2.1
The Department of Defence (Defence) seeks approval from the Committee to proceed with the Facilities to Support Naval Operations in the North project. The proposed works will include a new wharf and fuel storage facilities at the Larrakeyah Defence Precinct, Darwin. The proposed works will enable the berthing and refuelling of the Navy fleet including amphibious ships, afloat support vessels, surface combatants and specialist naval vessels such as submarines, mine hunter coastal vessels and hydrographic ships.
2.2
The estimated cost of the project is $272.5 million (excluding GST).
2.3
The project was referred to the Committee on 28 March 2018.
2.4
Subject to Parliamentary approval, construction is expected to commence in October 2019 and be completed in June 2023.
2.5
Related works are proposed at the same location across a similar time frame under a separate inquiry. The Larrakeyah Barracks Redevelopment (see Chapter 3) proposes building upgrades and infrastructure improvements at an estimated cost of $223 million (excluding GST). Subject to parliamentary approval, the Larrakeyah Barracks Redevelopment is expected to commence late-2018 and be completed mid-2023. The Larrakeyah Barracks Redevelopment works share overlapping local impacts with the Facilities to Support Naval Operations in the North project. This is discussed in the Committee Comment section of this chapter.
Conduct of the inquiry
2.6
Following referral, the inquiry was publicised on the Committee’s website and via media release.
2.7
The Committee received two submissions and one confidential submission.
2.8
On 30 April 2018, Defence conducted a site inspection/private briefing for the Committee. On 1 May 2018, the Committee conducted a public and in-camera hearing. A transcript of the public hearing is available on the Committee’s website.
Need for the works
2.9
The Larrakeyah Defence Precinct, located approximately two kilometres from the Darwin Central Business District, consists of Larrakeyah Barracks and HMAS Coonawarra.
2.10
Darwin is a strategically significant location for the Australian Defence Force (ADF) due to its proximity to the Timor Sea and the access it provides to South-East Asia. In its submission Defence explained that the multiple transport systems in Darwin provided access to a range of logistic supply and support:
… Darwin is effectively the only port capable of providing the facilities necessary for forward support to a range of maritime operations and exercises particularly when mounting maritime operations into the region.
2.11
HMAS Coonawarra is the homeport for 12 Armidale Class Patrol boats and other support vessels. The Coonawarra wharf is also regularly used by the Australian Border Protection Customs Service patrol boats. Visiting Navy vessels and foreign warships have previously relied on the commercial Darwin City wharves (Stokes Hill Wharf, Fort Hill Wharf and Iron Ore Wharf) ‘to provide necessary berthing facilities, logistics support, and replenishment of supplies and delivery of fuel to ships berthed alongside’.
2.12
However, the commercial Darwin City wharves are no longer a reliable option for Navy needs. The Iron Ore Wharf has been demolished and the capacity of the remaining two wharves has changed.
2.13
Stokes Hills Wharf is no longer part of the secure port area and is unsuitable for larger vessels. Stokes Hill Wharf also housed a naval fuel installation system which piped fuel to the nearby Fort Hill Wharf. This fuel installation system was decommissioned in 2014. Fort Hill Wharf is therefore unsuitable as Navy vessels are now unable to efficiently refuel by pipeline at this site. Furthermore, Fort Hill Wharf is home to the Darwin cruise ship terminal. The continued rise in cruise ships visiting Darwin has increased demand for berth space at this wharf.
2.14
The privately owned East Arm Wharf, located approximately 22 kilometres by road from Coonawarra, was not constructed for Defence vessels. If berthing was required at this site, Navy would be required to supply additional waterline fendering in some cases.
2.15
In its submission Defence explained there is ‘currently insufficient wharf space in Darwin to support major ADF operations or major multi-ship maritime exercises.’
2.16
Defence further elaborated that the purpose of the project:
… is to deliver new berthing capabilities at Coonawarra to accommodate varying combinations of major surface combatants, Offshore Patrol Vessels and submarines, with the largest warship being the Landing Helicopter Dock (LHD); and to provide fuel storage and refuelling capabilities to meet the current and projected demand.
Scope of the works
2.17
The works consist of a new wharf to berth Navy vessels and visiting foreign warships and a new ready use fuel storage facility.
Wharf
2.18
The wharf project includes:
construction of a new wharf structure;
installation of wharf services;
provision of wharf accessories;
construction of the new hardstand and associated buildings;
construction of the new access road to the wharf and hardstand; and
2.19
The new outer wharf will be a piled open wharf structure located approximately 55 metres from the shoreline. Sufficient water depth will achieve a natural berth pocket and mitigate the need for dredging.
2.20
The wharf will be 250 metres long and 25 metres wide with one mooring dolphin at each end of the wharf. The wharf will run parallel to the land and be accessible via two small bridges, each 8.5 metres wide and designated for one way traffic.
2.21
Proposed wharf services include ‘potable water, fresh water for fire-fighting, general power and lighting, refuelling, sullage, information and communications technology and security services’. Six cope points, located at regular intervals along the wharf, provide access to these services for berthed vessels.
2.22
Proposed wharf accessories include fendering and cathodic protection.
2.23
The works also include a 3000 square metre hardstand area onshore that is adjacent to the new wharf. The pavement will be able to support heavy vehicles and equipment and include tie down points for portable equipment in cyclonic conditions. Adjacent to the hardstand area will be new buildings and support structures including a Wharf Support Warehouse and dangerous goods store.
