- Department of Defence
Cultana Training Area Redevelopment Phase 2
3.1The Department of Defence (Defence) seeks approval from the Committee to proceed with the proposed project, Cultana Training Area Redevelopment Phase 2, located in South Australia between Whyalla, Port Augusta and Iron Knob.
3.2The project will upgrade facilities and infrastructure in the training area enabling the delivery of more complex training. It will also improve the facilities’ usability and safety.
3.3Works to be delivered as part of the proposed project include an extension to the all-weather road network, a permanent live fire training facility, two ammunition transfer points and an expansion and upgrade of the urban operations training facility.
3.4The estimated cost of delivery of the project is $79.8 million (excluding GST).
3.5The project was referred to the Committee on 24 November 2022.
Conduct of the inquiry
3.6Following referral, the inquiry was publicised on the Committee’s website and via media release.
3.7The Committee received two submissions and one confidential submission. A list of submissions is at Appendix A.
3.8On 10 February 2023, the Committee conducted a project briefing, and public and in-camera hearings – in person. A transcript of the public hearing is available on the Committee’s website.
Need for the works
3.9The Australian government intends to improve the preparedness, size and capacity of the Australian Defence Force (see the 2020 Defence Strategic Update, the 2020 Force Structure Plan and the 2006 Enhanced Land Force Program). To do this, the ADF requires training areas that will support complex training, multiple training environments, and collective training capability.
3.10To support this, Defence considers that the Australian Defence Force requires training areas that can support multiple units safely operating concurrently. The Cultana Training Area is an ideal location for this requirement due to suitable terrain and space, and a climate which permits year-round training.
3.11The western sector of the Cultana Training Area does not currently have the infrastructure to support complex training; especially urban training and vehicle activities.
3.12The provision of additional facilities will improve safety and usability.
Options considered
3.13Defence advised that three options were considered.
- Option 1 (do nothing) was discounted as it would not increase training capability.
- Option 2 (capability and safety) was the preferred option as it would deliver high priority scope elements including appropriate infrastructure.
- Option 3 (full scope) This option will provide the scope elements under option 2, plus additional items listed in the below-the-line items section in the Defence submission. These items have been identified for potential delivery in the event of cost reductions or the retirement of a risk provision:
- Hardstand: an all-weather hardened area to allow for parking of Defence vehicles during training exercises.
- High explosive target area: a localised area to mitigate against widespread environmental degradation.
- Ablutions: unisex ablution and laundry facilities to service the living-in accommodation.
- Mess/Kitchen/Recreation: dining and kitchen facilities and an area for social interaction within the camp area.
- Multipurpose Living-in Accommodation/Tent Slabs: accommodation facilities for 1000 personnel, to be constructed as two fixed barracks for 40 personnel and 110 concrete tent slabs for an additional 960 personnel.
- Urban Operation Training Facility Tier 2 to Tier 3: transition from a Tier 2 to Tier 3 facility with the construction of 10 additional training facilities, a road and stormwater infrastructure to create a simulated urban environment. This would enable Battle Group level urban operations training.
- Defence considers option 2 to represent the best value money solution to the Commonwealth to address the project’s need from a whole-of-life perspective.
Scope of the works
3.15The scope of works for option 2 includes:
- Serial 1 – Roads: all-weather unsealed road infrastructure to meet medical evacuation requirements and to provide suitable access to current and additional training facilities. Roads will be constructed for both heavy wheeled and tracked vehicles.
- Serial 2 – Permanent live fire training facility: a new Range to support live firing from vehicles and dismounted personnel to enable joint and combined Defence activities.
- Serial 3 – Ammunition Transfer Points: infrastructure to facilitate field storage and distribution of ammunition for units during training activities.
- Serial 4 – Enhance Urban Operations Training Facility Tier 1 to Tier 2: enhance the existing Tier 1 Urban Operations Training Facility to a Tier 2 facility. This will include a combination of multi-storey and multi-room environments in a mix of residential and commercial buildings, to enable training within the facility. An upgraded Tier 2 facility will also support an increase in the number of teams able to train concurrently in the facility and provide an increased level of complexity for training activities.
- Defence also outlined the general scope elements of the project:
- Structure: large multi-story structures will be built using reinforced concrete panel structures and suspended reinforced concrete floor slabs. Smaller single-story structures will use a lighter steel frame and clad construction method. Roofs will use either a suspended reinforced concrete slab or steel frame.
- Non-load bearing walls will be constructed with a cold formed steel framing system to provide maximum flexibility for future layout changes.
- Additional smaller structural elements will be delivered at ammunition transfer points, and the vehicle firing range. These structures will include shelters, sentry points and control towers.
- Civil infrastructure: roads will be constructed to be all-weather resistant and to meet Australian standards.
- Hydraulic services: have been designed to ensure that pits, pipes, drains and culverts have a 100-year life span. Stormwater pits will discharge into earth graded swale via reinforced concrete stormwater pipes and pits.
- Electrical services: ammunition transfer points will be provided with switchboards and a connection to an external generator for use during training exercises. The ammunition transfer points will be electrically insulated with earthing systems to meet requirements.
- Fire protection: ammunitiontransfer points will include a 25,000-litre storage tank to provide firefighting capability.
- Materials and furnishings: external walls and materials have been selected for resilience to the coastal environment.
