Page 4557 - Week 12 - Thursday, 15 October 2009
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I am also left wondering if Actew actually had a fair idea about how much the dam wall would cost much earlier than they revealed to the people of Canberra. It is also of concern that the increased costs associated with the larger dam wall were not put in the public domain earlier. It appears from the development application that the size of the dam wall was well understood in May 2009, certainly well enough understood to complete the diagrams for the development application. Geotechnical investigations were likely to have been completed well before then, yet even in the estimates hearing in May this year there were only vague references to what this might do to the cost of the project. No mention was made of the fact that costs may rise up to one-third of the project estimates to date. It would be of interest to the Assembly as to when it became clear—and this is not so much a technical but, rather, a political question.
There are some other issues that I will be interested to see more information on, such as why an estimate of environmental management costs was not included in the original estimates. Even though an EIS has not yet been completed, one would assume that a project of this size would incur environmental management on some scale and that an estimate based on current practice could have been made in the original estimate, even if it were a percentage projection of the cost of environmental remediation. The Greens are not concerned at the cost of the remediation but, again, are unclear as to why it is not at all included in the first estimate. I find this particularly surprising because my experience is that Actew are considerate of environmental remediation and environmental factors. I cannot imagine that they only thought of this later. It begs the question why those costs were not included in the original estimate.
The document that Mr Sullivan submitted to members of the Assembly last month rather mysteriously refers to an extra $118 million that has been included in the final cost “to allow for a range of other project, indirect, contractor and owner costs”. Now I am really confused as I thought that the escalation in cost, the final $118 million on top of the $245 million, was to do with increased building and labour costs and the cost of reinforced steel and fuel. So what exactly are “project, indirect, contractor and owner costs”? To me they sound like (a) the kinds of costs that you would know about well in advance if you undertook these kinds of dam-building projects and (b) not the kinds of costs that would increase the size of your project by another whole third. Perhaps I have misunderstood Mr Sullivan and these costs were on the table at the beginning of the process, but he has specifically identified them as being one cause of the escalation.
Identified in the calendar of updates to the Actew board it becomes clear that profit margins were not factored in prior to the final target outturn cost. Again, I will be interested to try and understand further why it is that profit margins are not included in any initial estimate of a project such as this. I am not meaning to be too facetious here but I am most interested to see what was included in the initial cost estimates, because it surprises me that so many seemingly obvious things were omitted.
The Greens would like to get some real outcomes here today, information on the table—information that we believe will make it clearer about whether or nor there is a case to answer on the Cotter Dam project. The amendment asks for the documents to be provided to members a week from now. We have included in our text some clarity
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