. 5.

4 Department of Defence, Submission 1, p. 5.

5 Department of Defence, Submission 1, p. 6.

ENGINE TEST CELL 1 UPGRADE PROJECT, RAAF BASE AMBERLEY 7

larger size, weight and significant increase in power of the F-35 engine compared to the F/A-18F Super Hornet and EA-18G Growler engines.

2.14 At the public hearing Defence explained:

The key differences between the F-35 engine and those currently tested at the engine test facility are that the manufacturer is Pratt & Whitney rather than General Electric and the engine is 50 per cent longer, three times heavier and produces double the thrust. […] The engine test cell upgrade is a key component required to support the F-35 global support solution partnership. In turn, the global support solutions partnership is a critical component of the F-35 Joint Strike Fighter capability.6

Scope of the works

2.15 The proposed upgrade of the engine test cell will enable post-maintenance testing of the F-35 engine. The scope of works is split into seven functional areas.

 Control room 1 (to be used by GEII). Will be refitted to remediate age-based defects inclusive of the slope that has developed to the floor and to remove the current window panel between the control room and the test cell. The room will be fitted with new services and furniture and lined with acoustic panelling appropriate to its location.

 Control room 2 (to be used by P&W). Will be established in place of the current kitting space incorporating the same provisions as Control Room 1 and a separate communications room for company proprietary server equipment. The room will be fitted with new services and furniture and lined with acoustic panelling appropriate for its location.

 Segregation between different engine manufacturer spaces. The space between the two control rooms will become a common access lobby. For the purpose of protection of intellectual property of the manufacturers, the remainder of the facility will be designed to limit access by one manufacturer to the other’s space. This segregation will extend to each manufacturer’s access to the common test cell when occupied by the other, including the ability to access the cameras mounted in the test chamber.

 Kitting Facility. The kitting facility is used for receiving engines by truck and mounting them to support frames that hold them in place for testing. Once fitted to the support frames, engines are moved from the kitting facility into the test chamber. The kitting facility is an extension of the existing building. It will be fire-isolated from the test cell building. It will

6 Brigadier Matt Galton, Department of Defence, Transcript of evidence, 30 January 2018, p. 1.

8 REPORT 1/2018

have two direct vehicle access points for engine delivery and a rail-based connection to the test cell to allow for engine movement within the facility.

 Test Cell. Modifications will be made to the test cell to achieve noise attenuation and compliance with fire safety regulations. Access to the test cell chamber will be via new doors at the end of the test cell. The height and width of the existing doorway will be increased to enable movement of the F-35 engine into the test cell. Airflow turning vanes will be installed to satisfy the increased inlet airflow requirements of the F-35 engine. The floor will be upgraded to accommodate the new rail-based engine movement system. New emergency egress points will be added to the test cell building and the exhaust building.

 Trailer store. The trailer store will be an enclosed garage structure for four trailers used to support engine movement. The building will be metal clad and lined with bird mesh.

 Amenities/Lunch Room. The amenities/lunch room will be modified to achieve compliance with the Disability Discrimination Act. This includes increased doorway widths. Minor repairs and grading will be undertaken on existing paths external to the lunchroom building.7

Cost of the works

2.16 The total estimated cost of this project is $23.7 million excluding GST. This includes construction, design, ICT, preliminaries, contingencies, escalation and management costs.8

2.17 The Committee received a confidential supplementary submission detailing the project costs and held an in-camera hearing with Defence on the project costs.

2.18 The Committee is satisfied that the costings provided to it have been adequately assessed by the proponent entity.

Local impacts

2.19 The Committee received evidence from Defence outlining the nature and extent of community consultation undertaken as part of the proposed project.9

7 Department of Defence, Submission 1, pp. 12-13.

8 Department of Defence, Submission 1, p. 18.

9 Department of Defence, Submission 1.2.

ENGINE TEST CELL 1 UPGRADE PROJECT, RAAF BASE AMBERLEY 9

2.20 Defence reported that the community were interested in noise, vibration and employment opportunities.10

2.21 At the public hearing, Defence informed the Committee there was no indication of any noise complaint relating to the engine test cell in the last two years.11

2.22 Defence told the Committee:

For this engine test cell facility, as it comes online to test the new F-35 engine, we’re looking at one test per fortnight to start off with. That may increase as more engines come online but probably not any more than one or two tests per week. The testing periods are between two to five hours. It is at the two hour mark where the actual engine is completely fired up - where noise does go beyond normal levels [….] the amount of frequency, and amount of noise that comes is not beyond what is currently coming off the base on a routine basis.12

2.23 Defence further clarified ‘there is no greater noise footprint that would emanate from this relative to jets taking off and landing at the RAAF base’.13

2.24 In the Community Consultation Report, Defence agreed to ‘consider ground vibration measurement due to engine testing and to communicate actions and outcomes relating to this matter through the Amberley Consultative Working Group’.14

2.25 In its submission, Defence stated:

It is anticipated that the project will generate employment opportunities, predominantly in the building construction, labour and supply markets from within the areas in close proximity to the Ipswich region.15

10 Department of Defence, Submission 1.2, p. 2.

11 Air Commodore Kenneth Robinson, Department of Defence, Transcript of evidence, 30 January 2018, p. 4.

12 Brigadier Matt Galton, Department of Defence, Transcript of evidence, 30 January 2018, p.p. 3-4.

13 Air Commodore Kenneth Robinson, Department of Defence, Transcript of evidence, 30 January 2018, p. 4.

14 Department of Defence, Submission 1.2, p. 2.

15 Department of Defence, Submission 1, p. 14.

10 REPORT 1/2018

2.26 Defence explained that RAAF Base Amberley has a program to engage with local industry and businesses.16

2.27 Defence elaborated:

As far as employment opportunities around the local area go, the prime contractor being TAE, for the construction of the works is expecting to let anywhere around 40 trade packages of work. At any one time we expect there’d be up to 70 people employed on the site. Over the course of the 12 to 14 month construction period about 120 people will be employed. As far as small and medium enterprises go, we’re expecting that it’d be anywhere up to around 70 per cent of those trade packages, which would be of a level of complexity and size that would be something that an SME would be able to competitively bid on. The other 30 per cent is much larger works where it might be beyond an SME. But the TAE is certainly focused in making sure we maximise those opportunities for small and medium enterprises around the local area to have a look in for it.

They’ll also be working closely with chambers of commerce and industry players around the local area, so there's a good awareness of what’s coming up, and they can be prepared to be bidding for the work.17

2.28 The Committee requested that in the project post-implementation report Defence provide details about the success of work packages and numbers relating to projected and actual employment outcomes.18

Environmental

2.29 In its submission, Defence stated that a report was commissioned that assessed environment and heritage considerations for the proposed project; and that the report found no matters of environment or heritage significance that would trigger a referral in accordance with the Environment Protection and Biodiversity Conservation Act.19

2.30 There are contaminants at the site including per- and polyfluoroalkyl substances (PFAS) including perfluorooctane sulphonates (PFOS) and perfluorooctanic acid (PFOA).

