Page 3981 - Week 11 - Tuesday, 15 Sept 2009
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This brings us to recent times and recent examples of mismanagement. In these last few weeks our attention has been drawn to the massive cost blow-out of the Cotter Dam project. The massive $243 million cost blow-out of the Cotter Dam project, I might add, would have paid for the duplication of the GDE three times over and is the equivalent cost of five new high schools. In 2005 Actew estimated that the cost of the dam would be about $120 million. In 2007, the Chief Minister announced the major water security projects and the figure magically turned into $145 million. This year the managing director of Actew Corporation told the 2009-10 budget estimates committee on 18 May:
We are working on an estimate of costs that we warned in that report could be 30 per cent higher than that again. I do think it is going to be something that the Actew board, which I am very interested in—is just trying to understand where the movement in costs occur across these major projects and taking it forward to understand and to work through where the answers are and, if there are deficiencies, where the deficiencies were in terms of the planning process.
A week after this, on 30 May, the costs had gone up yet again. By now the costs had risen to an incredible $246 million. And barely three months later, on 3 September 2009, the announcement was made that the cost had risen by another $117 million. In three months the blow-out had pushed the cost up to an astounding $363 million. That is more than three times the first costing, in just four years.
The question that must be asked now is this: how on earth could the government get this so wrong and, furthermore, allow this to get so out of hand? Again we have shareholders that pick and choose what they will take an interest in and which of the territory-owned corporations will be managed and how tightly they will be managed.
This government has made up the rules as it goes. Now it is time that the Chief Minister and his fellow shareholders ensured that the government, its agencies and territory-owned corporations put far more energy into getting the costings and the strategic directions right in the first place, in a fashion consistent with their responsibility to the taxpayers in the ACT.
This government has failed to take its responsibilities as a shareholder seriously enough to ensure that a maximum return on its investment in the corporation is made. This must change from now on.
MS GALLAGHER (Molonglo—Treasurer, Minister for Health, Minister for Community Services and Minister for Women) (3.34): I am pleased to have this opportunity to comment on the management of statutory authorities and territory-owned corporations. I would first like to comment briefly on the distinction between a statutory authority and a territory-owned corporation. A statutory authority is established under its own enabling legislation. There is a legal obligation to act in the interests of achieving the purpose or objectives for which the particular authority has been created. They can be a commercial, regulatory, quasi-judicial or advisory body.
The enabling legislation is used to define the structure and responsibilities for each authority. For instance, an authority can have a governing board or an advisory board.
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