Lease considerations
3.17The proposed works will be in the western sector of the Cultana Training Area. This area was acquired by the South Australian Government through the acquisition of Pastoral Leases in 2014. The area was then leased to the Department of Defence through a Miscellaneous Lease for Defence Purposes (MLDP) in June 2014. The MLDP is for a term of 75 years with a 25-year extension option.
3.18The South Australian Government maintains obligations in respect of mining and energy resource interests in the leased area. However, the MLDP provides that the state must consult with Defence prior to granting any new interest under the Mining Act 1971(SA) or other relevant resource state legislation.Defence advised that proposals are routinely received to conduct exploration work or to have mining leases placed within the training area. Defence allows exploration and extraction as required.
Community and stakeholder consultation
3.19The importance of engagement with residents and other interested stakeholders is recognised by Defence. A community consultation and communications strategy was developed to provide opportunities for engagement. Engagement activities included:
- establishment of an email address to receive submissions and questions regarding the project.
- advertisement of community information session in local newspapers in Adelaide and the Whyalla and Port Augusta regions. Some local businesses also posted notice of the information sessions.
- two community information sessions were held, one each in Whyalla and Port Augusta on 25 and 26 October 2022 respectively.
- advertisements were placed with some publications after these community information sessions to continue advertising Defence’s contact details.
- key stakeholders, including Federal, State and Local Members of Government, local community and business groups were invited to receive a personal briefing about the project. A list of stakeholders that engaged with Defence is included in Defence’s submissions.
- Defence stated that ‘no major issues or concerns were raised’ during the information sessions, that the proposed works were generally well received, and feedback had been supportive. Additionally, it was advised that ‘Defence has also not been made aware of any objections to the proposed works’.
- Defence did, however, note that ‘there was interest in the opportunities that the project would bring to the community and how local accommodation would be affected during the construction period’. Defence informed the Committee that tenderers will be required to take these concerns into consideration in their tender submissions.
- Defence also consulted with the four Traditional Owner groups that have a connection with Cultana. An Indigenous Land Use Agreement with Defence, registered in 2013, prescribes access and use conditions for the training area.
Cost of the works
3.23Option 2 of the proposed works has an estimated cost of $79.8 million (excluding GST). This includes ‘project management and design fees, construction costs, information and communications technology, furniture, fittings, equipment, contingencies and an allowance for escalation’.
3.24Defence noted in its submission that it expects an increase in sustainment costs. The increase is due to the project’s delivery of supporting infrastructure, which will require periodic and scheduled maintenance. The project will also increase the training capability and occupancy of the site, which will also contribute to an increase in sustainment costs.
3.25Defence provided further details on project costs in its confidential submission and during an in-camera hearing.
Revenue
3.26There will be no revenue generated by this project.
Public value
3.27Defence considers that the public value of the project will include:
- Employment opportunities: it is expected that the project will generate employment opportunities for a diverse range of consultants, contractors, and workers, and that there will be opportunities for up-skilling and job training. It is anticipated that the project will provide employment for 90 personnel.
- Economic impacts: opportunities for small and medium enterprises will be promoted through construction sub-contractor packages.
- Local industry and Indigenous business involvement opportunities: local businesses will be provided opportunities to supply construction materials and labour. Further, the project will comply with Government policy for Local Industry Participation, which requires the head contractor to provide commitments on how it will utilise and develop Australian industry. In accordance with the Government’s Indigenous Procurement Policy, the Head Contractor is required to develop an Indigenous Participation Plan, which will provide opportunities for Indigenous businesses.
- Defence advised the Committee that the Indigenous Land Use Agreement contains provisions for specific levels of contracting the traditional owners can tender for. Traditional Owners are also given preferential tendering conditions.
- Cultana is a live fire training facility. Unexploded ordnance and environmental management are important concerns. Defence stated on this matter that it ‘seeks to be a leader in sustainable environmental management’ and that risk assessments, pollution prevention and contamination remediation are undertaken.
Committee comment
3.30The Committee did not identify any issues or concern with the proposal, and it is satisfied that the project has merit in terms of need, scope, and cost.
3.31The Committee understands that option two is the preferred option for this project but that Defence will deliver some - if not all - of the below-the-line options under option three in the event of cost reductions or the retirement of risk provision. The Committee supports this, as the additional scope elements will further increase the usefulness of the facility.
3.32While the committee did not conduct a site inspection for this inquiry it did receive a comprehensive briefing from Defence on the proposed project.
3.33Considering Cultana is used as a live fire training facility the Committee was pleased to hear that Defence have pollution prevention and environmental protection plans in place. It is critical that Defence facilities ensure personnel safety and environmental protection. The Committee was satisfied that these factors are at the forefront of operations at Cultana.
3.34The Committee was also pleased to hear about the Indigenous Land Use Agreement between Defence and the Traditional Owner groups. The agreement contains provisions to allow indigenous groups to be preferred tenderers for specific contracts. Defence also has local capability industry plans with a component for Indigenous opportunities. The Committee encourages Defence to continue to use its contracting power to support Indigenous participation.
3.35Having regard to its role and responsibilities contained in the Public Works Committee Act 1969, the Committee is of the view that this project signifies value for money for the Commonwealth and constitutes a project which is fit-for-purpose, having regard to the established need.
3.36The 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 Defence—Cultana Training Area Redevelopment Phase 2.
3.37Proponent 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