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Monday, 9 August 2004
Page: 25969

Senator O'Brien asked the Minister representing the Minister for Local Government, Territories and Roads, upon notice, on 24 June 2004:

With reference to Commonwealth funding for the freight and passenger facilities at Rumah Baru on the Cocos (Keeling) Islands:

(1) Given that the original cost of the project was estimated at $16 million, with funding to be provided through existing resources of $10.4 million specifically for the facility and $5.6 million to be re-directed from other projects in the Indian Ocean Territory Capital Replacement Program, how much funding is currently available for the Rumah Baru proposal.

(2) Has any funding for these facilities been allocated to the department; if not: (a) why not; and (b) when will funding be allocated.

(3) Is funding for these facilities included in the forward estimates; if so: (a) under what program will they be funded; and (b) where does the funding appear in the department's Portfolio Budget Statements.

(4) What will be the cost of the Government's hovercraft proposal that was described by Mr Wilson during the 2004-05 Budget estimates hearings of the Rural and Regional Affairs and Transport Legislation Committee in May 2004.

Senator Ian Campbell (Minister for the Environment and Heritage) —The Minister for Local Government, Territories and Roads has provided the following answer to the honourable senator's question:

(1) The Government approved the construction of a new freight and passenger facility at Rumah Baru following the recommendation of the Commonwealth Grants Commission (CGC) 1999 Report on Indian Ocean Territories. Tenders for the construction were significantly in excess of the $16m cost estimate available for the project, even after reducing the scope of works. Accordingly the decision was made not to proceed with the project.

The government remains committed to the original purpose of the Rumah Baru project, vis, improving the safety of freight and passenger handling arrangements on West Island.

(2) There is $6.75 million identified in the forward investment programme for use in improving the safety of freight and passenger handling based on current cost estimates of achieving government objectives in this area.

(3) (a) Capital asset replacement projects on the IOTs are funded from accumulated depreciation.

(b) Depreciation expenses reported on page 66 of the department's Portfolio Budget Statements (PBS) include depreciation relating to IOTs administered assets. Funding for the IOTs capital works programme is a combination of depreciation in 2004-05 and of unspent accumulated depreciation from previous years ($7.488 million) transferred from Departmental as reflected in the Schedule of Administered Capital Budget on page 92 of the PBS.

(4) The Department sought proposals for the provision of passenger transport services and the preferred provider is a private company that intends utilising a hovercraft to operate the service. The Government's only involvement will be to provide a subsidy.

As the service will be operated by the private sector, all costs associated with the ferry are commercial in nature. Under the terms of the Ferry Service Request for Proposals, all price information submitted is treated as commercial in-confidence. Public release of proposed subsidy figures would breach those terms and prejudice future re-tendering processes should the government be unable to finalise an agreement with the preferred tenderer.