Page 4028 - Week 11 - Wednesday, 16 Sept 2009
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report. Simply put, the cost was promoted at $120 million, and the people of Canberra accepted that figure in good faith.
The only qualification directly made against the estimate was for the cost of catchment remediation, which the report in the very next sentence said would be additional to these costs. Incidentally, so far there has been no discussion or announcement about what these additional remediation costs will be. In the context of fairly large increases, I do start to wonder what they might be.
I have previously outlined in this place the Chief Minister’s state of denial over whether or not new water storage facilities will be required. I can refer members to those comments, but I do not think we need to dwell on them here. Let us move on to 2007 when the Chief Minister eventually saw the light, and in October that year he proudly announced that he would be proceeding with three major water security projects, of which the enlargement of the Cotter Dam and the Murrumbidgee to Googong transfer were two.
At the time, the cost of the Cotter Dam was going to be $145 million. I am sure the people of Canberra thought: “Well, $120 million in 2005, $145 million two years later, that’s a 20 per cent increase, and maybe it’s a bit over the odds, but perhaps we’ll give them the benefit of the doubt. At least they’re doing something.” The government and Actew sold it at $145 million, and I think the people of the ACT accepted that in good faith. There was no mention of rough estimates, target out-turn costs or anything else that would indicate that the Cotter Dam estimate might suffer a fairly large increase.
Then we have the revelation from Mr Sullivan in the estimates committee this year that the cost of the dam would go up by 30 per cent or more. This was the first time we started to hear anything about low estimates at the outset and fairly large increases or target out-turn costs. After four years, suddenly the qualifications started to emerge. On 30 May, the cost of the dam had grown to $246 million, more than 100 per cent over the 2005 estimate. That was a fairly large increase, but by 3 September, $246 million had become $363 million. That definitely is a fairly large increase—more than a 200 per cent increase on the 2005 figure.
The question is: when did the alarm bells ring? It was not in 2007, when the cost was $145 million. It was not during the estimates, when the costs looked like they might reach $118.5 million. It was not two weeks later, when Mr Sullivan told Mr Downie of the Canberra Times that we would be looking at $246 million. It was only on 24 August this year that we heard about the fairly large increase in excess of 200 per cent, as the Treasurer advised in question time yesterday. That is when, according to the Treasurer, the shareholders of Actew Corporation were advised by the Actew board of the cost blow-out—24 August. That is when the alarm bells started to ring for the Treasurer and for this government.
It is an important question to ask. The Chief Minister said on 3 September on ABC radio, after Mr Sullivan had dropped his bombshell, stating:
Suffice it to say, the government is disappointed. The government received the news over the last week with significant surprise—
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