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Rural and Regional Affairs and Transport Legislation Committee
Department of Infrastructure and Regional Development

Department of Infrastructure and Regional Development


CHAIR: I welcome Senator the Hon. Richard Colbeck, all the way from Tasmania, representing the Minister for Infrastructure and Regional Development; Mr Mike Mrdak, Secretary of the Department of Infrastructure and Regional Development; and officers of the department. Minister or Mr Mrdak, do you wish to make an opening statement?

Senator Colbeck: I don’t, but I understand that Mr Mrdak does.

Mr Mrdak : If I may advise the committee that since the department last appeared before the committee, there have been a number of senior changes to the department. Firstly, a number of senior officers have retired recently. Mr Robert Hogan has retired as the head of our vehicle standards area of the department and Ms Ann Redmond is acting in his position at the moment. Mr John Doherty retired last Friday as the head of aviation and airports division and Ms Pip Spence is now responsible for that division. Mr David Banham retired towards the end of last year and our new chief operating officer is Mr Carl Murphy, who is here with us today. Finally, there are some retirements that are about to happen. Mr Michael Sutton is appearing for the last time before this committee. He is retiring in the next couple of weeks. Ms Stephanie Werner has commenced in his position, looking after maritime and shipping matters. Mr Craig O'Neill, our finance director, will also be appearing at his last estimates today. He is also shortly indicating his desire to retire from the Australian Public Service. Most importantly, Mr Andrew Wilson, our deputy secretary, is retiring from the Australian Public Service in the next month after 33 years of service with the Australian Public Service. I would like to place on record my appreciation to all of those officers but in particular to Mr Wilson, who has been an outstanding senior servant both in support of the portfolio and to me personally. We look forward to assisting the committee through the balance of the hearings today.

CHAIR: Thirty three years?

Mr Wilson : Yes, Senator.

CHAIR: Before we commence, so that the person who sent me that beautiful note understands that under the present regime we have altered the way the programs come forward to try and accommodate the difficult circumstances in which these estimates are conducted-especially the additional estimates which only gets a few minutes in each section. Under the present rules and regulations, as we all know, if a senator has questions he can go on all day on a section. That is what makes it bloody stupid.

I also note, Senator Conroy, that you are just starting to go bald.

Senator CONROY: No, it's been there for a long time.

CHAIR: Senator Cameron.

Senator CAMERON: I have questions on Badgerys Creek airport. It seems to me that if you want to ask questions on Badgerys, you have to go all over this program. Corporate is on this morning. I assume corporate will take questions on the process that the department was involved in. Is that right?

Mr Mrdak : No, if I can clarify. There are two areas of the department that deal with the Western Sydney airport development and which would be able to accommodate all questions. The Western Sydney unit has responsibility for all of the processes involved in the environmental impact statement as well as the development of the project. They also have responsibility for the work being undertaken on rail planning and land use planning in the Western Sydney region. The only other area of the department that has a direct relationship with that is the Western Sydney roads project. That is handled in infrastructure and investment. So it is those two divisions which handle the Western Sydney project.

Senator CAMERON: Does Infrastructure Investment and Infrastructure Australia have any involvement?

Mr Mrdak : Infrastructure Investment, yes. That is the unit within my department that is managing the $3.6 billion Commonwealth-state road program in Western Sydney, which is now underway. Infrastructure Australia has an involvement. They are assessing the business plan for the Western Sydney airport in accordance with that normal process. That is currently with them. As I said earlier, the Western Sydney unit has responsibility for the project development.

Senator CAMERON: So it is not just those two areas. We now have Infrastructure Investment. Infrastructure Australia were involved or are involved?

Mr Mrdak : They are reviewing the business plan that was produced as part of the EIS, yes.

Senator CAMERON: What about CASA?

Mr Mrdak : CASA is an agency that has been involved in the preparation of the airport development project, particularly in relation to the safety aspects. But all of that Commonwealth work is coordinated through the Western Sydney unit.

Senator CAMERON: The Western Sydney unit cannot talk for CASA, can it?

Mr Mrdak : No, CASA is an independent authority.

Senator CAMERON: Aviation and airports division?

Mr Mrdak : No, all of the issues are being managed through the Western Sydney unit.

Senator CAMERON: So the airport and aviation division has got nothing to do with Badgerys?

Mr Mrdak : Internally they may provide some assistance and advice, but the responsibility rests with the Western Sydney unit.

Senator CAMERON: Assistance and advice is sometimes quite important, isn't it?

Mr Mrdak : It depends on the issue. I would need to understand the issue you are raising.

Senator CAMERON: The Australian Transport Safety Bureau must have been involved, surely?

Mr Mrdak : Not that I'm aware of.

Senator CAMERON: Not on any of the safety issues?

Mr Mrdak : No, they are an investigatory agency.

Senator CAMERON: That clarifies that for me. Airservices Australia had a big involvement, surely?

Mr Mrdak : Yes, they have been involved, particularly in development of the indicative flight paths and operating parameters for the airport site.

Senator CAMERON: So we move from two agencies to a number of agencies that are involved or have been involved. It is spread right through the whole program, isn't it?

Mr Mrdak : That is correct.

Senator CAMERON: How do I get some cohesion to these issues in terms of my questioning? The Western Sydney unit, that you say is doing the coordinating role, is on at 10 o'clock tonight. I am advised that we may not get to them. So that means we will not get any discussion about one of the biggest projects in Australia, certainly the biggest project in Western Sydney and New South Wales.

Senator EDWARDS: Surely that would be up to how you manage your time, Senator.

Senator CAMERON: Can I ask the chair to consider bringing Airservices Australia and the Western Sydney unit forward so that at least then we can get two of the bodies that are important to this discussion before this committee today? Part of the process of estimates is to be able to look at all of this and we cannot do it.

Senator Colbeck: Senator, the program is set by the committee and not by us.

Senator CAMERON: Sure.

Senator Colbeck: Whether or not we get to elements of the program, I would suggest, is in your hands and not our hands. We are in your hands.

CHAIR: Can I just bring a bit of discipline to this? A lot depends on how much we get played around with early in the day. I can recall that we were still on section 1 in the middle of the afternoon on one day. So it is up to the individuals as to where we get to as we go. We will make a decision, as I said, Senator Cameron, as we go along in the day.

Senator CAMERON: I think it is a bit all over the place, but I will have to be around for each one of these agencies up until 10 o'clock tonight—if we get to the most important unit that deals with Badgerys Creek.

CHAIR: As I say, the difficulty with these estimates, and all estimates now, is that one person can take as long as he likes on any section, which is stupid.

Senator CONROY: Sorry, I disagree with you.

CHAIR: That is alright.

Senator CAMERON: Yes, so do I. On corporate, I would like to ask some questions about the development of the EIS. Is that corporate?

Mr Mrdak : No, that would be the Western Sydney unit.

Senator CAMERON: That we won't get to. As the chair has said already, we will not get there.

Senator Colbeck: If the committee organises its time and work and allocates its questions, you can deal with whatever you like. There is no point in asking the officials about the committee's program and how the committee set the program. It is your program.

Senator CAMERON: Mr Mrdak, you are here. You have ultimate responsibility for Badgerys Creek, haven't you?

Mr Mrdak : Yes, I do.

Senator CAMERON: Okay, you are here so I can ask you questions, can't I?

Mr Mrdak : You can, Senator.

Senator CAMERON: Would that be done through corporate?

Mr Mrdak : No.

Senator CAMERON: It is cross portfolio normally.

CHAIR: Come on, I think we should start. We are now quarter of an hour into a very limited time schedule.

Senator CAMERON: Well, there have been plenty of questions but no answers. Thanks, Mr Mrdak. In relation to the EIS, who provided the instructions to Airservices Australia only to analyse the 05-23 mode?

Mr Mrdak : That would have been through our work in the department. The 05-23 mode is a long established planning parameter for the Badgerys Creek site. That is, when the site was first identified, selected and purchased from the 1985 EIS process—and the site purchase that took place between 1986 and 1994—there was an alignment presumption with the site. 05/23 was set at that time and the site was purchased with a view that that would be the optimal runway location for the site. Essentially, given the site parameters, 05/23 is the runway alignment for which the site has been planned since the 1980s. It was the basis of the EIS in 1985 as the preferred runway alignment. It was confirmed again in the 1999 EIS process. Subsequently, in the work now being undertaken, we utilised that alignment as the base reference case for our determination of runway alignment.

CHAIR: Can we be provided with the actual alignment of that runway? I would like to see whether it goes over the Blue Mountains and over your house. Would you like to declare an interest?

Senator CAMERON: I have a big interest. I do not think my interest is unknown. I live-

CHAIR: Are you under the flight path?

Senator CAMERON: I live under the proposed flight path.

CHAIR: Right-o.

Senator CAMERON: So are many thousands in my community.

CHAIR: At what height?

Senator CAMERON: At 5,000 metres or less. I want to indicate clearly that I do have an interest in this. It is an interest that no one around here is unaware of. I live in Blaxland, and there is real concern not only in Blaxland but the whole Blue Mountains area. So that is clear and that is fine and we will move from there. Was there any discussion with the government in relation to 05/23 prior to the EIS being determined?

Mr Mrdak : In all of the advice we provided to government coming from the joint study that was undertaken in 2010, there has been a presumption that, owing to the site layout and the site that is available, that that runway orientation was the likely orientation unless further decisions were taken to purchase additional land. There have been options examined previously in terms of purchasing additional land in the location for alternative runway alignments. But, in the end, advice through the joint study and successive advice to governments has been that that would be quite cost prohibitive and that 05/23 is an optimal alignment, given the nature of the site.

Senator CAMERON: What about the 23 mode? Are you aware of that?

Mr Mrdak : Yes.

Senator CAMERON: So that means that the direction would be reversed. Has that been looked at in terms of its cost?

Mr Mrdak : 23 and 05 are compass headings. Airports operate from either direction depending on wind and weather conditions. That is the primary determinant of runway direction.

Senator CAMERON: As I understand it, the 05 mode affects 48,000 people. If you use the 23 mode it would be between 4000 and 6000. Is that your understanding?

Mr Mrdak : I think that they are estimates for certain types of operations at night in certain circumstances. I would have to check those numbers. If I could take that on notice. Those figures sound familiar but I think they pertain to certain types of operations.

Senator CAMERON: This is about noise sensitivity in the Blue Mountains. Thank you to you and the unit for giving me the briefing a couple of months ago, but it has just raised more questions than answers, I think.

CHAIR: What is the altitude of the Blue Mountains?

Senator CAMERON: It goes up to about 1,000 metres. Blaxland is about 230 to 250 metres. When you are talking about flights coming in at 5000 meters, you have to take that away. Some flights could be in the 4000 metre area.

CHAIR: I recall from my pilot days that Wagga is 720 feet.

Senator CAMERON: That is correct, isn't it, Mr Mrdak? The EIS deals with sea level heights.

Mr Mrdak : Again, I am guided by my team. My understanding is that the heights are above surface area, not above sea level. Let me take that on notice, if I might. I think the heights that are in the EIS are actually calculated above surface area.

Senator CAMERON: That is not my understanding, but I am happy for you to look at this.

Mr Mrdak : Let me clarify that for you, Senator.

Senator CAMERON: Could you also clarify or take on notice whether there has been an increase in flights over the Blue Mountains recently? Anecdotal evidence has come to me that flights have increased over the Blue Mountains. Could you give me, over the last two years, the number of flights going over the Blue Mountains and at what heights those flights are going over at?

Mr Mrdak : Certainly.

Senator CAMERON: I do not want every flight. I want some broad based parameters.

Mr Mrdak : Certainly. As you are aware, particularly on approaches from the south to Sydney, the Blue Mountains is overflown.

Senator CAMERON: And take off?

Mr Mrdak : Less so on take-off. There is some, but less so. There is an established arrival path over certain sections of the Blue Mountains. I will ascertain to give you the latest traffic figures as best we can.

Senator CAMERON: I would appreciate that. Has there been any work done as to the noise of those flights over the Blue Mountains? What is the DBA level of those flights over the Blue Mountains?

Mr Mrdak : Yes, the draft environmental impact statement does set out information in relation to relative noise levels.

Senator CAMERON: Currently?

Mr Mrdak : Yes, that is my understanding and also forecast with the operation of the Western Sydney airport.

Senator CAMERON: Was there any work done in the development of the EIS to take into account the quiet nature of the Blue Mountains at night?

Mr Mrdak : Yes. We have looked at both the global and the Australian experience in relation to ambient background noise levels and what impact that has on sensitivity to noise. That is outlined in the appendix to the EIS.

Senator CAMERON: When you spoke to me at that last briefing, you spoke about respite.

Mr Mrdak : That is correct.

Senator CAMERON: I was a bit shocked to hear the word 'respite' being used in relation to the Blue Mountains. It was the last place you would think you would need respite from noise. That, I suppose, is the effect of this development on the Blue Mountains.

Mr Mrdak : If I may, I think I was indicating that the degree of respite between operations is one of the things that is looked at these days when you look at noise sensitivity. Certainly while the Blue Mountains are overflown, at the moment there are significant periods of non-overflight or respite. That would continue in any future operation.

Senator CAMERON: What is our relationship with CANSO and the Airport Council International?

Mr Mrdak : CANSO is the international representative body of air traffic control providers around the world. Australia is a member of that. It is a member of the CANSO council. Airservices Australia sits on the CANSO council.

Senator CAMERON: Have you seen CANSO’s publication Managing the Impact of Aviation Noise. A Guide for Airport Operators and Air Navigation Service Providers?

Mr Mrdak : I am not familiar with that document.

Senator CAMERON: This document, that I understood we were party to, says that when you are developing a new airport or increasing an airport, you have to look at things such as track density and you show the full width of a flight path so that it is clear what can be expected within a wide corridor. I do not see that that has been done in relation to the EIS that we have now.

Mr Mrdak : I think that the appendices to the EIS do show—as I outlined to you at the briefing—that the flight path in the EIS are very indicative, based on some initial assumptions made by Airservices Australia and the department. But they certainly have taken into consideration track width and density. Also descent profiles as well as ambient noise levels to ensure that the relevant guidance material has all been met.

Senator CAMERON: You have a noise modelling tool, haven't you?

Mr Mrdak : Yes.

Senator CAMERON: The noise modelling tool does not tell you what noise you are going to get, does it?

Mr Mrdak : The noise modelling tool, depending on the tool being utilised, does provide both individual noise events-that is, modelling of individual aircraft types—to produce what we call M60s, M70s and M55s. That models to a certain level of noise over areas where the noise may be intrusive. Secondly, there is what is called the ‘Australian noise exposure concept’, which is essentially a metric that provides an averaging to provide an overall cumulative noise impact over an area. That is predominantly used for land use planning purposes to satisfy AS 2021 for categorisation of land use planning. In all those situations, the modelling is relatively accurate in terms of utilising current and forecast aircraft types and modes of operation to provide information for both the community and airport flight path development.

Senator CAMERON: When I went on it, it was dealing predominantly with overflights. You could see how many overflights were coming over an individual street or house.

Mr Mrdak : Sorry, is this our departmental site?

Senator CAMERON: It was called the noise modelling tool.

Mr Mrdak : Sorry, I was talking about the analytical tools.

Senator CAMERON: No, I am talking about what the public go on. They go on to the noise modelling tool, don't they?

Mr Mrdak : They do. Sorry, I was talking about the technical work that sits behind that.

Senator CAMERON: And it doesn't show noise, does it? It shows overflights.

Mr Mrdak : It shows overflights and also shows indicative levels of noise based on what we call single event contours.

Senator CAMERON: If you go on to that and you go from my place, with about 270 overflights, two or three streets up the road, they don't show any overflights or one or two overflights. That means nothing, does it? Because if there is noise over one part of Blaxland, that noise will spread across a wide area, won't it?

Mr Mrdak : Depending on the topography and the nature of the noise event, yes, the noise can spread more broadly. As I said, the information is all indicative. As you can appreciate, we are applying the best possible information we have at this point based on certain assumptions.

CHAIR: Can I just ask a question to get my head around Senator Cameron's problem? If you are taking off from Mascot south and go over those suburbs to the west of Wollongong, at what height is the plane, coming into Sydney Mascot, 20 miles out, or however far out the Blue Mountains are? Are they at 5,000 meters coming down from 10,000 meters?

Mr Mrdak : They can be coming down. At 20 miles on approach they would be well above 8,000 feet.

CHAIR: At what stage do they get to 5,000 meters from the airport? You might take that on notice.

Mr Mrdak : I will take that on notice and give you an answer.

CHAIR: It would be interesting to know. It is the same as the Tralee development. What height are they going to be over Tralee? Much lower, I would have thought.

Mr Mrdak : Much lower. Generally, on a continuous descent profile of around 3 degrees, it would very much depend on the way in which the air-traffic controllers can maintain a descent profile with traffic management. So it is not simply a rule of thumb, but you essentially work on a 3 degree glide slope, once they are locked in and the aircraft are on final approach from about six to eight nautical miles.

CHAIR: There would be a lot of houses around Mascot affected at 5,000 meters.

Mr Mrdak : The approaches at Sydney airport are overflying some very dense areas, apart from approaches from the south.

CHAIR: Yes, over the water.

Senator CAMERON: For the record, Chair, you wanted me to be in and out as quickly as I can. I know that you are interested in this. But I would really appreciate some opportunity to follow my questioning through. I cannot get out here quickly if you want to divert the questioning. That is fine. It is entirely up to you.

CHAIR: That was a minute and a half. I will make a note.

Senator CAMERON: Mr Mrdak, you spoke about Sydney, but Sydney won't have the same issues as the Blue Mountains because there is a curfew in Sydney at night, isn't there?

Mr Mrdak : Yes, Sydney has a statutory curfew at night.

Senator CAMERON: And there is no curfew planned for Badgerys Creek, is there?

Mr Mrdak : No. Badgerys Creek has been planned from inception to be 24-hour operation. The land use around the site, the high noise areas, have been protected from development since the 1980s to enable 24-hour operations.

Senator CAMERON: But there has never been any planning over those 30 years that would advise people in the Blue Mountains that they would have overflights in the Blue Mountains, has there?

Mr Mrdak : The 1985 and 1999 EISs have all indicated the implications of aircraft overflight for a 24-hour operation at Badgerys Creek.

Senator CAMERON: I am asking if people in the Blue Mountains were made aware that the overflights would be over the Blue Mountains-that all incoming aircraft would be stacked over the Blue Mountains?

Mr Mrdak : All of the planning, given the geographic location of the site, for the past 30 or more years has always involved showing people operations over those areas. As I said, the current proposal in the EIS, which is indicative, has certainly refined some of that proposal based on current thinking of continuous descent profiles and merge points. They are the sorts of areas that you and I have discussed and which we are currently reviewing as part of the final EIS to see whether we can get a better accommodation of noise amelioration for communities. That is work that is now underway.

Senator CAMERON: What does that mean? Does that mean that there might be no overflights over the Blue Mountains?

Mr Mrdak : There will be overflights of areas of the Blue Mountains. The question that you have raised with me, quite rightly, is the way in which the EIS has concentrated certain merge points to enable continuous descent profiles, which have advantages in terms of fuel burn and also trying to minimise the numbers of people affected. But the trade-off may well be seeking a wider dispersal of a smaller number of flights over areas. They are the sorts of issues which are now being picked up. In response to the EIS, the EIS has had some 4,800 public submissions made to it. A large number of those have raised issues from your local community and areas of the lower Blue Mountains. That analysis and work is now being undertaken to see whether the design and operation of the indicative flight paths can achieve a better balance, recognising the concerns of the community.

Senator CAMERON: I would assume that someone in the department, if not yourself, had a look at the speech I made on this and at my submission.

Mr Mrdak : Yes, we have done that. We have looked closely at your speech to the Senate and also at the submission. Both of those are now being responded to in terms of the EIS process.

Senator CAMERON: Because I am saying that on my reading of Airservices Australia's stated objectives of the alignment of actions and processes to the International Civil Aviation Organisation’s balanced approach to noise management, this EIS does not fit that approach, does it?

Mr Mrdak : We are looking at that issue. I do not necessarily think that is a correct statement, but we are looking at that. As I said, Airservices, in developing these indicative flight paths and have looked at the CANSO guidelines. They have also looked at international work and at Australian experience in terms of noise minimisation. I do not agree that we do not meet the guidelines, but we are looking at the most optimal flight path.

Senator CAMERON: I assert that you do not in the EIS, because on noise concentration, on noise management and on night and weekend sensitivity, you do not meet those standards. That is the reality. I am happy for you to tell me how you do.

Mr Mrdak : As I say, in our response to the submissions and in the final EIS, we will address those issues.

Senator CAMERON: The other concern I have is that when I spoke to you and you started talking about the need for respite in the Blue Mountains, an area that is a beautiful place to live in but will need 'respite' because of this airport. The EIS talks about there being significant problems in the Blue Mountains. Do you accept that there will be significant issues in the Blue Mountains?

Mr Mrdak : Certainly we have always made clear that there will be overflight of the Blue Mountains. The issues will obviously depend on the nature of the operations, the volume and the sensitivity and also the design of the flight paths in a way that minimises impacts as far as possible. That remains our objective.

Senator CAMERON: In the Blue Mountains we are being told that there will be a significant—and it is not just as that is going to be a small—effect on the Blue Mountains. In fact, the amenity affect in the Blue Mountains is equal to living next to the airport. That is correct, isn't it?

Mr Mrdak : No, I cannot draw that conclusion, I am sorry. How do you—

Senator CAMERON: Because, according to the draft EIS, the Blue Mountains will suffer a negative impact. You accept that?

Mr Mrdak : Certainly we do indicate that in comparison to the operations today, there will be aircraft overflight.

Senator CAMERON: No, I am asking you if you agree with the EIS when it says that there will be a negative impact?

Mr Mrdak : I would have to have a look at the wording of the EIS.

Senator CAMERON: The EIS says that there will be a negative impact. Mr Mrdak, you are usually pretty upfront with this stuff. The EIS says that there will be a negative impact with major consequences of a very high significance rating. You must be aware of that.

Mr Mrdak : I am aware of it. I am just—

Senator CAMERON: Right. I am not trying to change what the EIS is saying. I am asking you a straight question. Do you agree that there will be a negative impact?

Mr Mrdak : I do not have the wording in front of me of the EIS, but—

Senator CAMERON: It says a negative impact with major consequences of a very high rating. That is what it says. You know that.

Mr Mrdak : As I say, I do not have the wording in front of me, but if that is an accurate reflection of the EIS then that is the findings of the draft EIS.

Senator CAMERON: Okay. The draft EIS lists Blaxland and the lower Blue Mountains in this rating with Badgerys Creek, where the airport is sited. So it is the same amenity affect, according to the EIS, at Blaxland and areas of the lower Blue Mountains as it is in Badgerys Creek. Do you accept that?

Mr Mrdak : No. I think the descriptions may relate to negative impacts but the quantum of the impacts are quite different. Obviously someone who is living at Luddenham or Badgerys Creek at the airport boundary would have a far different impact compared to those at Blaxland or the Blue Mountains who are subject to aircraft overflights at much higher levels. The descriptors may capture the overall impact but it doesn't accurately reflect the nature of the impact.

Senator CAMERON: You came to my office and you spoke about the need for respite. So I would assume that you have looked at all of this. It is ultimately your responsibility. If you have clear indications in the EIS of the amount of negative impact on one of the great places to live in Sydney, why can't we fix that?

Mr Mrdak : As I have indicated to you, issues such as respite and the way in which the flight paths can be adjusted to minimise the impact of concentration are things that we are now looking at in terms of the final EIS. Clearly, as it gets closer to the opening of the airport, obviously as the air traffic control management systems and plans are put in place, then those things will continue.

Senator CAMERON: So there will be uncertainty in the Blue Mountains for a decade?

Mr Mrdak : There will be the best available information in the final EIS but, also, work will continue to try to find as many ameliorative actions as possible—as technology changes and as we look at better ways to minimise impacts on certain communities. That will continue from the opening of the airport and beyond.

Senator CAMERON: Let's go to these technology changes, because I have heard the minister and you repeat that technology changes will assist. The big issue in terms of landing is airframe noise, isn't it?

Mr Mrdak : It varies on the location. The closer you get to the airport then airframe noise becomes the primary noise impact, yes. Further away from the airport there is a combination of engine and airflow noise as well as airframe. Predominantly airframe noise is within the final kilometres of the landing when the aircraft is stable and on a lesser power setting. Then that airframe noise becomes a much more critical factor.

Senator CAMERON: What is the major impact in the lower blue mountains of airframe noise, engine noise or a combination of both?

Mr Mrdak : It is more likely to be overflight engine noise.

Mr McRandle : I missed some of your questions on the way up to Parliament House this morning. Let me address the question of overflight around the lower Blue Mountains area. The altitude of aircraft around the time they would be going over the lower Blue Mountains would mean that there is not very much in the way of airframe noise that would be generated—that is the flaps and the slats deployed on the aircraft in the approach. It would be more engine noise. The aircraft engines are close to idle.

In relation to your questions around the technology, one of the technologies that is becoming more widely used, and I think will be developed further in the next decade or so, is the use of satellite-based approaches, which allows greater flexibility than the traditional approaches using radio navigation aids. You may be aware that radio navigation aids work on a line of sight and therefore along straight lines. Satellite navigation approaches permit air traffic controllers to develop an approach that can be more curved and therefore avoid areas of residential build up. Those technologies need to go through the ICAO process of certification and then are adopted locally by states such as Australia. Australia is quite advanced in regards to the adoption of these, but there are some further developments which will see improvements over the next 5 to 10 years. To the extent that we can take account of those before Badgerys Creek opens for business, the better that will be in terms of the options for noise mitigation.

Senator CAMERON: If the issue is noise mitigation and not simply the profits of the airport and the airlines, if noise mitigation is an issue, why then have you stacked every landing aircraft over one of the most densely populated areas in the Blue Mountains?

Mr McRandle : To answer that question, let me just explain the process whereby we are looking to develop the final flight paths.

Senator CAMERON: No, I am interested in where we are at the moment. Because the final flight paths could be 10 years away. That does not give any confidence to residents of the lower Blue Mountains that this is not a major effect on them. So let's have a look at where you are at the moment. What would possess anyone to stack every incoming flight over the major population area in the lower Blue Mountains? Why was that done?

Mr McRandle : The first stage in the process was actually to develop flight paths that were as efficient and as safe as possible. So safety and efficiency was the basis of the instructions we gave to Airservices Australia in order to develop the flight paths, with the view that we then take those out through the environmental assessment process and test those before finalising flight paths. We are at the stage now where we have been through that public exhibition period. We are having meetings at the moment. I had a meeting last week with senior Airservices staff to talk about the next steps in the development of the flight paths. We will look at what changes we can make to the flight path structure or architecture in order to better balance the environmental impacts with the safety and efficiency challenges that you want when having two airports in the one city. That is a stage of the process. You talk about 10 years of uncertainty. It is 10 years before Badgerys Creek will open for business. That does not mean, however, that we cannot start that work now. We are starting that work on developing the flight paths in order to come in with, if you like, an optimised balance between the environmental impacts and the safety and efficiency aspects.

Senator CAMERON: Airservices Australia basically did their analysis on safety and efficiency based on the 05-24.

Mr McRandle : It is the 05-23 runways.

Senator CAMERON: So they could not look at the whole gambit, could they?

Mr McRandle : They are the only two runways operating at the airport. So 05 and 23 are the two runways, depending on whether you are landing—

Senator CAMERON: There has not been a sod turned. You could change that.

Mr McRandle : Not really.

Senator CAMERON: You cannot change it?

Mr McRandle : Sorry, if you look at the layout of the site and the land that the Hawke government purchased all those years ago, there is really only one plausible direction for the runways, and that is north-east, south-west. You can move them within a few degrees, and we have looked at those aspects in settling the airport plan. But effectively it is a north-east, south-west orientation for the airport. Without buying 1,000 more hectares of land, the only plausible change would then be a north-south, which would point directly at Penrith and also Camden, which I do not think is plausible.

Senator CAMERON: How many submissions have you had opposing the airport from the Blue Mountains area?

