2.1
The Commonwealth Scientific and Industrial Research Organisation (CSIRO) seeks approval from the Committee to proceed with its proposed Sydney Consolidation Project. The Sydney Consolidation Project aims to consolidate and redevelop CSIRO’s property portfolio in the greater Sydney area, to reduce surplus accommodation capacity; provide relief in managing currently escalating property, operating, repair and maintenance costs; and advance current and future science capabilities.
2.2
This outcome will be delivered through the divestment of Marsfield, the expiration of the North Ryde lease and consolidation of staff and capability to Lindfield and other fit-for-purpose CSIRO facilities. These sites will include: Eveleigh, Mayfield (Newcastle), Kensington, Lucas Heights and the Western Sydney Large scale fire test facility site.
2.3
The estimated cost of the project is $107.26 million (excluding GST).
2.4
The project was referred to the Committee on 31 July 2019.
Conduct of the inquiry
2.5
Following referral, the inquiry was publicised on the Committee’s website and via media release.
2.6
In the 45th Parliament the Committee received three submissions and one confidential submission. In the 46th Parliament the Committee received three submissions, one supplementary submission, and one confidential submission. A list of submissions can be found at Appendix A.
2.7
On 26 September 2019, the Committee undertook a site inspection of CSIRO Lindfield site. On the same day, the Committee also conducted a public and in-camera hearing.
Need for the works
2.8
CSIRO is Australia’s national science agency and is one of the largest and most diverse scientific research agencies in the world.
2.9
Since its establishment in 1926, CSIRO has ‘continued to contribute to the ongoing prosperity of Australia’s primary and secondary industries and to the creation of new technologies, products and techniques for the continuing development of Australia’s manufacturing and service-based industries’.
2.10
In its submission to the Committee, CSIRO stated:
CSIRO requires property to undertake its specialised science capabilities. As such, the organisation needs to ensure that all its facilities are fit-for-purpose, support science and have facilities that will attract leading researchers and scientists to CSIRO.
2.11
CSIRO’s current Sydney Property Portfolio comprises seven sites located at North Ryde, Marsfield, Lindfield, Eveleigh, Mayfield (Newcastle), Lucas Heights and the University of New South Wales (Kensington).
2.12
In its submission to the Committee, CSIRO noted that these sites:
…accommodate approximately 880 CSIRO full time staff and approximately 300 part time or occasional staff and students and comprise a total of over 126,000sqm of laboratories, technical and specialist support facilities and commercial office space. These sites also accommodate 2583sqm of tenanted space, typically let to small research organisations. In addition to this, the National Measurement Institute (NMI) currently occupies 54% of the gross floor area at Lindfield.
2.13
CSIRO stated in its submission that:
Many of the existing buildings at North Ryde, Marsfield and Lindfield are no longer fit-for purpose, both from a functional perspective and from the perspective of complying with modern regulations pertaining to safely undertaking scientific functions.
2.14
CSIRO also identified a number of specific deficiencies with some of its Sydney sites:
The larger buildings on the Marsfield site are approximately 50 years old and do not meet current NCC or DDA requirements and are no longer fit for purpose.
The North Ryde site comprises 30 buildings and sheds… (Building 12) is 46 years old and has significant inherent health and safety issues. Many of the other buildings on the site are underutilised or unoccupied.
There is no opportunity for expansion beyond the current leased area at Eveleigh. Additionally, as a “stand alone” commercial office building within a commercially zoned precinct there is no opportunity for relocation of laboratories or other highly technical facilities to these premises.
The Mayfield facility has areas that are underutilised due to changes in the areas of research undertaken by CSIRO. These underutilised areas have been identified as suitable for relocating research activities from other sites without the need for major upgrades or building works.
2.15
At the public hearing, CSIRO explained to the Committee that its seven sites ‘represent an inefficient, under-utilised and increasingly maintenance-intensive component of our portfolio.’
2.16
CSIRO advised the Committee that the Sydney Consolidation Project ‘aims to realign this property portfolio to more closely meet industry and Commonwealth spatial benchmarks and to provide modern, flexible science facilities that can better address CSIRO's research requirements now and into the future.’
