Report No. 9 April 2011
William McCormack Place – Stage 2 – Project
Legislative Assembly of Queensland
Public Accounts and Public Works Committee
William McCormack Place – Stage 2 – Project
April 2011
Report No. 9
PUBLIC WORKS COMMITTEE 52 nd Parliament
Chair Ms Barbara Stone MP Member for Springwood Deputy Chair Hon Kev Lingard MP Member for Beaudesert Members Mr Stuart Copeland MP Member for Cunningham Mr Ray Hopper MP Member for Darling Downs Mr Jason O’Brien MP Member for Cook Mr Phil Weightman MP Member for Cleveland Mr Wayne Wendt MP Member for Ipswich West
PUBLIC ACCOUNTS AND PUBLIC WORKS COMMITTEE 53 rd Parliament
Chair Mr Wayne Wendt MP Member for Ipswich West Deputy Chair Mr Ian Rickuss MP Member for Lockyer Members Mr Michael Crandon MP Member for Coomera Ms Dianne Farmer MP Member for Bulimba Mr Ray Hopper MP Member Condamine Ms Mary-Anne O’Neill MP Member for Kallangur Mrs Christine Smith MP Member for Burleigh
Secretariat
Research Director Ms Deborah Jeffrey Principal Research Officer Mrs Helen Bogiatzis Executive Assistant Mrs Marilyn Freeman
Contacting the committee
Copies of this report and other committee publications are available on the Internet via the Queensland Parliament home page www.parliament.qld.gov.au or by contacting the secretariat at:
Public Accounts and Public Works Committee Telephone: 07 3406 7576 Parliament House Fax: 07 3406 7500 George Street Email: [email protected] Brisbane Q 4000
Contents
Glossary of terms and abbreviations ...... v Role of the Public Accounts and Public Works Committee ...... vi Chair’s foreword ...... ix 1. Introduction...... 1 1.1 Recommendations in this report ...... 1 1.2 Terms of Reference of the Inquiry ...... 1 1.3 Conduct of the Inquiry...... 1 2. Key Facilities ...... 2 2.1 Building background...... 2 2.2 Building/energy management systems ...... 4 2.3 Car parking and vehicle access ...... 5 2.4 Information technology and communications systems ...... 5 2.5 Landscaping...... 5 2.6 Public areas ...... 6 2.7 Public art consultancy ...... 6 2.8 Office spaces ...... 6 2.9 Support spaces ...... 7 2.10 Toilets, showers and changing facilities...... 7 2.11 Plant and related equipment ...... 7 2.11.1 Communications services...... 7 2.11.2 Electrical services ...... 8 2.11.3 Fire services...... 8 2.11.4 Hydraulic services...... 8 2.11.5 Lift and escalator services ...... 8 2.11.6 Mechanical services...... 9 2.11.7 Security services...... 9 3. Project Time Frames ...... 9 Committee comments ...... 11 4. Terms of Reference...... 11 4.1 Purpose of the work ...... 11 4.2 The necessity for, and the advisability of, the work ...... 11 4.2.1 Existing accommodation ...... 14 4.2.2 Agency requirements ...... 15 4.2.3 Options Study ...... 15 4.2.4 Option 1 – Pre-commitment lease option ...... 15
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4.2.5 Option 2 – Construct new government office building option ...... 16 4.2.6 Option 3 – Source leased accommodation option...... 16 4.2.7 Selected Option ...... 17 Committee comments ...... 17 4.3 The suitability of the work for its purpose...... 17 4.3.1 Location...... 17 4.3.2 Size ...... 18 4.3.3 Design...... 18 4.3.4 Vehicular and pedestrian access...... 19 4.3.5 Disability access ...... 21 4.3.6 Fire protection ...... 21 4.3.7 Maintainability ...... 21 4.3.8 Occupational health and safety ...... 21 4.3.9 Security ...... 22 4.3.10 Flexibility of internal reconfiguration of spaces...... 22 4.3.11 Consideration to future development of the building and site...... 22 Committee comments ...... 22 4.4 The cost, recurrent costs, revenue and value for money of the work...... 23 4.4.1 Project cost ...... 23 4.4.2 Recurrent costs...... 24 4.4.3 Revenue...... 24 4.4.4 Value for money...... 24 Committee comments ...... 26 Recommendation 1...... 26 4.5 The impact of the work on the community, economy and environment ...... 26 4.5.1 Community...... 27 4.5.2 Economy ...... 28 4.5.3 Environment...... 29 Committee comments ...... 31 Recommendation 2...... 31 4.6 The procurement methods for the work ...... 32 4.6.1 Engagement of consultants ...... 32 4.6.2 Engagement of the managing contractor...... 33 4.6.3 Trade package selection...... 34 Committee comments ...... 34 4.7 The balance of public and private sector involvement in the work ...... 35 Committee comments ...... 35 4.8 The performance of the constructing authority, the consultants and contractors for the work...... 35 Committee comments ...... 35
