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Wednesday, 4 November 1992
Page: 2576

Mr BEDDALL (Minister for Small Business, Construction and Customs) (4.27 p.m.) —I move:

  That, in accordance with the provisions of the Public Works Committee Act 1969, it is expedient to carry out the following proposed work which was referred to the Parliamentary Standing Committee on Public Works and on which the committee has duly reported to Parliament: Office construction at section 45, Belconnen, ACT, for Australian Estate Management to be leased by the Australian Taxation Office Canberra branch.

The proposed work, recommended by the parliamentary Standing Committee on Public Works, is the construction of offices at Section 45, Belconnen, ACT, for the Australian Estate Management Group of the Department of Administrative Services. The building is to be leased to the Australian Taxation Office to accommodate its Canberra branch office which is currently accommodated in premises leased from the private sector in Civic. The proposed five-storey building will provide approximately 16,500 square metres of net lettable space—office, storage and document dispatch facilities—and 50 basement car parking spaces at an estimated completed cost not exceeding $40.91m.

  The building site, bounded by Cameron Avenue and Chandler Streets in Belconnen, is Commonwealth owned. The western portion of the site is currently undeveloped and the eastern portion is a sealed car park. The building will accommodate 715 staff from the Canberra branch office of the Australian Taxation office. The project will also boost local employment and industry and is expected to generate at least 250 jobs on site as well as other ancillary services. The project is expected to take at least 17 months to complete. The proposal was referred to the parliamentary Standing Committee on Public Works in June 1992. The Committee tabled its report on 14 October 1992 and has recommended the building's construction at an estimated total cost of $40.9m.

  In its report the Committee made a number of recommendations, which I will comment on as follows. The first was that electricity for the proposed building should be derived from a gas cogeneration plant. The comment is that technical advice is that gas cogeneration would cost $2.85m more than the conventional electricity supply proposed and that total annual charges, which include components of capital, maintenance and running costs, would exceed the cost of electricity by $269,000 per annum—based on a 7 per cent discount rate and a 20-year life.

  In addition, the Australian Taxation Office, as a prospective tenant of the new building, requires a reliable power supply comparable with that available from the new ACTEW grid. Backup equipment needed to achieve this has a high capital cost, would require additional plant space within the building and would be costly to operate and maintain.

  Cogeneration is appropriate for industrial-type applications when there are steady power loads that match heating. It is not appropriate in office buildings which generally operate from 6 a.m. to 10 p.m. with dissimilar power and heating loads. The Natural Gas Co. has advised the Public Works Committee that a gas cogeneration system is not financially viable for the Belconnen project. It is intended to proceed with plans to provide a conventional electricity supply.

  The second point raised was that the proposed building be provided with a dimmed lighting system. Technical advice is that potential energy savings associated with the switched system that it is proposed to install are 35 per cent, compared to 30 per cent savings available through the use of reasonable cost dimming systems. The greater savings available through the use of a switched system arise from the ability to turn off selected lights automatically, whereas with reasonable cost dimming systems the lighting remains on at all times and can only be dimmed to a maximum of 50 per cent of full lighting output. In addition, the capital cost of the switched system is half that of a reasonable cost dimming system and will result in a saving of $99,000.

  A dimming system that allows dimming down to zero per cent of full lighting output is now available; however, the capital cost of that system exceeds the cost of the proposed switching system by $313,000, and the pay-back period for the capital expenditure is 12 years, as opposed to two years for a switched system. On that basis, the use of a dimming system in the Belconnen building is not considered to be cost-effective. The Australian Taxation Office has expressed its concern about the refusal of manufacturers to warrant the performance of their fluorescent tubes with the use of automatic light dimming systems on the basis that it may result in higher lighting maintenance costs for the ATO. Consequently, it is intended to proceed with plans to provide a switched lighting system within the building.

  The third point was that the contract for the removal of fill should not preclude its sale, but that the final destination of the fill be determined. If it is offered for sale, the cost of removal should be adjusted accordingly. Under the conditions of contract, the fill will be disposed of at an approved soil site agreed with the ACT Government. The fill will not be offered for sale by the contractor.

  The next point was that the extent of landscaping be reviewed to reduce the scope of shrub beds and associated irrigation. If the extent of shrub planting were reduced, cost savings could be achieved only if that shrub planting were replaced with grassed areas. This is not considered feasible for the following reasons: the requirements of the National Capital Planning Authority's development control plan for the area; the need to provide densely planted shrub beds to act as a security barrier to meet the requirements of the Australian Taxation Office, which has resulted in savings to the project by allowing perimeter fencing to be deleted from the scope of work; the gradient of some of the shrub beds is greater than that at which mowers can be safely operated; and the ongoing maintenance costs of shrub beds is significantly lower than that of grassed areas.

  The fifth point was that the Committee be provided with quarterly progress reports on the progress of the work and the implementation of its recommendations. Australian Estate management agreed to provide the Committee with quarterly progress reports on the progress of the work. I thank the Committee for its report and commend the motion to the House.