16 Air Commodore Kenneth Robinson, Department of Defence, Transcript of evidence, 30 January 2018, p. 4.

17 Brigadier Matt Galton, Department of Defence, Transcript of evidence, 30 January 2018, p. 4.

18 Senator Alex Gallacher, Transcript of evidence, 30 January 2018, p. 4.

19 Department of Defence, Submission 1, p. 8.

ENGINE TEST CELL 1 UPGRADE PROJECT, RAAF BASE AMBERLEY 11

2.31 Defence stated:

The concentrations of contaminants in the soil have been measured against ecological screening levels. Contaminants have been identified in shallow soil which means run off from the site will need to be managed during construction to prevent soil migrating to nearby Warrill Creek. Warrill Creek is approximately 100 metres from [the facility], outside the base boundary fence. Defence will require the construction contractor develop a soil and sediment management strategy, and incorporate this into their Construction Environment Management Plan.20

2.32 Defence elaborated on how PFAS was being managed at RAAF Base Amberley:

The testing to date has shown that the levels of PFAS are upper-low, the limit for what is harmful to humans. That is not stopping us, though, from continuing to test throughout and to take measures to make sure that there is no potential run-off into neighbouring Warrill Creek, which is only about 80 metres away from the current construction site.

On Amberley, as you would be aware, there is a number of other construction jobs going on there. Currently, regardless of the level found in the soil, we are not actually removing it. It is either being reused or stored in an appropriate fashion on the base. At the moment that would be the plan for the project we are proposing.21

Committee comment

2.33 The Committee recognises that the proposed works are essential to the delivery of Australia’s air combat capability. Providing engine testing in Australia and being part of the F-35 Global Support Solution is more affordable than purchasing aircraft off the shelf.

2.34 The Committee understands that the $23.7 million proposed works are a small but crucial requirement of the overarching air combat capability project that is valued around $1.48 billion.

2.35 The Committee notes that the last upgrade to the facility was in 2010 to meet the needs of Super Hornet and Growler aircraft engines - that are expected to stay in operation until at least 2030. The proposed works will enable to testing of the new F-35 Lightning II aircraft engines while retaining the

20 Department of Defence, Submission 1, p.p. 8-9.

21 Brigadier Matt Galton, Department of Defence, Transcript of evidence, 30 January 2018, p. 3.

12 REPORT 1/2018

capability to test the Super Hornet and Growler aircraft engines. The Committee notes that other engine test cell facilities around the world are generally limited to one engine type - so the proposed facility has a greater scope for productivity.

2.36 Having regard to its role and the responsibilities contained in the Public Works Committee Act 1969, the Committee is of the view that this project signifies value for money for the Commonwealth and constitutes a project which is fit for purpose, having regard to the established need.

Recommendation 1

2.37 The Committee recommends that the House of Representatives resolve, pursuant to Section 18(7) of the Public Works Committee Act 1969, that it is expedient to carry out the following proposed work: Engine Test Cell 1 Upgrade, RAAF Base Amberley.

2.38 Proponent agencies must notify the Committee of any change to the project scope, time, cost, function or design. The Committee also requires that a post-implementation report be provided within three months of project completion. A report template can be found on the Committee’s website.

13

3. Joint Health Command Garrison Health Facilities Upgrade Project

3.1 The Department of Defence (Defence) seeks approval from the Committee to proceed with the Joint Health Command (JHC) Garrison Health Facilities Upgrade. The project proposes to construct eight new health centres and refurbish five existing health centres across 13 sites around Australia.

3.2 The estimated cost of the project is $212.5 million (excluding GST).

3.3 The project was referred to the Committee on 7 December 2017.

Conduct of the inquiry

3.4 Following referral, the inquiry was publicised on the Committee’s website and via media release.

3.5 The Committee received two submissions and one confidential submission. A list of submissions can be found at Appendix A.

3.6 On 31 January 2018 Defence conducted a site inspection by presentation. The Committee also conducted a public and in-camera hearing on this date. A transcript of the public hearing is available on the Committee’s website.

Need for the works

3.7 The project seeks to create a hub model and will consolidate an existing 22 facilities into 13 centres that offer comprehensive health services.1 Speaking at a public hearing, Defence explained:

1 Department of Defence, Submission 1, p. 5.

14 REPORT 1/2018

The model of care is based on flexible, modern, best-practice health service delivery specific to defence. Defence health is different to civilian health. Defence health requires a high level of proactive care at a consolidated primary care hub delivering GP, rehabilitation and mental health services, with a pharmacy and dental and physiotherapy departments also. Services need to be delivered in time frames to suit the ADF’s training and operational needs.2

3.8 Defence stated that a key objective of this project is to deliver consistent and efficient health care facilities across Defence.3

3.9 Defence identified that there are a number of issues with existing facilities that are affecting the JHC’s ability to deliver effective health care services, including:

 Non-compliance with legislative codes including the Building Code of Australia, the Disability Discrimination Act, and policies including Defence’s Manual of Fire Protection Engineering, and the Defence Security Manual;

 Non-compliance with design standards including the Australasian Health Facilities Guidelines;  Dysfunctional layouts that limit JHC’s ability to provide efficient services;  Infection control risks associated with outdated fittings and fixtures;  Multiple extensions and repurposing of ad hoc spaces to accommodate

new or modified capability requirements; and  Engineering systems that are at the end of their serviceable life.4

3.10 In its submission, Defence identified that the rationalisation of health facilities will improve effectiveness and efficiency within garrison health care service delivery, including better utilisation of Australian Defence Force (ADF), Australian Public Service, contracted personnel and material resources.5

3.11 Defence identified that existing mainstream health services did not offer the same benefits that an internal health system could. At the public hearing, Commodore Sharkey said:

2 Brigadier Matt Galton, Department of Defence, Transcript of evidence, 31 January 2018, p. 1.

3 Department of Defence, Submission 1, p.p. 5-6.

4 Department of Defence, Submission 1, p. 6.

5 Department of Defence, Submission 1, p.p. 5-6.

JOINT HEALTH COMMAND GARRISON HEALTH FACILITIES UPGRADE PROJECT 15

… an important and critical part of our ability to deliver high-quality healthcare services that optimise the health of ADF members is a really detailed and nuanced understanding of the ADF environment both in the training garrison environment and the environment that they will be exposed to on operations and on operational taskings. That is not a knowledge base that is common in the civilian community. A familiarity with our standards of healthcare and our policy framework from which we deliver health services is really critical to us providing those health services to ADF members. Providing services on base that can be in close communication with a dedicated team with some continuity of membership of that team that supports command and individual ADF members is critical in underpinning our entire ADF health system.6

Scope of the works

3.12 The proposed project will deliver fit-for-purpose health buildings at 13 sites around Australia. The project proposes to construct eight new health centres and refurbish five existing health centres including:

1 Simpson Health Centre, Watsonia, Victoria. Defence proposes the construction of a new facility at this site. This new facility will include entry, administration, primary care (including mental health and rehabilitation), pharmacy, physiotherapy, dental, general support, external works, and Joint Health Unit Headquarters.

