Annual Report 2004-05

Capital Facilities Projects (-$18.2m)

The Capital Facilities Program funds the construction of buildings and infrastructure projects including specialised ranges, training and accommodation facilities, maintenance hangars, messes and warehouse facilities. The program develops facilities and infrastructure to support the introduction of new military equipment into operational service, as well as maintaining facilities to support Defence personnel where they work, live and train.

Examples of support to new military capability include:

• the extensions to the Darwin wharf (Northern Territory) for the new Armidale-class patrol boat;
• the construction of state-of-the-art specialised ranges and training facilities at Holsworthy (New South Wales) for special forces units; and
• a range of new and redeveloped facilities and infrastructure at RAAF Williamtown (New South Wales), including a maintenance hangar, aprons and fuel facilities to support the introduction into service of the Airborne Early Warning and Control Aircraft.
• Recent projects that support personnel and their families include:
• the construction of childcare facilities at RAAF Williamtown (New South Wales), Puckapunyal (Victoria) and East Sale (Victoria);
• the replacement of existing accommodation, messing and physical fitness facilities at RAAF Townsville (Queensland); and
• the construction of the new headquarters and training facilities at Lavarack Barracks (Queensland).

Approval processes for capital facilities projects vary according to value. Major capital facilities projects cost at least $6m and are subject to Government consideration and review by the Joint Statutory Committee on Public Works. Medium facilities projects have budgets between $250,000 and $6m. Medium facilities projects between $5m and $6m are subject to ministerial approval but are not reviewed by the committee. Projects under $5m are approved by departmental delegates.

Total expenditure on Defence's major capital facilities program in 2004-05 was $18.2m below the revised estimate of $411.5m. This primarily reflected an underestimation of the time required to finalise documentation and obtain approval for a number of major and medium projects. Also, adverse weather in some areas delayed construction and the inability of contractors in some regions to take on the work in the expected time frames due to the tempo of activity in the non-residential construction industry being very high in some regions, contributed to the result.

The operating expenses component of Defence's major capital facilities program was $27.7m above the revised estimate, partially offsetting the slippage in the capital element of project expenditure. Operating expenses include all costs incurred in developing projects such as preliminary designs, environmental clearances and cost estimates for facilities including whole-of-life operating and maintenance costs. The 2004-05 result represented a substantial increase in project development activity and has significantly increased the aggregate value of approved projects.