- Proposed Construction and Decommissioning of the Australian Pavilion at the World Expo 2025 Osaka, Kansai, Japan
Department of Foreign Affairs and Trade
4.1International Registered Exhibitions - also known as the World Expo (Expo) - are international events held every five years. The Expo is a global platform for the display of achievements and innovations, as well as collaboration and cooperation. Each Expo is organised around a theme that ‘attempts to improve humankind’s knowledge, takes into account human and social aspirations and highlights scientific, technological, economic and social progress’.
4.2The theme for the Osaka Expo 2025 will be ‘Designing Future Society for Our Lives’. The Department of Foreign Affairs and Trade (DFAT) considers that participation in the Expo will give Australia an opportunity to connect with the Japanese people and global citizens to promote our culture, values, products and services, and our technological and economic capabilities.
4.3Australia’s participation in the Expo is a whole-of-government endeavour delivered by DFAT. It was announced in January 2022, and reaffirmed in the October 2022 budget which provided up to $100 million for the project, over four years:
The context for that decision was a request by the Japanese government that Australia participate in the expo, a request that reflected the importance of a successful expo for the Japanese government as a key piece of public diplomacy that, in their minds, very much ranks up alongside Tokyo's hosting of the Olympic Games.
4.4The aim of Australia’s participation is to deliver a strong Australian presence at the Expo, to progress our national interests and to target the following key strategic objectives:
- deepen Australia’s relationship with Japan
- create new opportunities for Australia
- project a modern and diverse Australia.
- The total estimated cost of the project is $59.8 million.
- The project was referred to the Committee on 22 March 2023.
Conduct of the inquiry
4.7Following referral, the inquiry was publicised on the Committee’s website and via twitter.
4.8The Committee received two submissions and one confidential submission to the inquiry. A list of submissions can be found at Appendix A.
4.9On 17 April 2023 the Committee conducted a private briefing in lieu of a site inspection followed by public and in-camera hearings at Australian Parliament House, Canberra. A transcript of the public hearing is available on the Committee’s website.
Need for the works
4.10At the public hearing DFAT outlined the reasons for the Australian Government’s decision to participate in the Osaka Expo 2025:
… the Australian government took the decision to participate in the expo was the opportunity to strengthen the relationship with our special strategic partner. Japan, for us, is a vital economic partner. It is also a vital security partner, evidenced by the joint declaration on security cooperation that our leaders issued in October last year. And, of course, Japan is a vital partner in the major global and regional forums in which we cooperate, not least in the Quad alongside the US and India, with whom we work to promote a free and open Indo-Pacific that is stable, secure and prosperous.
4.11DFAT considers Australia’s partnership with Japan as ‘deep and enduring…underpinned by significant trade and investment links, strong defence and security ties and a deep affinity between our peoples’. Australia’s participation in the Osaka Expo 2025 will therefore provide a unique opportunity to project Australia as ‘modern and inclusive’ in Japan, promoting our diplomatic interests, policy, commercial, cultural and soft power interests to our second biggest trading partner and source of foreign direct investment.
4.12Two-way trade with Japan was worth $117 billion last financial year. Japan is a source of $134 billion of direct investment in Australia, with further prospects of increased investment associated with both countries’ commitment to net zero emissions.
4.13In the Expo, Australia will be competing with Japan’s other trading partners for market attention. With 150 countries and 25 international organisations expected to participate in the Expo, DFAT acknowledges that Australia’s ‘participation will need to be both commensurate with the significance of our bilateral relationship and able to cut through competition to achieve our objectives’.
4.14Australia’s participation in the Expo is supported by stakeholders including: Commonwealth agencies, state and territory governments, and business and industry groups. DFAT considers that the Expo will provide stakeholders with an important opportunity to strengthen links with Japan, including in relation to investment, trade, tourism, educational exchanges and sister state, city, and school relationships.
4.15State and territory government agencies have expressed interest in participating in Australia’s partnership and/or programming opportunities, so that they may benefit from the profile building and networking potential of a national pavilion.