2 Puckapunyal Health Centre, Victoria. Defence proposes the construction of a new facility at this site. This facility will include entry, administration, primary care (including mental health and rehabilitation), inpatient unit, pharmacy, physiotherapy, dental, general support, external works and range response.

3 Albury Wodonga Health Centre, Victoria. Defence proposes the construction of a new facility at this site. This new facility will include entry, administration, primary care (including mental health and rehabilitation), inpatient unit, pharmacy, physiotherapy, dental, general support, and external works.

4 ACT Health Centre, Australian Capital Territory. Defence proposes the construction of a new facility at this site. This new facility will include entry, administration, primary care (including mental health and rehabilitation), inpatient unit, pharmacy, physiotherapy, dental, general support, external works and Joint Health Unit Headquarters.

6 Commodore Sarah Sharkey, Department of Defence, Transcript of evidence, 31 January 2018, p. 6.

16 REPORT 1/2018

5 Larrakeyah Health Centre, Northern Territory. Defence proposes the construction of a new facility at this site. This new facility will include entry, administration, primary care (including mental health and rehabilitation), inpatient unit, pharmacy, physiotherapy, dental, general support, and external works.

6 Oakey Health Centre, Queensland. Defence proposes the construction of a new facility at this site. This new facility will include entry, administration, primary care (including mental health and rehabilitation), inpatient unit, pharmacy, physiotherapy, dental, general support, external works and airfield response.

7 Campbell Health Centre, Western Australia. Defence proposes the construction of a new facility at this site. This new facility will include entry, administration, primary care (including mental health and rehabilitation), inpatient unit, pharmacy, physiotherapy, dental, general support, external works and deployable health accommodation for the Special Air Service Regiment.

8 Townsville Health Centre, Queensland. Defence proposes the construction of a new facility at this site. This new facility will include entry, administration, primary care (including mental health and rehabilitation), inpatient unit, pharmacy, physiotherapy, dental, general support, external works, airfield response and deployable health accommodation for No. 1 Expeditionary Health Squadron.

9 Russell Clinic, Australian Capital Territory. Defence proposes a minor refurbishment to an existing facility at this site. The refurbished facility will include entry, administration and primary care only.

10 Holsworthy Health Centre, New South Wales. Defence proposes a major refurbishment to an existing facility at this site. The refurbishment will include entry, administration, primary care (including mental health, pharmacy and dental).

11 Robertson Health Centre, Northern Territory. Defence proposes a minor refurbishment to an existing facility at this site. Minor upgrades are proposed for the mental health area, physiotherapy, inpatient and administration areas, while a higher level refurbishment will be undertaken in the dental clinic.

12 Enoggera Health Centre, Queensland. Defence proposes a major refurbishment to an existing facility at this site. The currently vacant operating theatres will be refurbished to accommodate the dental clinic. Other refurbishments will include entry, administration, primary care, mental health, pharmacy, and dental.

13 Pearce Health Centre, Western Australia. Defence proposes a major refurbishment to an existing facility at this site. The existing dental building

JOINT HEALTH COMMAND GARRISON HEALTH FACILITIES UPGRADE PROJECT 17

will be demolished, and the dental department will be relocated from a separate building to the main health centre. The refurbished facility will include entry, administration, primary care (including mental health and rehabilitation), pharmacy, physiotherapy, dental, airfield response and deployable health accommodation for No 2 Expeditionary Health Squadron.7

Cost of the works

3.13 The total estimated capital delivery cost of this project is $212.5 million (excluding GST). The cost estimate includes construction costs, professional management of design fees and all fittings, equipment and infrastructure. It also includes appropriate allowances for contingencies and escalation.

3.14 The Committee received a confidential supplementary submission detailing the project costs and held a hearing with Defence on the project.

3.15 The Committee is satisfied that the costings for the project provided to it have been adequately assessed by the proponent agency.

Local impacts

3.16 The Committee received evidence from one local residents group regarding the impact of proposed works at one site; Gallipoli Barracks, Enoggera, Queensland.

3.17 The submission from the Gallipoli Precinct Action Group (GPAG) stated concerns relating to traffic management at the site:

…non-compliance to Traffic Management Plan and Traffic Directives by Gallipoli Barracks [means] traffic remains problematic and continues to affect the safety and amenity of the local residents.8

3.18 The GPAG highlighted that traffic management at the site had been an ongoing issue impacting local residents:

A long, documented history regarding non-compliance to Traffic Management Plans and traffic directives exists and these issues are exacerbated when projects are undertaken at Gallipoli Barracks. These issues of non-compliance have formed the foundation of a number of submissions to the Public Works

7 Department of Defence, Submission 1, p.p. 23-26.

8 Gallipoli Precinct Action Group, Submission 2, p. 3.

18 REPORT 1/2018

Committee by the GPAG and others over the past several years and remain problematic and unresolved.9

3.19 Defence provided a Community Consultation Report10 to the Committee that outlined a response addressing the traffic management issue, stating that GPAG representatives had attended community information session about the project and that:

The project team confirmed that the contractor would be required to adhere to a Defence approved traffic management plan during construction, and that a single point of contact would be provided to raise issues with.11

3.20 The Community Consultation Report from Defence outlined all other consultation activities relating to all other sites the project encompasses, stating:

Whilst there was limited public participation across the provided communication channels and engagement activities, there were no objections raised to the proposed works. There were some minor concerns raised about traffic, dust and noise during construction, but there are no major issues or concerns that require further action. Defence will continue to manage these issues until construction is completed.12

Environmental

3.21 In its submission, Defence stated that environmental and heritage impacts had been considered for each proposed new site.

3.22 Only one site was identified as having a high-risk heritage impact: the ACT Health Centre at the Royal Military College. This site is proximate to the Changi Chapel and Robert Campbell Road, which are regarded as having heritage value of exceptional significance.13

3.23 Defence explained that the heritage risk at this site would be mitigated:

Defence has undertaken a heritage impact assessment of the proposed new ACT Health Centre, and extensive consultation with National Capital

9 Gallipoli Precinct Action Group, Submission 2, p. 2.

10 Department of Defence, Submission 1.2

11 Department of Defence, Submission 1.2, p. 9.

12 Department of Defence, Submission 1.2, p. 2.

13 Department of Defence, Submission 1, p. 9.

JOINT HEALTH COMMAND GARRISON HEALTH FACILITIES UPGRADE PROJECT 19

Authority (NCA) and designed into the plans protection and extension of the heritage vista requirements.14

3.24 There are no significant heritage concerns for the other 12 sites.

3.25 Environmental assessments have occurred at each of the new sites, including reviewing the Asbestos Register and geotechnical testing for poly-fluoroalkyl Substances (PFAS).

