Defence: Program Funding

Senator Abetz asked the Minister representing the Minister for Defence upon notice, on 29 May 2009:

1. Can a list be provided, by agency, of all infrastructure and/or capital works projects that fall under the responsibility of an agency within the Minister’s portfolio.
2. For each of the projects in (1) above:
1. when was it first announced, by whom, and by what method;
2. if applicable, what program is it funded through;
3. what is its total expected cost;
4. what was its original budget;
5. what is its current budget;
6. what is the total Federal Government contribution to its cost;
7. what is the total state government contribution to its cost;
8. if applicable, what other funding sources are involved and what is their contribution to the project cost;
9. what was the expected start date of construction;
10. what is the expected completion date;
11. who is responsible for delivering the project, and (ii) if a state government is responsible for delivering the project, when will the funding be released to the relevant state government;
12. is the project to be completed in stages/phases; if so, what is the timing and cost of each stage/phase;
13. why was the project funded; and
14. what cost benefit or other modelling was done before the project was approved.

Senator Faulkner - The Minister for Defence has provided the following answer to the honourable senator’s question:

1. Defence has provided a list of current and approved capital works projects.
2.  
   1.     and b.          For Defence Infrastructure and Defence Materiel Organisation projects please refer to, Table 1, Attachment A.  All Headquarters Joint Operations Command projects listed in Table 2, Attachment A, are funded under operational funding lines.  There is no requirement to gazette contracts for goods or services procured and expensed overseas therefore no public announcement was made.
   3. d. and e. The estimated cost for Defence Infrastructure and Defence Materiel Organisation projects is the ‘budget’ and all amendments to the budget are noted in the Defence Portfolio Budget Statements 2009–10 (PBS).
      
      Please refer to Table 2, Attachment 1 for the estimated cost for Headquarters Joint Operations Command projects.
   6. For Defence Infrastructure and Defence Materiel Organisation capital works projects the Australian Government’s contribution is 100 per cent of the total cost.
      
      For Headquarters Joint Operations Command projects the budget listed is the Australian Government’s contribution to facilities construction.  Some projects (such as the Kabul Accommodation project and the Tarin Kowt Airfield) are components of larger projects coordinated (and paid for) by other coalition partners.
   7. and h.        In all cases of Defence capital works, there is no state or territory contribution;
   9. and j.         Please refer to, Table 1 and 2, Attachment A;
   11.  
       1. The Department of Defence is the agency responsible for delivery of all Defence capital works projects;
       2. Not applicable;
   12. Not applicable;
   13. Each Infrastructure Division capital works project was funded to enhance Defence capability.  Project Single Leap Phase 2 was funded to remediate Defence living-in accommodation on various bases across Australia.
       
       The Defence Materiel Organisation’s Mulwala Redevelopment Project – JP 2086 Phase 1 was funded as an indigenous military grade propellant and munitions production and is a strategic requirement endorsed by Government.
       
       Each HQJOC works project was funded to support operational capability.
   14. All Defence capital works projects are subject of a comprehensive development phase which culminates in a Detailed Business Case (DBC).  The DBC provides the basis for approval of the project.
       
       Prior to inviting formal tenders for Project Single Leap Phase 2, a Public Sector Comparator (PSC) was developed to reflect the cost to Defence of delivering the proposed facilities via traditional direct procurement methods.  The PSC includes the capital cost of constructing the facilities and the associated operating and maintenance costs expected to arise over the proposed 30 year operations term.  All tenders received will be assessed against this PSC to ensure the proposed delivery by Public Private Partnership will represent value for money for the Commonwealth.
       
       The Mulwala Redevelopment Project – JP 2086 Phase 1 was subject to commercial testing under Public Private Partnership/Private Finance Initiative arrangements.  This option was not assessed as representing value for money.
       
       All operations facilities costs are included as part of a net additional cost submission to the National Security Council when proposing changes to capability on operations.  They are based on either scoping studies undertaken in location or desktop studies based on previous works in the same location.  Procurement complies with the Defence Procurement and Purchasing Manual, bearing in mind limitations such as time, contractor availability and security considerations. 

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