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Appendix 1 – Copy of Inquiry Information Paper ...... 36 Appendix 2 – Submissions Received...... 38 Appendix 3 – Public hearing held Friday 31 October 2008 at the Sebel Harbour Lights Hotel, Cairns...... 39 Appendix 4 – Building Floor Plans...... 40
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Glossary of terms and abbreviations
ABGR Australian Building Greenhouse Rating ACS Actual Construction Sum AS Australian Standard CBD Central business district DETA Department of Education and Training DPW Department of Public Works DTRDI Former Department of Tourism, Regional Development and Industry GCS Guaranteed construction sum GOC Government Owned Corporation ICN Industry capability network IS Information Standard kW Kilowatt LIP Local Industry Policy MOG Machinery of government NABERS National Australian Built Environment Rating System – it is a performance-based rating system for existing buildings. NABERS rates a building on the basis of its measured operational impacts on the environment. It is a national initiative managed by the NSW Department of Environment, Climate Change and Water. NDIA Northern Development Industry Association NPV Net present value NTL Net lettable area PAPWC Public Accounts and Public Works Committee (53 rd Parliament) PWC Public Works Committee (52 nd Parliament) QBSA Queensland Building Services Authority QTC Queensland Treasury Corporation The committee Public Works Committee/Public Accounts and Public Works Committee WMP1 William McCormack Place Stage 1 WMP2 William McCormack Place Stage 2
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Role of the Public Accounts and Public Works Committee
The Public Accounts and Public Works Committee is a statutory committee of the Queensland Parliament, established by the Parliament of Queensland Act 2001.
The committee’s area of responsibility as described in section 95 of the Act is:
(a) the assessment of the integrity, economy, efficiency and effectiveness of government financial management by
(i) examining government financial documents; and (ii) considering the annual and other reports of the auditor-general. (b) works (public works) undertaken by an entity that is a constructing authority for the works if the committee decides to consider the works. (c) Any major GOC works if the committee decides to consider the works.
In deciding whether to consider public works, the committee may have regard to:
(a) the stated purpose of the works and the apparent suitability of the works for the purpose; and
(b) the necessity for, and the advisability of, the works; and
(c) value for money achieved, or likely to be achieved, by the works; and
(d) revenue produced by, and recurrent costs of, the works or estimates of revenue and costs for the works; and
(e) the present and prospective public value of the works, including, for example, consideration of the impact of the works on the community, economy and environment; and
(f) procurement methods for the works; and
(g) the balance of public and private sector involvement in the works; and
(h) the performance of –
(i) the constructing authority for the works; and
(ii) the consultants and contractors for the works;
with particular regard to the time taken for finishing the works and the cost and quality of the works; and
(i) the actual suitability of the works in meeting the needs and in achieving the stated purpose of the works.
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Government financial documents are defined in section 79 of the Act as:
a document tabled in the Legislative Assembly under the Financial Accountability Act 2009
the annual financial statements and annual reports of a government owned corporation
a document that would be a government financial document if it had been tabled in the Legislative Assembly as required by law.