Consultation
4.16Initial consultation was conducted through meetings with state and territory governments in July and August 2022. In these meetings, DFAT outlined the proposed approach to Australia’s participation at the Osaka Expo 2025 and sought feedback. A key purpose of the consultation was to identity state and territory interests in the Expo, how they sought to participate and what themes they were most interested in. Available opportunities for future state and territory government engagement with the Expo were also discussed.
4.17DFAT advised that state and territory government agencies will be invited to join the Osaka Expo 2025 Program Advisory Committee alongside relevant Australian Government departments. This Committee is expected to commence in May 2023.
4.18Additionally, DFAT outlined that it would embed First Nations perspectives, experience, and interests as a key cross-cutting theme for all engagement. DFAT has already engaged with the National Indigenous Australians Agency, the Australian Institute of Aboriginal and Torres Strait Islander Studies and Indigenous Business Australia.
4.19DFAT will also seek to incorporate corporate partnerships into the Expo, although the nature of the partnerships has not yet been finalised. DFAT has engaged with business and industry associations including: Rio Tinto, the Minerals Council of Australia, APPEA, the Australian Hydrogen Council, the Australian Energy Association, Dairy Australia, Meat & Livestock Australia, Wine Australia and the Woolmark Company. As stated by Mr Woods:
At this stage, we're again letting them know about our participation and putting them on notice to put their thinking hats on for what they would like out of this expo as we start to shape what that sponsorship and partnership program looks like.
4.20Consultation with stakeholders will continue as part of the design development process, and in relation to DFAT’s cultural program and strategy.
4.21The Committee received a submission supporting the project from the Australia Japan Business Co-operation Committee. The submission highlighted the importance of Australia’s multi-faceted relationship with Japan, and that the Expo was a ‘necessary and desirable contribution to Australia’s crucial national interest in maintaining and developing its relationship with Japan’.
Delivery strategy
4.22In its submission to the Committee, DFAT outlined its delivery strategy for the project. An important lesson learned from the Australia pavilion at the Dubai Expo 2020 was the early engagement of project managers.
4.23Past and planned delivery milestones are:
- DFAT approached the market in December 2021 and engaged a project management and cost planner/quantity surveyor in March 2022.
- Initial consideration of delivery options identified a Design and Construct (D&C) methodology as optimal based on familiarity and acceptance within the Japanese market.
- DFAT undertook an open approach to market procurement for a Lead Design Consultant (LDC) in June 2022, and made an appointment on 2 September 2022 with the intention that it would advance the pavilions architectural design to a 50 per cent, with the intention that a D&C would complete the design. The LDC was also to be responsible for exhibition and visitor experience content to a 90 per cent detailed design level.
- In October 2022 it was learned that there is a critical shortage of bilingual design consultant resources in Japan due to high demand. This affected the reliability of a D&C delivery methodology. As a result, a more traditional lump sum delivery approach was adopted which will involve a two-stage open approach to market procurement, with an initial Request for Expression of Interest (REOI) and a subsequent Request for Tender. Additionally, the LDC’s scope was extended to continue the pavilion’s design past the 50 per cent schematic design stage.
- In December 2022, the REOI was released, respondents’ submissions were evaluated and shortlisted in March 2023. Shortlisted respondents will be invited to submit responses to a Request for Tender, with the intention to contact the preferred tenderer on a pre-agreement by 1 July 2023. DFAT noted that the purpose of this is to enable construction to commence by November 2023.
- This pre-agreement will enable the ordering of long lead time building materials including structural steel and timber. DFAT informed the Committee that lead times for these materials are now approximately 10 months, so it is considered critical that orders are placed as soon as possible.
Construction challenges
4.24The Osaka Expo 2025 is a significant event. It will require extensive construction works including the pavilions of 49 other countries, and other Expo related works.
4.25Osaka is currently experiencing unprecedented escalating construction costs. According to the International Construction Market Survey 2022, Osaka is already the third most expensive city for construction.