Mr McRandle : I could not give you precise details other than to say around 80 per cent, or a little over, of the submissions we received on the EIS public exhibition came from the Blue Mountains local government area. The vast majority came from that part of the Western Sydney region. In terms of what proportion opposed, each individual submission needs to be assessed against what point it is raising. There are also some duplicates in that total. We are sorting through those now.

Senator CAMERON: Do you have a rough idea?

Mr McRandle : I am saying a little over 80 per cent of the submissions came from the Blue Mountains.

Senator CAMERON: And how many of that that 80 per cent, roughly, were opposing?

Mr McRandle : I would not be able to give you a proportion off the top of my head.

CHAIR: Can I just pause you? Obviously if you wrote from the Blue Mountains you had the shits about the airport. I think that we should move on. Your two minutes are up. We will come back to you.

Senator BULLOCK: Can I ask one question on the way through?

CHAIR: Quickly.

Senator BULLOCK: I have mentioned in estimates before that this airport is being built on my old family farm, so I have an interest in it. Coming over the Blue Mountains, you can come over the population where Dougie lives and follow the highway or, surely, you can come a bit further south over Warragamba. There is nobody there and it is only a few degrees. So you can avoid the population centres. Why wouldn't you consider an approach further south, north of Camden and south of the population over the Blue Mountains?

Mr McRandle : That is entirely the process that we are following now—that is, to work through and refine that, including moving the merge point either north or south. Indeed, whether there is a merge point, although that is a very efficient way and a very contemporary way of delivering aircraft into an airport safely. We certainly will be doing that. The EIS itself said that the merge point could be moved within 5 kilometres of that point without any difficulty. Any further movement of that merge point would require some additional analysis and some public consultation, which we will undertake as part of settling the flight paths. The other constraints that come in are the flight paths from Kingsford Smith airport that go out over the Blue Mountains and the air force restricted airspace around RAAF Base Richmond.

Senator BULLOCK: You could move it south. That wouldn't worry Richmond.

Mr McRandle : No, but there are other issues around Warragamba in terms of inbound aircraft into Kingsford Smith currently coming over Warragamba Dam. And without trying to analyse all the options at the moment, the purpose of the work we are now commencing with Airservices is to work through those option, to improve the environmental impact and to minimise the impact on residential areas in the lower Blue Mountains and elsewhere.

Senator CAMERON: Why weren't those options looked at before you put the merge point above the most densely populated area of the lower Blue Mountains? Why?

Mr McRandle : There are any number of options that you can choose.

Senator CAMERON: So you picked the worst one?

Mr McRandle : No, I disagree that it is the worst one. I think that the noise impacts have been overstated in the lower Blue Mountains by those who are against it. The noise impacts have been overstated by some people.

Senator CAMERON: Like who?

Mr McRandle : By a lot of people who are opposed to the airport. There is a concern about the degree of noise that would be generated. In fact—

Senator CAMERON: They have all got it wrong, have they?

CHAIR: I will pause you there. Thank you. Can I pause you, Mr McRandle. Stop!

Mr McRandle : Yes, Chair.

Senator CAMERON: Yes, stop!

Senator CONROY: That is the best advice you have ever given.

CHAIR: It is up to you now, Senator Conroy.

Senator CONROY: I am sure that Senator Cameron has many more questions and the Senate will have as well. I am happy to take your advice, and thank Senator Cameron for his contribution. I want to ask questions about your infrastructure propaganda blitz—the ad campaign that you are engaging in during the lead up to the forthcoming election. I understand there is a measure that includes a communication campaign funded within the program. Is that correct?

Mr Mrdak : The Australian government has decided to plan for an information and communications campaign on its infrastructure investment program, yes.

Senator CONROY: I refer to the following extract from the 2015 MYEFO referring to new investments in the infrastructure investment program. Under the headings ‘Infrastructure Investment Program—new investments’, the following reference is made:

This measure also includes a communications campaign funded within the programme.

So under the title of ‘new investments’ you have a propaganda campaign.

Mr Mrdak : The government has a communications information campaign. I can't comment on the language you are using in relation to it.

Senator CONROY: Why is it a line item under ‘Infrastructure Investment Program—new investments’? You are not suggesting that a communications campaign is a new piece of infrastructure, are you?

Mr Mrdak : I think it is listed as a new measure and the funding for the information campaign is being sourced from within the infrastructure program.

Senator CONROY: Yes, it is actually being taken out of the budget for infrastructure programs. That is right.

Mr Mrdak : It is being funded from within the budget for the program, yes.

Senator CONROY: How much is it?

Mr Mrdak : Final decisions are yet to be taken.

Senator CONROY: I have seen numbers like $18 million bandied around.

Mr Mrdak : Should the government decide to finally proceed with a campaign—and, as I said, that decision has yet to be finally taken—the approval is for $18 million.

Senator CONROY: Sorry, you have already let the program. It is up on the website. It is actually let. I am confused.

Mr Mrdak : Work has been done on the development of the campaign.

Senator CONROY: On Austender you have already hired a company.

Mr Mrdak : The final decision to proceed with a campaign has yet to be taken by the government.

Senator CONROY: The contract value is $15 million. So why are you saying that they have not decided?

Mr Mrdak : There remains a step. The government has yet to see the communications material and to sign off on the final agreement.

Senator CONROY: No, they may or may not like what the ads are and they may have veto rights and want to change them, but that is dissembling when it comes to the fact that they have actually let a tender for $15 million. You are trying to pretend that they have not decided to go ahead.

Mr Mrdak : We have put in place a contract with a firm for a media buy as well as market research and advertising development. The campaign has yet to receive final approval to proceed.

Senator CONROY: Is the $15 million the media buy?

Mr Mrdak : It is an $18 million total budget and the media buy is $13.7 million.

Senator CONROY: So $5 million is already spent. By definition, you have signed the contract for $5 million.

Mr Mrdak : There are a range of activities which are taking place, including creative development, research, concept testing and other work that will take place around websites and public relations material. The total budget which has been provided is up to $18 million.

Senator CONROY: You were asked in advanced several weeks ago, I understand, to have at hand the correspondence your department has had with ministers and external stakeholders about this communications campaign. I think you were are asked on January 22. Do you have that with you?

Mr Mrdak : The communications relating to these matters are Cabinet documents. The decisions that are being taken in relation to these matters were advice to a Cabinet committee and decisions of the Cabinet.

Senator CONROY: So the 700 pages identified but not yet provided from a FOI request, is that here?

Mr Mrdak : We do not have that material here. We are working through that FOI request at the moment. But the documentation relating to decisions made on the program are matters of Cabinet.

Senator CONROY: Just to clarify, Minister Truss told The Sydney Morning Herald in 6 January:

Infrastructure Minister Warren Truss has confirmed that the government is considering an $18 million advertising campaign to raise awareness of "long-term planning and investment into road and rail infrastructure".

Who is the officer in the department responsible for organising and managing the advertising campaign?

Mr Mrdak : That is the head of my communications area, Ms Goodspeed, who is with us today.

Senator CONROY: Welcome, Ms Goodspeed. I know you gave a brief outline. What does the campaign involve? Could you take us through that?

Ms Goodspeed : The campaign is an awareness raising campaign. It has three objectives: to educate road users of the important benefits of the Australian government's investment in road and rail infrastructure; to increase awareness and understanding of the Building Our Future deliverable of the government; and to build road users’ understanding and knowledge of transport infrastructure in Australia at a national and local project level. The main aim of the campaign is to increase knowledge in Australian road users of why the Australian government invests in transport infrastructure and that long-term planning and investment is vital to ensuring the economy remains competitive, people and goods can move effectively on safer roads with less congestion with faster travel times as well as the economic and social benefits.

Senator CONROY: Mr Mrdak outlined a couple of different more practical parts of it, as opposed to the thematic that you have just described. Could you take us through the practical things that the money is being spent on?

Ms Goodspeed : Certainly. The campaign has a number of stages that it goes through. A number of tenders have been awarded. There is a research process that we must go through—developmental plus testing of those materials that have been prepared. We have a number of contracts for developmental research through JWS Research consulting, which was $195,000. JWS research also undertook concept testing of the materials that were prepared by the creative agency. We have a contract of up to $128,000.

Senator CONROY: Sorry, JWS got $195,000 for the first contract. How much is that second one that you just described?

Ms Goodspeed : That is up to $128,000. The developmental research is undertaken at the beginning, before a campaign is developed, and that goes out and undertakes focus groups.

Senator CONROY: Who got that and how much is it?

Ms Goodspeed : That is $195,200.

Senator CONROY: That is different to the first JWS. The first JWS was $195,000 and the second was $128,000. So this is a third contract, just so there is no confusion?

Ms Goodspeed : No. We have two contracts with JWS—developmental research for $195,000 and concept testing of all the materials prepared. And that is the one for up to $128,709.

Senator CONROY: Okay. So JWS has two contracts.

Ms Goodspeed : Correct.

Senator CONROY: What other contracts are there? What are the other components?

Ms Goodspeed : The developmental research is what I have just explained. They actually go out and engage public understanding.

Senator CONROY: I am familiar with the process. I am asking you what other contracts are in place.

Ms Goodspeed : Yes. The concept testing goes through tests materials.

Senator CONROY: Thank you. That is the $128,000. We talked about that.

Ms Goodspeed : Yes. We also engaged BCM, who are the creative agency. That is a contract for up to $1.9 million. They actually designed the materials, which is the national TV commercials, the press advertising and things like that. They do all the creative work.

Senator CONROY: Have they completed that?

Ms Goodspeed : No, that is still being finalised now.

Senator CONROY: Have they finalised the content and is it now being reviewed?

Ms Goodspeed : Correct.

Senator CONROY: And JWS do that with you?

Ms Goodspeed : Correct.

Senator CONROY: And a focus group test it to see if it works.

Ms Goodspeed : Yes, and then that comes back to the final approval stage. We also have one further contract, and that is with Wallis consulting.

Senator CONROY: Who are the principals of that?

Ms Goodspeed : Wallis consulting are engaged to undertake benchmarking and tracking services.

Senator CONROY: Yes, but who is the principal?

Ms Goodspeed : Sorry, I do not have that information.

Senator CONROY: We can do a Google search. I just thought you might have it at hand. How much is Wallis consulting?

Ms Goodspeed : That is for $278,100.

Senator CONROY: They are doing benchmarking?

Ms Goodspeed : They track the campaign. If the campaign receives final approval to proceed, what they will do is undertake tracking throughout the life of the campaign.

Senator CONROY: Then there is a separate $15 million contract that Mr Mrdak mentioned.

Ms Goodspeed : That is the media buy, which is with Dentsu Mitchell Media. They are the Australian government's master media agency.

Senator CONROY: Is that all of the contracts and all of the money involved?

Ms Goodspeed : That is correct.

Senator CONROY: Are you supervising all of those contracts?

Ms Goodspeed : Yes.

Senator CONROY: Why is the spending period set up to September 30 of this year?

Ms Goodspeed : Provided we receive approval, the campaign will go through to approximately mid-to late August.

Senator CONROY: That is a coincidence. Why does a 20 year program only have a six or seven months spend period? I would have thought it would want to be over quite a long period of time, given that we are talking about projects that won't be completed, started or even approved for many years to come.

Ms Goodspeed : It was just the time that it takes to develop a campaign and to get it approved. It was the date that was determined as to the finishing date.

Senator CONROY: So the finishing date for the ads to run?

Ms Goodspeed : It will be towards late August and then there is the final tracking.

Senator CONROY: Who determined that the finishing date be late August?

Ms Goodspeed : It goes through a committee process.

Mr Mrdak : The ministerial committee.

Senator CONROY: Who is on that committee, just out of interest?

Mr Mrdak : It is the service delivery coordination committee. It is chaired by the Hon. Minister Christopher Pyne. I do not have a list of the full membership of the committee. I can seek that for you on notice.

Ms Goodspeed : the Department of Finance is the secretariat for that committee.

Senator CONROY: If you take that on notice, that will be fine.

Ms Goodspeed : Sure.

Senator CONROY: So Minister Pyne and his committee determined that the ad campaign would cease by about mid to late August?

Ms Goodspeed : Yes. We undertake the final tracking of that, which is where you see the date of September.

Senator CONROY: I understand that. What spending is allocated for this financial year?

Ms Goodspeed : At this stage we have an allocation of $13 million.

Senator CONROY: That is for this financial year—that is, ending on 30 June.

Ms Goodspeed : Yes. Then there is an allocation of $4.3 million into the next financial year.

Senator CONROY: So what is 2015-16?

Ms Goodspeed : That is $13 million for 2015-16.

Senator CONROY: And in 2016-17?

Ms Goodspeed : It is $4 million.

Senator CONROY: You book your ads well in advance.

Ms Goodspeed : Correct.

Senator CONROY: The ad buy is all part of the $13 million?

Ms Goodspeed : Yes.

Senator CONROY: Is there any money after 2017-18 or 2018-19?

Ms Goodspeed : No.

Senator CONROY: So we have projects that have not even been approved yet and they are being advertised by the government?

Ms Goodspeed : No, that is not correct. The aim of the campaign is to raise awareness. It will be focused on projects that have been approved and where there is work currently underway.

Senator CONROY: Have they started or have they been completed?

Ms Goodspeed : There are projects that are currently underway. So throughout the six-month period that the campaign will run, it will focus on national as well. It is a sort of national campaign. Also, it will focus on certain projects where there is work being undertaken at that point in time.

Senator CONROY: What sort of projects are we talking about?

Ms Goodspeed : Infrastructure, road and rail projects.

Senator CONROY: Which ones? Which ones will feature in the ads? They have already been completed, so you must know.

Ms Goodspeed : The media plan has not yet been finalised.

Senator CONROY: The media plan is not what I asked about. I am asking which projects—

Ms Goodspeed : Would you like me to read out every project at this point in time or take that on notice?

Senator CONROY: No, I am asking you which projects will feature in the ads. You have already seen the ads. You have seen the draft ads.

Ms Goodspeed : All up there are 88 projects being featured.

Senator CONROY: I will have to take this on notice. Could we get a list of those?

Ms Goodspeed : Yes.

Senator CONROY: If it is possible, could we get a state breakdown of those?

Ms Goodspeed : Yes.

Senator CONROY: If a project is being built in Queensland, will that be a feature of the Queensland ad or will it be a national ad?

Ms Goodspeed : It will be a feature of the Queensland ads.

Senator CONROY: So they are state specific?

Ms Goodspeed : Correct.

Senator CONROY: Is it down to even regional markets? So if there is a Bendigo Road it would be in the Bendigo footprint?

Ms Goodspeed : Yes, it would feature in the Bendigo Times.

Senator CONROY: It will be in the Bendigo Times and on Bendigo television.

Ms Goodspeed : Yes.

Senator CONROY: So it is that specific that you are advertising individual projects in the areas that they are being constructed?

Ms Goodspeed : Yes.

Mr Mrdak : As I think Ms Goodspeed has indicated, there is a national ad as well as placements in local and regional newspapers and the like, which will have a particular focus.

Senator CONROY: I am happy to take information about the newspaper campaign, but I just want to focus on the TV campaign.

Ms Goodspeed : The TV is national TV ads. The print is focused.

Senator CONROY: I was not as specific as I should have been.

Mr Mrdak : I want to clarify that the print is regional and state and is much more focused. The television advertising is national.

Senator CONROY: Is that one national ad or are the projects being featured in the TV campaign?

Ms Goodspeed : It is proposed that there be three national ads, one of which is suitable to metropolitan, one to urban and one to regional. But it is a national ad. It does not go down to projects. We also have three cultural linguistic ads. All up there are 12 media placement ads for CALD ads. All up there are 75 specific projects and 88 projects all up.

Senator CONROY: Can I get a list of the projects that are highlighted in the TV ads?

Ms Goodspeed : There are no projects listed. It is at a high level.

Senator CONROY: When you say that it is metro, urban and regional, how do you differentiate it? What are you looking at that differentiates them in terms of the national?

Ms Goodspeed : It would be much the same style ad for all three but it may just break it down for regional. It will be more the style of ad in terms of goods to markets, for example. Whereas the main metro ad will be about congestion.

Senator CONROY: So the metro ad is about congestion. What about the urban?

Ms Goodspeed : It is much the same. They are very much similar ads across the three.

Senator CONROY: You would not necessarily have done congestion, though, in the regional ad.

Ms Goodspeed : No. It is about safety and getting goods to markets.

Senator CONROY: Thank you. I am just perplexed why Minister Pyne’s committee wants to spend all the money and run all the ads prior to late August. Did you have any consideration that would have limited a nationwide campaign about investment projects that are going to take many years to be completed and why there was a need to focus on the next six months?

Ms Goodspeed : That was the decision taken by the committee in terms of—

Senator CONROY: Do you attend the committee?

Ms Goodspeed : Sometimes. I have been called into one committee, just in case there were questions to be asked.

Senator CONROY: Mr Mrdak, do you attend the committee?

Mr Mrdak : I am aware that this item has appeared. I have appeared before the committee on one occasion, yes.

CHAIR: Senator Conroy, you have had 17½ minutes. We will come back to you. Senator Rhiannon.

Senator RHIANNON: Have you seen an unredacted version of the WestConnex updated strategic business case?

Mr Mrdak : The WestConnex business case has been provided to the department, yes.

Senator RHIANNON: Is it the unredacted version?

Mr Mrdak : I will check that with my officers, but I believe it is, yes.

Mr Foulds : Yes, we have.

Senator RHIANNON: Have you seen the redacted copy and the clean copy so that you are aware of what has not been released?

Mr Foulds : Yes.

Senator RHIANNON: So you are aware that all of the figures pertaining to the capital costs for the construction of stages 1, 2 and 3, excluding property and urban renewal amounts, have all been redacted, as have those indicating the annual recurrent costs including life cycle operation and maintenance? Is that accurate of what has been redacted?

Mr Foulds : I would have to take those precise words on notice. But I think, more or less, you are correct.

Senator RHIANNON: What I am trying to understand is about the redacting. Without that information it is obviously very hard to have independent scrutiny of the detail here. Maybe the best starting point is, with the redacted material, can you explain how that decision was made and at what stage will that information be released?

Mr Foulds : What decision?

Senator RHIANNON: To redact this information. We have a report with reduced information in it, which makes it much harder to understand the detail here.

Mr Foulds : The New South Wales government has taken the decision to redact certain commercial elements in the updated strategic business case.

Senator RHIANNON: Yes. They have taken that decision, so are you saying that you have no role at all in ensuring that there is independent scrutiny? You are given a clean copy but nobody else is given a clean copy and you don't do anything about that? Or are you saying you cannot do anything about it? I am really just asking about the process now. It is obviously very hard to understand this when the report is so severely redacted.

Mr Foulds : We have received the unredacted version and we are analysing that version. But we do not make the decision as to the redaction or otherwise. That is a New South Wales government decision.

Senator RHIANNON: Do you give any feedback on that, considering there will be federal public money going into this? Do you give any feedback to the New South Wales government in terms of ensuring that this project is run with thorough scrutiny, which obviously depends on the information made available?

Mr Foulds : We do check that the project is being run with robust scrutiny but we do not make recommendations to the New South Wales government as to whether they should release elements of that business case or not.

Senator RHIANNON: When you say you check the robustness of the project, could you explain what you mean by that and how can that be achieved when the information is not available?

Mr Foulds : We have been intimately involved with the business case for the WestConnex project and the New South Wales government in relation to the development of that business case and the whole WestConnex project from its inception. As you know, when it came to stage 2 in particular, the work was done on the independent assessment of traffic modelling and impacts. We have received project proposal reports for the WestConnex project. So we do engage at every level, from project director level right the way through. We sit on an inter-departmental steering committee run by New South Wales, which also has as a representative from the Sydney Motorways Corporation. Through that and through the analysis work that we undertake, we are across the detail of the WestConnex project.

Senator RHIANNON: What we take from that really is that it is some people in the New South Wales government and some people in your department. That is as far as the scrutiny goes. I understand the updated business case states that the first two stages of WestConnex will be financed by a combination of public money and loans to be repaid from the tolls but the third stage cannot rely on that. I want to ask you about this passage:

The financing strategy for the M4 - M5 Link cannot rely solely on revenue generated by Stage 3, and may need to be supplemented by other funds, services or the sale proceeds from stages 1 and 2.

First off, could you just explain to what degree the department has been involved in stage 3?

Mr Foulds : In the same manner that I just described. In our relationship with—

Senator RHIANNON: The New South Wales government?

Mr Foulds : the New South Wales government-that is the way we have been involved with the development of stage 3 as well.

Senator RHIANNON: Has the department had any involvement in proposals to sell off stages 1 and 2?

Mr Foulds : At this stage, no.

Senator RHIANNON: Does ‘no’ mean no discussion or are you in the discussions but you are not the deciders? What does ‘no’ mean?

Mr Foulds : No means that we have not had any discussions with the New South Wales government on the sell down of equity in stages 1 or 2.

Senator RHIANNON: Do you expect to, as federal public money is going into this project?

Mr Foulds : As the New South Wales government has said—and if you are going back to first principles—the original schematic for WestConnex was to build stage 1, sell stage 1, build stage 2, sell stage 2 and then build stage 3. The mechanism of the concessional loan allows stages 1 and 2 to be built at the same time. New South Wales is exploring how it might finance it. There is enough funding around-

Senator RHIANNON: Are you involved in those discussions with the New South Wales government when they are exploring that?

Mr Foulds : At this stage only at a very general level, not specifically.

Senator RHIANNON: What does 'general level' mean?

Mr Mrdak : We are involved in the steering committee at senior level where we are updated by New South Wales on the thinking. But, as Mr Foulds has indicated, we are not party to the work that New South Wales is undertaking in relation to the mechanisms for the funding and financing of stage 3 at this stage.

Senator RHIANNON: Do to we take from that answer that the department is not advising. You are just sitting on the steering committee and collecting information. Or are you giving advice about how this should proceed?

Mr Mrdak : These are matters that are primarily being driven by the New South Wales state treasury and their agencies. They are matters for them. If there are areas of Commonwealth engagement, we will provide advice.

Senator RHIANNON: You said 'primarily', so that appears to leave the door open that there is a level of involvement of your federal department in the sell-off of stages 1 and 2.

Mr Mrdak : Not in the sell-off of stages 1 and 2. Those matters have been settled. But in relation to stage 3, were there a request from New South Wales to consider further Commonwealth involvement then obviously we would provide input into those discussions.

Senator RHIANNON: Given the cancellation of the East West Link, has the department considered its options with possible cancellation of WestConnex?

Mr Mrdak : No.

Senator RHIANNON: So there has been no discussions of any plan B or contingency plan? No discussions at all?

Mr Mrdak : No. WestConnex stage 1 and 2 are proceeding. Contracts have been entered into and we are all working on the presumption that those projects will continue as planned and as indicated by the New South Wales state government.

Senator RHIANNON: So there is no issue about the security of any federal funds? There are no question marks over that?

Mr Mrdak : The Commonwealth has made a mix of grant funding as well as a concessional loan. As we discussed in previous hearings, in determining that concessional loan certain sureties and mechanisms were put in place to ensure the repayment of that loan to the Commonwealth. We have confidence in the repayment of that loan by virtue of the contractual relationship put in place with the New South Wales government.

Senator RHIANNON: I just want to refer to the funding. I am aware that you have said in answers to other questions that IA does not make decisions on funding. But, as we know, there was the original cost of $10 billion and it is now up to $16.8 billion. Does the department have concerns about the federal financial allocations to WestConnex given this cost blowout?

Mr Mrdak : I will get Mr Foulds to explain the nature of the additional. It is not a cost blowout, per se. There has been a re-scoping of the project which has involved the changes, particularly to the planning of stage 3 and the gateway elements. But, certainly in our view, stage 1 and 2 is proceeding and the Commonwealth investment is effectively locked in at that point. Mr Foulds may want to give you an indication of the rationale sitting behind the revised figures and the business case, which largely relates to changes of scope providing for future flexibility of development of new options.

Mr Foulds : Senator, you would be aware of the Sydney gateway connection proposal, which is an enhanced high capacity connection from St Peter's through to the airport and the port. Infrastructure New South Wales undertook a project to determine an optimum solution for that. That increase in scope, which the New South Wales government has committed to, is an increase of $400 million, taking it to an $800 million project. With the realignment of stage 3, if you recall the New South Wales government sought to introduce northern and southern connectors and have an assessment as to their suitability and viability. The decision was taken that the northern connector would be incorporated into stage three around Rozelle and the old goods yards there and that stage 3 would enhance connections to Victoria Road, Anzac Bridge and a future western harbour tunnel. The cost of that is an additional $1.2 billion. That is additional scope to the reference scheme from 2013 business case. Lastly, acceleration costs. Now, that $322 million is because stages 1 and 2 have been decoupled and are not proceeding sequentially, you have two very significant projects being designed, developed, assessed and going to market at the same time. Therefore, more resources are required to achieve that. That is where that cost estimation comes from. That takes the total to $16.8 billion.

Senator RHIANNON: Could you just run through it? I think you have given some of them. We now have an additional $6.8 billion and you have detailed some of those. Could you just run through the line items that make up that $6.8 billion? I understand that there is the $1.2 billion that you have just outlined.

Mr Foulds : Do you mean what got up to 14.8?

Senator RHIANNON: In 2012 we were at $10 billion. We are now at $16.8 billion. So there is the extra $6.8 billion. Could you just break that down for us, please?

Mr Foulds : My recollection is that the $11.5 billion number went to $14.8 billion as a result of escalation. In October 2012 we had $10 billion, which was the target capital cost. In July 2013, it went to $11.5 billion and it was the estimated capital cost in the 2013 business case. That had stage 1 being $3.4 billion to $3.6 billion, stage 2 $3.6 billion to $3.8 billion and stage 3 at $4.1 billion. In November 2014, it was nominally out turned, which means escalation was added to take account of cost increases over a year because you had actually determined when the project was going to proceed. That was announced in the New South Wales state infrastructure strategy update. So the expression of costs to nominal terms rather than scope changes. That took it to $14.9 billion. In June 2015 there was an increase in scope and land acquisition costs. The southern connector stubs and the St Peter's surface works were included, and that was about $500 million. The change was the decision to include stubs in the southern connector. In November 2015, we have the updated strategic business case with $16.8 billion nominal, which had those changes that I just described here earlier.

Senator RHIANNON: So that last one is the $1.2 billion that comes in at that stage?

Mr Foulds : Correct.

Senator RHIANNON: I want to finish off by checking with you some answers from a couple of years ago. In terms of the questions being put, you answer questions often in a detailed way but then I looked over it again just to be clear on what the answer was. I am referring to question 145 and it was May 2014. There is such complexity around WestConnex, so we have been going over the history of it and what has been publicly set out. The question was:

Since Infrastructure Australia was established, how many infrastructure projects have been financially supported by the federal government without the federal government having access to a detailed cost-benefit analysis?

You answer was:

A key component of the Department’s management of projects is the requirement for all project proponents to complete a Project Proposal Report. This report includes… a cost benefit analysis.

Again, you are not providing the answer there on how many infrastructure projects have been financially supported by the federal government. It is just half an answer. There were a few questions like that. Was it because you did not have the detail? Why was it responded to in that way?

Mr Mrdak : Drawing on my memory, I think we were trying to answer two parts. The question was how many the Australian government has committed to with out IA and with IA.

Senator RHIANNON: No, since IA was established, how many infrastructure projects have been financially supported? That was a clear question and I do not get the answer. The answer you give is that you just literally describe the process.

Mr Mrdak : There are two separate processes. There is the Infrastructure Australia assessment process. Secondly, once governments have committed to a project, before they are funded they go through a project proposal report process under the legislation. What we were saying was that each of those PPRs contains a benefit cost ratio which enables PPRs to be considered by government. I am sorry if we have confused you.

Senator RHIANNON: No, it is not so much that I was confused. I just did not have the information. It was a clear question: how many infrastructure projects have been financially supported? No answer but a bit of information about the process. And again when I ask about funding issues, still with question number 145 on May 2014, No.3 in that section, which is again about funding issues. The question was,

Has the federal government funded any other roads projects that have been submitted to Infrastructure Australia where the Department has not been able to verify something as critical as traffic modelling?

The answer was:

The Department engaged an international traffic risk expert to assist in the review of the WestConnex traffic modelling in April 2014.

Again, the detail is not provided, which is a concern when we are asking those specifics. There is a pattern here, Mr Mrdak. Firstly, is this international traffic risk expert still employed?