3.26 Defence stated:

Defence’s Asbestos Register for each of the sites has been reviewed during the design phase. This will guide the identification and removal of asbestos during the construction phase of the project. Asbestos accommodation will be removed in seven existing facilities proposed for demolition (Simpson Health Centre, Albury Wodonga Health Centre, ACT Health Centre, Holsworthy dental building, Oakey Health Centre, Townsville Health Centre and Pearce dental building). The asbestos will be disposed of in accordance with local statutory requirements.15

3.27 Defence told the Committee that PFAS testing had occurred at each site.16

3.28 Defence submitted:

Geotechnical testing for [PFAS] has been undertaken at every new build site. Minor concentrations of PFAS compounds were detected in shallow soil samples at Oakey Army Aviation Centre and RAAF Base Townsville. The concentrations were found to be below the adopted Defence Human Health (Residential) screening criteria. The risk to human health and the environment is considered low. Testing will continue at these sites prior to, and during construction.17

3.29 Defence also acknowledged it is possible that other types of contamination will be discovered during the construction phase - but Defence would mitigate this risk:

The site-specific Construction Environment Management Plans (CEMP) will incorporate appropriate environmental control measures to ensure that any contaminated material is handled in accordance with the relevant legislation, codes or standards. Development of the site-specific CEMP is the contractual

14 Department of Defence, Submission 1, p. 9.

15 Department of Defence, Submission 1, p. 10.

16 Brigadier Matt Galton, Department of Defence, Transcript of evidence, 31 January 2018, p. 5.

17 Department of Defence, Submission 1, p. 10.

20 REPORT 1/2018

responsibility of the construction contractor. Compliance with the approved management plans will be audited throughout the course of the project.18

Committee Comment

3.30 The Committee recognises the importance of suitable health facilities in enabling Defence capability.

3.31 The Committee understands that it is important that ADF staff utilise internal health services over mainstream health services. The ADF needs to know the health status of personnel, especially to determine suitability for operations. This helps Defence manage risk, in particular for deployment. Being able to offer more comprehensive health services will encourage personnel to stay within the internal health system.

3.32 Furthermore, the Committee notes that Defence is a nuanced operating environment that has different health standards to civilian norms. Unlike civilian primary healthcare providers, internal ADF practitioners have a unique insight into the operational requirements and overarching policies and services that impact personnel. The Committee notes that offering a comprehensive, internal health service will therefore better meet the needs of personnel and the ADF more broadly.

3.33 The Committee understands that mental health is a key issue for the ADF and that this project will help remove barriers for personnel accessing these services. For example, existing mental health services are often in obvious stand-alone buildings. The new facilities will be large, multi-purpose spaces that will offer a variety of services. This new model will help reduce the stigma around accessing mental health services.

3.34 The Committee is aware that PFAS has had a significant impact in local communities where Defence facilities are located. The Committee appreciates the steps Defence is taking to address PFAS management in this project.

3.35 The Committee notes the on-going traffic issues experienced by local residents at Gallipoli Barracks, Enoggera, Queensland. The Committee encourages Defence to keep communicating with local residents in order to find solutions that work for both parties.

3.36 Having regard to its role and the responsibilities contained in the Public Works Committee Act 1969, the Committee is of the view that this project

18 Department of Defence, Submission 1, p.p. 10 -11.

JOINT HEALTH COMMAND GARRISON HEALTH FACILITIES UPGRADE PROJECT 21

signifies value for money for the Commonwealth and constitutes a project which is fit for purpose, having regard to the established need.

Recommendation 2

3.37 The Committee recommends that the House of Representatives resolve, pursuant to Section 18(7) of the Public Works Committee Act 1969, that it is expedient to carry out the following proposed work: Joint Health Command Garrison Health Facilities Upgrade Project.

3.38 Proponent agencies must notify the Committee of any changes to the project scope, time, cost, function or design. The Committee also requires that a post-implementation report be provided within three months of project completion. A report template can be found on the Committee’s website.

23

4. JP157 Replacement Aviation Refuelling Vehicles Infrastructure Project

4.1 The Department of Defence (Defence) seeks approval from the Committee to proceed with Joint Project 157 (JP157) Replacement Aviation Refuelling Vehicles Infrastructure. The proposed works will provide new and upgraded infrastructure at 15 sites to accommodate replacement aviation refuelling vehicles, including new vehicle shelters, bunding, hardstand and roads, and fuel treatment facilities.

4.2 The estimated cost of the project is $40.4 million (excluding GST) with future sustainment costs estimated at $0.5 million per annum. These sustainment costs include maintenance and cleaning of the new facilities, and utilities expenses.

4.3 The project was referred to the Committee on 7 December 2017.

Conduct of the inquiry

4.4 Following referral the inquiry was publicised on the Committee’s website and via media release.

4.5 The Committee received two submissions and one confidential submission. A list of submissions can be found at Appendix A.

4.6 On 2 March 2018 Defence conducted a site inspection by presentation. The Committee also conducted a public and in-camera hearing on this date. A transcript of the public hearing is available on the Committee’s website.

24 REPORT 1/2018

Need for the works

4.7 Defence is undertaking JP157 Replacement Aviation Refuelling Vehicles, which will provide the Australian Defence Force with a fleet of 100 vehicles to replace ‘an aged and failing, under-capacity aviation refuelling fleet’.1

4.8 The total value of JP157 is over $400 million, with the new refuelling fleet designed to provide ‘effective and efficient’ refuelling for both current and approved future fixed wing aircraft and helicopter fleets.2

4.9 The existing fleet of 141 vehicles located at military air bases within Australia, and at Royal Malaysian Air Force (RMAF) Base Butterworth in Malaysia, is being replaced with commercial-off-the-shelf aviation fuel vehicles of three kinds: high capacity semi-tankers, medium capacity rigid tankers and elevating hydrant vehicles.3

4.10 Defence explained the difference between the two fleets:

The current fleets, the older militarised vehicles, are built to withstand the extremes of weather. Newer commercial vehicles are not. Hence we are requesting shelters to protect those vehicles from the weather. That’s really the major difference between the two vehicles.4

4.11 Defence identified a number of requirements for the new vehicles, including: shelters, upgraded fuel spill containment and fuel treatment systems, and additional road and hardstand facilities for vehicle circulation. According to Defence:

Aviation refuelling vehicles need to be parked and sheltered within a bunded secure environment that complies with fuel spill, fuel treatment and security requirements. Vehicle shelters are necessary to protect the vehicles from the elements, reduce environmental degradation and maintenance. There is a lack of capacity in existing shelters as well as a lack of mandatory safety showers and other Building Code and Work Health and Safety (WHS) compliance

1 Department of Defence, Submission 1, p. 1.

2 Patrick Durrant, ‘Refuel contract for ADF aircraft support’, Australian Defence Magazine, 18 October 2016, viewed 9 March 2018.