2.17
CSIRO further stated that:
The Sydney Consolidation Project will yield significant reductions in CSIRO’s operating and maintenance costs. Key to these savings is the discontinuation of the lease at North Ryde resulting in a saving of $102.9m over a typical 10-year lease period. These savings, will in turn, ensure that available budget allocations can more closely align with operational and maintenance costs. The divestment of the Marsfield site will also result in a large reduction in operational and maintenance costs.
2.18
The CSIRO noted in its submission that the aim of its Property Strategy is to consolidate current national footprint, aligning infrastructure, science directions and partnerships. The key objectives of CSIRO’s Property Strategy are to:
Stabilise the operating expenses and costs of repairs and maintenance for CSIRO’s ageing properties to mitigate the need for cuts to science to support growing property costs;
Reduce the size of CSIRO’s now inefficient and under-utilised property portfolio which has evolved in piecemeal fashion over CSIRO’s history, while remaining compliant with workplace health and safety requirements and other regulatory standards;
Co-locate sites and buildings (including through lease arrangements where appropriate) with other participants in the field of science and innovation to stimulate and encourage partnership in the delivery of science, consistent with CSIRO’s focus on the transfer of science and innovation; and
Deliver fit-for-purpose and flexible (‘future proofed’) scientific facilities that enable CSIRO to continue to deliver its science contribution for national benefit.
Options considered
2.19
CSIRO engaged specialist design consultants in 2015 to look at potential consolidation options for CSIRO’s Sydney sites. Over several years CSIRO investigated and discounted a range of options. A fifth option was developed and selected based on:
CSIRO’s desire to reduce its property footprint and achieve cost savings through avoiding maintaining excessive infrastructure and equipment;
The ability of the Lindfield facility to accommodate most of the requirements of CSIRO’s Sydney based activities including science and workshop activities at a reasonable capital expenditure;
The ability of the Lindfield facility to accommodate foreseeable growth by CSIRO should there be a requirement to enter new areas of science…;
The inability of any other existing CSIRO Sydney sites to accommodate the full requirements of CSIRO’s Sydney activities without very significant capital expenditure;
The Lucas Heights site requires a land lease from ANSTO prior to the construction of any CSIRO buildings. The Lucas Heights site was also discounted for large-scale development due to the limited public transport access to the site;
Selling the Marsfield site would provide a larger financial return to CSIRO than the selling of Lindfield due to the nature and location and development potential of the respective sites; and
Closure of the Lindfield site would impose an additional liability on the Commonwealth due to the high cost to relocate highly specialised science based NMI facilities to another site.
2.20
CSIRO emphasised to the Committee that the Lindfield site was ‘originally designed to accommodate in the order of 600 to 700 people and that under the new arrangements, ‘we’re going to have a number in the high 500s…so our [building] footprint per se won’t change.’
Scope of the works
2.21
In its submission, CSIRO set out the objectives of the proposed works, as being to:
Consolidate and provide critical mass of CSIRO’s Sydney based research capability;
Gain cost efficiencies through reduced duplication of support facilities and amenities;
Enhance research capability by consolidating research into centres of excellence and innovation in various areas of science research including Data and Information Communications Technology (ICT), High Tech Manufacturing and Astronomy and Space Science;
Align post 2021 property requirements with long term research requirements as determined by CSIRO;
Improve engagement between various CSIRO business units and maximise the efficiencies and research opportunities associated with co-location;
Improve staff morale by providing more modern and attractive research facilities;
Provide fit for purpose facilities that will assist in better managing CSIRO’s property operating costs within the Sydney area;
Rationalise and improve CSIRO’s ability to address ever more complex Health and Safety and Environmental (HSE) compliance frameworks by locating research facilities with similar regulatory requirements on the one site; and
Provide best practice, fit for purpose facilities that address CSIRO’s Accommodation Principles as well as the National Construction Code – Building Code of Australia (NCC) and Disability Discrimination Act 1992 (Cth) (DDA) requirements.