Mr Danks : The international expert we are referring to is Dr Robert Bain and his engagement has now ceased at the conclusion of the concessional loan.

Senator RHIANNON: So he is not engaged any more?

Mr Danks : No.

Senator RHIANNON: Where are you taking your advice from?

Mr Danks : For what project?

Senator RHIANNON: Are you saying that you do not need any more traffic advice?

Mr Danks : For the WestConnex, no.

CHAIR: Senator Rhiannon, I know that you are having fun, but time flies.

Senator RHIANNON: I am not actually having fun.

CHAIR: That is just a pun. You have had 15 minutes. Haggis, it is your turn.

Senator CAMERON: Mr Mrdak, can we get the officer from the Western Sydney unit back as well?

Mr Mrdak : Certainly. I just want to check how you want to run the program, Chair. Are we still on corporate?

Senator CAMERON: Yes, this is corporate.

CHAIR: Even though we are stretching the boundaries a bit.

Mr Mrdak : Sorry. We moved from Western Sydney then advertising then to infrastructure investment. A lot of these officers were not programmed until later in the day.

Senator CAMERON: Sure. I appreciate your flexibility in bringing them back to the table. For the record, Mr Mrdak, you left some impression that I may not have been giving you the accurate position on this document. Volume 4, just for the record, appendix P1, the social impact document, page 73 has an impact description and it describes the lifestyle and amenity impacts on various areas associated with this new airport. That includes Blaxland in the Blue Mountains. It also includes Badgerys Creek, St Mary's, Erskine Park, Greendale, Liverpool, Silverdale, Wollondilly and I could go on. They are the areas that are impacted. I am saying that this document says that the impact is the same for amenity in the Blue Mountains as it is for those areas sitting on the doorstep of the airport. The development phase that it talks about is stage 1 operation, the longer term development. The nature of the impact is negative. The impact of stakeholders and communities includes Badgerys Creek, Greendale, Silverdale and Blaxland in the Blue Mountains. It says that the likelihood of the impact is almost certain. It says the consequence is major. And it says the significance rating is very high. What do you mean by a ‘very high significant rating’ in the effect on people in Blaxland?

Senator Colbeck: Senator, before we go to Mr Mrdak, you did indicate that he was questioning what you were saying. My interpretation of what he said was that he did not have the document in front of him in full, which I think is a fair point. It is all very well to read the odd word out of a document and then use that to create a perception of where things sit, but without the full document in front of him, which you do have, I do not think it is fair for you to characterise that he was questioning what you were saying. He just said he did not have the document in front of him.

Senator CAMERON: That is fine. What I am doing is that I have placed on the record exactly what P1 says in relation to these issues. I am now asking the question—and I have every respect for Mr Mrdak and I do not question his integrity at all; it is just that we may be at different analytical points on this document. What is a significant rating of 'very high'? What does that mean for the people in Blaxland?

Mr Wilson : Can I take that on notice. I do not have that in front of me.

CHAIR: Can I just move for a while to Senator Conroy, because this is a bit all over the place.

Senator CAMERON: If I can maybe just get the chair—if we could set aside some time for this very important issue during the day then I would be happy to move away from it now and come back if I can get some time with yourself, Airservices Australia and the Western Sydney Unit.

Senator Colbeck: Senator, this is a matter for the committee.

Senator CAMERON: I am asking the committee.

Senator Colbeck: And if you can have perhaps a private meeting at the break to organise your program—

CHAIR: Just pause there. Thank you, Minister—you have made the point.

Senator Colbeck: We are all over the place like a hose—

CHAIR: I have more descriptive words than that. Like a madwoman—

Senator Colbeck: under pressure on an insurance ad.

CHAIR: It is a fairly flexible thing. Senator Ludlam has pointed out that we are the only committee that is all over the place—

Senator LUDLAM: No, others jump around, but others run with much more discipline than this one.

CHAIR: I am giving people 15 minutes, but the trouble is that we are going back to an area where—Senator Cameron wants to investigate the noise because he lives in the noise area and it is on at 10 o'clock tonight, so he is trying to avoid that. I think—

Senator CAMERON: Chair, to be fair, you told me we would not get to the Western Sydney Unit.

CHAIR: Correct—if, under the flexibility of this committee, you go on and on on earlier things. It is up to the committee members who are asking the questions as to how far we get through. Under the ordinance of the Senate you can do what you bloody like, which is stupid. So, Senator Conroy, would you like to continue and we will come back to that.

Senator CAMERON: I would just like to finish this one. Maybe I can put it to Mr McRandle. Then maybe we can have a discussion about when we can actually get people to the table to talk about what is one of the biggest environmental and infrastructure issues in the country. Mr McRandle, I have just drawn Mr Mrdak's attention to volume 4, appendix P1—the social impact document. On page 73 it gives the lifestyle and amenity impacts. It gives a range—a list of areas that will be affected, including Blaxland. This is not simply about me and my house; this is about the community in the lower Blue Mountains and the Blue Mountains generally. People need to understand that it is a big issue. What it says there is that, in the development phase stage 1 operation and long-term development, the nature of the impact on the Blue Mountains and on Blaxland is negative. It says the impacted stakeholders are Blaxland and the Blue Mountains. It says the likelihood of this negative impact is almost certain. It says the consequences are major and it says the significance rating is very high. What are the major consequences and why is rated very high?

Mr McRandle : It is a very good question, Senator. In fact, that is part of the technical volumes for the report. We have gone back to technical analysts who put this assessment together to understand the specific elements that would actually lead to that conclusion, because it seems to me that the level of impact that is rated for amenity in the lower Blue Mountains seems out of proportion with that around the airport immediately and it does raise the question of just what that consequence is. So I am unable to give you a detailed answer as to why they have come up with the conclusion that it is a substantial negative impact, but that is one that we are addressing and examining further in relation to finalising the EIS. We will only be able to come back subsequently with advice on that one.

Senator CAMERON: So only when you finalise the EIS. What is the timetable for finalising the EIS?

Mr McRandle : We are looking to finalise the EIS in the first half of this year.

Senator CAMERON: The group who did this report as well indicated that the uncertainty over certain aspects of this is causing concern. Are you picking this up as well? If you are not, just look at what is happening here.

Mr McRandle : No, absolutely. I think the point you make about the uncertainty is a good one and a very fair point to make. One of the issues that we discussed earlier this morning was around the time to settle the flight paths for the airport. I think it is completely reasonable that the community should have some certainty before the airport commences operations in 10 years time and that is the basis of us starting work now with Airservices to work through the flight paths. We would like to do that much sooner than 10 years.

Senator CAMERON: Because the EIS, as I understand an EIS, is to allow people to analyse the effects, both socially and environmentally—

Mr McRandle : And economically.

Senator CAMERON: And economically—on the community.

Mr McRandle : Yes.

Senator CAMERON: So in terms of the social impacts, they are very high, significant and major in my community. Will we have an EIS that will actually fix this uncertainty?

Mr McRandle : That is the aim, Senator—to work through those issues that have been raised during the public consultation and our own analysis of the impact.

Senator CAMERON: So the public will know whether we are going to move the flight paths, as Mr Mrdak said, five kilometres one way or another, take them away from over the top of the densest population area in the Blue Mountains. This stupidity that we would actually put a draft EIS up that has the most effect on the densest population in the lower Blue Mountains will be fixed, will it?

Mr McRandle : That is the intention—to get the best outcome environmentally, socially and economically for the operation of the airport.

Senator CAMERON: When we talk about economics, how do we balance the amenity of people in the Blue Mountains that is going to be destroyed, according to this EIS, against the profitability of the airport and the profitability of the airline companies?

Mr McRandle : The economics are not so much about the profitability of the airport or the airlines as much as the economic benefits the community can realise through jobs.

Senator CAMERON: So there is no profitability in the airport. If there is no profitability for the airlines, you do not get any economic benefit anywhere, do you?

Mr McRandle : I think you can get a situation where the wider economy benefits from an airport, which is true of airports around Australia that operate in capital cities. They are all big generators of jobs and economic activity. But it is important that we get the balance right between the environmental impacts and the economic benefits that can accrue to those communities.

CHAIR: Can I just pause you. Senator Cameron, how much more time you need? We are cheating, as it were, to get your message across on the fact that you live under the flight path et cetera and—

Senator CAMERON: Chair, I object.

CHAIR: Don't take the bait.

Senator CAMERON: Well, you should not throw the bait out if you do not want people to take the bait.

CHAIR: Don't take the bait. How much more time you need?

Senator CAMERON: I would like another half hour and then I can come back to these other areas. I am happy to concede to Senator Conroy.

CHAIR: Just so we know, we are now questioning the equivalent of 10 o'clock tonight's questioning.

Senator CAMERON: If I can get half an hour—

CHAIR: They will be finished?

Senator CAMERON: I will be finished on that, but I do need to talk to Airservices Australia.

CHAIR: And they do not have to come in at 10 o'clock?

Senator CAMERON: They do not need to come in.

CHAIR: Because you have already had more than half an hour with them now.

Senator CAMERON: And I appreciate that.

Senator CONROY: I am just clarifying. Have you just released—

Senator CAMERON: Just released to you?

Senator CONROY: No, released the officer. I got the impression that the officer—

Senator CAMERON: I understand I am getting another half an hour.

CHAIR: If we go through to 11 o'clock, will that do you? That is 20 minutes.

Senator CAMERON: I have to cede to Senator Conroy now.

Senator CONROY: No—

CHAIR: I am running the show. Would 20 minutes get you through?

Senator CAMERON: Yes, with this—

CHAIR: Okay. We will end the Western Sydney Unit at 11 o'clock.

Senator CAMERON: So we have dealt with the uncertainty. I just truly want to understand the process if I have 20 minutes clear. What was the process that would give the department the idea that you could put a draft EIS out that affected the most densely populated area in the lower Blue Mountains and that would be a proper proposition to put up?

Mr McRandle : I think it is the case that, in putting together a very complex EIS—an airport is a very complex piece of infrastructure—the effort was made by Airservices to model flight paths that would allow aircraft to move into that area safely and efficiently, as I mentioned before, away from other aircraft movements in the Sydney basin. It is a busy city anyway. The judgement was made, I think, that the altitude that the aircraft would transit across parts of the Blue Mountains, including the lower Blue Mountains, was such that the noise impacts would be not as intrusive as I would say other parts of Sydney faced with KSA, where the urban population is much more densely distributed close to the airport. So the aim is to examine those noise impacts from those flight paths and make a judgement about whether they in fact work for the purposes of environmental impact, but that is not to say that in finalising the EIS it would not be our role and our objective to try to improve those flight paths and get a better balance that takes account of community concerns.

Senator CAMERON: I have been using an app called Flightradar24. I think it is one of the most popular apps in the lower mountains. Flights are going over the lower mountains now at heights ranging from 13,000 feet to about 24,000 feet. Is that right?

Mr McRandle : That is correct.

Senator CAMERON: Roughly?

Mr McRandle : Yes, that would be right.

Senator CAMERON: When those flights are at 20,000 feet, watching television you can still hear those flights going over.

Mr McRandle : That may well be the case, Senator.

Senator CAMERON: No, it is not maybe—that is the case. You do not know, do you?

Mr McRandle : Obviously—

Senator CAMERON: You are the expert in this stuff.

Mr McRandle : I think it depends on what sort of house you are in and whether the windows—a whole range of factors that go to individual circumstances. I cannot comment on—

Senator CAMERON: I am in the lower storey. I have a two-storey house and I am down below, not on the top floor. These flights are audible as they go over between 13,000 and 24,000 now.

Mr McRandle : These are the ones climbing out and heading north-west, for example?

Senator CAMERON: Yes. Perth flights, I think.

Mr McRandle : It is Singapore, Bangkok and—

Senator CAMERON: Yes. So they are audible now. You are now coming down to 5,000 feet. Can you clarify—I understood it was 5,000 feet above sea level.

CHAIR: Metres or feet?

Senator CAMERON: Feet.

Mr McRandle : It was 5,000 to 7,000 feet—5,000 to 7,000 would be the range that was modelled—above sea level.

Senator CAMERON: Above sea level—so I was correct.

Mr McRandle : And Blaxland is probably about 200 feet above sea level I think. It is not as high.

Senator CAMERON: It is 240, I think.

Mr McRandle : Yes, so it is pretty close to sea level.

Senator CAMERON: And it goes up to 1,000. Springwood would be a bit higher—it goes up. So you could have flights under—in the 4,000 feet plus range, couldn't you?

Mr McRandle : Yes, 4,000 to 6,000 feet might be reasonable.

Senator CAMERON: Now it is 4,000 to 6,000 feet?

Mr McRandle : It depends on which part of the Blue Mountains you are in.

Senator CAMERON: Has there been any modelling done about the ambient noise at night?

Mr McRandle : Yes.

Senator CAMERON: There has?

Mr McRandle : Yes.

Senator CAMERON: So are you saying that those night flights will not have an effect in Blaxland?

Mr McRandle : I am not saying that they will not have an effect, Senator. I think it is a situation where whenever you have an airport operating there is going to be the effective aircraft noise and no-one should aim to promise that there will be no noise intrusions. It is a question about to what extent those noise intrusions exist and whether they can be mitigated by moving the flight paths somewhat. But I think the point you make about aircraft departing out of KSA and heading west being audible or detectable by people in the lower Blue Mountains is indeed a fact of life with airports anywhere. There is going to be aircraft noise. I do not think anyone is promising—

Senator CAMERON: I am not complaining about that. What I am concerned about and what the residents of the Blue Mountains are concerned about is that their amenity is going to be affected in a major way. As the EIS says, there will be no curfew under this plan. Residents in the inner city and the Inner West have a curfew. There is no curfew planned for Blaxland or that area.

Mr Wilson : Senator, that is part of the EIS process—for the department to take submissions from the community, to assess those submissions, to assess the effects of the proposal as it is outlined in the draft document and then to take those into account in proposing a final document for consideration. As Mr McRandle has indicated, that is the process that we are working through. That is the process that we will work through with Airservices Australia to examine ways in which we can mitigate the impacts and to effect change through the flight paths. If that revolves around the movement of the flight paths in and over the lower Blue Mountains then those are some of the issues that we will consider in the forthcoming months.

Senator CAMERON: So the residents of Blaxland in the mountains will know whether the flight paths will be moved that five kilometres or changed significantly?

Mr Wilson : When we finalise the EIS for consideration by the ministers, yes.

Senator CAMERON: What does a five-kilometre movement mean in terms of overflights and noise?

Mr McRandle : In relation to specific movement of, say, the merge point, we will need to model that separately. I think the intention is that, in settling a flight path that minimises those environmental impacts and therefore the amenity aspects that you are talking about, we will have to model those noise impacts and come back out to the community and explain those.

Senator CAMERON: Who signed off on the merge point in the EIS? Who signed off on the EIS?

Mr McRandle : I did, Senator.

Senator CAMERON: Why did you sign off on a merge point above the densest populated area in the Blue Mountains? What possessed you to do that?

Mr McRandle : It was a case of having advice based on the flight paths that the noise impacts on the ground in those areas would not be greater than, say, the equivalent of a car passing a house in a suburban street—that there were going to be some noise impacts around western Sydney and we should test them in order to settle our public consultation process and then come back to refine those over the next year or so.

Senator CAMERON: A bit of an ambit claim, I think. With a car passing a house in a city street, if you have absolutely no noise at night, that is significant, isn't it?

Mr McRandle : It could be.

Senator CAMERON: It could be? It is significant, isn't it.

CHAIR: Can I just interrupt you there.

Senator CAMERON: Chair, you gave me time.

CHAIR: But you are trying to put words into his mouth. It would assist us if you were able to tell Senator Cameron where he could go around Sydney Airport or even out here when the planes are at 5,000 feet coming in to land so you can hear for yourself. Just go out and have a listen and see what happens. I can remember the trams in Sydney when I went to Castlereagh Hotel—the Carlton Hotel in Castlereagh Street. I could not sleep for the first night. After three nights I got used to the noise of the trams and went to sleep. Back to you. That was less than 30 seconds.

Senator CAMERON: Mr McRandle, is it possible to do some testing in the lower Blue Mountains and bring some flights in at 5,000 feet or under 5,000 feet at operating level between now and the finalisation of the EIS so that people can understand what the noise impact is and so this argument that it is like a car going past your house can be tested?

Mr McRandle : I do not have access to any airliners, Senator. Are you suggesting that we charter some aircraft to fly over?

Senator CAMERON: I am not sure whether some of the airlines that are desperate and that want to get this up and running would cooperate. Is it possible to bring some flights in over the lower Blue Mountains at that height before the EIS is finalised so that the public in the lower Blue Mountains can understand the effects that they are going to have in the middle of the night when it is perfectly quiet and you have a flight going over you at under 5,000 feet?

Mr Wilson : I do not think it will be possible. We can examine whether or not we can do something, but I do not think it would be possible to operate—for us to organise the operation of an airliner across the area.

Mr Mrdak : Senator, I think it is best placed that we do this additional modelling and work and then have the response to the EIS worked up, including coming back to you with further information and options before we went to any such measure.

CHAIR: Can I just ask a question, Senator Cameron. What do you mean by the middle of the night? Is that one o'clock in the morning or 11 o'clock or 10 o'clock?

Senator CAMERON: 2.00 am or 3.00 am—whenever flights are coming in.

CHAIR: But is that what is proposed for the new airport?

Senator CAMERON: Yes.

Mr Mrdak : It would be relatively small numbers, but it will be—it is designed—

CHAIR: If you wanted to do this test for Senator Cameron—which you could do or you could just take a group of people and get under the current flight paths at 5,000 feet—that would mean you would have to break the curfew at Sydney Airport, wouldn't you?

Senator CAMERON: Yes.

Mr Mrdak : The issue would be that we are still a long way short of determining what is the noise preferred mode of operation for nine operations. We are working—as Senator Cameron has indicated, in the EIS we have outlined some noise preferred options which would involve operations perhaps head-to-head in a southerly direction, which minimises overflow and which may mean that there are parts of the area that Senator Cameron is talking about that may have no night operations because we have noise abatement procedures to minimise overflight. That is why I say it is not as simple as simply flying an aircraft over a particular area, because we are a long way short of determining what will be the noise abatement procedures. For example, at Sydney Kingsford Smith Airport there are aircraft that operate at night. They operate under dispensation through the legislation. They operate in and out over the bay. There are noise abatement procedures which provide for that and which minimise noise impacts at night. So, similarly, at Sydney west airport, while it will be a 24-hour airport, we will look at noise abatement procedures to minimise overflight of residential areas. That is why it is not simply a case of running an aircraft at this time, Senator, I am sorry.

Senator CAMERON: Okay. What discussions took place with the minister in relation to this EIS? Were there meetings to discuss this EIS with the minister? I do not want to know what you said.

Mr Wilson : Before the document was released, we briefed the minister in regard to the broad contents of the document.

Senator CAMERON: Did you draw the minister's attention to this stupidity of funnelling all of the flights over one of the most densely populated areas in the lower Blue Mountains? Was that drawn to his attention?

Mr McRandle : The minister was made aware of the flight paths, but the thing was that the Minister for the Environment is also responsible for approving the EIS for release and so it was actually through the Department of the Environment that most of our briefing went.

Senator CAMERON: I have written to Minister Hunt some months ago and he has not even acknowledged my letter, so that is another issue. So the minister and the Deputy Prime Minister knew what was going out to be modelled and that was this funnelling of all of the flights over the lower Blue Mountains—correct?

Mr Wilson : Both ministers were aware of the issue.

Senator CAMERON: Both ministers were aware of that. Did they raise any concerns about this?

Mr Mrdak : Senator, I understand your concern, but I think we should be careful in using language like 'funnelling all of the flights over a particular point'. That is not an accurate representation.

Senator CAMERON: What is it?

Mr Mrdak : What we have indicated as an option would be a merge point at a certain location that has certain levels of traffic but does not represent all of the traffic for the airport.

Senator CAMERON: All incoming will be merged over Blaxland.

Mr Mrdak : A proportion of the incoming would be merged if that—

Senator CAMERON: Where does it say that in the EIS?

Mr Mrdak : If you read appendix 4 and perhaps volume 4, it indicates a range of approach and departure paths that are yet to be finalised and settled.

Senator CAMERON: It still goes back to the social impacts and the amenity impact being major.

Mr Mrdak : Yes, and we have undertaken to provide you with an analytical piece in relation to why those settings have been done. Also, as I said I think in my earlier answer, the gradations of that impact were perhaps not as well described in that appendix P1 given the differences between the locations—between Luddenham and, say, the lower Blue Mountains.

Senator CAMERON: I can see what is happening now. You have had an independent analysis that does not meet the political problems that the government is now starting to face, so you are going to change the rules of the game.

Mr Mrdak : That is not how we operate—

Senator CAMERON: That is what is happening. So the EIS—

Senator Colbeck: That would only occur if it was a final process. As the officers have indicated to you a number of times, they are indicative flight plans. They are not yet finalised. So that could only occur if it was a final process. They are out for consultation so that these sorts of issues can be aired, as you are doing quite rightly.

Mr Mrdak : Senator, I can assure you that this is a robust process. The department has been open at every stage of this process as this conversation is occurring.

Senator CAMERON: I do not want to get into an argument with you, Mr Mrdak, but I think the length of the period that it was open for consultation was very short. These are extremely complex issues. Even measuring noise in itself is a complexity that most residents would not understand. Would you agree?

Mr Mrdak : Senator, it is a complex area of science—I do agree.

Senator CAMERON: And, as to the argument that it is only like a car passing you at night and that the technology is going to change everything and everything is going to be quiet, I can find absolutely no evidence that the jet engine technology is going to change dramatically over the next decade. I can find even less—

Senator Colbeck: I will bring you an article after morning tea that demonstrates that it will.

Senator CAMERON: Just let me finish. I can find no evidence that the airframes are going to change to such an extent that you will have significant noise benefits under the airframes, because it is complex and it depends on the airlines taking up these changes. That is a cost. You still have 20- or 30-year-old technology operating now and that will operate for some period of time yet.

Mr Mrdak : Australia has been at the forefront of moving to new technology. In chapter 4, in fact—the fleet flying in Australia and to and from Australia is amongst the most modern in the world because of our regulatory requirements.

Senator CAMERON: I do not disagree with that, but what I am saying is that from here on the rate of change is diminishing. If you look at the models, they show you a massive change in terms of noise and it is starting to level out. It would only be incremental change in the future because to change the engines is costly. The engines become more heavy as you put more sound insulation in and the airframes have to be completely different airframes. That is not going to happen in a hurry. So perhaps we need to understand this.

Mr Mrdak : You are absolutely right. There is a lot of work taking place. The trade-off between emissions and noise is reaching some critical points of balanced judgement—there is no doubt about that—as the higher emissions standards have led to certain parameters on engine burn rates. What we are seeing, though—and I think Mr McRandle alluded to this and perhaps we have not explained this as well—is the importance of new satellite navigation technology, which gives you an ability to direct aircraft away from fixed geographic points to much more flexible rotations and also much more—

Senator CAMERON: Not if you are merging them over Blaxland.

Mr Mrdak : What I am saying is that it gives you greater flexibility around heights of approach. It gives you greater flexibility around speed. So there are a whole range of new technology developments outside the aircraft physical characteristics which are also starting to give us greater opportunities. If you look at what is happening at other major airports with what we call SMP technology, we are getting the capacity to have much tighter tolerances and much more overflight of less affected areas. So that is emerging.

Senator CAMERON: We might be getting ahead of ourselves now. If you are saying to me that what you are going to do is take into account that 80 per cent of the submissions that have got concerns in relation to the merge point being over the lower Blue Mountains and if you are saying to me that you would look at maybe a five-kilometre change in the incoming merge point, let us wait and see where we are. But you cannot have a situation where residents of the lower Blue Mountains are for a decade left with uncertainty about what is happening to their lifestyle amenity which is going to be massively changed with this approach.

Mr Mrdak : I think we are all agreed that there is a need to address the issues you have raised quite legitimately and also to find certainty as much as possible not just for the residents of the lower Blue Mountains but also for the whole of the Sydney basin.

Senator CAMERON: And I assume that other politicians will be taking these issues up on behalf of their residents—their constituents. The constituents that have been raising this with me are my local community in the lower Blue Mountains and that is why I am doing it. I understand the impact in St Mary's. I used to live there. I used to live at St Clair and I lived close to Erskine Park, so I understand all of those areas.

Mr Mrdak : I think you are right, Senator. Just for the record, the 60-day period was set by the Department of the Environment, which is double the statutory time frame which was in the legislation.

CHAIR: Thank you.

Proceedings suspended from 11:02 to 11 : 21

Senator LUDLAM: I have a couple of questions about the Perth Freight Link, which I do not think will be much of a surprise to you. What is the process for—

Mr Mrdak : Do you want to move away from corporate, then, to infrastructure investment?

Senator LUDLAM: Yes.

Mr Mrdak : I am not sure that that is where the—

Senator LUDLAM: Others have been all over the shop, so I just figured I—

Senator STERLE: You are the one who came in here and said this committee does not—this is the worst-functioning committee that you have been to.

Senator LUDLAM: I did not say it was the worst.

CHAIR: Senator Rice, you have the call.

Senator RICE: I am going to ask in general about the Melbourne Airport third runway proposal—how that is rolling out and whether to your knowledge there is going to be a new environmental impact statement done for that aspect.

Mr Mrdak : That needs to be dealt with under our Aviation and Airports group. We are assisting at this stage with the land acquisition for the third runway. There will need to be, as with any such project, a major development plan put together. I do not have the details on that with me. Perhaps I can come back to you on notice or perhaps we can deal with it later in the day. The Aviation and Airports team who look after that project are scheduled at five o'clock.

Senator RICE: So in terms of whether there will be an environmental impact statement—

Mr Mrdak : Normally, major development plan processes for airport development are referred for environmental assessment—that is correct. It is done as part of the MDP process.

Senator RICE: Maybe I will come back to it this afternoon.

Senator CONROY: Coming back to real infrastructure projects as opposed to propaganda blitzes—

Senator Colbeck: Is that a promise?

Senator CONROY: I am certainly going to be talking about them. The actual infrastructure investment program that we were discussing earlier is a program that funds actual roads—is that right?

Mr Mrdak : It funds a variety of infrastructure.

Senator CONROY: I will keep going, but it funds actual roads?

Mr Mrdak : Roads—yes.

Senator CONROY: Railways?

Mr Mrdak : Yes.

Senator CONROY: Actual public transport projects?

Mr Mrdak : Yes.

Senator CONROY: Actual intermodal terminals?

Mr Mrdak : Yes.

Senator CONROY: Actual bridges?

Mr Mrdak : Yes.

Senator CONROY: Actual heavy vehicle rest stops? That is included?

Mr Mrdak : Yes.

Senator CONROY: Actual community and regional infrastructure projects?

Mr Mrdak : Yes, we have separate programs for each of those items—yes, they form part of the government's infrastructure programs.

Senator CONROY: Actual local government roads via Roads to Recovery and other programs?

Mr Mrdak : Yes.

Senator CONROY: The Pacific Highway projects in New South Wales?

Mr Mrdak : Yes.

Senator CONROY: The Bruce Highway projects in Victoria?

Mr Mrdak : In Queensland.

Senator CONROY: Only in Queensland—not in Victoria?

Mr Mrdak : The Bruce Highway is in Queensland.

Senator CONROY: Yes—there is a typo here. Victorian projects—are there any Victorian projects? My understanding—and I am happy to be corrected—is that Victoria has about 25 per cent of the population of Australia but is only getting eight per cent of the funds currently allocated.

Mr Mrdak : I would have to check the figures, but there are a large number of projects now underway in Victoria which are in receipt of Commonwealth contributions.

Senator CONROY: No, I am talking about—the total pool of funds is roughly eight per cent, but 25 per cent of the population of Australia lives in Victoria.

Mr Mrdak : The Commonwealth has not for many years allocated funding on a per capita basis. It is done on a project basis. Of course, the cancellation of the East West Link project in Melbourne obviously has had an impact on the total Commonwealth spend in Victoria.

Senator CONROY: South Australia regional roads—are they included? That is roads like the North West Coastal Highway in WA?

Mr Mrdak : Yes.