3 Department of Defence, Submission 1, p. 1.

4 Major Francis Brindle, Department of Defence, Transcript of evidence, 2 March 2018, p. 3.

JP157 REPLACEMENT AVIATION REFUELLING VEHICLES INFRASTRUCTURE PROJECT 25

requirements at most sites. … Vehicle circulation and access roads are deficient at many sites.5

4.12 Defence told the Committee that 43 of the 100 vehicles have already been delivered to bases to fulfil the pressing need for the refuelling capability provided by the new fleet.6 These vehicles are being housed in existing facilities or are currently without shelter.7

4.13 Defence explained to the Committee:

The need to have the refuelling capability was such that we did need to move forward to get the vehicles now to start being able to produce that capability, always in the knowledge that the shelters would come along behind.8

4.14 In its submission, Defence clarified that adequate housing would be required to achieve the expected life-span of the fleet:

This facilities project will garage the replacement vehicles to provide protection from the weather and elements and to and increase serviceability as well as usable life of the vehicles.9

4.15 The Committee is satisfied that need for the works exists.

Scope of the works

4.16 The works impact 14 bases in Australia and RMAF Base Butterworth. While the refuelling fleet is being replaced at 17 military air bases, two of the bases (RAAF Base Scherger and Army Aviation Centre Oakey) do not require any works.

4.17 Infrastructure works proposed for the other 15 sites includes:

a. Bunding Works. Repairs and extension of damaged and/or undersized bunding and provision of new compliant bunding.

b. Fuel Treatment System Works. Increase of treatment system capacity or replacement of unsuitable treatment system type.

5 Department of Defence, Submission 1, p. 2.

6 Major Francis Brindle, Department of Defence, Transcript of evidence, 2 March 2018, p. 2.

7 Brigadier Matt Galton, Department of Defence, Transcript of evidence, 2 March 2018, p. 2.

8 Brigadier Matt Galton, Department of Defence, Transcript of evidence, 2 March 2018, p. 2.

9 Department of Defence, Submission 1, p. 26.

26 REPORT 1/2018

c. New Vehicle Shelters. Vehicle shelters are necessary to sustain the aviation refuelling fleet by protecting the vehicles from the elements, reducing environmental degradation and maintenance.

d. Hardstand and Access Roads. Hardstand and access roads are required to be Austroad dimension compliant to allow parking and associated circulation space to support movements.

e. Security Works. Security works are required to provide appropriate levels of physical security and illumination of parking areas.

f. Contamination Works. Contamination works are inclusive of disposal, storage and/or treatment of contaminated materials resultant from excavation works including soil and water contaminated with hydrocarbons and of per- and poly-fluoroalkyl substances (PFAS).10

4.18 Table 4.1 on the next page provides a list of the proposed works by location.

4.19 The most significant works will be undertaken in New South Wales at RAAF Base Williamtown, RAAF Base Richmond and 6th Army Aviation Holsworthy Barracks, as well as in Queensland at RAAF Base Townsville, and in Western Australia at HMAS Stirling.

4.20 The Committee was interested in how the life-span of the infrastructure compares to the life-span of the vehicles for which it is to be built. Defence clarified that the structures and building fabric of the vehicle shelters have an expected design life of 50 years, while the vehicles themselves have a service life of only 15 years.11

4.21 Defence further explained that the project team ‘fully anticipate’ that future replacement vehicles will continue to use the same shelters, as this is built into the design.12

4.22 The Committee finds that the proposed scope of works is suitable for the works to meet its purpose.

10 Department of Defence, Submission 1, p. 3.

11 Brigadier Matt Galton, Department of Defence, Transcript of evidence, 2 March 2018, p. 2.

12 Brigadier Matt Galton, Department of Defence, Transcript of evidence, 2 March 2018, p. 2.

JP157 REPLACEMENT AVIATION REFUELLING VEHICLES INFRASTRUCTURE PROJECT 27

Table 4.1 Summary of proposed scope of works by location

Source: Department of Defence, Submission 1, p. 4

28 REPORT 1/2018

Local impacts

4.23 During the course of the inquiry, the following issues of local impact were addressed: risks to cultural heritage, risks related to site contamination, and opportunities for local employment.

4.24 Defence identified a risk of encountering cultural heritage artefacts at RAAF Base Edinburgh. This risk is being addressed through a requirement that the construction contractor engage an on-site cultural heritage monitor at RAAF Base Edinburgh during construction.13

4.25 In its submission, Defence stated that a report was commissioned which found that it was ‘unlikely that the project could result in a significant impact’ under the Environment Protection and Biodiversity Conservation Act 1999 (Cth).14

4.26 However, there are contaminants at a number of the sites, including soil and water contaminated with hydrocarbons and of per- and poly-fluoroalkyl substances (PFAS).15 Defence has included provisions in the project budget for the removal of such contaminants at every site except Robertson and Butterworth, and confirmed:

Any contaminated material found during the construction phase shall be removed and disposed of in accordance with Defence Environmental Policy and applicable State Legislation.16

4.27 Defence stated that the project will ‘generate short-term employment opportunities and opportunities for suppliers predominantly in the building, construction and labour markets at 14 sites throughout Australia’.17 Further that the project will employ an average of 15 to 20 construction personnel at each location during the construction periods.18

4.28 Defence committed to providing the Committee with information about its engagement with local industry at the completion of the project, and added:

13 Department of Defence, Submission 1, p. 6.

14 Department of Defence, Submission 1, p. 5.

15 Department of Defence, Submission 1, p. 3.

16 Department of Defence, Submission 1, p. 6.

17 Department of Defence, Submission 1, p. 20.

18 Department of Defence, Submission 1, p. 26.

JP157 REPLACEMENT AVIATION REFUELLING VEHICLES INFRASTRUCTURE PROJECT 29

Whilst we are using a head contractor methodology across all sites, we fully anticipate, given the spread of the sites—in some instances being in a remote location—the head contractor will be subcontracting out to local providers.19

Cost of the works

4.29 The estimated cost of the project is $40.4 million (excluding GST) with future sustainment costs estimated at $0.5 million per annum.

4.30 The Committee received a confidential supplementary submission detailing the project costs and held an in-camera hearing with Defence on the project costs.

4.31 The Committee is satisfied that the costings provided to it have been adequately assessed by the proponent entity.

Committee comment

4.32 The broader JP157 project, worth more than $400 million, will provide the Australian Defence Force with fast refuelling capability to service its current fixed wing and rotary wing aircraft, as well as the capability to service future aircraft.

