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Wednesday, 24 May 1989
Page: 2563


Senator CALVERT(12.17) —I wish to make a few comments on the appropriation for the Antarctic Division, particularly the matter of the letting of the tenders for the Antarctic replacement vessel. This follows on questions that I asked the Estimates Committee D on 13 April. It was brought to my attention because there was a lot of concern about the replacement vessel for the ill-fated Nella Dan. Accusations were raised both before and in Estimates that unfair advantages were given to some tenderers and that the Minister for the Arts, Sport, the Environment, Tourism and Territories (Senator Richardson) had caused some irregularities to occur in the tendering process so as to favour the Carrington shipyard in New South Wales prior to the last New South Wales State election.

Mr Ralfs, who was one of the tenderers, queried the Minister on how or why his submission was altered. The answer that was received in Estimates from the Deputy Director of the Antarctic Division was that there was an error in the information that went to the Minister but that it was not material to any decisions and did not influence any decisions. When asked by Senator Puplick how Mr Ralfs became aware of that incorrect information, or misrepresentation of information, Mr Blunn's answer was, `We do not know the answer to that question'. He went on to say, `I am satisfied there was no evidence to suggest'-et cetera. There was a certain amount of speculation about how Mr Ralfs found out that his submission had been altered. I do not think that question has ever been satisfactorily answered. I believe that some attempt should have been made to answer those questions, to be fair to everybody.

There is no doubt that in the letting of tenders for his vessel the overseas tenders for construction and operation were much less than their Australian counterparts. Quite obviously, to judge from what has transpired, the overseas bidders were warned off so that the vessel could be Australian built and manned, for political reasons. It did not stop there. Even when the Australian tenders were looked at, the lowest tender, submitted by Australian Shipbuilding Industries (WA) Pty Ltd, was outbid on a commercial basis by P and O Polar Australia Pty Ltd. It had received a subsidy from the then New South Wales Labor Government so that the vessel could be conveniently built in New South Wales. As I said, this was just prior to the last State election. There is no question that the Minister, Senator Richardson, was in this right up to his neck.

It was further revealed in Estimates that the Minister announced the selection of the P and O Polar contract before contracts had actually been negotiated. I think that is the crux of the whole problem. The concern I have is that the Australian taxpayers have been ripped off because of what the Minister did and the way he did it. Senator Puplick asked:

. . . the announcement by the Minister, I take it, of the selection of P and O Polar as the successful tenderer before the contract had actually been negotiated. Was that announcement made before the contract had been negotiated?

Quite rightly the Secretary, Mr Blunn, replied that yes, it was. That is a rather unusual way of doing things. I would have thought in this day and age that to gain every advantage for the Australian taxpayer perhaps a bit more prudent housekeeping should have been done. Again one would have to ask why that was done. The answer of course was so that P and O Polar would get the contract, subsidised by the New South Wales Labor Government and built by the Carrington shipyards. I do not think there is any question that overseas operators and builders could have provided a better and cheaper vessel. In fact the estimates show that it would have been about half the price.

Further questioning showed that the Deputy Director was sent overseas early last year to inspect add-ons that could improve the capabilities of the vessel. But when I asked whether there had been regular inspections of the vessel and how many, we found at first that that could not be answered. Later on the Deputy Director remembered that an officer had been up there three times. I would have thought that once a project of such importance to this country was started, where the powers that be send the Deputy Director overseas at taxpayers' expense to find out all the latest technology that could be added to this vessel, someone would have shown an interest. Instead, no-one seemed to be showing any, or very little, interest in the whole project. At the moment everybody is waiting to see when the vessel is going to be finished. Regardless of all the promises, because of the sloppy way this whole matter has been handled by this Minister, we have to query whether the vessel will be available for the 1989-90 Antarctic season. If it is not, only time will tell how much more money is going to be squandered on this project. Quite a few questions of mine were not satisfactorily answered in the Estimates Committee. I would like to place the Minister on notice that I will be asking further questions in the committee stage about this matter.

I wish to make just a few observations about the whole fiasco. I would not argue that a strong argument can be put, and was put, that there were, and are, certain advantages in having an Australian-built and crewed vessel. My main argument is that, because of the way that this matter has been handled by the Minister, it has cost the taxpayer far more than it should have. Whatever figures we use, it would be fair to say that originally the overseas crewed and manned vessel would cost about $7m per annum for a 10-year contract, while the Australian equivalent, I believe, ended up at about $10m per annum. The Minister's exuberance in letting the New South Wales electorate know that the preferred tender was for the P and O Polar ship to be built at Carringtons in New South Wales had the effect of protracting negotiations for six months, and that deferred the starting date of the vessel by that time. That is why I believe there was a big doubt about whether this vessel would be available when it should be. That will mean that this Government will then have to turn around and negotiate further contracts at great expense for leasing another vessel for the forthcoming season, and it will put our endeavours in that future world park that the Prime Minister (Mr Hawke) would like to see in Antarctica further behind. When answering a question about the timing of the announcement, the Minister said:

. . . the decision to announce was part of the Cabinet decision. I think that should also be on the record.

It may have been part of the Cabinet decision, but I would seriously ask whether the Cabinet was aware that the Minister was going to do it when he did. By letting the tenderer know that it was going to get the contract and then, by some means or other, the Deputy Director in a very unprecedented action sending off a letter of intent also, this allowed the tenderer not only to delay the negotiations but also to negotiate a much higher price without any comeback. In fact it could be about $25m. I think that figure could be-and I hope it will be-backed up by some of the answers I get to my question in the committee stage.

I was very disappointed with some of the answers I received, as I said earlier. One that concerned me was when I asked what the actual contract price was, and I was told it was $124m all up. When I asked further, `Have you any idea what the actual price is now?', I was fobbed off by being told that in arriving at that price there were a number of variables, including the operation of cost inflation factors. That is fine, but I do not believe that was a satisfactory answer, because I believe that the figure of $124m was arrived at in such a way as to include the variables and the cost inflation factors. I asked: Why then could not the same factors be used to give me and the Senate an all up cost? I think the answer is that this matter has been so embarrassing to the Minister that his officers were told to keep quiet about it and not to cause too much flak.

We went on for quite some time asking further questions. It is fair to say that there was no doubt about the answers that we received. I asked whether there were cheaper vessels available of a similar type to that which was needed, and it was admitted that there were. There was an offer made by a company called Reiber, which would have put a vessel in Australia and which we would probably be using now for about half the cost. I would have asked, given all the facts that we have had before us-I do agree that it would be more preferable to have an Australian tenderer and Australian crewing-how far we go to promote local industry and the use of local labour when, in this shabby exercise, the taxpayers look like paying about $60m to $70m more than they should. That does not include the inconvenience that has been caused to the Antarctic program for 1989-90 and the probability that there is going to be another great expense foisted on the Antarctic Division when it has to charter another ship for the 1989-90 season.