Senator CONROY: The Midland Highway projects in Tasmania?

Mr Mrdak : Yes.

Senator CONROY: And the Black Spot Program—is that covered?

Mr Mrdak : Yes.

Senator CONROY: And the Stronger Regions program?

Mr Mrdak : Yes, that is one of our regional infrastructure programs.

Senator CONROY: Actual, real physical things are built with the money that was originally allocated in this program?

Mr Mrdak : Yes, there is a combination of funding for research, planning and physical construction.

Senator CONROY: So what is the sole portfolio outcome that underpins the infrastructure investment fund?

Mr Mrdak : It is outcome 1.

Senator CONROY: I understand it says the sole outcome for infrastructure investment is 'Improved infrastructure across Australia through investment in and coordination of transport and other infrastructure'. That is on pages 30 to 35 of the Infrastructure portfolio budget statement. Does that ring a bell?

Mr Mrdak : Yes, it does, Senator.

Senator CONROY: So how does an advertising campaign achieve—you only have one portfolio outcome assigned to the Infrastructure Investment Programme. Again, I will read you the words: 'Improved infrastructure across Australia through investment in and coordination of transport and other infrastructure.' I do not get how you have taken $18 million out of real builds and you are putting it into something that does not qualify on any fair-minded reading of your portfolio outcome. How does a communications or propaganda campaign—call it what you want—of $18 million build a single road, railway, public transport or intermodal terminal? How does that $18 million comply?

Mr Mrdak : Outcome 1 can certainly be read as the need to inform the community as contributing to that outcome.

Senator CONROY: Which part of the sentence can be read?

Mr Mrdak : 'Improved infrastructure across Australia through investment in and coordination of transport and other infrastructure.' There is nothing to preclude the community being informed in relation to the progress and status of the program. Successive governments have chosen through a variety of mechanisms to inform community of projects.

Senator CONROY: But that is my point. As you will remember, I was once, briefly, a minister. Money comes separately—it does not usually come out of the actual outcome. So I am confused about why the money was taken out of the outcome. As a Victorian, I briefly mentioned that we are on eight per cent of the funds. I would like to know why there are not $18 million more worth of projects being spent in Victoria rather than on an advertising campaign in the lead-up to the election to try to boost this flailing government's standing. How do you take $18 million out of actual infrastructure?

Senator Colbeck: We could be spending millions of dollars more in Victoria if it was not for the Victorian government cancelling projects.

Senator CONROY: I think you should read the Auditor-General's report before you actually go remotely near this project. Every guideline was overridden to pork-barrel a failed Liberal government. If I can come back to the issue—

Senator Colbeck: And a project that the reports say will be required at some point in time.

Senator CONROY: Damning report. My question is: how do you justify taking $18 million out of the actual infrastructure fund and why didn't you go and get the $18 million from somewhere else, Minister? Why are you taking money out of Victoria and out of Tasmania and out of Queensland for your own propaganda?

Senator Colbeck: We are running a tight and financially responsible budget. For all of our projects at the moment across all portfolios, if we need to spend money then we need to find the money from within the portfolio. We are not like the Labor Party—we did not just keep on spending money and not worry about where it was going to come from. We are maintaining—

Senator CONROY: You have noticed that you have increased the deficit, right? You have increased the debt and increased deficit.

Senator Colbeck: Only because of entrenched funding requirements that have been set up over a period of time.

Senator CONROY: Actually, no, you have not.

Senator LUDLAM: It is called landmines.

Senator Colbeck: Senator, the government has made a decision around funding this campaign. It is not a final decision, as Mr Mrdak said earlier. Because you have the budget documents, you know exactly where it is coming from.

Senator CONROY: How does an ad campaign improve infrastructure across Australia? How does this $18 million remotely—you have to be a gymnastic linguist to try to fit a propaganda campaign for election purposes into the words, 'improve infrastructure across Australia'.

Senator LAMBIE: What are you hoping to achieve from it? What are your achievements?

Senator Colbeck: Exactly what the officer has advised you—and you were not here, Senator Lambie, unfortunately—exactly what the officers advised Senator Conroy earlier.

Senator CONROY: Given it is to be funded within the program, which program?

Mr Mrdak : It is being funded from the Infrastructure Investment Programme—from the national contingency available from within the program.

Senator CONROY: How much is in the contingency?

Mr Mrdak : I will take that on notice, Senator.

Senator CONROY: That is a fair bit of money to be having whacked away in the contingency.

Mr Mrdak : There are always amounts. These contingencies are often savings from projects across the country that have been realised.

Senator CONROY: I do not think there are any savings that have been identified at this stage, have there? I am not—

Mr Mrdak : Yes there have been, Senator. There have been projects that have delivered savings which have enabled—

Senator CONROY: Which projects have delivered $18 million worth of savings to offset this?

Mr Mrdak : We have delivered savings in a range of projects.

Senator CONROY: $18 million worth?

Mr Mrdak : Yes, Senator.

CHAIR: We saved $50 million on one project in the Northern Territory just by asking a few simple questions in the Capital Works Program—just like that.

Senator CONROY: Like who is the chief minister today?


Senator CONROY: I think you did not ask that.

CHAIR: No, this is federal.

Senator CONROY: I was asking Mr Mrdak to identify projects that have saved $18 million.

Mr Mrdak : We have an amount in national contingency, a sum of which has come from projects that are not proceeding at this stage owing to decisions by state and territory governments, some of which are savings. For instance, we have made a saving on projects like the Moreton Bay Rail Link, which has been delivered ahead of schedule and ahead of budget. That has enabled us, for instance, to reallocate funds—

Senator CONROY: That is what I am asking. I am asking you to clarify. If you make savings on an individual project, I accept that you could round it up. Whether you have made $18 million on the one project I am not sure and I would seek your advice on that. You have said you will take that on notice.

Mr Mrdak : Yes, we have, and I will take on notice the amount—

Senator CONROY: But what I am not going to accept is you saying that certain projects across different states did not go ahead. That money should be allocated back into the central pool for other infrastructure projects, not spent on a government propaganda campaign to try to boost their stocks before the election.

Mr Mrdak : The government does place—where projects do not proceed, the government places those amounts in contingencies. The government then makes decisions in relation to the reallocation of those amounts across the program. As I said earlier, successive governments have sought to provide information to the community on—

Senator CONROY: Not paid out of the actual program.

Mr Mrdak : The program, for instance, has historically paid for things such as signage on projects and information campaigns on individual projects, and it has been successive governments. In fact, it has been a feature of governments that they have sought to build their own branding around elements of the investment program. All of us would see signage around the country put in place by successive governments.

Senator CONROY: I appreciate that there are a few straws you have to clutch at here, Mr Mrdak, but I think trying to equate a few signs—

Senator Colbeck: I recall going into a lot of school halls, Senator Conroy, that had signs that were compulsory as part of the project cost. I think that was called propaganda.

Senator CONROY: Trying to equate a few signs with an $18 million ad campaign is a bit of a stretch.

Senator Colbeck: In fact, they actually had to stay there until after the election under the contract.

Senator CONROY: It is a bit of a stretch even by your very professional capability, Mr Mrdak. The key question—

Senator Colbeck: The signage under BER, Senator, that was obliged to stay there until after the election, I think, would suggest that you are treading on pretty soft ground.

Senator CONROY: How will a six-month ad campaign in the lead-up to the next election provide future benefits to Australians, Mr Mrdak? Minister?

Senator Colbeck: As Mr Mrdak advised you earlier, it is about advising the Australian people about the projects that are being built using taxpayers' money. It is quite as simple as that.

Senator CONROY: Can I confirm, Mr Mrdak, that the Western Australian Armadale Road was funded out of the contingency, the Gold Coast Light Rail was funded out of the contingency and the South Australian Northern Connector had been funded from the contingency?

Mr Mrdak : Yes, Senator—that is the government's commitment. Those will be funded from within the program.

Senator CONROY: So they are from within the program. We are still back to how a government propaganda campaign in the lead-up to the election is meeting the portfolio outcome—improved infrastructure. To be fair, you said it was a government decision, so it was not your decision, Mr Mrdak. But, Minister, how does—

Senator Colbeck: I told you just a moment ago that we are advising the Australian people about the infrastructure projects that we are building. That is exactly what we are doing. That is what the program is about and that is what we are doing.

Senator CONROY: Is it the government's intention not to announce any new projects while this campaign is running?

Senator Colbeck: I am not sure how you would draw that conclusion.

Senator CONROY: No, I am asking you. It is a question. It is actually—

Senator Colbeck: Not that I am aware.

Senator CONROY: Does the government prefer ads to building actual infrastructure? This is at the nub.

Senator Colbeck: Can you repeat that, please?

Senator CONROY: Do you prefer running ads to actually building infrastructure? Clearly, you have taken $18 million you have committed to building infrastructure with and you are spending it on a government propaganda campaign in the lead-up to the election.

Senator Colbeck: As I said before, we are operating within a constrained budgetary process. We have taken a decision to advise the Australian people about projects that are being funded using taxpayers' dollars. In any circumstance where we put up a proposal to spend, we have to find savings within the agency. So that is the alignment.

Senator CONROY: Can I put to you that there are literally scores of current projects funded under Stronger Regions, Black Spot, Heavy Vehicle Safety and Productivity Program as well as road and rail upgrade projects that individually receive much less than $18 million in federal funding.

Senator Colbeck: You can make that point all you like, Senator.

Senator CONROY: Given that you are mounting this propaganda campaign by raiding the project pool, what have you got to say to the unsuccessful applicants under the National Stronger Regions Fund—'we cannot give you funding, but we can run a propaganda campaign in the lead-up to the election'?

Senator Colbeck: The government has made a decision to run a campaign—not a final decision but we are going through the initial processes of it. We have considerably constrained our public advertising spending since we came to government. In the last year of the Labor government the public advertising spend was $138.9 million. This year for us it will be $107.1 million. So we are in all circumstances being constrained with our spending and we are spending responsibly.

CHAIR: Senator Conroy, you have just had 15 minutes. You can have one last question and then we are going to go to Senator Ludlum.

Senator CONROY: I have almost finished. I have two or three questions and then I can probably finish. You do remember, Mr Mrdak, that the department produced an absolutely fantastic, topical, water-cooler-discussing video to promote this program after or possibly in the lead-up to the last budget. Do you remember that? We discussed how many clicks it had had and—

Mr Mrdak : I think that was after the 2014 budget.

Senator CONROY: How many clicks are we up to? How many views has that ornament of government advertising got?

Mr Mrdak : I will have to take that on notice, Senator. I do not have that information with me.

Senator CONROY: Do you think it would have surpassed Mr Albanese's video mocking it yet?

CHAIR: That is an opinion.

Senator CONROY: No, it is a factual question. Has it passed—

CHAIR: Yes, but it is a pointless question.

Senator Colbeck: He has taken the number of hits on notice and when you get the numbers back you can make the comparison, Senator.

Senator CONROY: What is the identified problem that this campaign seeks to address? I think the officer is still here or possibly in the next room. When you put a contract like this out, you normally say, 'Here is the issue that we would like to address'. What is the issue that you have asked this campaign to address?

Mr Mrdak : As Ms Goodspeed indicated, the market research that was undertaken highlighted a lack of awareness of the rationale for investment and the nature of the investment taking place across Australia in transport infrastructure—hence, the three objectives that Ms Goodspeed outlined to you are designed to address that. The market research found that there wasn't clarity in the community's mind in relation to what was being provided, what was the rationale for it, what were the economic and social benefits and also what was the extent of the program. They were the areas that the government has decided to target as objectives of this information campaign.

CHAIR: Last question.

Senator CONROY: I think Senator Ludlum indicated that he was happy for me to finish this and I am almost finished. What has been the extent of the minister's involvement in this? Have the minister and his office been involved in drafting this and then putting it to the committee headed by Minister Pyne? Is that the process in the minister's office?

Mr Mrdak : The process has been through a number of processes—firstly, the decision of the Service Delivery and Coordination Committee, which is chaired by Minister Pyne, which requested work to be undertaken in this area.

Senator CONROY: Does the minister appear before that? I know you mentioned that you had been called. Does the minister appear?

Mr Mrdak : Yes. Also, the process has been through the Independent Communications Committee.

Senator CONROY: Who chairs up the Independent Communications Committee?

Mr Mrdak : That is headed by the Department of Finance. It assesses independently all campaigns and information processes against the criteria.

Senator CONROY: Who is in charge of that inside Finance?

Mr Mrdak : I will take on notice who the chair of that is, but it has been through that. Quite clearly, in the development of the campaign the minister's office has been engaged in stages of it. Can I also clarify an answer we gave earlier. You asked about the timing—why the timing was through to the end of August. We indicated that was the decision of government. I should have added that that was based on advice from us and the consultants based on a length of time for a campaign. Originally, the campaign had been anticipated to commence earlier. The advice was that such a campaign should be targeted around five to six months.

Senator CONROY: Targeted around the election.

Mr Mrdak : No—around that time frame. The stark decision has now been that, if it proceeds, it would mean a start around later this month, which is where you get to that time frame. It was based on advice from us and the market research consultants about the length and extent of the time—

Senator CONROY: Minister, are you aware of any other portfolios which are running ad campaigns under Minister Pyne's committee? That was a question to you, Minister.

Senator Colbeck: No, I am not, but there quite possibly could be. I indicated to you before that there is a budget for government advertising.

Senator CONROY: How much did you indicate—did I hear you say $107 million?

Senator Colbeck: It is something in that vicinity. The figure spent last year—this is last year's expenditure—was $107.1 million.

Senator CONROY: Last calendar or financial year?

Senator Colbeck: Financial year. The last financial year for the previous government was $138.9 million.

Senator CONROY: So you do not have the forecast figure for this year?

Senator Colbeck: I do not have it with me, sorry—no.

Senator CONROY: For this financial year—30 June last year to 30 June this year?

Senator Colbeck: No, I am sorry, I do not.

Senator LUDLAM: I have questions on the Perth Freight Link. I do not mind who answers them. I imagine it would be Infrastructure Investment. Can you just step us through—obviously, the Supreme Court of WA has found that the environmental approvals were issued unlawfully, so that has thrown a pretty big spanner in the state government's timeline on the Perth Freight Link. What impact has that had on your workflow, particularly with regard to funding the project?

Mr Pittar : That decision of the WA Supreme Court has introduced a delay to the project and a delay to the delivery of the project. The precise implications and nature of those delays are matters that we are working through with the Western Australian government.

Senator LUDLAM: That is a classic estimates answer. I reckon that should go into tutorials about estimates and how it works. What does it actually mean?

Senator Colbeck: He is a good officer, Senator—he is a very good officer.

Senator LUDLAM: I did not imply that he was not.

Senator Colbeck: You are making an implication by your comment.

Senator LUDLAM: We are doing great without your interventions, Senator Colbeck. What does it actually mean for your workflow? The estimates that I have heard from the state government are that it could push their timelines out by as much as the year. Is that consistent with what your take on the situation is?

Mr Pittar : That is broadly consistent, Senator.

Senator LUDLAM: Previously it was stated that funding was reliant on the project starting at the beginning of this year. You have previously stated that you would not be funding stage 1 unless stage 2 had been identified, but now obviously even stage 1 is in trouble. Does this put Commonwealth funding at risk or is it just business as usual as far as you are concerned—apart from the delay, I guess?

Mr Pittar : The Commonwealth funding commitment for the project remains in place.

Senator LUDLAM: So there is a delay. You have said you are working through it, but it does not materially change your work as far as the Commonwealth is concerned?

Mr Pittar : As I mentioned, it will delay the project. We are working with Western Australia to understand the precise implications of that delay and the broad terms of that delay are potentially up to 12 months delay.

Senator LUDLAM: Okay.

Ms Zielke : Can I just note for your information that the teams within the Infrastructure Investment Division each deal with a number of projects for which their workload will change depending on the progress of the projects and therefore it is an area where those changes do happen and cycle through. So the team manages its workload, as you would expect, through the changes in those cycles.

Senator LUDLAM: Thank you for that. It is a shame that Minister Cormann is not here, but I have seen Minister Cormann urging the state government to get on with it so that the Commonwealth can hand the funds over. Do you have an estimated time frame for when you think Commonwealth funding could be forthcoming?

Mr Pittar : At this stage I would not want to project when that might be. As I said, we are working through those details with the Western Australian government.

Senator LUDLAM: Let us leave that there. It is good that Senator Colbeck is at the table, because my next questions relate to a batch of questions on notice that you tabled for us late last week. Thank you for those. They do not shed much light on the situation, unfortunately. At the last estimates I asked if you could provide modelling for air quality, noise and truck congestion for residents in the vicinity of the road surrounding the Perth Freight Link. We got question on notice 44, which avoided answering. Question on notice 2631 said that modelling on the impacts of diesel particulates, air quality and truck congestion on all roads and communities in the vicinity of the PFL has not been done 'that you are aware of'. So my question, obviously, is: categorically, has the modelling being done or not? It is curious to hear back that it has not been done that you are aware of. You are proposing to hand over more than $1 billion. Have you checked to see if that has been done?

Senator Colbeck: I will have to take that on notice, Senator.

Senator LUDLAM: Really? That is what happened last time I asked. How come it is so difficult to find out whether any modelling has been done? Otherwise, I am just basically handballing from estimates session to estimates session, which is not good enough. Has it been done or not?

Ms Zielke : The answer to the question, as far as we are aware at this stage, is that, no, it has not been undertaken. Would you like further advice in relation to when it would normally have been undertaken?

Senator LUDLAM: That would help, because at least that, I guess, will give me some indication of where you have been looking.

Ms Zielke : We will come back with that detail.

Senator LUDLAM: Thanks. What is the Commonwealth guidance for the safe level of diesel particulates—air quality with regard to diesel particulates for surrounding residents?

Mr Pittar : I do not have that information, Senator.

Mr Mrdak : We would need to probably seek that from the state EPA.

Senator LUDLAM: What I would like to know is whether you are looking at what are considered safe levels of diesel particulates in the air for human beings, children, pregnant women and older people. Then hopefully you will be able to tell us that the levels of diesel particulates for this project that the Commonwealth is proposing to fund would be lower than those maximum thresholds. I guess you can see where this is going.

Mr Mrdak : Certainly, Senator. As I said, I do not think we are in a position at the table to give you the details of the environmental assessments that are taking place or are about to take place. But we will ascertain from the Western Australian government what we can on those matters.

Senator LUDLAM: So it is not something that the Commonwealth would do, would it? It would be something that the state would do and then that would be an input into your assessment?

Mr Mrdak : It is part of their environmental assessment process unless it also involved EPBC matters—then it would also involve Commonwealth assessment, as you are well aware.

Senator LUDLAM: Thank you. We can take those questions up with those folks as well. There has been a series of front-page stories in the West Australian newspaper on the way that the state government is using the excuse of commercial-in-confidence as grounds to refuse to answer quite basic questions on large infrastructure projects like this one and a couple of others. The answers that Senator Colbeck tabled for us late last week—I have not done a count, but I probably should have done a word count of the number of times that the phrase 'commercial-in-confidence' has been used as an excuse to not provide information. Why are traffic modelling and the impacts of the existing alignment on surrounding suburbs considered commercial-in-confidence? Let us start with that one. Question on notice 2631—traffic modelling is commercial-in-confidence. How does that work?

Mr Pittar : Senator, this is information from the states. They have undertaken traffic modelling. We consult with them over release of information and they have indicated to us that traffic modelling, which goes to issues of patronage, is commercial-in-confidence.

Senator STERLE: What a load of crap, with the greatest respect. What a load of bollocks. Can you believe that?

Senator LUDLAM: We will take that interjection just in case Hansard was not going to get it.

CHAIR: That is terrible language.

Senator STERLE: I do not mean to be disrespectful to you, Mr Pittar, but that is pathetic.

CHAIR: That is terrible language, Senator Sterle.

Mr Mrdak : Just in response to Senator Sterle, we are not the project proponents. We are reliant—the business case is Western Australia's and that is their primary judgement.

Senator LUDLAM: You are proposing to drop upwards of $2 billion on this thing.

Mr Mrdak : And planning and assessment processes and the business case and implementation are matters for the Western Australian government, Senator.

Senator Colbeck: And the use and release of their data does come with arrangements, obviously, and agreements on use and release of the data. It is not necessarily our position or situation, but when you are using somebody else's data and information there is a level of trust and respect around its utilisation and release. I think you would understand that. Whether you like it or not—

Senator LUDLAM: Trust and respect in the state government is in very short supply at the moment, Senator Colbeck.

Senator Colbeck: It is not about a particular colour or political party or government; it is about a relationship between two entities and respecting the relationship between the two entities in the use of data. It might be a different political persuasion of government later on, but you still have arrangements between levels of government about use and release of data. If you cannot have those arrangements then you are probably not going to have data that is going to flow.

Senator LUDLAM: Data is not flowing, Senator Colbeck. Data is not flowing, otherwise I would not be sitting here taking up your time.

Senator Colbeck: Well it may not be flowing to you—

Senator STERLE: It is not flowing at all.

Senator Colbeck: but between the two levels of government it may be flowing. So the question you are asking is: can you see it. We have had a conversation earlier in the day about information when Senator Rhiannon was here. She was after some information that had been redacted out of a report and the officials had seen the information.

Senator STERLE: You should table the front page of the West Australian, Senator Ludlam. That might help the minister.

Senator Colbeck: I am actually not debating the particular issue; I am debating the principle of the relationship between governments.

Senator LUDLAM: Let us move along. One of the things that you did respond on—not you, Senator Colbeck, but the Minister's office came back with the following: they said there is currently a tender process underway for the project and it is the usual practice not to make this sort of data publicly available; value for money for the investment will only be achieved if tenderers put in their best bids; blah, blah, blah. The tender has now been awarded. Can you confirm for us whether any of the information that has been withheld from public view on the grounds that there was a live tender process afoot will now be forthcoming given that the tender has been awarded—it has gone to Leighton and a consortium of other contractors. Will there be anything now that we know who got the gig?

Mr Mrdak : I think the issue with the delay in the project is that there are options which Western Australia needs to pursue as to whether the tendered project remains valid. That will obviously be dependent on the time frame that the Western Australian government will require to address the findings of the court and the environmental assessment process. That may mean that WA is unable to continue the current tender price and contract and therefore may require a new market process. We do not have that information; hence, I cannot give you an answer in terms of the availability of the information. I think there is just too much uncertainty at this stage as to both the planning and approval process but, more importantly, what procurement process would have to flow if there was an extended time frame for the completion of the environmental assessment process.

Senator LUDLAM: You might want to pass that advice on to Senator Cormann, because he seems desperate to write the cheque out no matter what. That is probably more of an editorial question.

CHAIR: Is this contingent on the sale of the port?

Mr Mrdak : No, Senator.

CHAIR: Is this to make the potential sale of the port more attractive?

Senator LUDLAM: I think you are onto something, Senator Heffernan.

Senator STERLE: Yay—you should have been a copper.

Senator LUDLAM: I think you are onto something.

CHAIR: No—also, the drop-dead bit is that I hope we do not do what we did in bloody Darwin. We are fighting over who owns the South China Sea, but we have said to the mob up there, 'Come on down and you can have the harbour for 99 years'. I hope we do not make that mistake with this harbour. That is a comment you do not have to respond to.

Mr Mrdak : I do not think I can respond to any of those.

Senator LUDLAM: Just by way of summary, then I will let the committee move on, can you just confirm for us that you have used commercial-in-confidence to refuse answers on the following issues: modelling on the impact or traffic impacts on all of the roads surrounding the Perth Freight Link. That is question 44.

Mr Pittar : Yes, Senator.

Senator LUDLAM: That was commercial-in-confidence. The impact of increased traffic on roads to local residents—that is commercial-in-confidence? Just a yes or no will do, if you like, and we will chip through these fairly quickly.

Mr Pittar : Yes.

Senator LUDLAM: Modelling on traffic impacts into Cottesloe in the western suburbs—question 16—is commercial-in-confidence?

Mr Pittar : Correct, Senator.

Senator LUDLAM: Modelling on the traffic flow and impacts of the proposed Perth Freight Link overall—that one as well is commercial-in-confidence?

Mr Pittar : Correct.

Senator LUDLAM: Modelling on the impacts to Fremantle, North Fremantle, the connection in and around Stock Road, High Street, the Leach Highway and through to the port of Fremantle—that is question 16.

Mr Pittar : Yes.

Senator LUDLAM: That is commercial-in-confidence. And traffic impacts across the project area in aggregate is commercial in confidence. Value for money—you have replied commercial-in-confidence on value for money. You people pay taxes. Does this not distress you just a tiny little bit? And the final one—the business case—

CHAIR: They have actually answered these questions. Why are you asking them?

Senator LUDLAM: I am looking for confirmation. The business case is commercial-in-confidence as well.

Mr Pittar : A summary of the business case has been released, Senator, with commercial-in-confidence parts of it removed.

Senator LUDLAM: Senator Colbeck has said that you just basically rely—if the state government says they do not want this information disclosed, would you ever contest a state government's assertion that something should remain commercial-in-confidence or do you just leave it to them to decide?

Mr Mrdak : In a range of projects—and we discussed this with Senator Rhiannon this morning; the WestConnex project, for instance—we certainly do engage with the state governments to ascertain the importance of the material that they redact and do they wish to make it publicly available. But we certainly do agree, having been through a number of these tender processes, on the importance of some of this traffic information being available, because it goes to the heart of the issue of—particularly when you look into tolling regimes—

Senator LUDLAM: Available to who, Mr Mrdak?

Mr Mrdak : To the state government in their negotiations with the potential tenderers for the project.

Senator LUDLAM: Where do residents come into this?

Mr Mrdak : They are matters for, in the first instance, the state government—

Senator LUDLAM: No, you are proposing to fund the project, Mr Mrdak. So it is a matter to you.

Mr Mrdak : The Australian government is providing a funding contribution. Responsibility for the planning and delivery of the project rests with the state of Western Australia.

Senator LUDLAM: I think you can understand why people are just so pissed off about this thing. A short time ago—I think it was on Thursday—the Senate passed a resolution requesting the Auditor-General to take a look at the decision-making process behind the funding of this, because it appears to me and apparently a majority of the Senate that it is the identical debacle that unfolded around the East West Link in Melbourne, which Senator Conroy mentioned before that the Auditor-General tabled such a critical report of. We are in the process of making identical mistakes in the case of this project. If that is not true, I think that putting some of this information into the public domain might go some way toward assuaging people's concerns. What would your view be of an Auditor-General investigation into this project at this time? Would that be something that you would welcome or something that you would prefer did not happen?

Senator Colbeck: That is an opinion, Senator, and that is not within the bounds of what the officials are here to provide.

Senator LUDLAM: Are you happy to open the books on this thing to the Auditor-General?

Mr Mrdak : Senator, the Auditor-General operates independently under their own statutory provisions. If the Auditor-General decides to undertake any audit or inquiry, we would obviously cooperate fully, as we always do.

Senator LUDLAM: Because all of this could have been avoided by putting some of this information into the public domain in the first place. Thank you, Chair.

Senator RICE: I will move on to projects that have commercial-in-confidence issues with them and start off with Victoria. Victoria has been sitting the lowest on the list of states in terms of Commonwealth funds for infrastructure. Is it still the case that, per person, Victorians are well behind in terms of funding?

Mr Mrdak : As I indicated to Senator Conroy earlier, successive governments have not funded infrastructure on a per capita basis for many years. We provide certain per capita funding in programs that are general purpose grants, such as financial assistance grants, but in terms of individual infrastructure projects they are on a project-by-project basis. The state of Victoria took a decision not to proceed with a key project. That was a judgement of the state of Victoria. The Australian government is now discussing with the state of Victoria other projects in that state which may receive Commonwealth funding assistance given the decision not to proceed with the East West Link road project. I think that is the clearest way I can put it. I cannot comment in relation to per capita because that is not the basis on which the Commonwealth has for many years sought to attribute funding.

Senator RICE: But we are in a situation now where Victoria has about eight per cent of federal infrastructure funding compared with a 20 per cent population?

Mr Mrdak : Those figures would depend very much on future decisions of the Victorian government in relation to—

Senator RICE: But that is the current situation?

Mr Mrdak : I have not checked that, but if that is the case then it is somewhat contingent on future decisions of the Victorian government as to which projects they progress. The Australian government has made a contingent provision should the East West Link road be brought back into scope and also is talking to the Victorian government about other alternative projects.

