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Thursday, 25 November 1993
Page: 3735


Senator VANSTONE (4.13 p.m.) —I move:

  That the Senate take note of the document.

I wish to use the five minutes that I am allowed under Standing Orders to refer to some of the matters contained in this report. A couple of sitting weeks ago, I raised with the Minister for Transport and Communications, Senator Collins—the minister responsible for AMSA—the question of AMSA's purchase of a replacement ship for the Cape Moreton at a cost of nearly $20 million. Senator Collins did his usual bellowing, claiming that this was best offer available, that the authority had done the right thing and everything was beyond reproach and beyond question. He still maintains that view and did so at the estimates committee hearings.

  Since then we have found a bit more information. I look to this report to see whether I can get any more information on how the authority went about purchasing a $20 million ship overseas without putting it out to tender in Australia. It is my understanding that in 1992 the cabinet issued guidelines for purchases by government business enterprises. AMSA was listed as one of those government business enterprises that ought to follow these guidelines on the manner in which such purchases should be handled. At this stage it is my view that the guidelines have not been appropriately followed.

  This is a $20 million purchase that Australian industry was not effectively given the chance to compete for. In response to that allegation, AMSA says, `Look, we were never going to buy a ship; we were just looking for a charter. We were roaming the world looking for a ship to charter, and what do you know? A cheap bargain came up'. It is like going to the supermarket for chops and coming home with pea soup. AMSA spotted these bankrupt hulls—I think that is what they are called—and thought, `They are cheap, so we will buy them'. And they were cheap; there is no dispute about that. AMSA came back and asked the Department of the Arts and Administrative Services and it basically said, `They might be cheap but you should give Australian industry, and Australian workers, a chance to compete for this work'.

  Instead of putting it out to tender, what happened? The chief executive officer hopped on a plane, whizzed around and in a matter of days had verbal consultations with four shipping companies—and, as I understand it, another company said that it could have made the ship—all of whom said that they could do it, although some said that they could not do it within the time required. One said that it could do it for $20 million to $25 million, slightly less than the average that Senator Collins referred to.

  I then turn to the financial statements and see that $2.6 million was spent on redundancy payments because the authority has chosen to decommission the ship that it had. Presumably, that means the 100 or so crew—or at least a big portion of them for $2.6 million in redundancy payments—have gone off to do something else while we wait for this other ship to come from Spain. So, if the firm that said it could do it for $20 million to $25 million had been able to do it for $20 million, that could be compared with the cost of the Spanish option, which you could day has gone up to $22 million, because there might not have been redundancies.

  But the real point to make is that this report does not detail adequately the manner in which that purchase was made. AMSA did not originally intend to buy a ship. It badly miscalculated what the purchase price of a ship would be in Australia. I can hardly believe that Senator West is asleep listening to this; I am not that boring. If, instead of doing a quick ring around at the last minute to say, `Listen guys, could you do this at this price by this time?', AMSA had started the ball rolling in September the year before and done what it should have and issued tenders and given Australian industry a chance to compete, a few more Australian workers in the shipbuilding industry might now have a job. I seek leave to continue my remarks later.

  Leave granted; debate adjourned.