4.26Japan’s construction sector is already facing multiple issues, including a significant number of construction projects and material shortages. Construction costs are also affected by inflation, supply chain issues and labour shortages, and issues of declining construction motivation. There have also been examples of unsuccessful tender results for works related to the Osaka Expo, such as for national/prefecture pavilions and other supporting buildings and infrastructure.
Scope of the works
4.27The project will involve the construction and later decommissioning of a national pavilion on Australia’s 3,504m2 allocated plot of the Expo site on Yumeshima Island, Osaka, Japan.
4.28On its website DFAT states that:
The Australian Pavilion story, ‘Chasing the Sun’ encapsulates Australia’s connection to land, unfading resilience, and collaborative nature in embracing ingenuity, optimism and opportunity for a better future. It celebrates Australia’s 60,000-year indigenous history and bond with the sun to power the spirit of our people, and act as a conduit for cultivating inspiration, creativity, and innovation.
4.29The concept design of the pavilion is based on a eucalypt gumnut with two pods sheltered by opening shells. DFAT stated that ‘this metaphor for Australia represents new ideas and future generations; potential and hope; regeneration and fertility; strength and resilience; and time and growth’.
4.30The pavilion itself will have three storeys with approximately 2,500m2 of gross floor area divided into two sections. The first area will be public facing, including a simulated bushwalk and a living mural to highlight Australia’s caring for country. The site will also include a public forecourt with a stage for Australian cultural acts, a small gift shop and a small retail area. It is expected that this area will receive 25,000 visitors a day. The private section of the pavilion will be the VIP area for hosting events with dignitaries and key stakeholders.
4.31The intended size of the pavilion sections are:
- public and visitor experience area – 543m2
- function and representational areas – 330m2
- commercial retail, food and beverage areas – 193m2
- back of house including staff areas, circulation and service areas – 1422m2
- external landscaping including a front forecourt and internal courtyard, and external roof terraces – 600m2 and 217m2.
- At the conclusion of the Expo, the Australian national pavilion will be decommissioned. The specific process for this has not yet been finalised.
- As part of DFAT’s approach to market it has stipulated within the tender packages that it will seek opportunities to maximise the re-use and recycling of materials used in the construction of the pavilion. DFAT is also considering possible re-use of the pavilion. Through the tenderer, DFAT will seek to explore modular and re-usable elements so that they may be repurposed where applicable.
- According to DFAT, there are media reports that the Japanese Government has considered retaining the expo site for further use after the event. This may mean that some pavilions and infrastructure may be retained, however the Expo is currently planned to be de-commissioned and removed.
Cost of the works
4.35The proposed works have an estimated cost of $59.8 million including fees and contingencies. The cost estimate for the project was developed by Tokyo-based quantity surveyors. It includes both the construction and decommissioning of the pavilion and other related elements.
4.36No formal lease will be required for the use of the allocated land for the pavilion. Australia must, however, enter a Participant Contract with the Expo Association which includes the allocation of a plot of land. Additionally, approvals under the Land Acquisition Act will be required to acquire, and dispose of, Australia’s interest in the land.
4.37DFAT advised that the construction contractor will be engaged after a lump sum fixed price quote is submitted based on a detailed cost estimate. The escalation risk will be borne by the construction contractor; however, foreign currency risk will remain with the Commonwealth.
4.38DFAT provided further details on project costings in their confidential submission and during an in-camera hearing. The Committee is satisfied with the rationale underpinning the project costing.
Revenue
4.39There will be partnering opportunities for states and territories for the Osaka Expo 2025.
4.40DFAT discussed matters relating to the project’s revenue in its confidential submission to the Committee.
Public value
4.41In its submission to the Committee, DFAT discussed the relationship building opportunities that the Expo will offer, particularly for Australian businesses, arts and cultural organisations, academic and research organisations and civil society groups. DFAT also anticipates that the Expo will boost Australia’s soft power status through strategic communications and public diplomacy initiatives that will advance Australia’s interests and influence within Japan.