2.22
In order to achieve these objectives, CSIRO proposed the following scope of works:
Refurbishing and reconfiguration of existing buildings with some new build works at Lindfield and Mayfield (Newcastle) and associated site works to meet the science needs of staff relocated from the North Ryde and Marsfield sites;
Refurbishing of existing premises at Mayfield (Newcastle) with some minor new build works to meet the science needs of staff relocated from the North Ryde site;
Fit-out works to the existing leased premises at Eveleigh to better meet the needs of the staff from Marsfield, North Ryde and Lindfield relocating to Eveleigh; and
Relocating staff and specialist science equipment to their new facilities at these locations.
2.23
In its submission CSIRO stated that concurrent with this project it was currently in negotiation with the NSW Government to co-locate its large-scale fire test facility to a site in Western Sydney. CSIRO explained that:
This co-location with Fire and Rescue New South Wales is a collaborative arrangement and will ensure a more appropriate location for large-scale fire testing and associated activities, other than other CSIRO sites. It's a joint response with Fire and Rescue New South Wales and is a pillar of our collaborative environment.
2.24
CSIRO also noted that ‘concurrent with the project, some minor staff relocations are also proposed at Lucas Heights’. However, no works are proposed at Lucas Heights with staff being relocated to suitable currently vacant office space.
Staff consultation
2.25
CSIRO noted that since 2016 it has conducted regular information and consultation sessions during the planning and concept design phases with CSIRO Business Unit leaders, their representatives and CSIRO staff.’ In particular, CSIRO emphasised that most ‘issues raised, particularly by staff, during the consultation sessions have related to open-plan office accommodation, child care and transport’.
2.26
At the public hearing, CSIRO further noted that:
There's a lot more consultation that needs to happen from this point forward…we're at about the 15 to 20 per cent design resolution. We've got the opportunity and, indeed, the need and desire to engage further with the stakeholders—the principal stakeholders, of course, being the scientists—to make that work.
2.27
The CSIRO Staff Association raised a number of concerns in its submission to the Committee, including: the potential for expansion of scientific capabilities and staffing levels, impact of open plan accommodation, provision of on-site childcare, and availability of public transport at the Lindfield site. In response to these issues CSIRO informed the Committee that it had established several working groups of CSIRO staff impacted by the move, to look into addressing issues surrounding the design works, traffic, and child care.
2.28
The possibility of moving the location of the CSIRO Astronomy and Space Science (CASS) to Macquarie University’s campus at North Ryde was also raised by the CSIRO Staff Association in their submission to the Committee. The CSIRO Staff Association noted that ‘CSIRO Staff Association representatives have worked with CASS management in recent months to propose a viable and preferred alternative option: relocation to Macquarie University’s campus at North Ryde, which is currently under consideration.’
2.29
With regards to the issues raised concerning available transport to the Lindfield site, CSIRO explained to the Committee that it was aware of the current limited services to the site, and had met with Transdev, part of Transport NSW, and the local council to discuss ‘what further bus services can be provided to the site’.
2.30
CSIRO also explained that it was currently in discussion with the local council about improving cycle paths to the site, and was looking into how CSIRO could better link the site to the Lindfield and Chatswood train stations.
Community consultation
2.31
CSIRO informed the Committee that it had ‘developed a comprehensive community consultation and communications strategy that recognised the importance of providing local residents, community groups, statutory authorities, and other interested stakeholders with the opportunity to provide input into, or raise concerns relating to the proposed works’.
2.32
In addition to its community consultation and communications strategy, CSIRO explained that it had offered verbal briefings to a number of key external stakeholders, including local and federal members of Parliament, and the Ku-ring-gai Council. CSIRO informed the Committee at the public hearing that, following on from the briefing with the local council in May, the local council ‘were very interested in what CSIRO was looking to do on the [Lindfield] site’, and ‘offered their help with discussions on transport, cycle paths and further discussions around footpaths.’
2.33
CSIRO Lindfield is located in an area that has experienced a number of bushfires in the past. One submission received by the Committee concerned bushfire risk in the location, including road access and water pressure in the event of a bushfire.
