Chapter 4 Issues and Conclusions
Background
4.1
Defence described the purpose of the proposed works as being to provide
an overall infrastructure solution for Land Engineering Agency (LEA) test
services.[1] It is proposed to
relocate the existing test services facility from Defence Site Maribyrnong
(DSM) which is surplus to Defence requirements and will be disposed of at some
time in the near future.[2]
4.2
The LEA comes under the umbrella of the Defence Materiel Organisation
and is responsible for ensuring the technical integrity of the land combat
capability in support of Defence, and the Army in particular. The Agency’s
facilities that support its test and evaluation capabilities do not exist
elsewhere in Australia. Monegeetta was selected as the preferred site to relocate
the LEA, having the necessary range of facilities to support its role and
functions, including the Monegeetta Proving Ground that complements the
activities of the LEA at the DSM; the long-term retention of Monegeetta within
the strategic plan for the defence estate, and its proximity to Melbourne.[3]
4.3
The Committee expressed interest in the reasons for the decision to
dispose of the DSM, particularly as to whether the decision was initiated by
the Department of Finance and Administration or by the Department of Defence.
4.4
According to the LEA witness, the decision to dispose of the DSM had its
genesis in the late 1980s as part of the Cooksey Review. This Review which
included a total review of Defence facilities recommended inter alia the
early closure of what was then the Maribyrnong explosives factory that led to
the removal of elements of the explosives factory in the early 1990s. The
Defence Science and Technology Organisation that was also located on the same
site has been relocated in recent years, leaving the LEA as the sole occupant
of a 127 hectare site. With the decision to relocate the Agency to Monegeetta,
the DSM will, subject to the undertaking of appropriate remediation works be
freed up for disposal.[4]
4.5
The Committee referred to the remediation of soil contamination at
Randwick Barracks, noting the ongoing problems associated with these works, and
asked what remediation works would be required at the DSM prior to disposal.
4.6
Defence responded that given the history of the site as including a former
explosives factory, Maribyrnong is heavily contaminated in a number of areas,
and that significant land remediation will need to occur. In preparation for
these works, Defence stated that it was in discussion with the Victorian
Government and the Victorian Environmental Protection Agency as to how the
works could be advanced. The department estimated that it would cost ‘millions
of dollars’ for these works, and that they would be referred to the Public
Works Committee in due course.[5]
Tender Process
4.7
According to its Statement of Evidence at paragraph 86, the method of
delivery for the project will be by Head of Contract. A Project Manager has
been appointed to represent the department and act as contract administrator
for the development of the project.[6]
4.8
To clarify the tender process followed by Defence, the Committee asked
the department witness to describe how the tender process operated.
4.9
The Defence witness described the current tender process as the
pre-approval phase. This involved developing the main elements of the project
– scope, budget and schedule – with a view to arriving at a final estimated
project cost that includes estimates of risks built into the escalation and
design contingency elements of the project’s estimated budget.[7]
4.10
In the case of the current project that will be based on a Head Contract
arrangement, the project estimate will be refined into a pre-tender estimate,
broken down into the integral component elements of the project that in turn
will be used to evaluate different tenders when they are submitted by
tenderers.[8]
4.11
Defence informed the Committee that it had established a panel of ten
companies from which it selected, again on a tender basis, the Project
Manager/Contract Administrator for projects that will be addressed under the
Head Contract arrangement. According to Defence:
The panel’s purpose is to provide…professional services. We
engage them at the start of the project and we engage them, generally speaking
for the whole project. When we go to tender, in this case it is for the Head
Contractor to do the construction work….We do not have a panel for construction
services; we have to go to open tender.[9]
Options
4.12
In deciding that Monegeetta was the preferred site for the relocation of
the LEA, the Committee enquired whether other sites had been assessed and if so
where were these located.
4.13
The Defence witness informed the Committee that a number of other sites
had been looked at for their suitability as alternative sites for the LEA.
These included continuing to use part of Maribyrnong; Fishermens Bend, another
area with Defence zones; Ballarat; Geelong which has existing Defence
establishments; Simpson Barracks, Watsonia; Puckapunyal; Crows Nest;
Queenscliff; Portsea, and a number of other places including Defence establishments
in the Melbourne CBD.[10]
4.14
However the key criterion was the opportunity to integrate the services
provided by the LEA with others. From this perspective, Monegeetta offered the
most attractive solution because of the considerable advantages of bringing the
activities of the LEA and those undertaken at Monegeetta together.[11]
4.15
In response to the Committee’s question as to why Victoria was preferred
over sites in other States, the witness informed the Committee that the
Headquarters of the LEA is located in Melbourne. Some 500 staff are employed at
that location, and only 75 personnel are employed at four locations outside Melbourne – Maribyrnong, Monegeetta, Laverton North and Bandiana North. According to
Defence, the focus of the agency’s operations and those of its parent
organisation is Victorian oriented, including liaison with industry, and the
prospect of moving the entire operations of the DMO would not be cost
effective.[12]
Master Planning
4.16
The Committee sought assurances from Defence that the work being
undertaken at by the LEA at Monegeetta would have a long term future.