The term does not include estimates of receipts for the proposed expenditure under an Annual Appropriation Act.
The committee may also refer issues within its area of responsibility to the Auditor-General for consideration.
An entity is a constructing authority for works if the entity is the State or a department. An entity is also a constructing authority for works if:
the entity is established under an Act, or under State or local government authorisation, for a public, State or local government purpose; and
the works are funded from the consolidated fund or the proceeds of a financial arrangement within the meaning of the Statutory Bodies Financial Arrangements Act 1982 .
A GOC is a constructing authority for works if the works are undertaken specifically or substantially for a community service obligation of the GOC or for major GOC works referred to the committee by the Assembly.
An entity (a commercial entity) is a constructing authority for works if, under an agreement for the works:
(a) the state or another entity representing the State -
(i) has, or will or may have, a financial liability or interest; or
(ii) has granted, or will or may grant land, or an interest in land or another right, privilege, monopoly, concession, franchise or interest; or
(iii) has contributed, or will or may contribute, resources of any kind; and
(b) the works have become, or will or may become, the absolute property of the State or another entity representing the State.
Major GOC works means works (other than public works) undertaken as part of a major infrastructure investment outlined in a GOC’s statement of corporate intent.
If the committee makes a recommendation in a report that a minister should take particular action about an issue, the minister must table a response within three months after the report is tabled.
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Chair’s foreword
This inquiry was commenced by the Public Works Committee of the previous Parliament. That committee issued an Inquiry Information Paper seeking public submissions and held a public hearing in February 2009. The Public Accounts and Public Works Committee of the 53 rd Parliament resolved to complete the inquiry.
The $79.5million William McCormack Place Stage 2 building was constructed on a site located to the rear of the William McCormack Place Stage 1 building on the corner of Sheridan and Hartley Streets, Cairns. The project commenced in July 2007 and the building was officially opened by the former Minister for Public Works and Information and Communication Technology in November 2010. The construction of this building allows for the provision of a single point of contact to cater for a range of government services.
The building has achieved a 6 Star Green Star – Office Design v2 rating from the Green Building Council of Australia. The building has a particular focus on environmental sustainability, water and energy efficiency, accessibility, life-cycle costing and the delivery of government services.
The committee is satisfied that the project is necessary, is suitable for its purposes and meets functional, technical and environmental requirements. The committee is also satisfied with the procurement method and process and with the balance of public and private sector involvement in the work.
The committee has made two recommendations as follows: Recommendation 1: that the Department of Public Works table in the Parliament a detailed schedule providing actual and budgeted costs for the WMP2 project. Recommendation 2 that the Department of Public Works review its consultation methods to ensure that adequate public consultation is undertaken prior to the commencement of future projects.
On behalf of both the former Public Works Committee and the current committee, I would like to thank all those that took the time to provide submissions, provided additional information or who met with us during the course of this inquiry.
Finally, I would like to thank the other Members of the committee for their continuing hard work and dedication to the work of the committee.
Wayne Wendt MP Chair
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x Public Accounts and Public Works Committee William McCormack Place – Stage 2 project
1. Introduction
1.1 Recommendations in this report
1. The recommendations in this report are addressed to the Minister for Government Services, Building Industry and Information and Communication Technology, as the responsible minister 1.
1.2 Terms of Reference of the Inquiry
2. The Public Works Committee of 52 nd Parliament (PWC) resolved to conduct an inquiry into the construction of the William McCormack Place – Stage 2 (WMP2) project situated at the Cnr Sheridan and Hartley Streets, Cairns. The terms of reference for the inquiry were to examine and report on the project with particular reference to: a) the purpose of the work b) the necessity for, and the advisability of, the work c) the suitability of the work for its purpose d) the cost, recurrent costs, revenue and value for money of the work e) the impact of the work on the community, economy and environment f) procurement methods for the work g) the balance of public and private sector involvement in the work h) the performance of the constructing authority and the consultants and contractors for the work
3. The Public Accounts and Public Works Committee (PAPWC) of 53 rd Parliament resolved to complete the inquiry.
1.3 Conduct of the Inquiry
4. The committee advertised the inquiry and called for submissions in The Cairns Post , on Saturday, 26 July 2008. The committee also wrote to a variety of interested persons and organisations advising them of the inquiry and inviting them to make a submission. A copy of the Inquiry Information paper is provided in Appendix 1.