Senator RICE: Moving on to those other alternative projects—Transurban's unsolicited proposal to the state government on the Western Distributor. I understand that the business case for the Western Distributor has been provided to government.

Mr Mrdak : We have received the Victorian government's reference case. I will ask Mr Foulds to take you through that, because it is quite an important distinction as to what that is.

Mr Foulds : The Victorian government has provided the Australian government with its business case, which is a reference document and assumes delivery by an independent authority. It is not the Transurban market-led proposal. As a result of having developed that business case and taking into account the Transurban proposal and working through that, they are now at stage 4 of the five-stage process.

Senator RICE: Can you go through those? Is it a Victorian government five-stage process or a federal government one?

Mr Foulds : Yes, it is a Victorian five-stage process. Stage 4—and I do not have the five stages written down, but I can get them for you easily—is direct negotiations with the market-led proponent, which means direct, exclusive negotiations with Transurban. Stage 5 will be a decision by the Victorian government as to whether to accept it and go ahead.

Senator RICE: Given that the federal government has been given that reference case, what is your process for going through and assessing it?

Mr Foulds : We have also gone through that and we continue to go through that reference case to assess the impact and the project as a whole, as we would with any other project.

Senator RICE: Can you step me through what your process for deciding whether to support that case is going to be?

Mr Foulds : The process begins, as it does with all projects, with the information that is provided and then understanding the scope and time frames and, in the case of the Western Distributor, understanding the funding and financing that is set out in the reference business case, then working through that and the various options and permutations that might be available and are at the disposal of governments should they wish to take it further.

Senator RICE: Does your assessment as to whether to support that project with federal funding depend upon going through an Infrastructure Australia assessment as well?

Mr Foulds : Infrastructure Australia will assess that project, but they are on later today so you could explore that with them.

Senator RICE: But a decision on whether to fund the project would have to be contingent upon completion of the Infrastructure Australia assessment?

Mr Foulds : The Australian government's position is that, for investments of over $100 million in Australian government funding, projects need to have been assessed by Infrastructure Australia.

Senator RICE: What is your understanding—what do you expect the timeline to finish that federal process is going to be?

Mr Foulds : How long is a piece of string, Senator? But I think we would be looking at trying to nail that in this calendar year.

Senator RICE: When do you expect to have the Infrastructure Australia assessment completed?

Mr Foulds : You would have to ask Infrastructure Australia.

Senator RICE: I will be asking them.

Mr Foulds : I do not have the answer to that.

Mr Mrdak : Senator, we were only provided with the reference business case at the end of November. This will take some time given the complexity of the issues to be worked through.

Senator RICE: So your process for working through—how much influence or how different are they given that this was an unsolicited market-led proposal initially? I understand that you are saying it is now a Victorian government reference case, but is it a different process that you will go through in terms of looking at the finances?

Mr Mrdak : We are looking at the Victorian government reference case. That is the one we will focus on because that has essentially made some adjustments to what was, as I understand it, the unsolicited bid—it does contain elements such as the widening of the Monash Freeway, enhancements of access in and out of the port and the like. Our focus is on the Victorian government reference case. That is where our focus is.

Senator RICE: Has the government been provided with a full business case, including all of the appendices?

Mr Mrdak : We have been provided with the Victorian reference case. There is still further work going on, as Mr Foulds indicated. There are additional stages to the Victorian assessment which will need to be completed. So, no, we do not have the completed piece of Victorian work.

Mr Foulds : Then there will be another one. If Transurban's bid is successful then that will be the final one that would be taken to market and that would also require assessment to see whether it was different.

Senator RICE: So we have three things then?

Mr Foulds : No, Senator—it depends. We are doing the reference business case now. That does not assume that it is Transurban doing the work.

Senator RICE: Is that the same business case that the Victorian government has released publicly?

Mr Foulds : The redacted version that they have released publicly—yes, it is.

Senator RICE: So you have got the full version—the non-redacted version with all the appendices?

Mr Foulds : Yes.

Senator RICE: Have you seen what was reported in the Age today, I think it was, that there were independent assessments of the business case undertaken by infrastructure experts Tony Canavan and Kerry Schott?

Mr Foulds : I have seen the article. I would have to take that on notice.

Senator RICE: So you do not know whether you have been given those independent assessments?

Mr Foulds : I have only just read the article this morning, so I would like to take that on notice.

Senator RICE: Would you be able to get back to me sometime today as to whether you have seen those independent assessments?

Mr Foulds : I can try.

Senator RICE: That would be appreciated, because obviously it is critical information that the public is not being given the opportunity to look at. Given that you have the Victorian government reference case, which must have some information about how it is proposed to be funded, what is your understanding of the proposed funding arrangements for the project?

Mr Foulds : There are a number of options that are being worked through and no decisions have been reached in a particular sense, but there would be a tolling regime applied and there would be a government grant. The permutation of that is being worked through and how that would be exactly funded and financed. But they are the sorts of things. If it goes ahead, there will be a public-private partnership and a tolling regime and there will be an element of government grant.

Senator RICE: Has there been a specific request to the federal government for a contribution toward the project?

Mr Foulds : There has not been a specific request or a cast-iron request for an amount because those discussions are not yet settled and the business case has not yet been analysed. I understand Infrastructure Australia has not finished its work either.

Senator RICE: The Victorian government seems to consider it pretty much a fait accompli, from the media reports, that there would be federal government support for this project. Do you think their confidence is justified?

Mr Foulds : I cannot comment on the Victorian government—

Mr Mrdak : That is a matter for the government once they have further considered it, Senator.

Senator RICE: Senator Colbeck?

Senator Colbeck: Senator, we are working our way through a process and once we get our way through the process we will make some decisions. A lot of what you are talking about is quite hypothetical, so let us work our way through the process.

Senator RICE: Do you acknowledge that in your discussions with the Victorian government there seems to be an assumption that there will be federal money for it? The media reports we have seen indicate that $1.5 billion from the federal government is the funding package. The state government will be putting in $400 million, but that money would be allocated to the widening of the Monash Freeway.

Senator Colbeck: Senator, a lot of people will make assumptions as this progresses, I am certain, from a range of perspectives. We are talking quite actively with the Victorian government on their project priorities. As we work our way through those discussions, we will come to agreement on a number of projects, I am sure.

Senator RICE: Let us move on to those other projects. I want to move on to the Melbourne Metro Rail Project and what status that currently has.

CHAIR: You may have to come back to that if you are going to go on.

Senator RICE: I have a very small amount on both of these other two projects. What is the current status of the Melbourne Metro Rail Project as far as the federal government is concerned?

Mr Mrdak : At this stage it remains a matter with the Victorian government. We have not received any business case or formal request for assistance at this stage. The Victorian government has successively sought a Commonwealth commitment, but the Commonwealth at this stage awaits further information in relation to the design and the cost of the project. That is still some time off.

Senator RICE: Senator Colbeck, how can the federal government make decisions about priorities if it has not got the information for that public transport project at the same time it is getting information about the road project?

Senator Colbeck: It cannot make a decision on one project if it does not have the information on the project. As I said—

Senator RICE: But you just said that you would be making decisions based—there would be a suite of projects and there would be priorities. I am wondering how the federal government can be—

Senator Colbeck: That is the point of the discussion, Senator. While we are having the discussions, while we are waiting for the information and until we get the information, we cannot make those decisions.

Senator RICE: So would you be waiting to make a decision on funding the Western Distributor project until you have information about the Melbourne Metro Rail Project?

Mr Mrdak : This is one of the difficulties we face. Jurisdictions will put up more advanced business cases at certain times and it makes it very difficult. The Victorian government is working. It has indicated that the Melbourne Metro remains one of its priorities, but at this stage we are yet to see any details of the business case or its design. So at this stage it is very difficult to make a comparison. Obviously, under our process we would like to be in a position, as would Infrastructure Australia, where you are looking at a multitude of business cases and you are making priority decisions. The timing of the bring-forward of some of these business plans means that that is often difficult.

Senator RICE: So you would prefer to have these projects together. But do you feel that you would need to wait until you have the Melbourne Metro business case before you made a decision on the funding of the Western Distributor?

Mr Mrdak : That is something which is going to be a judgement that government will have to make if it decides to support the Western Distributor. The Victorian government has been looking for a commitment to the Melbourne Metro but has not yet been able to indicate what extent of financial commitment it is after and it is far too early in its business case to do that. It has allocated some initial money for planning and preconstruction, but we are yet to see the full detail of the project, which would enable that sort of judgement to be made by the federal government.

Senator RICE: But you would prefer to be looking at them both together?

Mr Mrdak : Obviously, you would like to be able to see a range of projects, recognising that a project like the Melbourne Metro is a project that will not substantially have a lot of construction until at least early 2020. So it is a difficult one.

Senator RICE: Well, it depends on how much of a priority it is for the Victorian government.

Mr Mrdak : I think that is their indicative timetable—that most of the construction will be at the back end of this decade or early next decade.

Senator RICE: The other related project which has got federal funding towards it is the Port Rail Shuttle, which appears to still be in limbo with the Victorian government. I think there is Commonwealth funding of $37 million that was allocated to the Port Rail Shuttle. What is the timeline? Is that money at risk of expiry if it is not spent by the Victorian government?

Mr Mrdak : It is not at risk at this stage. It remains in the program. We had been talking to the Victorian government and also to a number of the intermodal terminal operators. We believe that is a very important project. Unfortunately, the Victorian government has decided to await the completion of its process of the long-term lease of the port of Melbourne. It is my understanding that bidders for the port have been asked to include plans for rail upgrades and connections to the port as part of their future investment strategies were they to be the successful purchaser of the lease. Unfortunately, what that has meant is that we are unable to have a detailed discussion and settle a time frame for the investment of the Commonwealth money that is committed to the intermodal terminals and rail upgrades. I will just check with my colleague Mr Wood, who may wish to add some further detail to that.

Mr Wood : I think Mr Mrdak has actually covered the issue entirely.

Senator RICE: So at this stage the money is in limbo if there is no expiry date.

Mr Mrdak : It is in the five-year program. We await advice from Victoria.

CHAIR: Thank you.

Senator BULLOCK: I would like to start off with some questions regarding the East West Link and the advice that was provided to then Prime Minister Abbott with respect to it. This has been the subject of—

Senator Colbeck: Senator, we can hardly hear you over here.

CHAIR: Yell.

Senator BULLOCK: I will yell. The East West Link, Senator Colbeck, and the advice that was given to then Prime Minister Abbott with respect to it is my first line of questioning. I will look to firstly the National Audit Office report into this matter that says that the Department of Infrastructure and Regional Development provided clear advice to the government that the $1½ billion was being paid in advance of project needs and proposed an alternative payment approach that aligned payments with project progress. That report also notes that the Department of the Prime Minister and Cabinet provided the then Prime Minister with advice on the merits of making advance payments in relation to the East West Link project and the implications of such an approach more broadly in relation to infrastructure project decision-making. The first question is whether the department was given the opportunity to comment on that other advice that came to the Prime Minister from the Department of the Prime Minister and Cabinet.

Mr Mrdak : No, Senator. We worked with the Department of the Prime Minister and Cabinet and we gave them our advice and information, but that is their advice. I do not know if we would have seen that advice that went from them. The normal course of events is that the Department of the Prime Minister and Cabinet would talk to the line department in relation to specific issues and they would draw on our information and advice, but the ultimate advice they provide is theirs to the Prime Minister.

Senator BULLOCK: And you are satisfied that is good practice that they do not come back and share their advice with you?

Mr Mrdak : It varies on some occasions. We tend to know what their advice will be and often their advice may well be shared with us, but it is not always the case. In the circumstances you have described, I think the Auditor-General found that there was a consistency of advice.

Senator BULLOCK: I was going to ask you that—whether you are aware of whether the Department of the Prime Minister and Cabinet's advice was consistent with yours in recommending an alternative arrangement that did not have so much emphasis on advance payments but rather on progressive payments.

Mr Mrdak : Certainly we were aware of that at the time and it has certainly been confirmed by the Auditor-General.

Senator BULLOCK: Just to be clear, you were aware that that was the advice that was given by the Department of the Prime Minister and Cabinet?

Mr Mrdak : That is correct.

Senator BULLOCK: When the Auditor-General talks about the implications of such an approach more broadly in relation to infrastructure project decision-making, what had they identified as those implications?

Mr Mrdak : I think we have done a lot of work to ensure that payments are milestone based to ensure that there are effective milestones put in place for project delivery to drive the correct outcomes in terms of the behaviour of the jurisdictions. I think the Auditor-General was drawing attention to the fact that prepayments override that principle that has been put in place by successive governments to try to ensure cost-effective delivery of projects.

Senator BULLOCK: I must say that seems sensible to me. It was your advice and the Department of the Prime Minister and Cabinet's advice and that is supported by the Auditor-General. How come it was not applied in this case?

Mr Mrdak : The Auditor-General has made clear that the Australian government took decisions based on its strategy to progress this project quickly to give the project certainty and also to ensure that the funding was available to bring forward further stages of the project. That was a decision that the cabinet made through that budget process.

Senator BULLOCK: But not your advice?

Mr Mrdak : Ultimately, governments consider our advice and governments make judgements. Governments took into account other factors and made judgements.

Senator BULLOCK: It was their call?

Mr Mrdak : The Auditor-General makes that clear.

Senator STERLE: Can I just ask a question, Senator Bullock. You said that the cabinet made the decision?

Mr Mrdak : Yes, Senator.

Senator STERLE: Thank you.

Senator BULLOCK: Do you know whether it was the cabinet or the Prime Minister personally?

Mr Mrdak : The Auditor-General indicates it is a cabinet decision.

Senator BULLOCK: The Auditor-General also found that—I just want to quote a couple of summary points to you: 'The approval of funding had been given by the then Prime Minister'—he says 'the then Prime Minister', by the way—'some time between 7 May and 12 May 2014. The usual process for obtaining the required statutory approvals is for DIRD'—your department—'to brief the relevant Minister on its analysis of whether the proposal is in accordance with the legislated requirements prior to a project approval instrument being signed. That did not occur on this occasion.' Then they go on to say in a separate point, which is point 13: 'The Victorian government had not included stage two of the East West Link project in its 2013 submission to Infrastructure Australia. Instead, by approaching the then Prime Minister directly in early 2014, the Victorian government secured approval of $1.5 billion in Commonwealth funding for the western section without this proposal having been presented to, or assessed by, Infrastructure Australia'. The Auditor-General seems to be there just putting the decision-making role in the hands of the Prime Minister, but I will leave that. I take it that it is the case that at the time that decision was made, which they say is some time between 7 May and 12 May 2014, the relevant act was that Nation Building Program (National Land Transport) Act.

Mr Mrdak : Yes, Senator.

Senator BULLOCK: Were the payments made in accordance with that act?

Mr Mrdak : Yes, Senator. The decision of the government was taken which enabled—and I think the Auditor-General finds that the payments were made in accordance with the act.

Senator BULLOCK: Notwithstanding that those processes that should have occurred did not occur?

Mr Mrdak : The decision of the government, which was then I think, as the Auditor-General outlines, confirmed in the letter of the Prime Minister, contained the authority for the payments to be made.

Senator BULLOCK: So the payments were made in accordance with the provisions of the act—you are satisfied with that?

Mr Foulds : The payments were made in accordance with the transport act in force at the time.

Senator BULLOCK: At the time, was the East West stage 1 part of the national network or off the network?

Mr Foulds : It was approved under the then part 3, which means that it would become on the network. It would become, once built, part of the network.

Senator BULLOCK: So it was not at the time, but once it was built it would be?

Mr Foulds : It did not exist at the time. Once it was built, it would be become part of the network. That was the plan.

Senator BULLOCK: How were the statutory requirements for making a payment under, as you say, part 3 for stage 1 met given that the relevant minister was not part of the approval process—was not acting on your advice—but, rather, it was made by the Prime Minister?

Mr Foulds : The approvals were met by going through—and the project was eligible, so that is one of the tick-offs; it was an eligible project. There are a number of those key points that are relevant: was it going to be on the network or was it on the network and other projects that already are on the network—you would tick that—or was it intended to become on the network. So there are a number of those that are assessed and usually there is a project proposal report as well, which underpins the advice to the ministers, and that project proposal report for East West stage 1 was under development and progressed. The issue was not whether the project was a good project or not; the issue was about the payment schedule.

Senator BULLOCK: I just want to take you back to the Auditor-General comments. He says, The usual process for obtaining the required statutory approvals is for DIRD to brief the relevant Minister on its analysis' and so on. Then he says, ' That did not occur on this occasion'. If that is the usual process and it did not occur, how did it tick all of the boxes that you just said it ticked?

Mr Foulds : The notes on administration is the process that underpins the national land transport act. That has the project proposal report in it and the format it takes. Then the legislative instrument is the instrument that the minister signs, which authorises payments to be made. The legislative instrument was signed appropriately on the authority of the cabinet is what the Auditor-General found.

Senator BULLOCK: The Auditor-General also finds that the department had not completed due diligence on stage 1 before the $500 million was paid to the Victorian government on 30 June. Do you agree with that?

Mr Foulds : The project proposal report that I was mentioning earlier had not been finalised. That is the due diligence that was referred to. But it was being progressed.

Senator BULLOCK: And is it satisfactory to sign off on these things before the due diligence is completed?

Mr Foulds : The Auditor-General found that the process that is undertaken usually is that that project proposal report and analysis goes to a minister. In this case the instrument was signed without the minister requiring that.

Senator BULLOCK: Having the benefit of it.

Mr Foulds : Yes. So that is the unusual aspect.

Senator BULLOCK: Yes. And you would have to say it is poor practice.

Mr Foulds : The Auditor-General suggests that it is not best practice.

Senator BULLOCK: Yes, quite. What information did the Prime Minister personally have when he approved the payment to Victoria if he did not have the sorts of information that normally are the basis of the decision?

Mr Foulds : I could not answer that question, Senator.

Senator BULLOCK: So we do not know?

Mr Foulds : I would not know what the Prime Minister had at his hand or what advice he had.

Senator BULLOCK: So he might have had none as far as you know?

Senator Colbeck: I suggest that would be highly unlikely, Senator.

Mr Mrdak : As the government has publicly indicated, they made a commitment to this project and were keen to accelerate this project and to provide funding certainty for this project. We cannot comment on what specific information the Prime Minister had, but the government has made public comments to that effect.

Senator BULLOCK: It may have been merely motivated by the fact that a commitment had been made and he was determined to honour it.

Senator WILLIAMS: First time for that.

Senator BULLOCK: I was not going to comment. Thank you, Senator Williams—I was not going to comment on the government's track record in honouring the commitments it has made, but if you would like to comment then you are welcome. Given that this was principally an initiative of the Prime Minister, what role did the actual minister—Minister Truss—have in the approval of the payment?

Mr Foulds : The approval instrument was signed by then Assistant Minister Briggs, which was the agreed protocol between the two infrastructure officers.

Senator BULLOCK: How did the Prime Minister's authorisation of the payment of the $1½ billion to Victoria align with a specific statutory requirements of the act for making payments?

Mr Foulds : It provided the authority for then Assistant Minister Briggs to sign the instrument.

Senator BULLOCK: And that is an absolutely normal process?

Mr Foulds : Yes, absolutely.

Senator BULLOCK: In the Audit Office report, it found that the MOU used by the department to address the legality of the payments—the memorandum of understanding—was not an effective approach to managing the particular risks involved with approving funding and making advance payments prior to the project having 'proceeded fully through the processes that have been established to assess the merits of nationally significant infrastructure investments'. It sounds pretty damning to me. Do you accept that finding?

The Audit Office report found of the MOU used by the department to address the legality of the rush payments:

The Memorandum of Understanding was not an effective approach to managing the particular risks involved with approving funding, and making advance payments, prior to the project having proceeded fully through the processes that have been established to assess the merits of nationally significant infrastructure investments.

That sounds pretty damning to me. Do you accept that finding?

Mr Mrdak : We certainly recognise the Auditor-General's position on memorandums of understanding, which is the traditional nature of documents between levels of government. We rely on those. The Auditor-General does make clear that the department include—and we certainly did—in the memorandum of understanding provisions for the repayment of the funds and that the funds were not to be used for purposes other than the construction of the project. For example, for compensation and the like in the event that a project did not proceed.

Our view is that the MOU provided as high a degree of rigour and control in relation to the utilisation of those funds as would be available. MOUs are traditionally used between the Commonwealth and the state for funding agreements. While the Auditor-General, quite rightly, points out that MOUs are not legally binding contracts, jurisdictions tend to use MOUs in their relationships, and I think the Auditor-General did draw attention to the fact in his report that the department had put in place the best possible protections available in relation to that MOU over the Commonwealth's money.

Senator BULLOCK: Given that it was somewhat of a rush job?

Mr Mrdak : Recognising that the government did seek to ensure that the funds would not be available for other purposes and were to be repaid in the event the project did not proceed.

Senator BULLOCK: Are you satisfied that it is compliant with the National Land Transport Act?

Mr Mrdak : We are, yes.

Senator BULLOCK: Have there been any other projects that have received advanced payments under similar arrangements?

Mr Mrdak : There are often occasions where successive governments have made decisions to bring forward payments for projects, yes.

Senator BULLOCK: That is not exactly an answer to the question, is it? Bringing forward a payment on a project that has already been through an appropriate process is different from an advanced payment, don't you think?

Mr Mrdak : You are absolute right; there are differences. As the Auditor-General has drawn attention to, this was a commitment of government, which was proceeded with. It is unusual in terms of other things that we do where we normally have a program of works in bringing funds forward.

Senator BULLOCK: I will just get back to the question. Are you aware of any other examples of where advanced payments have been made on this basis?

Mr Foulds : In the same manner as the East West Link project, I am not aware. For other projects that have been approved, money has been brought forward by successive governments.

Senator STERLE: To $1.5 billion? What sorts of figures are we talking about? Maybe you can take that on notice and provide examples of that.

Mr Foulds : We can certainly take that on notice.

Mr Mrdak : Again, there have been large bring forwards of money for projects such as the Hume Highway, the Pacific Highway and the like under successive governments.

Senator STERLE: They are projects where they had actually started work.

Mr Foulds : That is correct.

Mr Mrdak : As Mr Foulds has indicated, that is correct. That has been the case where we have had an agreed program of works. As we have indicated, the East West prepayment was an unusual arrangement.

Senator BULLOCK: Could you take that on notice?

Mr Mrdak : Yes.

CHAIR: Thank you very much. We are going to come back to that. We will go to Senator Lambie. I will make the observation that most of the Western world is technically insolvent and China does not even know where its banking is, because 60 per cent of its banking is shadow banking. You have the call.

Senator LAMBIE: Well, the Liberal Party should stop taking political donations from the Chinese. Firstly, with regard to Australia's infrastructure budget can you detail the total and break that down into its different categories and please further subdivide into Tasmania's total infrastructure budget? Do you have that on hand or do I need to put that on notice?

Mr Mrdak : We will give you that on notice, just to be accurate. We can give you the whole program. It is published on our website, but I can provide you with the total program plus Tasmania's program, if you would like that.

Senator LAMBIE: That would be great, and obviously broken down into different categories of where that spend is going.

Mr Mrdak : Yes, certainly.

Senator LAMBIE: That would be wonderful. Can you tell me what percentage of Australia's infrastructure budget is actually going to Tasmania? I am just a little confused, because when Tony Abbott was PM he said he was doing a $50 billion budget infrastructure spend.

Mr Mrdak : That is correct.

Senator LAMBIE: Is that $50 billion still going ahead?

Mr Mrdak : Yes.

Senator LAMBIE: So, it is all going to be spent from the time he was elected to the next—what length of time have you anticipated in spending that $50 billion?

Mr Mrdak : The bulk of that is in what we call the current program, which runs till 2018-19, which is a five-year program. Some of that $50 billion component extends beyond that into the first few years of the next program. You are talking about a program overall into about 2020-21.

Senator Colbeck: It depends on the project.

Mr Mrdak : It depends on the project.

Mr Foulds : Beyond 2019-20 and into the 2020s the money has not been profiled yet. It just sits as beyond that time.

Senator LAMBIE: What percentage of Australia's infrastructure budget is going to Tasmania, out of that $50 billion?

Ms Zielke : We just do not have the percentage in front of us at the moment. For example, in this year we have $4.4 billion, of which $144.8 million is going to Tasmania. That is in this financial year but, as Mr Mrdak said, we can come back to you with every financial year and what percentage Tasmania is of the national budget.

Senator LAMBIE: In relation to Tasmania's infrastructure budget, how much is being spent on the outside of Hobart?

Mr Mrdak : Again, I will have to take that on notice. Our major commitment at the moment is obviously the Midland Highway program, but I will get you some details in relation to where projects are under the program. Obviously, additional to the numbers Ms Zielke gave you, clearly we have programs such as Roads to Recovery, Black Spots and Financial Assistance Grants, which apply across all local government areas in Tasmania. It is not just the $50 billion infrastructure program. There are also other programs that apply across the whole of it through local government.

Senator LAMBIE: That is coming out of that $50 billion?

Mr Mrdak : Some is and some is additional to it.

Senator LAMBIE: That is what I needed to know. Do you know how much the north and northwest of Tasmania is receiving in the federal infrastructure investment? Please detail those projects.

Mr Mrdak : We will get that for you on notice.

Senator LAMBIE: Do you have a policy to use, where possible, Australian made goods and products in federally funded infrastructure projects? For example, does the Australian government give preference to Australian made steel on infrastructure projects?

Mr Mrdak : Not as such. The state level are the procurers of the projects. I know a number of states look for opportunity to source. The advantage of physical infrastructure construction is much of the product is sourced locally in Australia. I do not have the exact details, but we do not have a strict preference, for instance, of Australian steel in infrastructure projects we fund.

Ms Zielke : Each of the states has an Australian industry participation plan for each of the projects, and that would look at what opportunities were provided to local companies to participate as well as how they might contribute to larger players who might participate in the project as well.

Senator LAMBIE: Why do we not have a policy or anything to buy Australian first, for example, steel? Is there any reason we do not do that?

Mr Mrdak : We look for best value for money for product in terms of the infrastructure spend. As I said, the states and territories tend to tender to the market for best price. Often that does involve Australian product, but it is always driven towards the best possible price.

Senator LAMBIE: Do you have a breakdown of how much Australian product you buy during that infrastructure spend?

Mr Mrdak : I do not think we do. I can take that on notice.

Ms Zielke : Also, obviously, the resources portfolio may have figures that are not available to us as well in that regard.

Senator Colbeck: The Finance portfolio would be able to help you with our overall procurement policy. That is managed by the Department of Finance. There is a national procurement policy, which is documented, and that would go for direct procurement by the Commonwealth. But as most of these projects or effectively all of these projects are procured by the states at a state level, they would be done under their respective state procurement policies. I think, from recollection, there is some local preference policy in Tasmania, for example, which you would understand and have seen some publicity on over the last couple of months. But each of the states has their own individual procurement requirements. I am not sure what Commonwealth overlays there might be in that sense, but we can find that out for you.

Mr Mrdak : We can find that out.

Senator LAMBIE: Just in relation to the university and the Launceston campus, you obviously would realise that the University of Tasmania is calling for some funding of $300 million to $400 million to help build their new university in the vicinity of the city in Launceston. Do you have any plans in your forecasted infrastructure budget to give them any money towards the building of that new campus?

Mr Mrdak : No. It is not a project that we have been involved with.

Senator Colbeck: I do not think they have finalised their plans. I think they are getting close to finalising a proposal, but they have not yet, as I am aware, come to government with a final proposal.

Senator LAMBIE: Let us just have a quick chat about national highways. You have $18 million in a contingency plan that you are using for ads. Tell me a little more about this contingency money.

Mr Mrdak : Essentially these are funds that either are savings from projects not proceeding or projects that have come in under budget. We provide what we call a contingency. It is essentially an allocative pool from which government can then utilise the funding to fund other infrastructure projects.

Senator LAMBIE: How long has that contingency fund been there for?

Mr Mrdak : We have always had a contingency, because you have to allow for either cost overruns in some circumstances where the estimated costs have come in higher or where the Commonwealth has not capped its amount but it has a fixed percentage amount contribution, or where you have savings. Each program starts with an amount of contingency and that contingency can vary through the life of a program. We have five-year investment programs, and that contingency amount varies throughout the year.