4.33 The Committee recognises that suitable garaging and facilities are not only required in order to fully operate the new fleet of aviation refuelling vehicles, but also to maximise the life-span of the investment.

4.34 The Committee is also aware of the need to provide adequate fuel spill containment and fuel treatment, and as such supports Defence in ensuring all facilities meet current standards.

4.35 Noting that 43 of the 100 vehicles have already been delivered and are in operation, the Committee appreciates the need for the new and upgraded facilities.

4.36 Having regard to its role and the responsibilities contained in the Public Works Committee Act 1969, the Committee is of the view that this project signifies value for money for the Commonwealth and constitutes a project which is fit for purpose, having regard to the established need.

19 Brigadier Matt Galton, Department of Defence, Transcript of evidence, 2 March 2018, p. 3.

30 REPORT 1/2018

Recommendation 3

4.37 The Committee recommends that the House of Representatives resolve, pursuant to Section 18(7) of the Public Works Committee Act 1969, that it is expedient to carry out the following proposed work: Joint Project 157 Replacement Aviation Refuelling Vehicles Infrastructure Project.

4.38 Proponent agencies must notify the Committee of any change to the project scope, time, cost, function or design. The Committee also requires that a post-implementation report be provided within three months of project completion. A report template can be found on the Committee’s website.

31

5. SEA1654 Phase 3 Maritime Operational Support Capability Facilities Project

5.1 The Department of Defence (Defence) seeks approval from the Committee to proceed with the SEA1654 Phase 3 Maritime Operational Support Capability Facilities Project.

5.2 The estimated cost of the project is $220.5 million (excluding GST).

5.3 The project was referred to the Committee on 7 December 2017.

Conduct of the inquiry

5.4 Following referral, the inquiry was publicised on the Committee’s website and via media release.

5.5 The Committee received two submissions and one confidential submission. A list of submissions can be found at Appendix A.

5.6 On 6 March 2018, Defence conducted a site inspection at HMAS Stirling, Western Australia where the majority of proposed works will occur. The Committee also conducted a public and in-camera hearing on this date. A transcript of the public hearing is available on the Committee’s website.

Need for the works

5.7 The Royal Australian Navy regularly operates far from the Australian mainland. When in operation, they need fuel replenished, along with other supplies such as water, food and explosive ordnances (munitions containing

32 REPORT 1/2018

explosives such as bombs, missiles and artillery). Currently the need to support the wider Navy fleet is met by two supply vessels: HMAS Success and HMAS Sirius.

5.8 Defence explained:

The current ship HMAS Sirius [on the west coast] really can only resupply marine diesel fuel and aviation fuel. It carries very limited foodstuffs, very limited spare parts and it can carry no explosive ordnance. And that is a consequence of the fact that Sirius is a converted merchant tanker; it was never built as a dedicated replenishment ship. But she is designated as an auxiliary oiler rather than these new ships which are auxiliary oiler replenishment.

HMAS Success on the east coast was a purpose-built dedicated replenishment ship but she's ageing. She was the last ship built at Cockatoo Island Sydney back in the early eighties and she is just reaching the end of her operational life and will be replaced by the new ship. …1

5.9 In 2016, the Australian Government entered contracts to purchase two new supply ships to replace Success and Sirius, known as Maritime Operational Support Capability (MOSC) vessels. The new MOSC ships are both the same class of Auxiliary Oiler Replenishment vessel and share the same systems. They will both have the same capability of being able to carry fuel, water, stores and explosive ordnances. Unlike Sirius and Success, the new MOSC ships will each have a combat management system. This is a computer system that connects vessels with onshore centres and potentially other craft such as other ships and helicopters. Combat management systems enable the near real-time sharing of data to improve the interoperability of the support fleet and wider Navy.

5.10 Defence further explained that:

…the current ships, HMAS Success and HMAS Supply, only have very basic communications systems and rudimentary bridge navigation systems, very similar to a commercial ship. Their ability to actually maintain a situational understanding of the environment and any unfolding operational scenario is quite limited. The [new] ships will have a Saab-designed combat management system, which will allow them to really understand the tactical picture that has also been shared by the warships they are there to support. It helps them

1 Commodore Philip Spedding, Department of Defence, Transcript of evidence, 6 March 2018, p. 7.

SEA1654 PHASE 3 MARITIME OPERATIONAL SUPPORT CAPABILITY FACILITIES PROJECT 33

to be in the right place, and to do the right thing, at the right time—that's the essence of it—more than being a fighting system.2

5.11 Defence noted the considerable efficiencies gained by having two ships of the same class in terms of training, maintenance support and spare parts efficiencies.3 Defence further clarified:

We all realise fleet efficiencies from having a single class for both vessels.4

5.12 The proposed works will provide suitable facilities and infrastructure to support the two new MOSC vessels. The new ships have different capabilities to the existing vessels Success and Sirius and as such have different support requirements. The proposed works are at one location on the west coast (HMAS Stirling) and two locations on the east coast (Garden Island Defence Precinct and Randwick Barracks).

Scope

5.13 The proposed scope comprises seven project elements and includes:

HMAS Stirling, WA:

 Extending the Armament Wharf;

 Upgrading the engineering services at Diamantina Pier;

 Constructing additional Living in Accommodation (LIA);

 Constructing a shared-use facility, including systems program office working accommodation, accommodation for crew support and remote monitoring station for the MOSC vessel’s integrated platform monitoring system (IPMS); and

 Constructing a maintenance hardstand area (MHA).5

5.14 The current Armament wharf can only berth vessels up to a displacement of approximately 6,000 tonnes. The new MOSC vessels have a displacement of approximately 19,620 tonnes. Extending the wharf will allow for this greater displacement. The extension includes a 156 metre quay line, plus the

2 Commodore Philip Spedding, Department of Defence, Transcript of evidence, 6 March 2018, p.p. 2-3.

3 Commodore Philip Spedding, Department of Defence, Transcript of evidence, 6 March 2018, p. 7.

4 Commodore Philip Spedding, Department of Defence, Transcript of evidence, 6 March 2018, p. 7.

5 Department of Defence, Submission 1, p. 7.

34 REPORT 1/2018

addition of two berthing and one mooring dolphins. This will allow for other larger ships to berth at the Armament Wharf in the future.

5.15 Defence elaborated:

…the actual length of the wharf can accommodate up to 330 metres. That allows for future larger ships to be berthed including the largest, which is the LHD at the moment, to be berthed alongside this wharf.6

5.16 The extension also includes widening the wharf to enable heavy rigid vehicles (that deliver explosive ordnances such as torpedos) to perform 180 degree U-turns on the wharf. The deck level will be raised 0.85 metres above the existing wharf to allow for sea level rise over the 100 year design life.