5. In response to the Information paper, the committee received six submissions. A list of those who made submissions is provided in Appendix 2.
6. On Friday, 31 October 2008 the committee inspected Stage 1 and Stage 2 of the William McCormack Place project. At the completion of the inspection, the committee returned to the Sebel Harbour Lights Hotel in Cairns to hold a public hearing. The names of the witnesses at the hearing are detailed in Appendix 3.
1 Parliament of Queensland Act 2001 (Qld), s.107 ministerial response to committee report
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7. Copies of the submissions and transcript of evidence are available from the committee secretariat.
8. In February 2009, the 52nd Parliament was dissolved for the State Election to be held on 21 March 2009. Subsequent to the election, the government implemented a number of machinery of government (MOG) changes which resulted in significant changes to the departmental structure. Submissions for this inquiry were received prior to the MOG changes and as such the previous departments have been quoted in this report where required.
9. The Public Works Committee (PWC) for the 53rd Parliament was appointed on 23 April 2009. On 19 May 2009, the Legislative Assembly passed the Parliament of Queensland Amendment Bill which merged the Public Accounts Committee and the Public Works Committee to form the Public Accounts and Public Works Committee (PAPWC). This bill was assented to and commenced on 28 May 2009.
10. The PAPWC reviewed the work of the former PWC and progressed other outstanding matters since dissolution of the previous committee.
11. This report draws on the views presented at the hearing together with the submissions, inspections and other information sources.
2. Key Facilities
2.1 Building background
12. WMP2 is the second stage of the two-stage development on the site located at 5B Sheridan Street, Cairns. The site is freehold land owned by the Department of Public Works (DPW) and adjoins the existing William McCormack Place Stage 1 building (WMP1), which was completed in 2002. 2 The WMP1 is situated on the corner of Sheridan and Hartley Streets, Cairns. WMP2 is located further along Hartley Street and behind WMP1 when viewed from Sheridan Street.
13. The complex is named after the first Australian-born Premier of Queensland, Cairns MP, William McCormack. WMP2 will accommodate 689 public servants from the departments of Health, Community Safety, Environment and Resource Management, Infrastructure and Planning and Justice and Attorney-General. 3
14. The building shares some facilities with WMP1. These include plant rooms and the loading dock. It provides all the car parking requirements for both buildings. 4
15. WMP2 building has nine storeys with a gross floor area of 12,453m 2 and a net lettable area (NLA) of 9,622m 2. DPW will retain ownership of the building. The building was fully occupied, by government tenants, as of 4 October 2010. 5
2 Submission 6: 3 3 Ministerial Media Statement, Minister for Public Works and Information and Communication Technology, Hon R Schwarten, ‘ Public Works Minister opens William McCormack Place Stage 2’ , 5 November 2010 4 Submission 6: 3, and Correspondence to PAPWC from Mr M Grierson, Director-General, DPW dated 4 February 2010: 1 5 Submission 6: 3, and Correspondence to PAPWC from Mr M Grierson, Director-General, DPW dated 1 November 2010: Attachment
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16. The following table details the tenancies for the building:
Agency Location Department of Community Safety Level 8 Queensland Health Levels 1, 7 & part level 6 Department of Justice and Attorney-General Part of level 6 Department of Environment and Resource Management Levels 2, 3, 4 & 5 Shared meeting and conference facilities Ground
Source: Correspondence to PAPWC from Mr G Messenger, Manager Major Projects, DPW, dated 3 August 2010
17. The primary structural elements of the WMP2 building consists of piled foundations and a reinforced concrete frame. A composite cladding system has been used, comprising concrete masonry, double glazed windows and pre-finished panels. The roof is of standard pre-finished metal sheeting. 6
18. The project was registered with the Green Building Council of Australia as a Green Star project and was awarded a 6 Star Green Star office design v2 certified rating. 7 WMP2 is also registered for a Green Star Office Interiors v1.1 and a Green Star Office As Built v2 ratings. 8
