Page 1900 - Week 05 - Thursday, 3 May 2012
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providing this statement pursuant to parts 2(b) and (c) of the resolution passed by the Assembly on 21 March 2012 concerning the enlarged Cotter Dam project. I tabled on 27 March 2012 the information required under part 2(a) of the resolution. This included the revised cost estimate and completion schedule for the dam that the Actew board was expected to consider at its meeting on 4 March 2012. At that meeting, however, the board did not approve the revised cost estimate and completion schedule due to the impact of the major flood that took place in late February 2012. The board decided instead to defer any further consideration until an assessment had been made of the extent of the damage and the delay caused by the flood.
The Actew board has since approved the revised costs and schedule for the enlarged Cotter Dam project. The actual resolutions made by the Actew board are as follows:
On 24 April 2012 the Board:
Noted the outcomes of the review conducted in early 2012 of the project schedule and budget as presented to the Board at its meeting on 4 March 2012 are now accepted and incorporated in the recent review of the flood cost and schedule impact.
Noted as covered in the Board presentation in March 2012, the forecast project cost at completion, prior to the Match 2012 flood, was $396.9 million.
Noted the March flood is estimated to cost $17 million, of which $9.1 million is estimated to be recoverable from insurance, and $7.8 million is the delay cost to be borne by ACTEW.
Noted the revised total project cost is $413.8 million, of which $9.1 million is estimated to be recoverable from insurance, bringing the final budget estimate to $404.7 million.
Noted that should the insurance payout vary from the $9.1million estimate, ACTEW shall either benefit from any additional insurance recovery, or be required to contribute an additional sum to the total cost of the insurance claim for the flood.
Noted the revised project completion date is April 2013.
Approved a revised project budget of $404.7 million to cover the full flood cost impact, which is net of an estimated $9.1 million anticipated to be recovered through insurance.
It is worth noting that the original approved total project budget for the dam was $363 million and was subjected to several independent reviews, all of which confirmed that this was a reasonable price estimate. In particular, on 30 June 2010, the Independent Competition and Regulatory Commission stated:
The Commission now confirms its conclusions that the revised costs of the ECD represent a realistic and efficient cost estimate of the project and that the alliance arrangements, including the contractual arrangements with regard to risk sharing and the potential for further cost increases, are in accord with industry standards and represent a fair outcome for the ACT community.
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