4.1
The Department of Defence (Defence) seeks approval from the Committee to proceed with the RAAF Base Tindal Redevelopment Stage 6 and United States Force Posture Initiatives Airfield Works, NT project. The project is comprised of two key components:
Component 1 - RAAF Base Tindal Redevelopment Stage 6
Component 2 - United States Force Posture Initiatives RAAF Base Tindal Airfield Works and Associated Infrastructure.
4.2
Defence state that the aim of component 1 of the project is to ‘maintain the existing capability of the base by addressing functional deficiencies and capacity constraints in existing facilities and infrastructure, and to support growth in demand from the increasing operational tempo’. Component 1 also aims to address the risks associated with non-compliant facilities and to reduce ongoing operating costs by replacing under-utilised or redundant facilities.
4.3
The aim of component 2 of the project is to ‘increase the capacity of RAAF Base Tindal to support KC-30A Multi Role Tanker Transport operations, which are a key part of the core Air Power role of air mobility, in particular air-to-air refuelling and air logistics support missions’. Component 2 also aims to support the United States Force Posture Initiatives by improving accessibility to the RAAF Base for United States Air Force aircraft. Defence note that ‘the United States Force Posture Initiatives is an element of the Force Posture Agreement between the Australian and United States Governments’.
4.4
The estimated cost of the project is $1,174.0 million (excluding GST).
4.5
The project was referred to the Committee on 25 February 2020.
Conduct of the inquiry
4.6
Following referral, the inquiry was publicised on the Committee’s website and via media release.
4.7
The Committee received four submissions, one supplementary submission and one confidential submission. A list of submissions can be found at Appendix A.
4.8
On 21 April 2020, the Committee conducted a project briefing, public and in-camera hearing via teleconference. A transcript of the public hearing is available on the Committee’s website.
Need for the works
4.9
RAAF Base Tindal, located 15 km east southeast of Katherine in the Norther Territory is an enduring Air Force base. Defence state that as RAAF Tindal is ‘the Air Force’s major operational base in Northern Australia, it is critical to the employment of Australia’s air combat capability’.
4.10
Defence state in their submission that:
[RAAF Tindal] is the main operating base for No 75 Squadron, which will operate the F-35A Joint Strike Fighter, and is a key forward operating base for E-7 Wedgetail Airborne Early Warning and Control aircraft. The Tindal base will become a key forward operating base for aircraft such as the MQ-4C Triton Remotely Piloted Aircraft. The KC-30A Multi Role Tanker Transport operating from the base will carry out air-to-air refuelling operations and air logistics support missions.
4.11
Additionally, Defence told the Committee that ‘The United States Air Force will also conduct training from RAAF Base Tindal under the Enhanced Air Cooperation component of the United States Force Posture Initiative.’
4.12
When asked by the Committee if Defence planned on submitted future proposals for works at RAAF Base Tindal, Defence stated:
Not works that would then build on what we've done. There's no immediate one that does staged redevelopment work as such. What you will see from us in the future, though, will be some air capability projects, but they are above and beyond what we're doing here…[and] other capabilities from Air Force—for instance, unmanned aerial vehicles, which will require some of their own facilities above and beyond what we're doing…
4.13
Defence further stated that it was not likely that base development works or further investment in the in-ground infrastructure would be required for some time given the investment for this project.
Options considered
4.14
Defence state in their submission that considered the following four options for component 1 of the project:
Option 3: in-budget scope
Option 4: highest priority scope
4.15
Defence state that option 1 was not a viable course of action as ‘it failed to address the risks to Defence capability from ineffective, non-compliant and inefficient operational and support facilities and engineering infrastructure that underpin operations at RAAF Base Tindal’. Additionally, although option 2 ‘addressed the shortcomings of the facilities identified as being at the end of their service lives’ the option was discounted as it was significantly over budget ad not affordable.
4.16
Option 3 was also discounted as it ‘presented significant risks to Defence capability’, therefore option 4 was selected as the preferred option as it ‘includes all additional scope to reduce the risks to Defence to an acceptable level and is affordable within the revised budget approved by Government in December 2019’.
4.17
With regards to component 2 of the project, Defence considered the following three options:
Option 2: in-budget scope
Option 3: minimum capability scope
4.18
Defence state that option 1 of component 2 was deemed ‘not viable as it failed to address the Australian Defence Force’s capability requirements, it also did not meet Australia’s commitments under the Force Posture Agreement’. Additionally, option 2 was discounted as it ‘required unacceptable compromises in capability’.
