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Tuesday, 23 September 2008
Page: 29

Senator WILLIAMS (4:10 PM) —On behalf of Senator Troeth, a member of the Parliamentary Standing Committee on Public Works, I present report no. 7 of 2008, Update report: the Christmas Island Immigration Detention Centre project, and seek leave to move a motion in relation to the report.

Leave granted.

Senator WILLIAMS —I move:

That the Senate take note of the report.

I seek leave to have the tabling statement incorporated in Hansard.

Leave granted.

The statement read as follows—

This report presents the Committee’s views on the planning and construction of the Christmas Island Detention Centre by the Department Finance and Deregulation. The Committee of the 40th Parliament reported on the original proposal for the Centre in December 2003. At that time, the total cost of the proposal was estimated at $276.2 million.

In January 2008 Finance advised the Committee of a cost increase for the project of $120 million. This brought the total value of the project to $396 million which is about a 43% increase. Finance briefed the Committee on the reasons for the cost increase at a public hearing on 26 June 2008.

There have been some positive lessons for project planners to emerge as a result of the cost overruns. The current two stage approval process for public works provides greater cost certainty for project proposals. But overall, the Committee was not satisfied by the Finance’s justifications for the cost overruns.

The key factors cited such as the breakdown of the port crane, the isolation of the location, the high transport costs, competition with the booming mining sector and project design expenses, should have been foreseen. The Committee was also concerned with other cost overruns such as the budget for sundry fees, design and project management. The Committee considers that it was presented with a poorly costed plan in 2003 which was then inadequately managed.

Finance asserted that the project did include adequate planning for risks associated with the crane. However, the Committee is unable to agree with that assertion in the absence of clear evidence of an appropriate risk assessment process. This highlights the need for the Committee to be provided with rigorous risk assessment documentation as part of the inquiry process.

The Committee has also expressed its concerns about the project to the Auditor-General, whose agency, the Australian National Audit Office, is currently undertaking an audit of the project.

I would like to thank the Committee for its work in relation to the review of the Christmas Island Detention Centre project.

I commend the report to the Senate.