Page 3203 - Week 08 - Wednesday, 22 August 2012
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By the time of the December quarter 2011-12 capital works report, which was released on 6 July 2012, the project value had increased to $40 million, an escalation of 230 per cent. Remember, we are shrinking by 30 per cent, but it is costing us 230 per cent more. In the 2012-13 ACT budget presented on 5 June there is more money for this project. An additional $15 million has been allocated to this project, making the total project value of $55 million, an escalation of 360 per cent over the initial cost of the project—and no bridge. Remember that. We have gone up 360 per cent on the cost and we have gone down 30 per cent on the volume. I think Mr Barr forgot to mention that in his dixer when he was spouting how good the government was on capital works. Yes, you can spend the money, but so often you cannot deliver on time, on budget or on scope.
What did the auditor say about the north Weston pond project? The auditor said:
ACT Government agencies did not effectively manage the North Weston Pond project to ensure the project was completed for the budgeted cost within the planned timeframe. The project has required significant redesign to address escalating costs due to risks that were known at the earliest stages of the project.
Does that sound familiar? We knew the risks. We ignored the risks. Taxpayers, you get to pay for the ineptitude of the ACT Labor government. The auditor continued:
The smaller capacity ponds approved by the Minister for Transport in January 2011 are estimated to cost $43.4 million. This is $22.6 million (or 109 percent) more than the originally budgeted amount …
The location of the North Weston Pond presented significant risks to the project. These risks stemmed from the former uses of the site and existence of the critical Molonglo Valley Interceptor Sewer at the site. ACT Government agencies were aware of these risks from the beginning of the project. However, the growing knowledge and understanding of these risks, including their impact on the project, was not adequately recognised by ACT Government agencies and reflected in project design and cost estimates.
That is not a bad summary of just about every major capital works project from the Tharwa bridge to Gungahlin Drive, to the delivery of the prison, to the delivery of the car park at the Canberra Hospital and to the delivery of the women’s and children’s hospital. They are always over time, they are always over budget, and the scope is constantly changing.
What caused this? The auditor said:
Specific shortcomings in the management of the project included a failure by
ACT Government agencies to:
apply a robust risk management framework;
implement appropriate project governance …
critically assess the feasibility or otherwise of the pond at key points … and
critically review the work and advice provided by consultants engaged in the
project.
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