2.24
The hardstand area will be accessible via a new access road that will be suitable for trucks up to a B-double size. The road will have a total width of seven metres allowing for one lane going in each direction.
2.25
Shore power will provide berthed vessels access to mainland power supply. Defence explained this project element is dependent on the Offshore Patrol Vessel (OPV) facilities project being approved as a public work in the future:
Should the OPV project be approved to proceed, the works may be undertaken by the [Facilities to Support Naval Operations in the North] project under a funding transfer arrangement. This would maximise efficiencies and provide value for money to the Commonwealth by delivering these works whilst the wharf is being constructed.
Fuel storage facility
2.26
The fuel storage component of the project includes:
construction of the tank farm and associated engineering infrastructure; and
construction of the Fuel Quality Control Centre.
2.27
This facility will store 3.5 mega litres of diesel fuel in two tanks. The tanks will be approximately 10 metres high and have a 17 metre diameter and use a single pipe system.
2.28
The Fuel Distribution Network will enable the importation of fuel, delivered by ship or road tanker, and the extraction of fuel (servicing all Coonawarra berths by pipeline).
2.29
The Fuel Quality Control Centre will be a multipurpose building – adjacent to the tanks – that contains a lab for diesel testing. Defence explained:
Having a purpose-built facility … ensures that the quality of fuel is consistent in terms of being the right standard to support the bunkering of the required vessels … the people monitoring the fuel, actually need to visually monitor the loading of fuel onto the vessels, so having a facility that overlooks where the fuel tanks are and then monitoring as it is moved down to the vessels being bunked is provided through that facility … The actual discharge of the fuel from the tanks into the vessels is all controlled through the systems inside the fuel quality control centre.
Cost of the works
2.30
The estimated cost of the project is $272.5 million (excluding GST). The cost estimate includes the construction costs, management and design fees, furniture, information communications technology, fittings and equipment, contingencies and escalation allowance.
2.31
The new facilities and infrastructure will require additional maintenance and cleaning. Defence anticipates that this will increase net personnel operating costs by $4.1 million per annum.
2.32
The Committee also received evidence relating to cost breakdowns in the in-camera hearing.
2.33
The Committee is satisfied that the costings for the project provided to it have been adequately assessed by the proponent entity.
Heritage and environmental
2.34
In its submission, Defence stated that it commissioned a report that assessed environmental and heritage considerations for the proposed project; and that the report found no matters of environment or heritage significance that would trigger a referral in accordance with the Environment Protection and Biodiversity Conservation Act 1999.
2.35
Defence further stated there was no evidence of per and poly-fluoroalkyl substances during site investigation works. However, low concentrations of perfluorooctane sulfonic acid (PFOS) had been identified. These amounts were below the trigger values for the site and any provisions for PFOS management and removal will be in accordance with Commonwealth guidelines.
2.36
Hydrocarbon pollution from an oil spill is a risk arising from the operating and proposed fuel facilities. Defence stated:
An assessment of potential impacts from hydrocarbon spills will be carried out as part of the oceanic processes modelling, and will include preparing an oil spill model and wastewater/stormwater discharge model. An oil spill boom and spill kits will be provided for use as part of fuelling operations.
2.37
The site for the new wharf was a location for conflict during World War II. Unexploded ordnance and historic wrecks may be encountered at the site during construction. Defence explained that the probability of this happening is very low and divers will inspect the area before the piling of the wharf begins.
Committee comments
2.38
The Committee notes that Coonawarra is the only naval base on the northern coast of Australia. It provides critical support to activities in Northern and North-West Australia, deployments in Southeast Asia and operations in the Indian Ocean region and Middle East.
2.39
The Committee understands that whilst there are commercial berths available in Darwin, these facilities do not meet the specific support requirements of a modern warship. Berth availability constrains Defence’s ability to operate a major fleet in Darwin. The Committee notes that the Government has committed to the largest recapitalisation of the Navy since World War II. The new wharf at Coonawarra will enable Defence to refuel, mount and hold ready major fleet units from Darwin over the next 100 years.
2.40
The Committee notes that the combination of major works scheduled for the Larrakeyah Defence Precinct over the same time frame of late-2018 to mid-2023 will have a significant impact on the local community. This includes the Joint Health Command Garrison Health Facilities Upgrade Project, Larrakeyah Barracks Redevelopment and Facilities to Support Naval Operations in the North. The collective local impact of these projects is discussed further in Chapter 3.
2.41
In particular, the Committee notes that the traffic management plan for Packard Street relies on one-way streets for the approximately 18-month duration of the combined projects. The Committee is concerned that the increase in Defence traffic along Packard Street will adversely impact local residents – by hindering access to their homes and the safety of preschool and school children during drop-off and pick-up times.
2.42
The Committee encourages Defence to continue to liaise with local residents and the preschool and school. This may mitigate concerns about traffic problems in the area. This issue is examined in greater detail in Chapter Three of this report.
2.43
The Committee notes the support of the Chamber of Commerce Northern Territory for the proposed works at Larrakeyah Defence Precinct. The Committee encourages Defence to maximise local industry participation, but understands that the wider context of Defence’s procurement framework is not the subject of this inquiry.
2.44
The 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 work: Facilities to Support Naval Operations in the North.
2.45
Proponent agencies must notify the Committee of any change to the project scope, time, cost, function or design – and if the project has been cancelled. The Committee also requires that a post-implementation report be provided within three months of project completion.