2.1
The Commonwealth Scientific and Industrial Research Organisation (CSIRO) seeks approval from the Committee to proceed with the proposed Perth Precinct Project (P3). The project aims to ‘provide efficient, fit-for-purpose and consolidated accommodation for CSIRO’s Perth site’, by moving staff from the Floreat site to the Kensington and Waterford sites.
2.2
CSIRO states that the project is the first step towards consolidation, with further efficiencies to be delivered by future projects under the Perth Master Plan.
2.3
The estimated cost of the project is $18.72 million (excluding GST).
2.4
The project was referred to the Committee on 11 November 2020.
Conduct of the inquiry
2.5
Following referral the inquiry was publicised on the Committee’s website and via media release.
2.6
The Committee received two submissions and one confidential submission. A list of submissions can be found at Appendix A.
2.7
On 11 February 2021, the Committee conducted a private briefing, public and in-camera hearing via teleconference. A transcript of the public hearing is available on the Committee’s website.
2.8
On 11 February 2021, the Committee conducted a site inspection of the current Waterford and Kensington sites.
Need for the works
2.9
CSIRO is Australia’s national science agency, and is one of the largest and most diverse scientific research agencies in the world.
2.10
Since its establishment in 1926, CSIRO has ‘established an international reputation for excellence and achievement in basic and applied research’, and has contributed to the ‘ongoing prosperity of Australia’s primary and secondary industries and to the creation of new technologies, products, and techniques’.
2.11
In their submission to the Committee, CSIRO stated that:
To support these activities, CSIRO requires property to undertake its specialised science capabilities. The organisation needs to ensure that its facilities are fit-for-purpose, support science and of a standard that will attract leading researchers and scientists.
2.12
CSIRO’s current Perth Property Portfolio comprises four sites located at Floreat, Kensington, Waterford, and Crawley. CSIRO noted in their submission that the four sites ‘are a mix of laboratories, science process bays, storage, desk-based work area[s] and amenities.’ The sites are also leased to a number of research organisations and Universities in accommodated tenanted space.
2.13
CSIRO stated that the current utilisation of the Floreat, Kensington and Waterford sites is low and inefficient, and ‘the buildings located on the Floreat site are reaching end of life, resulting in high operating and maintenance costs.’
2.14
CSIRO stated in their submission that:
Buildings at Kensington and Waterford are more modern and present opportunities for collaboration with neighbouring organisations. For these reasons, Kensington and Waterford have been identified as the sites for future CSIRO investment. The Crawley site is owned and operated by the University of Western Australia and used for University specific science collaborations so there are no P3 activities occurring at that site.
2.15
At the public hearing CSIRO told the Committee that ‘part of the consolidation work in Perth is linked to a master planning exercise around the longer-term footprint from our property portfolio in Perth.’
Options considered
2.16
In developing the detailed business case for the works, CSIRO examined three options. These were: do nothing, partial scope and full scope.
2.17
In evaluating the three options, CSIRO discounted option 1: do nothing, as it ‘fails to address any of the project requirement identified by CSIRO’.
2.18
CSIRO also noted that option 1 would defer, but not avoid the need for either a major investment in the accommodation for the relevant business units, or the identification of alternate suitable accommodation elsewhere.
2.19
Option 2: partial scope (relocate all the L&W Business Unit to Waterford), was deemed the preferred option as it fully addressed ‘all but one of the project requirements.’ CSIRO noted that while option 2 was the preferred option, it does not meet the ‘infrastructure’ criterion as it retains and mothballs, rather than demolishes, unused buildings at the Floreat site.
2.20
Option 3: full scope addressed all of the project requirements outlined by CSIRO, however due to the significantly higher cost, in comparison with option 2, it was discounted.
2.21
CSIRO stated that ‘in assessing the options available, CSIRO undertook a whole-of-life cost assessment and determined that the proposed project provides a good value for money property solution.’
2.22
During the public hearing the Committee asked the CSIRO if there were efficiencies or long-term savings to be gained by including the demolishment of the unused Floreat buildings in the scope of the P3 project. CSIRO responded:
… there are probably a couple of elements on top of the cost. One is relocating existing capability, so that's the cost that we'd have to factor in, which comes back to the earlier question around the glasshouses. While it remains an operational site our preference is to probably not pose any additional HSE risk by doing buildings and demolition while it's still functioning.
2.23
CSIRO also noted that while there could be some economies of scale to be achieve by:
…demolish[ing] all of the buildings in a single pass, rather than having it in two stages…a site with fully demolished buildings may not realise a significant increase from a divestment point of view, from a development perspective.
Scope of the works
2.24
In its submission, CSIRO outlined the requirements of the proposed project:
Reduce operating and maintenance costs through reducing CSIRO’s reliance on aging buildings and infrastructure and improving space utilisation.
Deliver a cost effective, value for money property solution, consistent with Commonwealth and CSIRO property, accommodation, Health Safety and Environment (HSE) and Human Resources (HR) policies.
Support staff health, safety, and wellbeing by providing modern, safe, and fit-for purpose world-class facilities.