Senator LAMBIE: That would be a little bit of spare money running around. The reason I am asking for that is, obviously, you have probably heard my call about looking into a feasibility study about a catamaran going across the Bass Strait. Right now Tasmania does not have any plan on what it is going to do in five years time when the TT-Line has finished its lifespan. There is no direction for Tasmania and what it intends to do to move passenger and car across Bass Strait. Would it be fair to ask that a couple of hundred thousand dollars come out of that contingency plan so that feasibility study can be done for the future of Tasmania and Victoria?

Senator Colbeck: I think you are asking the officials for an opinion and that is not within the remit of their responsibility.

Ms Zielke : Can I also note that the act only provides for land transport or land infrastructure to be funded out of the program funds as well.

Senator LAMBIE: That is correct, but this is a national highway. It is part of the national highway. I want to make sure that is very clear. That is part of the national highway, the Bass Strait. Therefore, it is the infrastructure.

Mr Mrdak : Bass Strait is not deemed to be part of the national network per se.

Senator McKIM: That is the problem.

Senator LAMBIE: Who has control of that?

Mr Mrdak : We fund programs across Bass Strait—the Bass Strait vehicle equalisation program and the Tasmanian Freight Equalisation Scheme. The Commonwealth provides significant funding support for both programs for the movement of goods and people, including on the ferry. The infrastructure investment program relates to a defined national land transport network and that includes roads and rail in Tasmania, but Bass Strait is covered by our separate shipping programs, both our Tasmanian Freight Equalisation Scheme and the Bass Strait passenger vehicle scheme.

Senator LAMBIE: So, outside that scope which department does the Bass Strait come under?

Ms Zielke : This department, and separate funding is provided for those. They are provided on a needs basis. As companies need TFES support then—

Mr Mrdak : Tasmania Freight Equalisation Scheme.

Ms Zielke : Yes.

Senator Colbeck: If you are looking at the program, it is under Surface Transport Policy Division.

Mr Mrdak : We have responsibility for the Commonwealth shipping programs which relate to Bass Strait.

Senator LAMBIE: As to the infrastructure or the port at King Island, is anyone putting proposals forward in relation to upgrading that port at King Island for the future?

Mr Mrdak : The port is a state matter.

Senator Colbeck: It is a state owned port. I am aware of some proposals that have been prepared probably going back about eight or nine years ago now to do some work. Some of those are dependent on other developments on the island, but as far as I am aware we have not received any proposals from the state in respect of work at the King Island port. It is a Tasmanian government owned port. If we were to be engaged in that process we would have to be approached by the Tasmania government and go through the infrastructure assessments accordingly.

Mr Mrdak : I will take on notice and check whether we received any bids for community infrastructure grant funding, but I am not aware of anything for the King Island port.

Senator LAMBIE: How much did the Tasmanian Freight Equalisation Scheme increase?

Ms Zielke : It has been increased by $2 million over the next four years.

Senator Colbeck: It is $203 million over the next four years.

Mr Mrdak : $203 million over the next four years in the forward estimates.

Ms Zielke : So, approximately $50 million a year was put aside to fund the new elements of the program.

Senator LAMBIE: The federal government has no plan of attack when we cannot get our ships into King Island in about 12 months time. I am just wondering how they are going to have their deliveries when the state of Tasmania has no money. That is the problem that we are having.

Mr Mrdak : I do not think we would say we have no plan of attack. This is primarily a matter for the state government. They own the TT-Line, and those decisions are theirs.

Senator LAMBIE: I was not talking about the TT-Line. I was talking about King Island. I am talking about getting goods in and out of King Island.

Mr Mrdak : As the minister has indicated, if there are proposals, they are yet to be brought to our attention.

Senator Colbeck: My understanding is that the Tasmanian government is working on solutions to what is happening on King Island with the MVSearoad Mersey coming off the run I think in about 12 months time. They obviously need to find a replacement vessel and there could quite possibly be some infrastructure requirements around that.

Senator McKIM: I just wanted to ask a couple of questions around the National Stronger Regions Fund. A lot of local governments in southern Tasmania are a bit confused and, it is fair to say, put out about the fact that in the first two rounds no money—that is, not a cent—has been allocated anywhere south of Oatlands in Tasmania. In the last round, which is obviously round 2, of the $293 million allocated Tasmania received the not so grand total of $767,000. Firstly, do you dispute any of those figures? Secondly, can you advise how many applications were received from Tasmania from round 2? Can you advise the value of those proposals and can you also provide, if you have it and if not on notice, a breakdown on a state-by-state basis?

Mr Mrdak : I will just ask Mr McCormick, who looks after this program, to give you a breakdown of round 2.

Senator McKIM: Thank you.

Mr Mrdak : Mr McCormick, are you able to assist or would you like to take it on notice?

Mr McCormick : I can say that under the National Stronger Regions Fund we have six projects funded in Tasmania for a total funding amount of $12.31 million. Any further breakdown of that I would have to take on notice.

Senator McKIM: Perhaps if you take on notice what you are able to provide based on my previous question. Thank you. I am aware of that $12 million figure. I will repeat, again, that none of that is in southern Tasmania. I am not putting this to the department at all, but I do want to note for the record that three marginal Liberal held seats are in northern Tasmania. There is a view amongst some in the Tasmanian community that those two things may be linked. I wanted to put this to you in relation to the $12 million. That represents about 2.4 per cent of the just over half a billion dollars allocated in rounds 1 and 2 of National Stronger Regions, but the ABS statistics show that about 7.5 per cent of people that live in regional Australia actually live in Tasmania. I do not know whether you want to respond to this, Minister, but it strikes me that Tasmania is grossly underrepresented in the allocation of rounds 1 and 2 of National Stronger Regions. Can anyone explain that? Is it a quality of projects issue? Is it a quality of bids issue? Why is Tasmania so grossly underrepresented? We always hear we are the mendicant state. When you look at the per capita numbers—and I do want to put these on the record—we get $1.50 per person. This is for round 2. It is $1.50 per person in Tasmania, $14.20 in New South Wales, $9 in Victoria per person, $13.30 per person in Queensland, $18.60 per person in South Australia, and $14.50 per person in WA. It is only $1.50 per person in Tasmania.

Senator Colbeck: I think I am already on the public record as saying I was disappointed at the amount of funding coming out of the program, but it is a competitive program and project proponents are given feedback about the quality of their project and the quality of their application. If my recollection is correct—and I think it is—a number of those project proponents have been invited to make applications in the round. Is it still open or has it just finished?

Mr Mrdak : A new round has just opened.

Senator Colbeck: A new round has just opened, to continue to participate in the process. But it is a competitive program and I think it was oversubscribed by several multiples. It is a very competitive program and that is borne out by the numbers.

Mr Mrdak : From recollection, there is a pretty good correlation between percentage of projects submitted and value of projects submitted by Tasmania and the outcome. I think this goes down to the issue of numbers of projects being submitted and quality of projects. When we work through both rounds 1 and 2, I think the Tasmanian projects were funded pretty closely in proportion to the percentage of applications provided. You will see that in the data that we will provide. As the minister has outlined, it is a very competitive process. A number of jurisdictions submit very large projects. Tasmania tends to submit smaller projects. But as I say, from recollection without the figures in front of me, I think the proportion of applied for and proportion gained is pretty consistent and you will see that in the data. Certainly, where the auditors look at these areas they have found a reasonable correlation between applicants, provided they are of sufficient quality, and the grant funding decisions under the guidelines.

Senator McKIM: Can I just confirm the number of applications submitted from any particular area would not be relevant, would it, to the number of applications funded for any particular area?

Mr Mrdak : No.

Senator McKIM: You are not telling me that volume of applications would be a good strategy for Tasmania to increase the number of projects that would funded, are you?

Mr Mrdak : No. Under the program this time councils are able to submit more than one project. There have been multiple opportunities for councils and communities to submit projects. What I am saying is in a competitive process you are dealing with some very high-quality proposals that deliver very strong economic and social benefits for communities. That is the challenge; Tasmania has to provide that sort of quality of project which will attract those sorts of funds. On top of that, government has provided things like the Tasmanian Jobs Package and the like as additional programs recognising the special needs particularly of regional Tasmania.

Senator McKIM: We could probably discuss that one all day, but I think we will move on. Are you able to provide an average BCR, benefits-cost ratio, for the projects that were funded? I know that, for example, the Kingston High School project, which was submitted by Kingborough Council, had a BCR of 4.1. That to me seems a pretty high BCR. I do not know how that stacks up against BCRs for other projects. Is it possible to provide the committee, perhaps on notice or perhaps if Mr McCormick has the information at his disposal, what the average BCR of the projects that were funded was?

Mr McCormick : We do not require applicants to provide a BCR. In the larger projects we do say that that information would be very helpful in assessing the application. However, because application funding goes from $20,000 to $10 million it was considered to be an imposition for smaller projects to have to go to detailed BCRs.

Senator McKIM: Too onerous?

Mr McCormick : Yes.

Senator McKIM: That does not sound unreasonable. I wonder whether you have given consideration to requiring larger projects to provide a BCR.

Mr McCormick : They do provide the benefits and costs associated in their application. However, to provide a determination or average BCR we would have to put them all into the same framework, and we do not do that. Some applicants provide information, but others do not.

Senator McKIM: This is my final question, and I thank the department for their responses. Can I just ask about the definition of 'regionality'. I ask in the context that there has been funding provided through the National Stronger Regions Fund in areas like Sunshine in Melbourne, which is about 15 kilometres from the CBD in Melbourne. I am not making any comment at all about the relative merits of that project. It may well have been a fantastic project, but my understanding is that there has been some comment made by the Assistant Minister to the Deputy Prime Minister which talks about the need to differentiate clearly between regional Australia and metropolitan Australia. A request made by Assistant Minister McCormack that he wanted to hear from Regional Development Australia boards and other regionally related government bodies as to 'where we draw the line around regional Australia'. I am not sure whether this is a question for the minister or the department, but can someone provide an update? Is that a formal departmental process and, if so, can you provide an update and perhaps a timeline of where that process is at?

Mr Mrdak : Various classifications are utilised by the Australian Bureau of Statistics and in our publications of locations. We can certainly provide you with a description of those that are utilised. For instance, we produce a yearbook, essentially a regional yearbook, which sets out against a whole range of indicators regional performance. We use certain parameters for that. But for projects like stronger regions the guidelines are that that is available to all communities in Australia.

Senator McKIM: So, CBDs of major cities?

Mr Mrdak : It is available to all regions and communities in Australia. That is a decision that the government has made. That is available to metro, non-metro, regional and remote.

Senator McKIM: Thank you.

Senator STERLE: I think Senator Bullock was talking about the contingency payments earlier on. Was it Senator Conroy or Senator Bullock? Senator Conroy.

Mr Mrdak : Contingency reserve.

Senator STERLE: As to the $1.5 billion that has not been paid to Victoria for the East West Link project, can you tell us where it is listed in the 2015 budget?

Mr Mrdak : The government has taken that into the budget bottom line and has made a commitment that it is a contingent liability for the budget in the event that a future government decides to proceed with the East West Link project.

Senator STERLE: Thank you very much.

Senator BULLOCK: I should start by acknowledging my debt to Ms Forde, who in 1961 taught me how to add up. I have been grateful to her for that ever since, particularly when I look at WestConnex. Looking at the KPMG benefit-cost analysis of that project, they say that the estimated benefit is $24.3 billion and we know the cost is $16.8 billion. They say the benefit-cost ratio based on that is 1.88. I put 24.3 over 16.8 and come up with 1.45. I asked myself: how could the bright people at KPMG get that wrong? If you take the Commonwealth's contribution of $3.5 billion off the $16.8 billion cost, you get $13.3 billion. If you put $24.3 billion over $13.3 billion, you get 1.88. It would seem as though the benefit-cost analysis that was performed by KPMG treats the Commonwealth government's $3.5 billion as pennies from heaven rather than factoring that into the costs. Can you tell us how the New South Wales government treats the Commonwealth's contribution when it comes to determining the benefit-cost analysis?

Mr Mrdak : It would be best to get you a detailed answer to that question. You do recognise that of that $3.5 billion contribution, $2 billion is a concessional loan, which is repayable from 2029?

Senator BULLOCK: Yes, I understand that.

Mr Mrdak : It is not simply to say that it is pennies from heaven. There is a repayment schedule on that, which has to be funded.

Senator BULLOCK: What does that still leave?

Mr Mrdak : It leaves $1.5 billion. I would need to take on notice and get more detailed information on the structure of the cost-benefit analysis, but I do not think you could assume that the grant funding is not included in the cost of the project.

Senator BULLOCK: When I did the sums it does seem to work out that if you knock off the Commonwealth's contribution the sums work.

Mr Mrdak : I would need to get some advice and come back to you.

Senator BULLOCK: I will show you about long division in the lunchbreak.

Mr Mrdak : I do not doubt your long division. I suspect the benefit-cost analysis is going to be a much more complex process than that.

Senator BULLOCK: I look forward to that further information on how that Commonwealth contribution is treated.

Senator Colbeck: You might have to go back to your teacher and see if there are some additional skillsets that can be plonked into the system.

Senator BULLOCK: I peaked in 1961. From the department's perspective, what are the strategic reasons for the WestConnex project?

Mr Foulds : As outlined in the business case, it is the reduction of travel times. It is halving bus travel times between the inner west and the city. These are the anticipated benefits. And 10,000 jobs, doubling the capacity of the M5, bypassing 52 sets of traffic lights, removing an estimated 4,000 trucks a day from Parramatta Road, improving north-south travel times for public busses accessing the western rail line at Burwood, and overall more than $20 billion in economic benefits. It is also about the connection from the M4 corridor to the M5 corridor to allow traffic to come down towards the airport rail. It is also in the connections to a future western harbour tunnel, and the ability to duplicate the current northern passageway and see another crossing of the harbour. It has got a lot going.

Senator BULLOCK: It does. Thank you for that comprehensive list. That was the introductory question. The question is: how satisfied are you that these reasons are being met through the project?

Mr Foulds : I think the project is developing as it is expected to develop. It started off as a project over 10 years. The initial business case had a very settled stage 1, a semi-settled stage 2 and an indicative stage 3. Since it was first announced in 2012 as a project, it has developed. The things that can improve it are the St Peters Interchange, the idea of an enhanced gateway giving high-capacity connections to the port and the airport, the better access to the city through stage 3 now connecting to Anzac Bridge at Rozelle, and a future harbour tunnel. Provision for future growth in southern areas with the stubs and the southern sector or the southern end of the M5. We think it is looking like it is achieving its objectives.

Senator BULLOCK: That is all I wanted to know. Moving on briefly to the Perth Freight Link—of course, that project has had a bit of a setback in recent times with a court decision. What effect has that had on the timetable and the projected funding arrangements over the project? How have you taken that into account?

Mr Foulds : Mr Pittar was saying earlier that the implications of the court case and the judgment are being worked through and it will incur a delay. The extent and the manner of that delay are being worked through with Western Australia. It could be up to 12 months, we understand, but really that is indicative and we could not give you an answer now. The funding commitment remains the same, and no funding has yet been paid.

Senator BULLOCK: Has the department considered, in the event that those funds cannot be used for the purpose for which they were originally intended, reallocating those funds to other projects in Western Australia?

Mr Foulds : Not at this time.

Senator BULLOCK: So, no consideration at all?

Mr Mrdak : No.

Mr Foulds : No.

Senator BULLOCK: Has the Western Australian government come to you and requested funding for some of its other projects, such as the rail link to Forrestfield, the MAX light rail or the much-needed outer harbour development?

Mr Foulds : To be funded from that, no.

Senator BULLOCK: 'To be funded'? Let's leave aside 'to be funded from that' for the moment. Have they asked you to look at those other projects?

Mr Foulds : States and territories have put submissions forward to Infrastructure Australia and this department as part of a 2016—

Senator BULLOCK: Hold on. I am not asking about other states and territories. I am asking about this one and those projects.

Mr Foulds : It is relevant to the answer in that it is part of the 2016 process and what states have put forward. They have asked for those to remain confidential, with respect to funding bids.

Senator STERLE: Can you not tell us if they have asked you for funding?

Mr Mrdak : WA has identified further new projects it would like to see Commonwealth funding for, but coming back to Senator Bullock's question that does not involve a diversion of the funding that was committed to the Perth—

Senator STERLE: That is understandable but, as Senator Bullock said, have they asked for any funding?

Mr Mrdak : They are seeking new projects for the next program, yes.

Senator STERLE: Can you tell us? You cannot tell us that is confidential, if the government is asking taxpayers—

Senator BULLOCK: I must say I am concerned about that answer. If the Commonwealth taxpayer is being asked to foot the bill for some major infrastructure projects in Western Australia and we as the Senate ask what is under consideration, I think we should be told.

Mr Mrdak : At this stage, the project proposals from WA are not fully complete. That is the answer.

Senator STERLE: I did not ask that. Senator Bullock clearly asked you what projects—

Mr Mrdak : What I am saying to you is that we have not received their final complete program for what they would like. When we do that I would be in a position to share that with the committee.

Senator BULLOCK: I am just going to clarify that. The requests have not been finalised, so until you get a finalised request you do not want to formally say what you have been asked to do, because you have not been asked to do it yet? Is that your position?

Mr Mrdak : That is correct.

Senator BULLOCK: When you do receive a proper request for funding, will you confide in us what that request is?

Mr Mrdak : Generally, when the state makes such a request and it has finalised its view, it generally makes it pretty widely known.

Senator BULLOCK: Not at the point where you determine your response to it, but at the point at which the request is made.

Mr Mrdak : At the point at which the request is made, as we have seen, state governments generally announce their funding requests. We are in discussions with Western Australia. At this stage, they have not put in what they would see as their future program requests.

Senator BULLOCK: Therefore, you are not working on any requests from the Western Australian government at the moment; is that right?

Mr Mrdak : That is correct.

Senator BULLOCK: Thank you. Is there no work being done on the Forrestfield rail link, MAX light rail or the outer harbour?

Mr Mrdak : That is right.

Senator BULLOCK: Thank you.

Senator STERLE: Carry on, Senator Bullock.

Senator BULLOCK: Moving on to some new things that were announced as part of MYEFO—we learned there of the three new projects that are going to be undertaken: the Northern Connector in Adelaide, the much-needed Armidale road duplication in Perth, and the Gold Coast Light Rail, all of which we are told are going to funded out of the existing infrastructure investment program. So, there is no new money there. It is all there already—along with the propaganda fund that Senator Conroy was discussing earlier this morning. With respect to each of those projects—the Northern Connector, the Armidale road and the Gold Coast Light Rail—could you outline the spending profiles from now into the forward estimates for the next few years?

Mr Mrdak : I do not know whether we have details of the programs. I will just start with the Northern Connector. Do we have a spending profile there, Mr Pittar?

Mr Pittar : We do not have a spending profile with us at this stage. We are still waiting on project proposal reports from South Australia for that project.

Senator BULLOCK: I understand why—

Senator EDWARDS: Sorry, Senator Bullock, co-funded from the state government?

Mr Pittar : That project proposal report would outline the indicative profile for Commonwealth expenditure and state expenditure.

Senator EDWARDS: Is it 80 per cent us and 20 per cent them? Have they stumped with the cash?

Mr Pittar : It is a project that will be funded on an eighty-twenty basis. What I understood Senator Bullock's question to ask is what the expenditure across financial years would be.

Senator BULLOCK: South Australia is the big beneficiary of these.

Mr Mrdak : Coming back to your question, yes, the funding is contingent on South Australia making available their contribution.

Senator EDWARDS: Have they given a commitment to do that?

Senator STERLE: Senator Bullock has only four minutes. At least give him the opportunity to use his four minutes.

Senator EDWARDS: It is the first thing I have said all day.

CHAIR: That is what happens when you are in government. You sit there to make up the numbers. Trust me.

Senator EDWARDS: I am here to talk about a relevant topic. I am hopeful that I am adding to Senator Bullock's questioning. This is not totally an adversarial issue. I do not think he needs your bulletproof armour to protect him.

Senator STERLE: I am shaking in my boots. Get on with it.

Senator EDWARDS: I am just interested, because the South Australian government has had a propensity to hang on to $40 million-odd when they did not go ahead with the light rail program, the Adelaide to Gawler one, and we had to go back and bang on the door to get it back out of their coffers. Have they committed to the 20 per cent?

Mr Mrdak : Yes, they have.

Senator EDWARDS: When are they going to give you the money? Have you outlined that?

Mr Mrdak : We are currently in discussions with them to settle the project proposal report, which would effectively also then be an amendment to the schedule of the national partnership agreement. The commitments have been made, but the details of the schedules, including the cash flow, which will then be reflected in the agreement, are yet to be settled.

Senator EDWARDS: When would you expect that commitment? It is a very important billion-dollar project in South Australia that is going to free up all the freight lines. We have been waiting for it for 50 years. Is the South Australian government balking at all on any of the money?

Mr Mrdak : Not at this stage.

Mr Pittar : It is seen as a high commitment from the South Australian government, and construction is expected to commence mid this year. We would be expecting a project proposal report in coming months.

Senator EDWARDS: You are dealing with Minister Mullighan over there in relation to that and the Treasurer, Minister Koutsantonis.

Mr Mrdak : Yes.

Senator EDWARDS: Watch this space. Thank you.

CHAIR: We will adjourn until 2.15.

Proceedings suspended from 13:14 to 14:15

Senator BULLOCK: Mr Mrdak, earlier you quite rightly pointed out that with regard to WestConnex the $2 billion loan is not a cost to the federal government; it is of course a cost to the project. When they are working out the benefit-cost analysis for the whole project they have to include that $2 billion back in plus presumably any interest they pay on it.

Mr Mrdak : That is correct.

Senator BULLOCK: That does take me back to where I was on those sums. It does look as if the $3.5 billion contributed by way of both the loan and the direct contribution have not been factored into the New South Wales government's calculations. I look forward to your answers on notice.

Mr Mrdak : I will get some details on that for you.

Senator BULLOCK: When Senator Edwards started to talk about his great interest in the project in South Australia, we were up to looking at the costings for those three projects that I mentioned earlier out into the future. I am not clear whether the answer that there was no program for the future applied just to the South Australian project or to all three of those projects.

Mr Mrdak : I will just check with my officers, but I think it applies to all three. We are still trying to settle the cash profile on Armidale Road, the Gold Coast Light Rail and Northern Connector.

Senator BULLOCK: I know Senator Ketter, who was here earlier, is very keen to catch the train down to the Commonwealth games in 2018. Have we got a wriggle on with regard to that yet?

Mr Mrdak : The Queensland government is working towards a timetable to have it completed for the games. This section is something—

Senator BULLOCK: Would you be a big part of that in terms of getting the costings up?

Mr Mrdak : They are currently out to the market there. I think tenders have been received. We have not seen those as yet, but I think the tenders for the Gold Coast Light Rail are due back shortly, if not already. We will have a price on the project very shortly.

Mr Wood : Yes, the tenders have been received by the Queensland government. We are still waiting on the final business case, which is due this month.

Senator BULLOCK: Do you reckon after the budget this year we will have the answers to these questions with respect to these three projects?

Mr Mrdak : That would be our intention, yes. We would certainly want to see the cash flow projections for all three projects by the budget if at all possible.

Senator BULLOCK: There is $999 million allocated to those three projects. In the answers to questions on notice there was $1,469 million in contingencies. Does the $999 million come out of that $1,469 million?

Mr Mrdak : Yes.

Senator BULLOCK: Can you outline the profile of what is left of that? But before I get on to that I will just have a whinge. We had 161 questions on notice. Your report date was 4 December. As at 4 February, of the 161 questions on notice we had failed to receive answers to 161 of them. That is all of them. What is the problem with getting answers to questions on notice, Mr Mrdak?

Mr Mrdak : I think on this occasion, from recollection, some 140 or so of the 161 were with the minister and his office before the due date. There were a number which were running—

Senator BULLOCK: Was that December?

Mr Mrdak : That is right.

Senator BULLOCK: So, 140-odd of the 160 questions were with the minister by the due date in December and we get them last Thursday?

Mr Mrdak : There were still a number which we took some time to complete across a number of—

Senator BULLOCK: 'A number' being the difference between 161 and 140-odd?

Mr Mrdak : That is correct.

Senator BULLOCK: That would give you a pass mark. If you were late on 20, I would not be raising it. But you are late on 161.

Mr Mrdak : The essence is that with the Christmas-New Year period and the delay at our end they were not cleared by the minister till quite recently.

Senator BULLOCK: Just to make it absolutely clear, the full blame for 140-odd of these answers lies with the minister's office.

Mr Mrdak : Some of them were returned to the department for amendments and changes to the answers. I will get that information for you. I am reminded that all 161 were provided prior to Christmas to the minister's offices. There were 49 responses returned on 12 January for changes with comments. Then some further 78 were later returned with comments. The final package was not signed off until lodgement on 4 February.

Senator BULLOCK: I do not know the view of the chair on this matter, but for my part I would be happy to take such answers as are available as early as possible rather than wait until they are all answered and get them two months late. The chair nodded; I think he agrees with me.

Mr Mrdak : We do make every effort. I do apologise. I think it has just been the circumstances of the timing of the year and the availability of the minister and his office to look at these and delays on our part in getting them to the minister as well. Normally we do work very hard to make sure we are there with the committee, but obviously there is a clearance process which has to be gone through.

Senator McLUCAS: You did say that 140 were with the minister's office prior to the date of return of 5 December; is that right?

Mr Mrdak : That is correct.

Senator McLUCAS: I think you are being very generous taking the blame for your department. We need these answers so that we can prepare properly for estimates. I am now not being angry with your department as much as I am furious with the minister's office. That they would sit on those answers for two months in the knowledge that that would then delay our preparation for estimates. This is a part of the Senate process that is regarded internationally as exemplary. When ministers do not provide answers in a timely way, that means that our ability to do our job properly is limited. Would it be possible for this conversation to be relayed to the minister's office so that this does not happen again?

Mr Mrdak : Certainly.

Senator EDWARDS: I agree wholeheartedly and I remember having this conversation in 2011-12.

Senator McLUCAS: If the minister's office has received this by 5 December—

Senator Colbeck: I am happy to convey the conversation, but I was thinking exactly the same as Senator Edwards; on a number of occasions we did not receive any answers at all from Minister Albanese when he was in the portfolio. If you want to express outrage, that is fine. I agree with you, Senator Sterle. It does not make it right on either side.

Senator STERLE: No excuses.

Senator Colbeck: Let us be clear that it is not just one side of the coin that has issues here.

Senator BULLOCK: Just going back to those contingencies, could you outline for us what the profile was on those contingencies, firstly, when it was, as it previously was, $1,469 million, and, secondly, what it is now minus the $999 million?

Mr Mrdak : The government is yet to take final decisions on the allocation of the contingency as to the years and the like, some of which are driven by our need to get profiles across the new projects. I will come back to you on notice.

Senator BULLOCK: Note that I am not asking about the new projects. I was asking about the contingencies. What is left over after you take the new projects out?

Mr Mrdak : Yes, but that is what I am saying. It depends on what year you take it out. That is dependent on the cash flow projections you get from the jurisdictions. At this stage, I cannot give you an accurate view by year of what the contingency will look like because if the profile for the Northern Connector comes in at a certain amount and the profile for the Armidale road, that will change year by year. I think the best way is if I take that on notice and, once the government has resolved these issues of the movement of the contingency once we get the cash flow projections for the new projects, then I will be able to give that to you.

Senator STERLE: I just want to clear something up. Mr Mrdak, when I asked earlier on about the $1.5 billion that had not been paid to the East West Link, if I remember rightly you said that that has gone into the bottom line.

Mr Mrdak : It has been returned to budget.

Senator STERLE: Would that $1.5 billion go on top of that figure of $1,469 million that Senator Bullock was questioning about?

Mr Mrdak : No. It has been returned to budget.

Senator STERLE: So, it is not an extra $1.5 billion floating that can sit in that fund and be distributed somewhere else?

Mr Mrdak : No. The government has made it clear that, if a future Victorian government proceeds with the east west, that $1.5 billion will be found effectively or reallocated. It sits as a contingent liability on the Commonwealth's balance sheet.