4.42Trade and investment links with Japan are a specific focus of the potential value of the Expo. Japan is a key trading partner of Australia, and Osaka is a commercial capital with strong links to Australia. Austrade has an Osaka post with strong commercial relationships with local companies, and DFAT advises that the Expo will be an opportunity to strengthen these relationships and form new ones.
4.43DFAT states that Osaka based companies also have specific interests in Australia including clean energy and pharmaceuticals. Participation in the Expo will therefore offer relationship building opportunities for these and other shared business interests.
4.44The Expo will also offer opportunities for tourism. Japan was Australia’s fifth-largest tourism market prior to the COVID-19 pandemic with around 500,000 tourists per year. In 2022, that had fallen to 66,000 tourists but it remains a priority market. DFAT consider that its ‘public diplomacy and cultural program at Osaka Expo 2025 will reinvigorate interest in Australia as an attractive, multi-faceted destination by projecting a modern, dynamic image of Australia to Japanese visitors’. Data from the Dubai 2020 Expo demonstrated that 75 per cent of visitors to the Australian pavilion were more likely to visit Australia as a result.
4.45In relation to the delivery of the Australian national pavilion DFAT are prioritising creating opportunities for Australian companies to participate through:
- delivery of works through an open approach market for project management services, design consultancy services, and construction services
- information to state and territory governments and Australian companies on how they may register with the Expo’s potential list of suppliers so the Japanese Government and other participating countries can procure their services and products.
- There are also upcoming procurement opportunities in areas including: operations, food and beverage services, retail services, event management, catering, security, information technology support, cleaning, photography and entertainment.
- DFAT advises that Australian companies have demonstrated interest, and submitted responses, in relation to these procurement opportunities.
- DFAT are seeking to advance Aboriginal and Torres Strait Islander interests through Australia’s participation in the Expo. This will be done through programming which showcases Indigenous business participation in sectors such as clean energy, space, and tourism. DFAT will also be highlighting Aboriginal and Torres Strait Islander people’s contributions to knowledge of land and water management to our international climate change mitigation and adaption efforts.
- In terms of the measurement of the success of the Expo for Australia, DFAT stated that:
What we will do through Osaka, as we have previously done through Dubai, will be to use performance and outcome reporting, data collection and sentiment surveys to measure success. That would look like visitor surveys to measure shifts and sentiment towards Australia, traditional and social media engagement data, trade investment outcome reporting and surveys to measure the impact of programmed events that will assess business, scientific, cultural and academic outcomes. Coming out of this will be a final evaluation of our participation in the expo that will assess those results—that will assess the outcome from our participation.
4.50This information will be reported to the Public Works Committee to help inform decisions related to future participation at Expos.
Committee comment
4.51The Committee was satisfied that the proposed project has merit in terms of need, scope, and cost.
4.52The Committee recognises that a significant sum of money is being spent on both Australia’s participation in the Osaka Expo 2025. The Committee supports this expenditure as part of showing the importance of Australia’s relationship with Japan, and to further Australia’s international trade.
4.53The Committee recognises that there are challenges facing the Japanese construction industry which have driven up the cost of construction. The Committee encourages DFAT to make every effort to ensure that the project does not experience cost increases.
4.54The Committee also encourages and supports DFAT’s commitment to re-use and recycling of elements of the Australia pavilion after its decommissioning, including any steps to recover costs of materials.
4.55The Committee supports the engagement with the states and territories and notes that there should be benefits for them in both tourism and trade. However, the Committee encourages DFAT to ensure that reasonable contributions are made by the state and territories in return for enabling their participation at the Expo.
4.56The Committee recommends that the House of Representatives resolve, pursuant to Section 18(7) of the Public Works Committee Act 1969, that it is expedient to carry out the following proposed works: Department of Foreign Affairs and Trade – Proposed Construction and Decommissioning of the Australian Pavilion at the World Expo 2025 Osaka, Kansai, Japan.
4.57Proponent entities must notify the Committee of any changes to the project scope, time, cost, function or design. The Committee also requires that a post‑implementation report be provided within three months of project completion. A report template can be found on the Committee’s website.
Mr Graham PerrettMP
Chair