4.17
Defence responded that:
…this site that we see here today, including the proving
ground…has a long-term future as part of the Defence Materiel Organisation’s
capability to test and deliver equipment to the ADF in general but, in this
case, to the Army in particular. I am certainly not aware…that there is any
current prospect or plan to change what we do here at Monegeetta.[13]
4.18
According to Defence, the current proposal is based on it having a
life-span of 30 years. In support of this, the department made mention of the number
of rigorous reviews over the last ten years that had been undertaken into the
activities of the LEA, and that so far as the department has been able to
ascertain no further reviews of the role and functions of the LEA is
anticipated.[14]
4.19
The Committee enquired as to whether evolving technologies had been
considered in considering the current project, and whether the proposed works
could adapt to these, particularly against the background of value for money.
4.20
The witness responded that as far as practicable, all factors are taken
into account when it comes to the design of buildings. According to Defence,
in the case of the current project, a number of design reviews were undertaken,
together with a value management process to work out the detailed design of
particular parts of buildings. Because the proposed facility has some unique
requirements, the design has incorporated elements of flexibility to provide
the opportunity to adapt it to meet changing circumstances. These include open
truss arrangements, and partitioning that is capable of being moved to other
configurations, or being removed entirely should circumstances warrant.[15]
4.21
The witness also stated that in developing the design works, the Defence
Capability Plan was used as a guide in order to determine what items of
equipment will need to be tested in the future.[16]
Consultations
4.22
On the matter of staff consultations, the Committee sought comment from
Defence on the extent of staff involvement with the new facilities,
particularly since the new arrangements involving the relocation of staff from
the DSM to Monegeetta may impact on staff conditions.
4.23
According to Defence there had been discussions with staff related to
the relocation from Maribyrnong to Monegeetta. The department reminded the
Committee that the number of staff involved was small – some 25. During the
course of the consultative process 17 staff indicated that they would be happy
to move to the new site. Of the remaining eight, some of those will be
retiring during the period between construction and occupancy of the facility.
To restore the numbers of people employed at Monegeetta, the department will be
canvassing the local employment market with the view to employing people from
the local community.[17]
4.24
The Committee enquired as to the extent of consultations with the local
community particularly those with the local council.
4.25
According to the Defence witness, consultations have been held with the Federal
Members for Maribyrnong and McEwen, and the State Members for Macedon and the
Western Metropolitan region. Consultations have also been conducted with the
Mayor of Monegeetta, the local Aboriginal association, the Australian
Greenhouse Office, the Country Fire Authority, the Macedon Ranges Shire
Council, Western Water, and other service providers.
4.26
Defence is of the opinion that the proposed works have been favourably
received. Two neighbours immediately adjacent to Monegeetta have also been
consulted. One expressing satisfaction with the project, the other is yet to
be convinced of the value of the project. This latter situation has emerged
largely as a result of that landholder being absent; however, Defence have
recently had a meeting with him, and is confident because of the good
relationship existing between he and Defence any outstanding issues can be
resolved.[18]
Re-use of Storm Water
4.27
The Committee sought clarification that water collected from the main
would flow into a testing pond and that other water collection points would be
used internally and for fire fighting.
4.28
Defence explained that the current water reticulation system was dual
purpose – providing potable water to taps and other outlets around the site, as
well providing ‘fire services water’. As part of the new development, the
water system would be split to provide a potable drinking water supply and a
separate system for fire fighting. This was a requirement identified by the
Country Fire Authority as part of the overall fire protection measures being
installed as part of the current project, or that currently exist.
Energy Efficiency
4.29
Clarification was sought by the Committee of the term ‘separate digital
on marketing status metering’ referred to in the department’s Submission.
4.30
Defence explained that this referred to the installation of intelligent
metering of buildings. These new metres provide a range of information
associated with the use of energy consumed by buildings. They provide
information as to energy demand and consumption, providing useful information
in terms of peak demand. The installation of intelligent metres will allow
greater energy efficiency, and contribute to savings on energy costs.[19]
Project Costs
4.31
The Committee is being asked to consider an estimated cost of this
project of $35.9 million that includes:
n all construction
costs;
n professional fees;
n furniture and
fittings; and,
n contingencies.
Recommendation 1 |
| |
The Committee recommends that the proposed Land Engineering
Agency Test Services Relocation, Monegeetta proceed at an estimated cost of
$35.9 million |
Mark Butler MP
Chair
17 March 2008