2.34
CSIRO noted that all of its sites have appropriate emergency management plans, as part of health and safety legislation requirements. CSIRO further explained that fire management outside of the CSIRO site was undertaken by local and state authorities.
2.35
As to whether emergency management plans included local community consultation, CSIRO noted that:
…we have taken on board the concerns of the community around the fire management in the area, and what we’ve undertaken to do through the course of this project is communicate with council and the other authorities and try to form a group that meets on a regular basis to look at how we can assist and be part of that broader planning as well.
Cost of the works
2.36
CSIRO Sydney Consolidation Project has an estimated cost of $107.26 million, exclusive of GST. This cost estimate includes the construction costs, consultant fees, furniture and fittings, and escalation and risk provisions.
The Sydney Consolidation Project will yield significant reductions in CSIRO’s operational and maintenance costs through the expiration of the North Ryde Lease and the divestment of the Marsfield site. Key to these savings, is the discontinuation of the lease at North Ryde resulting in a saving of $102.9m over the 10 year period.
2.38
CSIRO provided further details on project costings in its confidential submission and during an in-camera hearing.
Committee comment
2.39
The Committee recognises CSIRO as a key contributor to the ongoing prosperity of Australia’s primary and secondary industries, and acknowledges its contributions to the field of scientific research.
2.40
The Committee notes the Sydney Consolidation Project aims to consolidate CSIRO's Sydney property footprint, reducing the whole-of-life cost of its property portfolio and provide modern, flexible science facilities to better address CSIRO's research requirements.
2.41
The Lindfield site was built in the 1970’s as a bespoke physics laboratory with a more traditional scientific layout. Informal discussions with staff on site indicated to the Committee that there were still some areas of concern in relation to proposed new working arrangements.
2.42
The Committee acknowledges that CSIRO are currently at the 15 to 20 per cent design resolution stage, and are continuing to work with staff representatives to find solutions to issues raised by principal stakeholders. The Committee was interested to hear at the public hearing that there are issues yet to be resolved and encourages CSIRO to continue to work with staff representatives to find acceptable solutions to these issues.
2.43
The Committee recognises the effort made by CSIRO to engage with staff and reiterates that changes to working environments need to be carefully undertaken to ensure minimal disruption to staff. The Committee encourages CSIRO to continue to seek feedback from staff and to ensure that staff remain informed and engaged throughout the project.
2.44
The Committee notes that discussions regarding the location of the CSIRO Astronomy and Space Science (CASS) are ongoing and encourages CSIRO to continue to discuss viable options with the CSIRO Staff Association and CASS management.
2.45
The Committee notes that views of local community members in relation to the water pressure in the instance of bushfires are of serious concern particularly given the history of bushfires in the area. The Committee appreciates that the relevant emergency services has the leading role in such instances but believes CSIRO could take a more proactive role in ensuring that the presence of their facility in this area has less impact on water pressure under bushfire and emergency conditions.
2.46
The Committee encourages CSIRO to continue consulting and engaging with key external stakeholders and the local community with regard to issues that were raised throughout the inquiry process.
2.47
The Committee has observed at times some proponent entities providing insufficient detail in their notifications particularly around the present and prospective value of the work. This is one of the key areas, identified in the Public Works Committee Act 1969, for the Committee when considering and reporting on a public work, and lack of this critical information impedes the work of the Committee as the Committee can only make decisions about project based on the information provided to it.
2.48
While the Committee does not intend to delay this project, it considers it important to reiterate to CSIRO that they need to provide all information the Committee requires, through the original notification and with reference to the Public Works Committee Act 1969 and the PWC Procedure Manual. Notwithstanding this provision of information matter, 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.
2.49
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.
2.50
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: proposed CSIRO Sydney Consolidation Project, New South Wales.
2.51
The Committee recommends that, prior to commencing the proposed works, CSIRO provide:
all information previously requested by the Committee;
evidence of how they are addressing the concerns of the local community regarding the impact on water pressure in the event of a bushfire or emergency in the area of the Lindfield facility.
2.52
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