4.19
Option 3 was selected by Defence as the preferred option for component 2 as it ‘delivers the required minimum capability improvements and is affordable within the budget approved by Government in December 2019’.
Scope of the works
4.20
The proposed scope of component 1 of the project includes:
Permanent Living In Accommodation: ‘Three buildings are proposed which will provide 108 single occupancy units, including a number of accessible units. Each room will be 30 meters squared and will include an ensuite, built-in fixtures such as wardrobes, cupboards and desk, furniture, and will be air conditioned. Each room will have a balcony or patio. Laundries will be provided on a “one per four units” basis. Covered car parking will be provided for each unit.’
Electrical Infrastructure: The proposed electrical infrastructure work comprises: improving the high voltage reticulation, replacing the Central Emergency Power Station with a new facility which will comprise five new diesel generators, with a spare bay for the future installation of a sixth generator if required), replacing and / or upgrading substations to provide adequate and reliable electrical supply; and installing power control and monitoring cabling underground to eliminate the possibility of storm damage.
Hydraulic Infrastructure: Existing sewerage and stormwater services will be extended to service each new facility. All new stormwater pits and modifications to existing pits will be constructed using reinforced concrete to meet the relevant standards, including a 100-year design life. The water distribution systems in each new building will be connected to the existing water supply via a sub-meter.
Control and Reporting Unit Facilities: This element includes ‘constructing two new technical equipment and communication buildings, improving access to, and earthing of, the fixed communications facility antenna and replacing the existing antenna; and demolishing redundant buildings and associated structures.’
Security Force Amenities Facilities: These facilities ‘will be improved by reconfiguring the working accommodation areas, refreshing some building services and finishes and constructing a new amenities annex that will comprise of toilets, showers, and change rooms. External works will include providing all-weather access to the kennels and quarantine facilities, irrigating the exercise yards and constructing a sealed car park.’
Visiting Squadron Facility: ‘The proposed purpose-built Visiting Squadron Facility will replace five transportable buildings to improve the working conditions for aircrew and maintenance personnel. The existing equipment shelter and the storage facility will be retained and additional car parking will be provided.’
4.21
The proposed scope for component 2 of the project includes:
Airfield Works: The primary airfield upgrades involve extending the runway by 2,000 feet to 11,000 feet (3,353 metres) and widening runway shoulders from three metres to 10.5 metres and re-aligning, extending and widening the parallel taxiway for heavy aircraft movements. Works also include constructing two new operational readiness platforms… upgrading an existing secondary taxiway to accommodate larger aircraft, constructing a new taxiway and upgrading the airfield stormwater drainage system. The existing aeronautical ground lighting system will be re-configured to complement the proposed airfield layout, and the existing navigation aids will be re-configured or replaced.
Aircraft Parking Apron: The proposed aircraft parking apron will be approximately 52,000 square metres to provide parking bays for four Code E3 aircraft. It will be situated to comply with the RAAF Base Tindal Flight Line Master Plan. The apron pavements will be designed for heavy transport aircraft movements and will be graded to the airfield stormwater network. Environmental controls such as interceptor tanks will be installed to capture any fuel spills. Apron floodlighting will be installed to support night operations.
Aviation Fuel Farm: An aviation fuel farm is proposed, to provide a total storage capacity of six mega litres. The two storage tanks will be made of steel, encased in concrete and earth-mounded for protection… The proposed fuel farm includes a control centre and fuel quality laboratory, tanker loading and off-loading equipment, electrical and mechanical services buildings and measures to protect the environment from potential fuel spills. A hydrant refuelling system, designed to support air mobility operations such as air to air refuelling, will service each of the four aircraft parking bays.
Air Movements Terminal: The proposed Air Movements Terminal has been designed to enable a passenger handling capacity of 250 inbound or outbound personnel on domestic or international flights and a commensurate cargo handling capacity. The proposed facility comprises an administration area, a passenger handling area and an area for receipting and despatching cargo. Departures and arrivals areas will be separated. Areas for the quarantine and border security processing checks for international flights will also be constructed.
Engineering Services and Infrastructure: The existing engineering services infrastructure will be extended to provide new electrical, communications and hydraulics services to the proposed Fuel Farm, the Air Movements Terminal, aircraft parking apron, aeronautical ground lighting system and navigation aids.