5.17 Whilst the berths at the Diamantina Pier can accommodate the physical size and displacement of the new supply vessels, improvements to the engineering services infrastructure are needed. This includes alterations to the cope point boxes to connect the integrated platform management system back to the Shared User Facility.7 The IPMS is a sophisticated control system that may control propulsion, electrical, HVAC and damage control systems of a vessel through one platform.

5.18 The scope at HMAS Stirling also includes construction of a shared-use facility, including systems program office (SPO) working accommodation, accommodation for crew support and remote monitoring station for the vessel’s IPMS. This will be a two storey building providing approximately 1,300 square metre gross floor area. The facility will include space for the duty watch to work and sleep, and include office areas, meeting rooms and training rooms that will also be used by the SPO attachment.8

5.19 Defence explained the efficiencies gained in removing crew from the docked vessel and working from the shared-use facility:

Remaining on board introduces some additional requirements. You have to maintain galley equipment to feed them. You have to run certain services on board the ship to give them a level of habitability and safety on board, but it does expose that small number of people on board a ship to a level of risk which you can mitigate by having them accommodated ashore in a crew support facility. The key bit to be able to do this is an integrated platform management system which can be remotely monitored from the shared-use

6 Lieutenant Colonel Karl Reynolds, Department of Defence, Transcript of evidence, 6 March 2018, p.5.

7 Department of Defence, Submission 1, p. 6.

8 Department of Defence, Submission 1, p. 19.

SEA1654 PHASE 3 MARITIME OPERATIONAL SUPPORT CAPABILITY FACILITIES PROJECT 35

facility that has been proposed under this project. So the small-duty watch, ashore in the shared-use facility, will be able to maintain monitoring of the temperatures, fluid levels and all the other elements of running machinery on the ship and can intervene if required, but they're doing it from a safe location and a more comfortable environment ashore, on the wharf.9

5.20 Defence explained that the need for the construction of additional LIA was due to limited existing accommodation options on base:

The accommodation that’s at the current standard that’s utilised for defence living-in personnel is sitting at a very high percentage of, I think, 90-plus per cent at any one time. This additional accommodation that we’re putting in is to cater for the fact that the new ship has an extra crew of around about 60 extra personnel, which is what has driven the need for extra accommodation on this project.10

Randwick Barracks, NSW: constructing a new training centre

5.21 This component will be an integrated two-storey extension of the existing Navy Training Systems Centre, providing approximately 3,480 square metre gross floor area. It will provide working space for MOSC staff responsible for Through Life Support functions - which refers to supporting the MOSC vessels system platform throughout its entire lifecycle, to reduce costs and increase performance. The existing supply ships Success and Sirius do not have a Through Life Support facility - and as such this facility is a new requirement.

5.22 The extension will include space for specialist training rooms and equipment for MOSC staff and trainees. The facility will require special power supply to service the test equipment and training systems. Additionally, separate communications rooms will be provided for classified and unclassified systems.11

5.23 Defence explained that the new MOSC vessels share a common designer (Spanish ship builder Navantia) with the existing fleets of air warfare destroyer and amphibious ships, making the extension of the existing Navy Training Systems Centre the best option:

…there is a high degree of commonality in terms of systems between those ship classes, which allows us to build upon the existing facilities to extend the

9 Commodore Philip Spedding, Department of Defence, Transcript of evidence, 6 March 2018, p. 6.

10 Brigadier Matt Galton, Department of Defence, Transcript of evidence, 6 March 2018, p.5.

11 Department of Defence, Submission 1, pp. 20-21.

36 REPORT 1/2018

training capacity rather than building a standalone facility, which would have inefficiencies to it and cost overheads. We’re actually able to reuse some of the facilities that are already in place supporting those other ship classes.12

Garden Island Defence Precinct, NSW: refurbish part of Building 122

5.24 The refurbishment will modify existing work stations in Building 122 and reconfigure the existing electrical, lighting and communications services to enable the space to be used as a remote monitoring station for the vessel’s IPMS.13

Local impact

Environmental

5.25 The Committee received evidence relating to the impact of the works at HMAS Stirling, WA on the local marine flora and fauna. An independent environmental consultant completed an Environmental Report, that noted that environmental and heritage impacts were low and a referral under the Environmental Protection and Biodiversity Conservation Act 1999 was not anticipated at this stage.14

5.26 The most significant work at this site is the extension of the Armament Wharf. A survey of the seagrass beds was completed in August 2017 and concluded that there is no seagrass in the footprint of the wharf extension. Defence stated that further assessment of the potential impacts to the seagrass beds will be required.15

5.27 Construction mitigation measures - such as ceasing noise generating activities if marine mammals are sighted near the construction area - will mitigate any impacts on the sea lions, southern right whales and little penguins found on and around HMAS Stirling.

5.28 The Environmental Report also assessed potential impacts of aqueous film forming foams and the associated potential for impacts by per- and poly-fluoroalkyl substances (PFAS) at HMAS Stirling.

5.29 Defence elaborated:

12 Commodore Philip Spedding, Department of Defence, Transcript of evidence, 6 March 2018, p. 2.

13 Department of Defence, Submission 1, p. 21.

14 Department of Defence, Submission 1, p. 12.

15 Department of Defence, Submission 1, p. 13.

SEA1654 PHASE 3 MARITIME OPERATIONAL SUPPORT CAPABILITY FACILITIES PROJECT 37

There has been PFAS found through the bores in the groundwater. The only locations where that’s anywhere near that for this project would be the shared-use facility and the hardstand. Given the nature of constructing a hardstand, we don’t think there’s any chance that we’d be getting anywhere near groundwater for that as part of the construction. If that were to occur for the shared-use facility—we still think it’s quite a minor risk that that would happen—then it would be closely monitored. If there was groundwater that had to be removed, we would be looking at measures such as bringing in a water treatment plant to be able to deal with that. But we see that as being a very low probability on this particular project.16

5.30 The Committee also received evidence about the presence of asbestos at Randwick Barracks, NSW. This is due to the historical placement of asbestos-containing fill material within utility trenches across the site.