Increase CSIRO collaboration through co-location.
Better utilise existing infrastructure for compatible uses and deliver improvements in infrastructure.
Deliver improvements in information and communication technology to meet the needs of the next ten to twenty years.
Deliver efficient allocation of workspaces, resources, with the ability to modify and adapt these spaces as CSIRO needs change in the future.
2.25
In addition, CSIRO stated that the project has:
…identified and will address existing Health Safety and Environment risks, including the potential exposure to asbestos and other hazardous materials, enhancing code compliance, and addressing non-compliant storage and handling of dangerous goods and gasses.
2.26
In order to fulfil the above requirements, CSIRO proposed the following scope of works:
Move the [Land and Water] Business Unit from Floreat and providing desk-based work areas and associated support spaces, laboratory, and storage facilities at Waterford
Move the [Health and Biosecurity] eHealth Team from Floreat and providing desk-based work areas and associated support spaces at Kensington
Move corporate services’ [Human Resources, Information Management and Technology, Health Safety and Environment] permanent location from Floreat and providing desk-based work areas and associated support spaces at Waterford
Consolidate those [Mineral Resource] team members located at Waterford
Consolidate [Health and Biosecurity, Ecosystems Change Ecology, Information Management and Technology, CSIRO Business Infrastructure Services] and other support staff remaining at Floreat
Mothball vacated areas in building 1, 1A, 1B and 1C and all of buildings 34 and 46 at Floreat.
2.27
The relocation works proposed by the CSIRO include:
refurbishment of empty spaces to accommodate relocated groups
pack up of all furniture, fittings, and equipment
relocation of items to be retained and removal of those items to be disposed of
refurbishment of those vacated spaces to be reused or decommissioning of those areas to be mothballed
decommissioning including the removal of remaining equipment, furniture, and fixtures, capping, and sealing of sewer pipework, isolation of hot and cold-water services and water drained from the system.
2.28
The proposed refurbishment works include:
demolition of internal fit-out to allow for adaptive re-use
modification and reconfiguration of existing services
provision of new services where existing services are not present or modification of existing services to accommodate the new layout
office accommodation including partitioning, provision of workstations, storage units and loose furniture
laboratory accommodation including provision of benches with specialised services and equipment
science process bay accommodation including provision of benches with specialised services and equipment
fit out of storage spaces including appropriate racking, benches, secure areas and specimen storage.
2.29
With regards to the layout of the staff offices, CSIRO stated that:
The project seeks to open-up banks of offices around the perimeter of buildings at Waterford to provide desk-based activity space with a variety of quiet spaces, and meeting rooms.
Staff consultation
2.30
CSIRO currently employs 567 staff across all four sites in the Perth property portfolio. At the public hearing CSIRO confirmed that there would be no staff losses within Perth as a result of the proposal.
2.31
Furthermore, CSIRO stated that ‘as part of the design process, we've accommodated for some growth as part of normal design parameters.’
2.32
In response to a question from the Committee asking what discussion had been had with staff that would be relocated as part of the project, CSIRO stated:
We've had quite an intensive change management process to date. We have a change manager that's allocated to the project. We then identify leaders on the ground and change managers on the ground to talk to our staff. We complete town halls, which are general get-togethers, for all three sites where we communicate progress on the project, and we encourage feedback and questions and answers. We have an internal website that has information. We've had a very intensive design process where we've involved end users all the way along. It was a very intensive process, so the design very much reflects their requirements. We had HR attend the meetings and the briefings, so they've been involved as well.
2.33
In their submission, CSIRO stated that since the inception of the P3 project, Perth staff had been invited to five town hall meetings between March 2019 and October 2020 in which staff were informed of a number of items including the program design proposal, change update and human resources communications.
2.34
At the public hearing CSIRO told the Committee that at that time there were no staff concerns that the CSIRO were aware of that had not been resolved.
Cost of the works
2.35
The estimated total capital out-turned cost of the project is $18.723 million (excluding GST), which includes ‘contingency, project management, design and documentation and escalation to third quarter 2021.’
2.36
CSIRO noted that ‘the project will be funded through the CSIRO internal capital for planning and construction budget over the coming years.’
Revenue
2.37
There will be no expected revenue generated by the project.
Australian National Audit Office Report
2.38
During the inquiry the Australian National Audit Office (ANAO) made a submission to the Committee pertaining to findings from the ANAO’s 2019-20 audit into the Implementation of the Commonwealth Scientific and Industrial Research Organisation (CSIRO) Property Investment Strategy.
2.39
As part of the inquiry process, the Committee conducted a private briefing with representatives from the ANAO to discuss the impact of the findings from the audit on the proposed P3 project.
Committee comment
2.40
The Committee was pleased to hear that the CSIRO had agreed to and addressed the five recommendations made by the ANAO in the 2019-20 audit into the Implementation of the Commonwealth Scientific and Industrial Research Organisation (CSIRO) Property Investment Strategy.
2.41
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.
2.42
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.
2.43
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: CSIRO Perth Precinct Project (P3).
2.44
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.