4.22
Defence states in their submission that two ‘additional project elements have been identified and approved by Government for delivery that are unfunded within the available capital provision. Should funds become available within the budget, for example through competitive tendering or retired risk provisions, these will be allocated to the unfunded project elements.’
4.23
The unfunded project elements are related to component 2 of the project:
Aviation Fuel Farm - Demolish the old Fuel Farm, and replace the refuelling truck parking at the new Fuel Farm
Engineering services and infrastructure - Re-align Civilian Terminal access road
4.24
At the public hearing the Committee asked about the impact of the COVID-19 travel restrictions on the works. Defence told the Committee that:
We know that out-of-Northern Territory based subcontractors will no doubt be awarded some of the work. What we're yet to test is their ability to move from whichever state they're in into the Northern Territory to see if there's any need for them to be quarantined for any period of time or not. We just don't quite have certainty on that yet. Both my team and the managing contractor team from Lendlease and our project manager contract administrator in RPS are carefully monitoring that. So at the moment we don't foresee any significant impact, but it is a bit hard to say how it will unfold with the movement of contractors into the Northern Territory and how the quarantine regime may impact that.
4.25
In an answer to a question on notice to the Committee, Defence stated that it estimated that the managing contractor would require an average of 46 staff per years over seven and a half years to complete the works. Based on previous experience, Defence expects that most of these staff will come from outside the Katherine area, however, the managing contractor MC expects local Katherine companies will be engaged by either their direct subcontractors, sub-subcontractors or suppliers on the project who will use local Katherine based employees.
4.26
Defence further noted that ‘the managing contractor has and will continue to actively encourage participation by local Katherine businesses through the conduct of Industry Briefings and through the project specific Industry Capability Network NT site for opportunities relating to the works.’
Community consultation
4.27
In its submission to the Committee, Defence stated it had engaged with a variety of internal and external stakeholders during the project development phase.
4.28
Defence stated in their submission that the project would benefit the local community as:
There will be opportunities for indigenous business involvements in accordance with the Indigenous Procurement Policy. Works to be undertaken must comply with the Government Policy for Local Industry Participation, which requires successful tenderers to provide detailed commitments on how they will utilise and develop Australian industry.
4.29
At the public hearing Defence told the Committee that:
From the start of the project when Lendlease became the MC approximately two years ago, we started engagement with community groups such as Master Builders NT, the chamber of commerce and ICN NT particularly to understand opportunities for the market. We've also been talking to government and we've developed a procurement strategy which we think will provide maximum opportunity to the market… Lendlease work with ICN for our industry presentations that we undertook on procurement late last year, both in Darwin and Katherine, where they were very well attended. There were approximately 300 in Darwin and 60 persons in Katherine. What the project is doing is making it easier by following proven paths for local businesses to be involved in the work.
4.30
The Committee received two letters of support for the project from the Australian Industry and Defence Network – NT, and the Northern Territory Government.
Cost of the works
4.31
RAAF Base Tindal Redevelopment Stage 6 and United States Force Posture Initiatives Airfield Works, NT has an estimated cost of $1,174.0 million, exclusive of GST.
4.32
Defence provided further details on project costings in its confidential submission and during an in-camera hearing.
4.33
The Committee is satisfied that the costings for the project provided to it have been adequately assessed by the proponent entity.
Revenue
4.34
There will be no direct revenue generated by the project.
Committee comment
4.35
The Public Works Committee acknowledges the critical role that RAAF Base Tindal plays in supporting Australia’s air combat capability and recognises the need for this program of works in order to support KC-30A Multi Role Tanker Transport operations in Australia.
4.36
The Committee recognises the important role that large scale Defence projects such as the proposed works at RAAF Base Tindal play in creating job opportunities and advancing local industry in regional areas throughout Australia.
4.37
The Committee was pleased to hear that the managing contractor, Lendlease, had been engaging with the Industry Capability Network in the Northern Territory to make sure that local industry was aware of the opportunities surround this project and given the opportunity to bid for work.
4.38
The Committee did not identify any issues of concern with the proposal and is satisfied that the project has merit in terms of need, scope and cost.
4.39
Having 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.
4.40
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 works: RAAF Base Tindal Redevelopment Stage 6 and United States Force Posture Initiatives Airfield Works, Northern Territory.
4.41
Proponent 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.
Hon Dr John McVeigh MP
Chair