Page 2698 - Week 08 - Wednesday, 10 August 2016
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another $400 million in non-current provisions, which I believe is a deferred tax liability. The fact that the $1.5 billion liability is hovering at that point and is, in effect, increasing is a real worry. It shows there is real risk that interest expense will be capitalised as a result of our inability to tackle the principal. There is a real structural issue that will have to be addressed at some point. Although the total assets or net assets are still reasonable, there is still that significant issue with regard to the ever-increasing interest bearing liabilities and the potential for the interest to capitalise.
I want to touch on a couple of issues with regard to the bulk water alliance Auditor-General’s report released last year, but with the tabling of a PAC report this week it is topical to mention a few concerns. It is important to note a few paragraphs in this report, in particular, paragraph 5.68:
The then ACTEW Managing Director’s 17 September 2009 report to the Legislative Assembly, in response to a 16 September 2009 Legislative Assembly motion, used material from a report that had been provided to the ACT Government by ACTEW in December 2008. Information in the December 2008 report conveyed that there had been a significant increase in the cost of reinforced steel. It is apparent, however, that the cost of reinforced steel had reduced in 2009. While it would have been prudent for ACTEW to review and revise this information it had only approximately one day to prepare and present this information to the Assembly.
It is important to note that ACTEW were, in effect, blaming several commodities for going up in price as being a cause of or a contributor to the blowout in the cost of the Cotter Dam when, in actual fact, the Auditor-General found that the price of steel had decreased in that time and, therefore, was a contributor to the cost going down, not increasing.
It is also worth noting paragraph 5.47 in the report. It states:
In October 2007 the ACT Government, on the advice of ACTEW, announced that the expected cost of construction of the Enlarged Cotter Dam would be $145 million. Notwithstanding the limitations of this figure it was not specifically and publically refuted until early September 2009.
That date is very important—early September 2009. It goes on:
Following its initial consideration and prior to its endorsement of the Final Target Outturn Cost ($299 million) the ACTEW Board communicated the revised figure to the Chief Minister and Deputy Chief Minister (and Cabinet).
I will go on. Paragraph 5.57 says:
Based on an analysis of documented material there is evidence that information was made available to the then Chief Minister and Deputy Chief Minister, throughout 2008 and 2009, on expected cost increases for the project.
It is very important to note that the government, the two shareholders of ACTEW, were being kept aware of cost increases for the Cotter Dam project despite the fact, as I have already read out, they only notified the public in September 2009.
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