Legislative Assembly for the ACT: 2009 Week 08 Hansard (Thursday, 25 June 2009) . . Page.. 3134 ..
these issues. I was concerned about the way Actew seems to systematically underestimate the cost of major projects, let alone the costs that flow through later with the increase in, say, steel prices. I go to the transcript from that hearing and quote from Mark Sullivan, the head of Actew. I draw the distinction there, of course, between Actew and ActewAGL. I am slowly learning what the two organisations actually do.
We asked about costs and were asking about the total outline cost. Mr Smyth was there at this time at least; I think Mrs Dunne was as well. Mr Sullivan was talking about how Actew thought they had benchmarked themselves against other organisations as to whether they were doing a good job on this total outline cost. What he said was:
We tend to always have a low estimate at the start, despite people trying to encourage it to be as reasonable as possible. We have a peer review to have it confirmed. Then, by the time we get to this total outline cost … we generally see a fairly large increase.
I am no expert in what a total outline cost is but I read that as Mark Sullivan telling the estimates committee that basically Actew start with a price and they know it is going to be much more. This is where the rubber hits the road on this one. What we have basically got is a situation where Actew come along and say, “We’re going to build you a new dam and we’re going to build you a pipeline to deliver water security. This pipeline is only going to cost you $100 million.” The community think, “Okay, that is a cost we can bear.” The government think, “That is a cost we can bear.” Actew know it is going to cost a lot more somewhere down the line. I find this a very bizarre way to go about getting approval for projects and engaging with the community.
I think that is something we need to bear in mind very closely next time Actew come along with a new proposal. We need to have a close look at what their current cost is and what the eventual total outline cost may well turn out to be. I am not suggesting these projects should not necessarily happen but I think the ACT community should be as fully informed as they can be and be aware of Actew’s standard process in underestimating the cost. Unless we know how much these things are going to cost, we cannot decide on the true value of the project or, importantly, other policy alternatives.
I want to take that opportunity to come back to a discussion we were having earlier about the issue of increase in supply versus the need for energy efficiency. Mr Corbell was making some comments there. I guess I would like to take the opportunity to say that the Greens are not opposed to the increase in supply. We have, for example, been quite clear that the increase in capacity of Cotter Dam is a sensible approach to increasing the ACT’s water supply.
It is about balance. In my speech earlier I made reference to the fact that we are looking at water efficiency programs in the ACT with a six-figure price tag. I think it was $545,000 I mentioned, and we are looking at $360 million-odd worth of supply site increases here. I think that is not balanced. To me, there is a lot more we can do.