5.31 Defence noted it is possible asbestos and hydrocarbon contamination will be encountered during the extension of the Navy Systems Training Centre at Randwick Barracks, stating:

Further assessment is currently being completed by the projects design consultants, in conjunction with geotechnical investigations, to determine whether remediation or management measures will be required during construction.17

Employment opportunities

5.32 Defence submitted that the proposed works will generate ‘significant short-term employment opportunities predominantly in the building, construction and labour markets in the Rockingham [WA] and Sydney [NSW] areas’.18

5.33 Defence further explained the number of local tradespeople expected to be employed at HMAS Stirling where the majority of works will occur:

In terms of people on site, there has been an estimation of what we’d be looking at by way of contractors working. So, for HMAS Stirling, we’re looking at up to 140 on the site at its peak but, over the course of construction, on average, about 50 a day. For Randwick Barracks, it is a peak of 60 at the most but, on average, 15 throughout the life of the project. When it comes down to local industry content, the lessons that we’ve had so far from the HMAS Stirling redevelopment project that’s currently underway are that, as of January, five of nine subcontract packages had been let and, of those five, a

16 Brigadier Matt Galton, Department of Defence, Transcript of evidence, 6 March 2018, p.4.

17 Department of Defence, Submission 1, p. 14.

18 Department of Defence, Submission 1, p. 27.

38 REPORT 1/2018

total value of around 76 per cent of the dollar figure has gone to a local firm as defined by WA. That should be a good indication of what we’d be able to achieve on this next project…19

Cost of the works

5.34 Regarding costs, Defence explained:

The total cost of the proposed works is $220.5 million excluding goods and services tax, with the exception of the living-in accommodation component, which is GST inclusive. This cost estimate includes construction costs, professional management and design fees and charges, and furniture fittings and equipment, together with appropriate allowances for contingencies and escalation. Subject to parliamentary approval of the project, detailed design is scheduled to be completed in 2018, with construction to commence mid this year for completion by late 2020.20

5.35 The Committee also received evidence relating to cost breakdowns in the in-camera hearing.

5.36 The Committee is satisfied that the costings for the project provided to it have been adequately assessed by the proponent entity.

Committee Comment

5.37 The Committee notes that the investment in the new MOSC vessels is significant and that appropriate infrastructure is needed to support and maintain these new vessels. The Committee understands that adopting a single class of supply vessel - that also shares similar systems with other vessels across the Navy - will result in greater efficiencies for staffing, training and maintenance and ultimately reduce costs.

5.38 The majority of the proposed works will occur at HMAS Stirling, WA. The Committee notes that 18 per cent of naval personnel are based at this site. The growth of the Royal Australian Navy will see two thirds of its entire future fleet based on the west coast in the next 40 years. The Committee understands the importance of improving facilities on the west coast due to its proximity to the Indian Ocean and the access it provides to Asia and the Middle-East. The Committee also notes the importance of having an Armament Wharf facility on the west coast for the loading and unloading of

19 Brigadier Matt Galton, Department of Defence, Transcript of evidence, 6 March 2018, pp. 3-4.

20 Brigadier Matt Galton, Department of Defence, Transcript of evidence, 6 March 2018, pp. 1-2.

SEA1654 PHASE 3 MARITIME OPERATIONAL SUPPORT CAPABILITY FACILITIES PROJECT 39

explosive ordnances, as currently there is only one such facility (located on the east coast).

5.39 The Committee understands that Defence personnel have changing accommodation needs and that access to appropriate accommodation is an important factor for Defence recruitment and retention. The Committee notes that having crew live on land, rather than on board, mitigates risk.

5.40 Having regard to its role and the responsibilities contained in the Public Works Committee Act 1969, the Committee is of the view that this project signifies value for money for the Commonwealth and constitutes a project which is fit for purpose, having regard to the established need.

Recommendation 4

5.41 The Committee recommends that the House of Representatives resolve, pursuant to Section 18(7) of the Public Works Committee Act 1969, that it is expedient to carry out the following proposed works: SEA1654 Phase 3 Maritime Operational Support Capability Facilities Project.

5.42 Proponent entities must notify the Committee of any changes to the project scope, time, cost, function or design. The Committee also requires that a post-implementation report be provided within three months of the project completion. A report template can be found on the Committee website.

Mr Scott Buchholz MP Chair

41

A. List of Submissions

Engine Test Cell 1 Upgrade, RAAF Base Amberley

1 Australian Government Department of Defence

 1.1 Supplementary submission (Confidential)  1.2 Supplementary submission

Joint Health Command Garrison Health Facilities Upgrade Project

1 Australian Government Department of Defence

 1.1 Supplementary submission (Confidential)  1.2 Supplementary submission

2 Gallipoli Precinct Action Group

JP157 Replacement Aviation Refuelling Vehicles Infrastructure Project

1 Australian Government Department of Defence

 1.1 Supplementary submission (Confidential)

2 Ipswich City Council

42 REPORT 1/2018

SEA1654 Phase 3 Maritime Operational Support Capability Facilities Project

1 Australian Government Department of Defence

 1.1 Supplementary submission (Confidential)

43

B. Public Hearings and Witnesses

Engine Test Cell 1 Upgrade, RAAF Base Amberley

Tuesday, 30 January 2018 - Ipswich Qld

Department of Defence

Brigadier Matt Galton, Director General, Capital Facilities and Infrastructure

Air Commodore Damien Keddie, Director General, Joint Strike Fighter Division

Mr Mark O’Connor, Acting Director, Base and Community Support, PFAS Investigation and Management Branch

Air Commodore Kenneth Robinson, Senior Australian Defence Force Officer, RAAF Base Amberley

Coffey International

Mr Philip Wright, Project Manager Representative

TAE Aerospace

Mr Andrew Sanderson, Chief Executive Officer

Joint Health Command Garrison Health Facilities Upgrade Project

Wednesday, 31 January 2018 - Brisbane Qld

Department of Defence

Brigadier Matt Galton, Director General, Capital Facilities and Infrastructure

44 REPORT 1/2018

Mr Peter Ingham, Project Director, Capital Facilities and Infrastructure

Mr Mark O’Connor, Acting Director, Base and Community Support, PFAS Investigation and Management Branch

Commodore Sarah Sharkey, Director General, Health Business and Plans

AECOM

Mr Malcolm Catchpole, Technical Director

Aurecon Australia

Ms Kristian Wheeler, Project Manager

JP157 Replacement Aviation Refuelling Vehicles Infrastructure Project

Friday, 2 March 2018 - Canberra ACT

Department of Defence

Brigadier Matt Galton, Director General, Capital Facilities and Infrastructure

Major Francis Brindle, Staff Officer, Combat Service Support, Army Headquarters

Colonel Amanda Fielding, Director, Combat Service Support Systems, Land Capability Division, Army Headquarters

Wing Commander John Force, Project Director, National Airfields

AECOM Australia Pty Ltd

Mr Paul Brown, Design Manager

Ms Angela Hanson, Principal Cost Estimator

GHD Pty Ltd

Mr Neal Morrow, Project Manager, Contract Administrator

SEA1654 Phase 3 Maritime Operational Support Capability Facilities Project

Tuesday, 6 March 2018 - Rockingham WA

PUBLIC HEARINGS AND WITNESSES 45

Department of Defence

Brigadier Matt Galton, Director General, Capital Facilities and Infrastructure

Lieutenant Colonel Karl Reynolds, Project Director, Capital Facilities and Infrastructure

Commodore Philip Spedding, Director General, Navy Program Support and Infrastructure

GHD Pty Ltd

Mr Rodney Adlam, Design Services Consultant Representative

RPS

Mr Niall Pigott, Project Director