Page 4225 - Week 11 - Thursday, 17 Sept 2009
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what was involved in delivering it. It is entirely appropriate that detailed planning, based on extensive engineering and geotechnical investigations, would result in an iterative costing process, with those costs evolving as the full scope of works and final design became known.
We have been asked how we can be confident that the cost as now known will not increase further as the project gets underway. It is important to note on that point that the cost of the project is no longer an estimate, unlike the previous figures. It now forms the basis of a contractual arrangement through which the Bulk Water Alliance will deliver the project.
The government has sought and received assurances from Actew around the delivery of this significant and complex capital project. We are satisfied that the “alliancing” delivery mechanism chosen by Actew provides a high level of mitigation against time and cost escalations, and so too is the managing director of Actew.
Naturally, we have asked, through the voting shareholders, that Actew provide regular and detailed reports on these major water security projects covering the financial performance as well as construction progress. This is sensible, normal practice and one that Actew has fully committed to meet.
Actew’s capital works programs are not just those of the major water security projects. Since 2002-03, Actew has actually delivered approximately 240 capital projects, with a total value of over $400 million. In the 2007-08 financial year Actew’s general capital works program managed 85 different projects with budgets ranging from $5,000 up to $72 million. So, in fact, Actew’s general capital works budget for the past two years has been more than $100 million per annum.
The alliance delivery mechanism has proven successful for Actew. In fact, Actew is delivering nearly $30 million worth of projects aimed at increasing the supply and inter-basin transfers. These have included the installation of ultraviolet treatment infrastructure at the Mount Stromlo water treatment plant, which is the largest plant of its type in Australia. The UV treatment gives Actew greater ability to access water from the Murrumbidgee River for town supply.
Another project completed through an alliance agreement is the Cotter pumping station restoration and recommissioning. I would encourage members to go and look at the restoration of the Cotter pumping station. This historic building has been beautifully restored and there is a wonderful synergy between the history of the building and the fact that it is also still a working pumping station with modern equipment. This has been delivered successfully through an alliance model for the project.
The government, therefore, has a high degree of comfort in Actew’s capacity to deliver its capital works projects based on the excellent track record it has demonstrated for delivering capital works projects over many years. Actew develops its capital works program from asset management plans which cover five-year and 20-year programs. A critical element of that track record is the financial management of the program. Actew’s capital works program is scrutinised by the Independent
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