Senator STERLE: Is this the one that has not been paid?

Mr Mrdak : That is correct.

Senator STERLE: So, it is a contingency but it is not part of this $1,469 million?

Mr Mrdak : That is correct.

Senator STERLE: Thank you.

Senator WILLIAMS: How much was paid to the Victorian government for that project originally?

Mr Mrdak : It was $1.5 billion.

Senator WILLIAMS: How much did you get back?

Mr Mrdak : We are yet to receive any of that funding back.

Senator WILLIAMS: You have given the Victorian government $1.5 billion and they have not given it back?

Mr Mrdak : No.

Senator WILLIAMS: They are not proceeding with the project. It was an election promise. They have cancelled the project, but they have kept the $1.5 billion?

Mr Mrdak : That is correct. The Australian government has requested formally that those funds be returned in accordance with the MOU. The position of Victoria is that they have yet to agree to do that.

Senator WILLIAMS: What steps can the government take from hereon in if there is an agreement with an MOU? What happens if they do not cough up the $1.5 billion?

Mr Mrdak : The Australian government has a number of options. They range from agreeing other projects for which the money can be spent right through to making reductions in other payments to the state of Victoria equivalent to that amount.

Senator WILLIAMS: That is fair enough. Finally, was the contract signed to proceed with that East West Link?

Mr Mrdak : Yes.

Senator WILLIAMS: How much did it cost the Victorian government to pull out of it?

Mr Mrdak : Figures vary. I think some of the public—

Senator WILLIAMS: Mr Foulds, have you got an idea?

Mr Foulds : Just off the top of my head?

Senator WILLIAMS: Off the top of your head will do.

Mr Mrdak : I think the Auditor-General of Victoria suggested that it could have been as high as $700 million or $800 million.

Senator WILLIAMS: Great; $700 million or $800 million up in smoke. That is what they had to pay the contractors to get out of the contract.

CHAIR: So, was part of the deal not to put the money that was allocated in anticipation of the tunnel in that deposit over there at that bank and not touch it until you start to spend it?

Mr Mrdak : It was. It was specific to that project. The agreement is that it could only be applied to that project. It cannot be used to pay any of the compensation for not proceeding with the project. Nor can it be used for any other project without the Commonwealth's agreement.

CHAIR: So, allegedly, it is still in a deposit somewhere?

Mr Mrdak : It is sitting with the Victorian Treasury, yes.

CHAIR: Would they have offset against that as security the $700 million to play all the hangers-on, lobbyists and crap that goes on with those projects?

Senator EDWARDS: This is groundhog day. This is the Adelaide-Gawler train line all over again.

Mr Mrdak : I am not familiar with how the Victorians have accounted for that money.

CHAIR: The political lobbyists and leaches would be getting it all. Would the government have had to borrow the money against the security of the deposit from the Commonwealth to pay the $700 million?

Mr Mrdak : They certainly would have had to make provision in their budget. How they have done that, either through borrowings or their own revenue—

CHAIR: Would it not be, shall I say, responsible of the federal government to know the answer to that which you said we do not know the answer? Why do we not just demand it or go down there and audit them?

Mr Mrdak : The Australian government has written formally and on a number of occasions sought the refund of the money. Those conversations are continuing between the two treasurers.

Senator STERLE: Tony Abbott has done this. He should not have given them $1.5 billion as a captain's pick.

CHAIR: This is nearly as bad—

Senator STERLE: That is what he did.

CHAIR: Or not as bad. This is nearly as bad as—

Senator STERLE: Without any work done, he has just given them $1.5 billion.

CHAIR: Order! The set-up is the responsible management of the money. This sounds incredulous. This committee has heard me say many times that you can get a signature on anything you like in Asia as long as you find the right person to bribe. The Prime Minister of Malaysia owned up the other day that he got an $860 million gift from a Middle East country for his personal bank account.

Senator WILLIAMS: That is a good gift.

CHAIR: This is a different scale but just as—

Senator WILLIAMS: It was $700 million to get out of the contract, and you will not get $1.5 billion back.

Senator STERLE: Chair, we are running out of time. Let us blame Tony Abbott; he should not have given them $1.5 billion.

Senator BULLOCK: Going back to the MYEFO and when we started with these questions, there was provision there for $4.9 million to establish cross-jurisdictional freight rail planning capacity. Can you fill us in a bit about what that is?

Mr Mrdak : Yes, certainly. I will ask Mr Wood to come to the table. This is to provide for some long-term planning for rail in northern Australia. We are currently working with Queensland, the Northern Territory and Western Australia on this. This is the early days of this project, but the aim is to look at the current condition of the rail system in northern Australia.

Senator BULLOCK: What are the jurisdictions?

Mr Mrdak : Ourselves, Queensland, Northern Territory and Western Australia.

Senator BULLOCK: And Western Australia?

Mr Mrdak : Yes. And to look at future rail investment.

Senator BULLOCK: As I understand it, Senator McLucas is bursting to ask questions about northern Australian roads.

CHAIR: I might make her wait.

Senator KETTER: Just before we move off this section, unfortunately I was not here when we recommenced after lunch.

CHAIR: What do you mean by 'unfortunately'? You were fortunate.

Senator KETTER: I missed the response in respect of the Gold Coast Light Rail Stage 2. I understand you do not have the profile for the spending, but we do know that the Commonwealth Games are fast approaching, in 2018. The Prime Minister has committed $95 million and that is a reversal of a previous decision. I just wanted to get some further information from you about to what extent this is a priority and whether you can provide us with any more details in respect of spending there.

Mr Mrdak : Certainly. I will ask Mr Wood to give you an update on that project.

Mr Wood : Our understanding is that the tenders have now been received by the Queensland government. They are under assessment. Separately to that, the final business case for the project is close to finalisation. We are expecting to receive that some time during February. My understanding is that with the project itself the intent is to award a tender in around April this year, and that timeframe is the estimate needed to meet delivery prior to the Commonwealth Games.

Senator KETTER: Just before we finish on light rail, the Lord Mayor of Brisbane has also come out with a proposal for a metro rail project of $1.54 billion. Has an approach been made to the federal government for funding there?

Mr Wood : I am not aware of anything. We have only seen media reports. I am not aware of any approach. There may have been something at a political level, but certainly nothing directly to the department.

Senator KETTER: And no business case submitted?

Mr Wood : No. Based on the media reports I saw, it appeared to be at an early stage of development, but as I said we have no awareness of the project beyond what we see in the media.

Senator KETTER: Thank you very much.

Senator BULLOCK: So, you will defer that bit for the time being?

Senator McLUCAS: No. I will go on to northern roads now. Do you have some information about the funding profile for the Northern Australia Roads package of $600 million?

Mr Mrdak : I will ask Mr Pittar to give you that.

Mr Pittar : The Northern Australia Roads Program has funding available over five years between 2015-16 and 2019-20. The profile for that is $30 million in 2015-16; $100 million in 2016-17; $210 million in 2017-18; $195 million in 2018-19; and $65 million in 2019-20.

Senator McLUCAS: What is the process by which decisions will be made around that package?

Mr Pittar : The Deputy Prime Minister wrote to his state and territory colleagues for those three northern jurisdictions during the latter part of last year seeking proposals from those jurisdictions. Jurisdictions have responded to that request. Those proposals are currently being assessed and we expect that advice on those proposals will be provided to the Deputy Prime Minister for his consideration so that announcements can be considered in the first half of this year.

There was also a process whereby a paper was put out seeking input from the private sector on innovative delivery and innovative financing. That process closed at the end of January and the department is currently considering responses to that paper and will be providing advice to ministers on that process as well.

Senator McLUCAS: Let us go to encouraging private investment into roads in northern Australia. Did these submissions to this process come from private sector interests as well?

Mr Pittar : Correct and, as I said, that process only closed on 29 January—the week before last. We have not had an opportunity yet to work through all of those or brief ministers on those. I am not in a position to go into too much detail on that given things are at a fairly early stage at this point.

Senator McLUCAS: How many expressions of interest were received?

Mr Pittar : If my memory serves me correctly, we received in the vicinity of 12.

Senator McLUCAS: Were they all from private construction companies, private investors or the banking sector?

Mr Pittar : A range of interests primarily in the private sector.

Senator McLUCAS: What happens from here? You will obviously need to brief ministers.

Mr Pittar : That is correct. For that to be taken into account in terms of how delivery of the program can consider the information, thoughts and ideas that came as part of that consultation process.

Senator McLUCAS: Which minister will decide the successful projects or investments?

Mr Pittar : The ultimate decision making around the Northern Australia Roads Program would sit with the Deputy Prime Minister.

Senator McLUCAS: Not with industry?

Mr Pittar : The Minister for Northern Australia, whilst part of the industry portfolio, has responsibilities. But for the two roads programs that are part of the northern Australia white paper program, if you like, or white paper process, namely, the Northern Australia Roads Program and the Beef Roads Program, continue to sit with this portfolio.

Senator McLUCAS: How do you make sure there is an interface between the broader northern Australia agenda and your building roads that need to fit with that agenda? How does that work?

Mr Pittar : A number of ways. Firstly, if I am talking about the Northern Australia Roads Program, the white paper included a process whereby Infrastructure Australia conducted an audit of northern Australian infrastructure needs, and that pointed to a number of broad road needs, if you like, where priorities might lie. We sought submissions from states and territories that would go to how those needs might best be addressed, recognising that a prioritisation process, by definition, was needed, because $600 million would only go so far across the three jurisdictions. That, if you like, interlinks or ties in with the northern Australia white paper process. I can talk about the Beef Roads—

Senator McLUCAS: We will come to Beef Roads in a moment.

Mr Pittar : That is how that process would tie in. There was that lead from the northern Australia audit process that IA conducted.

Senator McLUCAS: Thank you, Mr Pittar. Some $30 million has to be spent this current year, according to the profile that you have given me.

Mr Pittar : In the 2015-16 financial year.

Senator McLUCAS: What do you expect that to be spent on?

Mr Pittar : As I mentioned earlier, decisions on which projects are yet to be taken. I am not in a position to advise on that at this stage of the game.

Senator McLUCAS: We do not have many months left.

Mr Pittar : I am conscious of that. As I said, decisions are yet to be taken on which projects would be funded.

Senator McLUCAS: Do we expect that money to be spent this financial year?

Mr Pittar : That is the expectation.

Senator McLUCAS: And if it is not?

Mr Pittar : If it is not, then decisions will need to be taken on whether that money might be reprofiled or not, but at this stage our expectation is that the $30 million would be spent this financial year.

Senator McLUCAS: If it was not, you said that decisions would have to be made. Is there a risk that we would lose that money?

Mr Pittar : I do not want to speculate on what may or may not happen, but the commitment is for $600 million of Australian government money to be spent on northern Australia and it is a very high priority of government to see this sort of investment being made in northern Australia.

Senator McLUCAS: We will now move to Beef Roads. Can you give me the profile for the Beef Roads over the forward years?

Mr Pittar : Funding for Beef Roads is available over a three-year period from 2016-17 until 2018-19. The profile for that is $35 million for 2016-17, $35 million in 2017-18, and $30 million in 2018-19 in Australian government funding.

Senator McLUCAS: My recollection is that you told me that before. I am sorry about that. Why was the decision made not to allocate any money in the 2015-16 year for the Beef Roads project?

Mr Pittar : Ultimately that was a decision of government driven in large measure by the desire to use a model that the CSIRO has developed. The short name of that model is the TRANSIT model, which stands for the transport network strategic investment tool. That is designed again to help prioritise which roads across the north the funding might best be directed to based on information from the cattle industry about things like where the main cattle movements were occurring and where upgrades might have the greatest beneficial effect for the cattle industry, recognising again that $100 million in investments spread across the northern part of the three jurisdictions would only go so far. It was about trying to make the best decision on where that investment might go.

Senator McLUCAS: Mr Mrdak and I have had conversations in the past about how much it costs to build a bit of beef road in northern Australia. Does CSIRO have figures on how much a kilometre a bit of beef road might cost?

Mr Pittar : The work that CSIRO does is essentially around, if you like, the input side, or where the cattle movements occur.

Senator McLUCAS: I am sorry. I was being cheeky.

Mr Pittar : I am sorry. I missed that.

Senator McLUCAS: Do you expect that through the TRANSIT process, through CSIRO's assessment process, that you will eventually end up with a list of projects? Is that the output of undertaking that work?

Mr Pittar : In broad terms, the plan is to end up with a short list. That will give us an idea of where those investments might go and the jurisdictions. Like northern roads, we would expect with this program there will be a 20 per cent funding contribution from jurisdictions as well and that this will help identify which projects will best meet the objectives of the program. We will end up with a shortlist that will be the basis upon which government will be able to make investment decisions. We expect that that will also be the basis of a dialogue with industry following an initial two implementation workshops being held with industry. There will be a wrap-up workshop held to say that these are the outputs from that TRANSIT model based on the information that has been collected to sort of indicate where those investments or where those priorities might most likely sit.

Senator McLUCAS: What is the time frame for those consultations with industry's discussions with states and territories?

Mr Pittar : The first workshops occurred in October and November of last year. We are anticipating that the final workshop will occur in March of this year.

Senator McLUCAS: When do you expect we will get the list of projects?

Mr Pittar : We are currently working with CSIRO to get that list. That is the information. That is the output from CSIRO that we will be looking at providing as part of that workshop in March.

Senator McLUCAS: We expect we will have a list of projects before the end of this current financial year?

Mr Pittar : Yes, before the end of this financial year. We will need jurisdictions to be indicating which projects they will be contributing funding to as a consequence of that list of projects from CSIRO, given as I mentioned earlier the funding profile has funding committed starting next financial year.

Senator McLUCAS: Where was that money sourced from?

Mr Pittar : It is from within the infrastructure investment program.

Senator McLUCAS: What element of the program?

Mr Pittar : It is its own line item, if you like, within the infrastructure investment program.

Senator McLUCAS: Did it originate from the asset recycling scheme?

Mr Pittar : The asset recycling initiative was an offset for that.

Mr Mrdak : Asset recycling did provide an offset for the funding of the northern Australia package, yes.

Senator McLUCAS: Do the rules around the asset recycling scheme apply in any way to the application of the Northern Australia Roads package or the beef roads?

Mr Mrdak : No.

Senator McLUCAS: Thank you. Mr Pittar, you said there was a 20 per cent contribution from the other jurisdiction. Has that been agreed by all three?

Mr Pittar : They all understand that that is part of the arrangement. As part of jurisdictions putting forward proposals as they were invited to do that is understood in the process of putting forward proposals from each of the three jurisdictions.

Senator McLUCAS: That was not an agreement prior to the announcement of the roads packages?

Mr Pittar : It is quite common within the infrastructure investment program that those funding ratios in regional areas are of that order.

Senator McLUCAS: In terms of the 20 per cent contribution, what do you do to ensure that that is not just a reallocation of money that would have been spent on that road anyway by that jurisdiction?

Mr Pittar : We would expect that the projects would be new projects, and we would ensure that the project proposal reports indicate the scope of works, the timeframes and that sort of thing so that we would be confident that the projects are projects additional to what would otherwise have occurred.

Senator McLUCAS: We are not talking about new alignments of roads, though? They will be existing roads that are upgraded?

Mr Pittar : We certainly expect that roads would be upgraded.

Senator STERLE: Just before we finish with the Beef Roads Program, how many kilometres of beef roads do we have in the north?

Mr Pittar : I cannot answer that question. I do not have that information in front of me.

Senator STERLE: Does anyone have it? I think any announcements on roads are great as long as they are delivered. With the $100 million, you said there are existing roads that could be upgraded. There could be an expectation that a bit of blacktop might be put down. Would we also assume that culverts and bridges may be part of that funding program?

Mr Pittar : We hope that the TRANSIT process will identify those projects that will deliver the greatest benefits to the beef industry. It could comprise packages of works that involve widening, bituminising and maybe culverts. We do not have that information at this stage of the game, but it is primarily focused around delivering benefits to the beef industry. That is a key criteria.

CHAIR: Would not all-weather be the first priority?

Mr Pittar : You would think so.

Senator McLUCAS: It is northern Australia.

Senator STERLE: I agree.

CHAIR: But if you want to go to Port Keats, a lot of the time, as you are probably aware, you cannot get there.

Senator McLUCAS: Because of rain.

CHAIR: Yes, but if you fix those creeks—

Senator STERLE: I agree. You do not have to tell us. We agree.

Mr Pittar : Those are the sorts of points that were made at the workshop.

Senator STERLE: I missed an election once, because I was stuck on a dirt road. It was fantastic. But if my vote had not tipped out Howard I would have been spewing. Lucky we won by more than one.

CHAIR: If you joined up Mount Isa to Tennant Creek with a railway line it would help.

Senator EDWARDS: Can I remind the committee of the time?

Senator STERLE: Yes.

Senator McLUCAS: I would like to go to question on notice No. 53, the answer to which as Senator Bullock indicated was only received last week. The contingency amounts at the signing of the National Partnership Agreement—and I am going to Queensland—in October 2014 was $763.66 million, including $478.81 million which is the Bruce Highway. But then as of 30 September 2015 Queensland's contingency moves to $1,133.69 million across the state, including $752 million which is the Bruce Highway contingency. Mr Mrdak, in answer to a question to Senator Lambie earlier you said that the role of contingency is savings from projects that are not proceedings or underspends. What projects are not proceeding on the Bruce that would move the contingency reserve from $478.81 million to $752.01 million?

Mr Mrdak : There is no project not proceeding. Based on original estimates that were done when the program was established, we are finding that project costs are coming in under expectations or projects are taking longer to come into market and therefore funds have not been allocated.

Senator McLUCAS: Can you break that down then? How much is the underspend? That is a good thing? How much is the underspend out of that money?

Mr Mrdak : I would probably need to take that on notice, if I can, and come back to you.

Senator McLUCAS: If you can disaggregate that figure into how much is the underspend and then the more concerning answer is the delayed rollout.

Mr Mrdak : Certainly.

Senator McLUCAS: What projects have been delayed?

Mr Mrdak : Again, I will come back to you on notice with that one.

Senator McLUCAS: I would prefer if we could do it now if that is at all possible.

Mr Mrdak : I do not think we have that disaggregation with us, but I will get that for you as quickly as I can.

Senator McLUCAS: Would that be possible today?

Mr Mrdak : We will endeavour to, if we can.

Senator McLUCAS: If it is okay with you, Chair, I will leave the Bruce off to the side for the moment and we may come back to that. Is that all right?


Senator McLUCAS: This is my second last set of questions. What role has the department been playing in determining projects that may qualify for funding or even the terms of reference under the northern Australia infrastructure facility? What role has this department had in the NAIF, as it is starting to become known?

Mr Mrdak : We have been consulted on the guidelines as they have been developed, and obviously they have been through a public consultation process. The government is now finalising those. We presume that as the project proposals are brought forward to the northern Australia portfolio we will be consulted on transport projects as they are brought forward. That is how we anticipate our role.

Senator McLUCAS: Is there an interdepartmental committee or some formal arrangement?

Mr Mrdak : Yes, there is an arrangement at deputy secretary level whereby we work closely with the industry department in relation to any transport projects that are brought forward.

Senator McLUCAS: Will you be part of the assessment process of any project?

Mr Mrdak : The guidelines provide for an independent board to manage the program. I expect that we will be providing advice through the industry department, depending on the arrangements set up for that advisory board.

Senator McLUCAS: Thank you for that. Ms Zielke, did you have something to add?

Ms Zielke : I was just going to say that it is actually a board with members from industry as well as internal.

Senator McLUCAS: I am more interested in the department. I understand that level, but there needs to be a formal structure between departments so that the left hand knows what the right hand is doing.

Mr Mrdak : We have a good working relationship with the industry department, but the details of how that is going to work with the new board are yet to be settled.

Senator McLUCAS: Can you update the committee about where the Cape York roads package of $210 million is up to?

Mr Pittar : With the Cape York package—I think as we talked about last time the primary work around that project or that program is around the mean deviation project on the Peninsula Development Road. The objective there is to maximise the amount of sealing that is being undertaken on that road. Around 60 kilometres of the Peninsula Development Road was sealed prior to the onset of the wet season in 2015. The objective is to get around 130 kilometres of that road sealed all up. It is expected that the work on the mean deviation project will be completed around April once work can recommence following the conclusion of the wet season.

Senator McLUCAS: We have not had a wet season.

CHAIR: El Nino pinched it.

Senator McLUCAS: Mr Pittar, just for time, I wonder if I could be provided on notice with a list of projects that will be sourced from the $210 million. I think there was $40 million from the Queensland government. Is that right?

Mr Pittar : That is correct.

Senator McLUCAS: If you could give me a profile of the projects and over what period of time they are going to be rolled out. The original project that you would remember had a number of elements that are quite separate from the Peninsula Development Road. What I am wanting to know is what the current status of each of those expenses is going to be and in which year as well.

Mr Pittar : We can provide you with that information on notice.

Senator McLUCAS: Thank you. I am going to come back at some point—if you could alert the secretary—around the Bruce and any projects that are going to be delayed. I am very interested in getting that today.

Mr Mrdak : Yes, certainly. As I said earlier, all the commitments are being maintained on the Bruce and in fact we are trying to, at this stage, bring forward projects. With Cooroy to Curra, section D, for instance, planning is about to start and those sorts of projects are under way. A number of projects across safety works on the Bruce are being accelerated at the moment. I will get you the details of those.

CHAIR: Senator Bullock.

Senator BULLOCK: I must say I am feeling increasingly fond of the Auditor General. I have quoted from him a number of times hitherto, and now this with regard to bridges renewal:

Notwithstanding the policy rationale for the introduction of a bridges renewal program, the assessment approach did not include consideration of the applicant's relative need for financial assistance, the condition of the existing bridge or the urgency of its repair. While the department had recognised the productivity benefits of bridge works, it otherwise lost sight of the Australian government's intentions for a program that would address the backlog of deteriorating local bridges that were beyond the financial resources of Councils to renew.

In other words, you took a whole pot of money, spent it on bridges and did not work out which bridges needed to be repaired before you spent it. What have you done to address that?

Senator WILLIAMS: Who said that?

Senator BULLOCK: The Auditor General said that.

Senator WILLIAMS: It has been a good program.

Senator BULLOCK: I do not doubt that, except they did not look at what bridges needed to be repaired before they repaired them, according to the Auditor General.

Mr Mrdak : We have a different view to the Auditor General.

Senator WILLIAMS: I am with you, Mr Mrdak.

Mr Mrdak : This is a very successful program. Quite understandably, the program was well over subscribed. There is no doubt about that. The guidelines for the program and the department's assessment did look at a whole range of factors, including productivity and economic development. It also looked at connectivity. We were somewhat surprised by the Auditor General's commentary there, because we felt that the projects were ranked based on the best possible outcomes. There are always judgments to be made.

The government did take steps, though, to recognise the issue of connectivity, particularly for small councils, recognising that the program does have a co-contribution element. This means it is more difficult for smaller communities to find the funding, particularly for replacement of ageing bridges.

The most significant change that was made in round 2 was that the government solely focused round 2 on local government bridges. Round 1 was open to state and local government. Our assessment, and then subsequently the Auditor General's as well, was that state governments tended to put more focus and were able to deliver co-payments or co-funding much more easily than a lot of local governments. In the second round of the bridges program the government solely focused that on local government.

Senator BULLOCK: I am getting the thrust of this. In the first round, if there was a bridge that was totally falling down but the local council could not ante up the co-funding it dropped off the list for repair.

Mr Mrdak : It did not drop off, but obviously co-funding is one of those elements of the criteria. What also occurred was that we were being guided by the priorities of the state governments. On a number of occasions the state governments rated some of those bridge much lower than, say, the council did in terms of its urgency for need of repair. Hence in round 2 the Australian government focused the whole of the round on local government bridges. In round 2, there were 141 successful bridge projects announced, all for local government, including addressing a number of bridges where the council would have otherwise struggled. There was still a co-contribution required, but otherwise the council would have struggled in any ranking where they were competing with state government projects.

Senator BULLOCK: At least you fixed up the bridge near Senator Williams's place.

Mr Mrdak : There always have to be objective criteria for this. It is very hard to assess local government capacity to pay and it is very hard to determine. Some councils make judgments about priorities and some councils fund their own bridges and then try effectively to get the Commonwealth to fund others. In many ways, in a future life, it would be much easier to be an auditor than it is to be in program delivery. It is always good in hindsight to see what might have happened, but it is very difficult, with all due respect to the auditors, to make program decisions when you are faced with very strong competitive projects.

Senator BULLOCK: I think I have got it. There are perhaps, according to you, some elements that the Auditor General did not have sufficient regard to, in particular the priorities afforded to various projects by state governments and the capacity of local councils to pay. I have got it.

Senator WILLIAMS: I will give you an example. The Emu Creek Crossing Bridge at Bundarra is a beauty. Uralla Shire is a very small council, could not get $4 million to build it. The states and the feds put it in over the Gwydir River, and now the kids can get to school when it is in flood. It is a lot safer. It is a great scheme. I drive over it often. I will be glad to take you there one day, Senator Bullock.

Senator BULLOCK: I am happy to go and see all of the improvements that the government has made in the immediate vicinity of your place.

Mr Mrdak : Can I just add another important point. We learnt a lot of lessons in round 1. Also, that the quality of the information able to be provided by a number of local councils was patchy in some cases, which meant it made it difficult when you were running a competitive round. What we have seen in round 2 is quality. We have worked very hard with local government. My officers, led by Mr Pittar and others, have worked very hard with local councils to show them how these applications need to be put together, what the competitive nature of it is and to ensure we are getting all of the information we need. For instance, on a number of occasions we found in round 1 that councils subsequently told us when a project had not been approved certain details of the condition of the bridge which they had not told us in the application. Those elements have been improved in round 2.

Senator WILLIAMS: Little wooden bridges that are 100 years old.

Senator BULLOCK: What about the Northern Australia Infrastructure Fund?

Mr Mrdak : I think we covered that with Senator McLucas.

Senator BULLOCK: To the extent of identifying the projects that might have been on Minister Truss's mind when he said what wonderful improvements the new initiative was going to deliver?

Mr Mrdak : We certainly covered the general scheme. I am happy to go further, if you would like.

Senator BULLOCK: My colleagues have pointed out that they think it has been adequately covered. I will leave it. Going on to the Western Sydney Infrastructure Plan, there is a plan to spend $3.6 billion on a number of roads in Western Sydney. I suppose that would be $36 of expenditure in Western Sydney for every dollar expended on the beef roads. That is really just an aside. Werrington Arterial Road, the Northern Road Upgrade, M7 to the Northern Road and Bringelly Road—how are all of these projects progressing?

Mr Mrdak : I will ask Mr Foulds to give you an update. They are progressing very well.

Senator BULLOCK: How is the market in Sydney? Are we getting value for money?

Mr Foulds : Actually they are getting value for money. Roads and Maritime Services have made a number of public approaches to industry and held a number of seminars across industry for not just this project but others. Industry is beating down the doors at the moment to get involved in the New South Wales infrastructure program. With respect to this one—

Senator BULLOCK: These four.

Mr Foulds : Yes. The Western Sydney Infrastructure Plan, Bringelly Road—construction commenced on stage 1 of Camden Valley Way to King Street on 20 January 2015.

Senator BULLOCK: Before you go on, because I think you are going to cover the area that I wanted to ask a question on, and that is to say whether or not with respect to each of these four bits of road we are on schedule, ahead or behind?

Mr Foulds : We are essentially on schedule to meet the targets. The particular target that is important is with respect to the Northern Road and its ability to deviate around the boundary of Badgerys Creek airport site. We are on track to deliver that deviation in time for airport works to commence at the end of the month.

Senator BULLOCK: You will probably have to knock down Jim Roots's dairy. It is on the wrong side of the road there. Under the national partnership agreement there was supposed to be $103 million of work done by 2014-15. Has that been done? Was it underspent or overspent? How did that go?

Mr Foulds : I just have the overall profile for the program. I will go to the spreadsheet.

Senator BULLOCK: While you are looking it up, have a look at 2015-16 as well and just give me an assessment of how that is on track, whether you think it is going to be fully expended and whether the work will be done as per the plan.

Mr Foulds : There has been a bring forward of $10 million for the Werrington Arterial, because of progress ahead of schedule.

