Freo's View


Posted in economy, finances, fremantle, state government, Uncategorized, western australia by freoview on May 15, 2017

I am surprised and disappointed that WA Premier Mark McGowan has not included the cost it has taken to prepare for the sale of Fremantle Ports in the inquiry into the spending of the Barnett Liberal/National government.

A meeting I attended at the Port well over a year ago was told they were spending millions of dollars on lawyers, consultants and experts to make the port ready for privatisation, which will not be going ahead under the new Labor government.

The inquiry announced by the Premier today will be headed by former under treasurer John Langoulant and will investigate 26 projects.

They include: Elizabeth Quay, Perth Stadium and Swan footbridge, land assets sales, Ord River Irrigation Project, Pilbara accommodation, Pilbara underground power project, Ningaloo Centre, Bulgarra sports complex, Wanangkura stadium Port Hedland, Fiona Stanley Hospital, Children’s Hospital, QE II Hospital, Karratha Hospital, St John of God Midland, IT at Department of health, outsourcing of non-clinical services, NurseWest, Muja power station, Synergy billing, Synergy and Western Power contracts, Western Power Woodlands and Vista, Road Safety Commission’s Rugby WA partnership, Buyback Scheme renewable energy, Temporary Personnel Services common use arrangements, Next ICT project.

But not Roe 8 and Fremantle Port and that wonders me a lot. Why were they excluded from the extensive list?

Roel Loopers

8 Responses

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  1. Rob Fittock said, on May 18, 2017 at 6:13 am

    I take your point Carl however I would hazard a guess that even if the government goes back 20 years on contracts the arguments and findings would be similar and I also know how tight contract delivery can be having been involved in a number of $100mil + Pilbara projects for the major miners

    Has the government learnt anything from many years of cost over runs and delays?….only time will tell….or will it?

  2. freoview said, on May 17, 2017 at 12:08 pm

    Yes indeed, Carl and it is essential that it won’t be a political game, but that we learn lessons for the future.


  3. Carl Payne said, on May 17, 2017 at 9:16 am

    Rob, your view that “every government contract for construction consistently appears to be grossly higher than what is expected” is a common misconception, but just not true. My firm has worked on only Government contracts for the past 20 years. Every single one of those had a clearly-defined budget; and we were required to keep all construction costs within these limits. This was done. Examples where substantial overruns occur need to be examined. The reasons may be many and various; but it’s important that we know them.

  4. freoishome said, on May 17, 2017 at 8:34 am

    Carl I like your contrast of Port headland and Mandurah.

    I continue to raise here the need to establish two new Metro cities in WA. It is crazy for WA to be 1/3rd of the continent and only have one metro sized city.

    The Royalties for Regions idea of the Nationals was done with good intent, but from the very outset, they bumped into the issue you outline. Regional centres don’t have any of the basic needs to make development financially feasible. They don’t have the economies of scale to establish the construction industry infrastructure, eg, Brickworks, prefabrication of roofing, doors, windows, a skilled and semi skilled workforce and a permanent place for their families to live, etc.

    What is needed is two 500 sqkm identified as WAs’ next two metro cities that will have 250,000 by 2050 and 500,000 by 2100. That would become a developer dream. Linked to Perth by state of the art utility and transport corridors, eg, wide gauge fast freight and passenger rail. Their own deep water harbours, but not located in their city centres, like Freo Port is. This would trigger the building of the permanent workforce and infrastructure industries, and everything else would follow.

    Value add benefits, vastly increased political power from having 3 independent metros; virtually ridding the development industry of development conflict, creation of new cities based on best practice building standards and sustainable city design, with great public transport, suburbs based on integrated communities not just shopping malls, walkability, etc.Land prices would be significant lower, thus improving affordability.

    Enabling Perth to change and grow at a slower, less conflict ridden pace, evolutionary not revolutionary pace.


  5. Rob Fittock said, on May 16, 2017 at 5:32 pm

    Carl we have asked this same question for years about the best bang for our buck however every government contract for construction consistently appears to be grossly higher than what is expected and is associated with additional costs and time

    Is it that the government specification is far more extensive to provide for longevity and delivering the best outcomes for the community as opposed to a private developer whose bottom line is profit?

  6. freoview said, on May 16, 2017 at 10:30 am

    Yes they are good points you are making Carl. It is not so much about a witch hunt, or should not be!, against the Liberal government but about ways of spending and developing more sensibly. Royalty for Regions has wasted millions on infrastructure not needed in the country and councils not being able to look after new halls, etc. because of limited finances.

    It is important for ALL political parties when they are in power to be prudent and not waste money and we hopefully can learn from past mistakes.

  7. Carl Payne said, on May 16, 2017 at 9:55 am

    We just might find some poor returns for the huge dollars spent.
    For example, the Wanangkura Stadium in Port Hedland features a 400-seat one court indoor stadium; gym and fitness rooms; squash courts; kiosk facilities; creche; change room facilities; function room; meeting and training rooms; and three external netball and basketball courts. Plus storage and bits and pieces, it covers 4,500 m2. It appears to have cost $35 Million, making it around $8,000 per m2.
    This compares to the new stadium and associated “dry-sports” facilities recently completed by the City of Mandurah, redeveloping their old centre adjacent the Mandurah Aquatic facilities. This includes a new 2-court indoor stadium – 2 courts provides greater programming and club-use flexibility – as well as a large new gym; 2 group fitness rooms; crèche; admin offices; change rooms; renovated squash courts (3); community meeting room, 2 kitchen/kiosk areas; public toilets; and new entry and foyer/reception areas. It covers 6,145 m2, and cost $15 Million, making it around $2,500 per m2.
    Construction costs for Port Hedland are around 1.45 that of building in Mandurah. So this would mean the Mandurah project – had it been built in Port Hedland – would have cost around $22 Million. And to create the same – reduced – built area as the Port Hedland stadium at these adjusted Mandurah rates, it would have cost only $16 Million.
    Check out the new Mandurah development – it’s economical; but technologically it’s state of the art – it lacks very little in terms of providing the required sports and community experience.
    So asking questions about how we spend our public dollars is very valid.
    Oh we can all admire the architecture of the Port Hedland stadium; no question. But this just might miss the point of looking at how we spend scarce resources.
    The outcomes from the Langoulant audit might just enable us to make more sensible future decisions.

  8. Rob Fittock said, on May 15, 2017 at 5:24 pm

    and what exactly will the enquiry achieve?….is it just political points scoring and/or head hunting which would be of little interest to the average punter who just wants to see the promises the McGowan government has made delivered

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