Senator BULLOCK: Werrington is ahead of schedule. That is good.

Mr Foulds : The remainder stays the same. The Northern Road upgrade has a bring forward again of $7.5 million. There is a bring forward of $2 million for the local roads package.

Senator BULLOCK: Local roads is ahead.

Mr Foulds : That is it. Everything else is on schedule.

Senator BULLOCK: Bringelly Road, the M7 and the Northern Road are on schedule?

Mr Foulds : At this stage, yes. We can say today that we expect the payment schedule to be met.

Senator BULLOCK: When you said those three were ahead of schedule, is that the work—

Mr Foulds : The milestones were met earlier than expected.

Senator BULLOCK: How is it going for cost?

Mr Foulds : The costs are all good. They are all within the budget.

Senator BULLOCK: Under budget or on budget?

Mr Foulds : The ones that are underway are on budget. Elizabeth Drive, or the Motorway Connection, that is early days and because it is just in its design phase we do not have a total estimated cost yet. We just have an estimate. Until you actually have a contract, which will not happen for another two years, we will not be in a position to say whether that is—

Senator BULLOCK: Work is progressing?

Mr Foulds : Yes.

Senator BULLOCK: We are ahead on the work and on budget for costs?

Mr Foulds : We are on schedule and on budget.

Senator BULLOCK: Pardon me for being staggered by the figures, but they do seem to be pretty expensive roads on a per kilometre basis.

Mr Foulds : They are. When you consider what is actually being done and the fact that they are urban roads, it is always a more expensive proposition to add lanes in an urban environment than it is in a rural environment. The Northern Road, for example, is a 35 kilometre length, from two lanes to a minimum of four lanes of divided road, with a wide median, which will allow six lanes to be provided in the future. It is a four-stage project.

Senator BULLOCK: I used to go down that road every day.

Mr Mrdak : Where it follows ridgelines and the like, you know how difficult that is going to be.

Mr Foulds : That has to be deviated around the western end of the Badgerys Creek site, because currently it goes straight through. The Northern Road goes across the airport site. That has to change.

Senator BULLOCK: I must say that is a surprise to me, because our side of the road, the eastern side of the road, was resumed, but the people on the western side of the road did not have their properties resumed, as I recall it from 30-odd years ago. Maybe you have some more land since. Is the federal contribution to this capped?

Mr Foulds : Yes.

Senator BULLOCK: It sounds like you are fairly confident that we are not going to hit the cap and that everything is going to be done on time and on budget.

Mr Foulds : As I sit here now, given that it is going to go into beyond 2018-19, I am confident with what I know now and with what I have seen, and I have been closely involved.

Senator BULLOCK: Do you think there is potential for any significant savings to be made out of this and to come out in front?

Mr Foulds : I think it is a little early yet. Given this plan commenced when it did, you might start to see evidence of potential savings in 18 months or so, particularly when we know more about what the motorway might cost. Equally it could go the other way.

Senator BULLOCK: Going back to the cost of these particular bits of road, why do you think they are so much more expensive than the earlier stages of the Bringelly Road and the Camden Valley Way?

Mr Foulds : Which ones?

Senator BULLOCK: These new roads that are a part of this phase seem to be more expensive on a per kilometre basis than their immediate predecessors.

Mr Foulds : Bringelly Road is only a 10-kilometre project.

Senator BULLOCK: That is what I said, per kilometre.

Mr Foulds : That is going to cost just over $500 million. The Northern Road is 35 kilometres, and that is going to be $1,500 million.

Senator BULLOCK: Just apples and apples.

Mr Foulds : It is not apples and apples.

Senator BULLOCK: Did you say that it was $500 million for 10 kilometres on Bringelly Road?

Mr Foulds : Yes.

Senator BULLOCK: That is $50 million a kilometre. What was the per kilometre cost of Bringelly Road phase 1?

Mr Foulds : I have not worked that out. Each road will be different for the per kilometre rate. It is different because the cost of land, if you have to procure land, will be different for every project.

Senator BULLOCK: I am assuming that on Bringelly Road the earlier bit was probably closer to the city and more costly than the later bit, and yet its per kilometre cost is significantly less. Unless I am wrong.

Mr Foulds : To examine the detail on that I would have to take it on notice.

Senator BULLOCK: Looking at the per kilometre cost—and I do not want you to compare apples and oranges; that is why I used Bringelly Road as the example. It is one bit of road. We have the first stage that has already been done and the second stage is underway now.

Mr Foulds : Yes.

Senator BULLOCK: A little bit of compare and contrast on those might be helpful.

Mr Foulds : I am happy to take that on notice.

Mr Mrdak : We will get you some unit rates on those.

Mr Foulds : What I cannot recall at the moment is what the differences are in scope between stage 1 and stage 2, whether there is any, or any interface issues or geotech problems or land acquisition. All of those things impact on the cost of a road.

Senator BULLOCK: Will they all feature in your answer?

Mr Foulds : Yes.

Senator BULLOCK: There was $100 million—which is the same as the beef roads—to be spent on Inland Rail this year, 2015-16; is that right? I have been trying to make that point indirectly.

Senator STERLE: Unfortunately.

Senator BULLOCK: If that is the case. The question is: how much has been spent?

Mr Mrdak : Are you looking at this year's profile?

Senator BULLOCK: Yes.

Mr Mrdak : I will get Mr Wood to give you that.

Mr Wood : To 31 December 2015, $29.1 million had been spent.

Senator BULLOCK: What do you estimate the total spend for this financial year to be?

Mr Wood : It is currently $89 million in the budget for this year. There was originally $100 million, and $11 million has been reprofiled into next year.

Senator BULLOCK: Reprofiled into what?

Mr Wood : Into the following financial year.

Senator STERLE: I cannot hear you, sorry.

Senator BULLOCK: It was $100 million, it is down to $89 million and they have pushed it out.

Mr Mrdak : It has been reprofiled into 2016-17.

Senator STERLE: What happened to the other $11 million?

Mr Wood : It has been moved out.

Mr Mrdak : It has been reprofiled into 2016-17.

Senator STERLE: On the same project?

Mr Mrdak : Yes.

Mr Wood : Yes.

Senator BULLOCK: Next lot. Community development grants. Is there a limit on how much an individual applicant can claim for a project under the program?

Mr Mrdak : No. Community development grants are predominantly either government election commitments or previous government's RDAF rounds 4/5 projects. The amounts vary depending on the projects involved. There is no upper limit per se.

Senator BULLOCK: How is this expenditure overseen? What is the role of the department? Is there anybody external and independent looking at this expenditure?

Mr Mrdak : It is managed by the department as one of our programs. Mr McCormick has responsibility for it. I will get him to take you through what our role is.

Mr McCormick : When a project is identified to be funded under the community development grants, according to the guidelines we will assess that project and make a recommendation on the value for money of that project.

Senator BULLOCK: Take me through that a bit. How do you perform that assessment?

Mr McCormick : We provide a template to the potential fundee requiring further information on the project to be funded. We will work with the proponent until we can actually identify the specifics under the project and are in a position to make a recommendation for funding.

Senator BULLOCK: There is some extra money, an extra $50 million, that has just gone into this program; is that right?

Mr McCormick : In MYEFO?

Senator BULLOCK: Yes.

Mr Mrdak : Yes, a further $50 million was added to the appropriation as part of the budget last year.

Senator BULLOCK: I note that some money has been found out of this extra money for the Murray Bridge Racing Club. Have any other projects been identified and funded through the extra money? If you have determined to fund some additional projects out of that extra $50 million, could you give us a list of them?

Mr Mrdak : I do not know whether we have a list of the new projects.

Mr McCormick : No, we do not have a list of those projects.

Mr Mrdak : We will get you those projects that have been added to the program since the budget as quickly as we can.

Senator BULLOCK: When you are preparing that list, could you add to it a list of the applications that have been made for funding from this additional pot? Where organisations have written in and said, 'Look, here's a project that we would like you to fund under this program.'

Mr Mrdak : It is not a competitive applicant process. It is determined by government.

Senator BULLOCK: Yes, but you receive requests for funding.

Mr Mrdak : Not through a formal process.

Senator BULLOCK: Hang on. You have oversight of these projects. You recommend on their value for money, and you do not know what they are?

Mr Mrdak : They are initiated often by government. There is not a competitive process in the way there is for Stronger Regions of bridges where there are rounds called for. I can certainly provide you with information on—

Senator BULLOCK: We just heard that there is some oversight provided by the department on these allocations of funds. An assessment is made of value for money and all of that stuff. We have just heard that.

Mr Mrdak : That is right.

Senator BULLOCK: You must know what they are. I just want a list of the ones that are before you.

Mr Mrdak : Yes, we can do that. What I am saying is that you asked for applications, and there are not applications—

Senator BULLOCK: I may have used the wrong word in terms of 'application'. In order to receive money, somebody has to ask for it.

Mr Mrdak : That is right. We will give you the information on the projects that have been selected and what has been assessed.

Senator BULLOCK: There you go.

Mr Mrdak : Sorry for the confusion.

Senator BULLOCK: That is all right. You asked the question better than I did and so now you can go and answer it. How much money do you expect will be spent on the program this year? I will put that another way. Is there about $70 million in the kitty awaiting to be expended?

Mr McCormick : Some $126.8 million is expected to be spent in 2015-16.

Senator BULLOCK: How much of that is already allocated?

Mr McCormick : It is all allocated.

Senator BULLOCK: Is it all gone?

Mr McCormick : Of that $126.8 million there is currently around $20 million uncommitted within that program.

Senator BULLOCK: Only $20 million?

Mr McCormick : It is around $20 million.

Senator BULLOCK: Does that count the extra $50 million? Is that where I am getting $70 million from?

Mr McCormick : Yes.

Senator BULLOCK: Even with the extra $50 million rolled in there is still only $20 million uncommitted?

Mr McCormick : Yes.

Senator BULLOCK: Is it not $20 million plus $50 million?

Mr McCormick : No.

Senator BULLOCK: Do you expect any further announcements to be made for the funding for this program during the rest of this year?

Mr McCormick : I think that is a question for government.

Mr Mrdak : We are not aware of any further commitments.

Senator BULLOCK: How many successful applicants have there been? 'Applicants' is the wrong wording. Correct me.

Mr McCormick : We have 300 projects being funded.

Senator BULLOCK: That is another bit of homework. It would be nice to get a list of the 300 projects as well.

Mr McCormick : Yes, we can provide that.

Senator BULLOCK: Thank you. I thought that would be relatively easy for you.

Mr Mrdak : They are publicly listed on our website.

Mr McCormick : We can provide a list to you.

Senator STERLE: Can you forward that to Senator Bullock and the committee?

Senator BULLOCK: Thank you. You keep my ignorance a secret.

Senator STERLE: No, I would not dare.

Senator BULLOCK: How many projects have we got that you are going to fund but we have not got a formal agreement with yet?

Mr McCormick : We have contracted $240.5 million and have uncontracted funds of $100.3 million.

Senator BULLOCK: That is $100.3 million, which is as much as beef roads. That is money that is agreed to be allocated, but the details of the funding agreement might be unsettled; is that right?

Mr McCormick : Yes. We currently have 116 contracted in process. We are negotiating funding agreements with a 10 further proponents and we are awaiting information on a further 26 proponents.

Senator BULLOCK: Do these fall within the 300?

Mr McCormick : Yes.

Senator BULLOCK: When you give us the list of the 300, could you note where they are up to according to what you have just said?

Mr McCormick : Yes, certainly.

Senator BULLOCK: You have just outlined the amount of the funding for those. That is good. Stronger Communities—more funding. How many applications has the department received for the Stronger Communities program?

Ms Zielke : As at 31 December 2015, 1,858 applications have been submitted to the department from across 148 electorates.

Senator BULLOCK: How many of those 1,858 have been fully assessed?

Ms Zielke : There are still 681 under assessment. I am trying to do the math quickly in my head.

Senator BULLOCK: That is 1,179, I think.

Ms Zielke : Noting that does not mean that final offers have been made in relation to all of those. They have been through the assessment process in some form.

Senator BULLOCK: You have just led into my next question. Of the ones that have been fully assessed, how many have been rejected? Or how many have been approved? You can come at it from either way.

Ms Wall : As at 31 December, 118 applications have been assessed, 103 have been approved and 15 not approved.

Senator BULLOCK: We are going to have a gap here. So, 118 were assessed, and how many were approved?

Ms Wall : Some 103.

Senator BULLOCK: Were 15 not approved?

Ms Wall : Yes.

Senator BULLOCK: My adding up has come back to me. I have a problem because you have had 1,858 applications. We have assessed 118 of them. We have 681 outstanding. There is a big gap in the middle.

Ms Zielke : Sorry, they have not commenced assessment as yet. Hence my comment about the others being under assessment.

Senator BULLOCK: I see.

Ms Zielke : Correct me where I have got it wrong, Ms Wall, but the process is that they will receive the applications, commence assessment and then the majority of cases will need to go back to the proponents and seek more information. Often the assessment is held up waiting for further information from proponents.

Senator BULLOCK: I can do the maths. We have 15 rejected and 103 approved. There are 1,059 in the process of being assessed and 681 that have not started being assessed.

Ms Wall : No. I am sorry. That was around the wrong way. It is the opposite. We have 681 that are under assessment.

Senator BULLOCK: That is not what I was told earlier.

Ms Wall : And 1,051 that are still to be assessed as at 31 December.

Ms Zielke : I am sorry. I did quote it the wrong way around.

Senator BULLOCK: I will get it right before I am done. There are 681 being assessed. If my adding up is right, 1,059 have not begun. We managed to get through that. That is good. What is the value of the projects that have been recommended by local members to the department in the first round?

Ms Wall : A total of $21.2 million worth of projects have been lodged with the department.

Senator BULLOCK: That is the 1,858?

Ms Wall : Yes.

Senator BULLOCK: Did you know before you started what the basis of the assessment arrangements would be for these projects, how they were going to be assessed, and how many applications did you think you would get?

Ms Wall : Yes, we did have an understanding of how we were going to assess them. We had to assess the value for money. In regard to the number of applications that we were expecting, we estimated that it could be up to 5,000 depending on the dollar amount submitted by each.

Senator BULLOCK: It is well within your estimate?

Ms Wall : Yes.

Senator BULLOCK: You thought you might get 5,000. You got 1,800. Have you received any representations from MPs or the government regarding the speed of the process for the applications?

Ms Wall : We brief the assistant minister monthly in regard to the speed and the progress we are making against that. What do you mean by 'representation'?

Senator BULLOCK: A 'hurry up' I suppose is what I meant.

Ms Wall : Yes.

Senator BULLOCK: The guidelines for these applications were made available generally on 24 June last year. Did the department make the guidelines available to any members of parliament before that date?

Ms Wall : No.

Senator BULLOCK: Definitely 'no'?

Ms Wall : As I answered last hearing, only cabinet saw the guidelines before that date.

Senator BULLOCK: Thank you for that. A condition of the program for MPs was that they set up a community consultation committee. What were the reasons the committee was included in the funding program?

Mr Mrdak : It was decided to recommend that members do that to provide some assurance of the process that members had as wide as possible opportunity to have the projects canvassed and basically as a risk management device for the members of parliament.

Senator BULLOCK: That sounds like a good idea to me. Were you overseeing that process to see that it had been implemented?

Mr Mrdak : We have left that with the local members to manage. That has been a judgment that they have made in relation to that. I think most have some form of assessment process or committee, but it has really been left with them to manage that. We do not get involved in that type of process.

Senator BULLOCK: Do you plan to have any sort of audit over that process? You admit you have left it in the hands of the members. Are you going to go back and see how it has worked and oversee that?

Mr Mrdak : There will be through the normal evaluation and audit processes, yes.

Ms Zielke : There would be audits in relation to the projects that we are funding in that regard—a risk managed approach to actually auditing the outcomes of that.

Senator BULLOCK: So, auditing the project?

Ms Zielke : Not the process used by the MPs.

Senator BULLOCK: Are we going to ensure that the committees are working as they are supposed to in terms of all of those goods things that Mr Mrdak said that the committees would achieve?

Ms Zielke : In relation to each of the grants, but not necessarily in relation to the processes used by all of the MPs. As Mr Mrdak said, we are leaving that process with the MPs.

Senator BULLOCK: In spite of it being as important as Mr Mrdak outlined, the doing of it is left to MPs with no oversight. Do I have that right?

Mr Mrdak : The guidelines provide the way in which it operates and, obviously, at some point we will do the normal evaluation and audit processes, but we are relying on the MPs managing these processes.

Senator BULLOCK: Fair enough.

Mr Mrdak : I should add that, importantly, the contracts for the provision of the funding are done by the department, which gives us a level of assurity.

Senator BULLOCK: We were discussing why the establishment of those committees was deemed to be important. I do not doubt that you are all over the funding. I was just hopeful that there was some level of oversight of the committees to ensure that they were properly established and doing the things they were meant to do in order to achieve the objectives and the high hopes that you had for them. Just to pop back a little bit to the outstandings and those partially processed—how long do you think it will take to work your way through and complete those?

Ms Wall : We are hoping that every application will have been looked at by the end of March.

Senator BULLOCK: Explain 'looked at'.

Ms Wall : What we are finding is that we have to go back to applicants to clarify the information and to also help them to submit an application that allows us to do the value for money assessment. We would like to ensure that by the end of March we have looked at—

Senator BULLOCK: The first cut.

Ms Wall : The first cut. What we are finding is that some applicants are taking up to three weeks to get back to the department.

Senator BULLOCK: Fair enough. I understand that. You will have completed a first assessment of all of them. Some will need further information. You will have contacted the applicant and that will all be done by the end of March?

Ms Wall : The first cut, yes.

Senator BULLOCK: I have got that. Thank you.

CHAIR: Someone out in the background wrote a private note to me, which is in my window, saying I was the world's worst whatever, and we were—

Senator BULLOCK: Yes, it is all your fault.

CHAIR: I appreciate it is all my fault and I am grateful for the note and the reminder. But to save that person writing another note, how much longer on this? We are only in section 2 at the moment. You can put them on notice. Everyone else has left.

Senator BULLOCK: I know, and don’t I envy them.

CHAIR: Senator Sterle, if you are out there somewhere, get yourself back here. I will not say what I would normally say.

Senator BULLOCK: It is painful, isn't it?

CHAIR: We have got no chance of—

Senator BULLOCK: I do not know how Mr Mrdak puts up with it.

CHAIR: It is what I call circle work.

Senator BULLOCK: I am not sure that these questions are circle work.

CHAIR: In any event, we have a big program. We have people out there just busting to get in here and answer questions.

Senator BULLOCK: Yes, I can imagine. I will do my best. If Senator Sterle tells me to shut up, I will shut up. He is my boss.

Senator EDWARDS: Chair, the point is valid. We are in section 2. It is 20 to 4.

Senator BULLOCK: If it is any consolation—

Senator EDWARDS: If the Labor Party were going to line up six and half hours or seven hours, we would have organised the program differently. That is the reality. Instead of having these high paid and highly respected public servants sitting in the back room with these questions—I just urge you, Senator Bullock, if you could take—

Senator BULLOCK: I am doing my best and I am working subject to direction.

Senator EDWARDS: Because we will just set down Saturday as a hearing day or something like that as well if you would like.

Senator BULLOCK: I was happy to leave it as all Senator Heffernan's fault.

Senator EDWARDS: I did not change the rules. I thought the rules were working all right, but I do not think the Greens are that happy and I do not know that the Labor Party are that happy. It would be nice if you had another rethink about it.

Senator BULLOCK: As I say, I work to order. The Stronger Regions Fund—can you tell us how much funding is available each year and when the round 3 funding will start?

Mr McCormick : The full appropriation is for $1 billion and it is $250 million from 2015-16 to 2019-20. So, $200 million a year.

Senator BULLOCK: Was there an extra $90 million allocated to the second round?

Mr McCormick : No, the profile is for a $200 million commitment each year and each round is looked at independently. To date, $505 million has been committed under both rounds 1 and 2.

Senator BULLOCK: I am sorry? What was that?

Mr McCormick : Some $505 million has been committed under rounds 1 and 2.

Senator BULLOCK: How does that square up with $200 million a year?

Mr McCormick : The $200 million a year is the appropriation. It is really the profile, committed in two rounds, around $250 million over the five years. At the moment there is around $495 million that is unallocated.

Senator BULLOCK: And to be allocated over the next three years, is it?

Mr McCormick : Yes.

Senator BULLOCK: We have front end loaded it a bit. There has been more allocated in the earlier rounds.

Mr McCormick : The profile is really on expenditure. So, we would commit over the five years. As I mentioned, the average is $250 million in each of the first two rounds, and that commitment is over the five years. We have committed half the $1 billion, and nearly half to go.

CHAIR: Senator, have you noticed that it is just the two of us now?

Senator BULLOCK: You should have grabbed him when he was here.

CHAIR: If you give me sixpence I will walk out and there will be no quorum.

Senator BULLOCK: As part of the appraisal process of round 2 of the national Stronger Regions Fund applications the department was required to advise the merits of eligible applicants and to provide this to the ministerial panel, who would ultimately decide the projects that were funded under that. What is the nature of the advice the department provided to the ministerial panel?

Mr McCormick : For round 2?

Senator BULLOCK: Yes.

Mr McCormick : Of the 514 applications that were submitted, we would then go through an eligibility process and identify those eligible projects that are going forward for assessment.

Senator BULLOCK: Did you just say that these ones are eligible or did you rank them?

Mr McCormick : The first cut of all applications is looking at the application to determine the eligibility. If the applicant is ineligible or the project is ineligible according to the guidelines it does not go for any further assessment.

Senator BULLOCK: Quite, but of the ones that are eligible?

Mr McCormick : They go forward for an assessment against the selection criteria.

Senator BULLOCK: You do not make any recommendations as to whether one is better than another?

Mr McCormick : No, that is an admin departmental process. Then when we assess them against the selection criteria we will make a determination on value for money. We would have two categories there of all the eligible projects—ones considered not value for money and a group that is considered value for money. All of those projects are ranked in assessment order.

Senator BULLOCK: There is eligible, ineligible, value for money, not value for money and then ranked in—

Mr McCormick : In priority order as to what the applicant has achieved against each of the selection criteria.

Senator BULLOCK: In the second round, how many projects did the department recommend?

Mr McCormick : Of the eligible applications we determined that 430 were eligible and of those 283 represented value with relevant money. Of those we made a recommendation to government based on what we considered would be the amount of funding to be spent on that round.

Senator BULLOCK: Did you rank them one to 283?

Mr McCormick : Yes. Because of the scoring there are groups. Three projects have identified equal fifth and then the next one is ninth.

Senator BULLOCK: That makes sense. Are you aware of any projects that were not recommended for funding that received funding?

Mr McCormick : Yes.

Senator BULLOCK: How many?

Mr McCormick : Two.

Senator BULLOCK: What were they?

Mr McCormick : The two Queensland projects. The Doomadgee to Burketown fibre link project and connecting remote communities in Central West Queensland to fibre optics—Indigenous community projects.

Senator BULLOCK: Did you knock those two back on a value-for-money basis?

Mr McCormick : No.

Mr Mrdak : We found the value for money. We ranked them. The ministers made the decision that while they were found to be ranked as value for money they felt they deserved a higher assessment in certain categories than what the department had given them.

Mr McCormick : The department could only assess the application on the information provided in the application form, and the ministerial panel determined that they considered the economic benefits to those projects were understated in the application, and it was assessed accordingly.

Senator BULLOCK: Fair enough. So, those two were not recommended but ended up being funded. On the other side of that coin, do you know of any that were recommended for funding but did not end up receiving funding?

Mr McCormick : There were a number, but I do not know them. I do not have that list here.

Senator BULLOCK: I might ask you for that one on notice. To keep Senator Heffernan happy, I will put something on notice.

Senator EDWARDS: Senator Heffernan is always happy.

Senator BULLOCK: When you are listing those projects that ended up not being funded, could you break them down on a state-by-state basis as well?

Mr McCormick : I will take that on notice. It was advice provided to government.

Senator BULLOCK: I am not asking for the advice. I am just asking for the ones that were recommended but did not end up being funded.

Mr Mrdak : We will take that on notice.

Senator BULLOCK: Senator Sterle, I have been the subject of earnest entreaties from the chairman to put the rest of the questions to this section on notice, and I did not feel that I had the authority to respond to that without you.

Senator STERLE: I will see where we are up to first. Keep going until smoko. What time is smoko?

CHAIR: A quarter past four.

Senator STERLE: Keep going, Senator Bullock.

Senator BULLOCK: With regard to the National Stronger Regions Fund, were there any concerns raised about funds going from this fund into metropolitan areas?

Mr McCormick : The National Stronger Regions Fund is for all Australia's regions, and applicants from urban areas are not excluded from applying.

Senator BULLOCK: I did not ask that. I asked whether any concern was expressed about that.

Mr McCormick : There has been concern raised, yes.

Senator BULLOCK: Could you expand on that a little?

Mr McCormick : There was a review following round 1 and it was identified that one of the hurdles for applicants, particularly in smaller communities, rural and remote communities, was the partnership requirement. It was that 50 per cent of the funding was required to be provided by the partner. To address that in round 3 the rules were changed so any identified areas, rural and remote, now only have to provide 25 per cent. They provide one part in three of the funding.

Senator BULLOCK: Has that eased that concern now?

Mr McCormick : It will make it easier for smaller rural and remote communities to apply. Round 3 closes on 15 March and we will be able to determine whether that has had an impact on smaller regional communities. Round 2 also introduced a $25 million quarantining for those projects seeking $1 million or less. As a result of that, there was a greater number of regional applications in that group as well.

Senator BULLOCK: So, with those greater number of lower funded projects and the other changes that you outlined, those changes have been made to address the concerns that have been previously raised?

Mr McCormick : To address some of the barriers to entry of particularly smaller applicants.

Senator BULLOCK: At the briefing conducted by the department on 21 January advice was given from the department that from round 2 of the program 15 applications were received from Tasmania with 14 assessed as meeting the criteria. Further advice stated that nine projects were recommended for funding by officials from the department and only three of the nine projects recommended for funding were approved by the ministerial panel. Is that the case? Is that right?

Mr McCormick : I was not at the information session in Tasmania so I am not aware of that information.

Mr Mrdak : Can we take that on notice? That does not sound very familiar to us.

Mr McCormick : It does sound like a bit of a conflict.

Senator BULLOCK: It sounds a little odd if it were the case that so many of the projects that you had recommended were rejected.

Mr Mrdak : Again, we would have to take that on notice. I am not familiar with that comment.

Senator BULLOCK: This is an extension of the question that you have taken on notice earlier about the rejection state by state. Can you tell us how many applications were received state by state and of those how many met the criteria and how many were recommended for funding? I probably should have asked that earlier.

Mr McCormick : We can take that on notice.

Senator BULLOCK: Yes, I dare say, and perhaps look at the criteria on which the decisions were made for the recommendation. I think in broad terms you have partly answered that already, but perhaps that could be included in the answer to that question. Can you confirm whether the member for Braddon provided representation in support of an application for an upgrade to the Burnie Tennis Club to either the department or the minister?

Mr McCormick : I would have to take that on notice. We received a large number of letters of support for the 514 applications.

Senator BULLOCK: Is it not uncommon for members to write in?

Mr McCormick : No.

Senator BULLOCK: Did you answer this already? How many funding agreements have been signed by the department for rounds 1 and 2?

Mr McCormick : We have negotiated 63 funding agreements for a value of $125.6 million.

Senator BULLOCK: Given that you are preparing some lists for us, can we have a list of those?

Mr McCormick : Certainly.

Senator BULLOCK: Thank you. Praise the Lord, Chairman; we have been advised that the rest can go on notice.

CHAIR: All right. Thank you.

Mr Mrdak : Chair, does that complete infrastructure investments?

Senator STERLE: For the purposes of moving along, I have one senator we are trying to find who did request to ask questions. If officers could just move behind, we will move on. I am not saying that we will put them on notice, but we just need to find Senator Urquhart. Can the officials just wait?

Mr Mrdak : The officials can stay on. Would you like to move to Infrastructure Australia?

Senator STERLE: Let us move on to Infrastructure Australia bearing in mind that if the senator comes up then we might have to just quickly go to that.