19. Details of the project are summarised in the following table:
Name: William McCormack Place Stage 2 Address: 5B Sheridan Street, Cairns Cost: $79.5 million Owner: Department of Public Works Architects: Cox Rayner Contractors: Laing O’Rourke Build Time: Commenced in September 2008 with completion in September 2010 Jobs Created: 600 FTE Floor space: 9,600 m2 net lettable area Accommodation: Designed to accommodate 689 people
20. Source: Ministerial Media Statement, Minister for Public Works and Information and Communication Technology, Hon R Schwarten, ‘ Public Works Minister opens William McCormack Place Stage 2’ , 5 November 2010
6 Correspondence to PAPWC from Mr M Grierson, Director-General, DPW dated 1 November 2010: Attachment 7 Ministerial Media Statement, Minister for Public Works and Information and Communication Technology, Hon R Schwarten, ‘ Public Works Minister opens William McCormack Place Stage 2’ , 5 November 2010 8 Green Building Council Australia, Green Star Project Directory , http://www.gbca.org.au/greenstar-projects/ [28 March 2011]
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21. An artist’s illustration of the completed building is illustrated below. Copies of the floor plans are provided in Appendix 4.9
Source: DPW Submission
2.2 Building/energy management systems
22. WMP2 shares the building management system of WMP1 due to their close physical location. 10 Mechanical control systems, which automatically control and monitor the mechanical engineering systems in the building, form part of the building management system. 11 The building management system also provides real time display and logging of energy use in the building as well as metering, logging and reporting the performance of individual services to allow future evaluation of actual energy usage with targets. 12
9 Correspondence to PAPWC from Mr M Grierson, Director-General, DPW dated 4 February 2010: Attachment A 10 Submission 6: 28 11 Submission 6 Attachment 1: 45 12 Submission 6 Attachment 1: 47-48
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2.3 Car parking and vehicle access
23. The construction of WMP2 necessitated the removal of the temporary car park at the rear of WMP1. 13
24. The 194 car parks included in WMP2 provides the total car parks available for the Complex. Car parks are located on ground level plus two semi-podium levels, and include five on-site undercover car parks designated as a drop-off point for visitors and staff. Two of the car park bays provide disabled access. 14
25. There are bicycle parks for 64 cycles and respective end of trip facilities (including change rooms, showers and lockers). 15
2.4 Information technology and communications systems
26. WMP2 shares the main ‘building distributor’ room located on the ground floor of WMP1. 16 The building distributor incorporates space to allow multiple telecommunication providers to install equipment. 17
27. Each floor has a communication room and associated communications riser for building related equipment. Each office level is provided with two secure data rooms to allow for the secure installation of tenant equipment as required. 18
28. The telephone and data cable backbone comply with the relevant Australian Standards and with the Queensland Government Information Standard IS32. There is multi-mode optical fibre in the backbone and ‘copper’ cabling to each workstation from the telecommunications room serving the floor. 19
29. Horizontal data and communication cabling is installed to consolidation points throughout each floor to allow for simple and flexible connection to tenant equipment on workstations. 20
2.5 Landscaping
30. New landscaping has been provided to the external courtyard/foyer and to the Hartley Street side of WMP2.21
13 Submission 6: 6 14 Submission 6: 6, and Correspondence to PAPWC from Mr M Grierson, Director-General, DPW dated 4 February 2010: 5 15 Submission 6: 6. and Correspondence to PAPWC from Mr M Grierson, Director-General, DPW dated 4 February 2010: 6 16 Submission 6: 5 17 Submission 6: 5 18 Submission 6: 5 19 Submission 6: 5 20 Submission 6: 5 21 Submission 6: 6
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31. The Local Authority was consulted regarding their requirements, strategies and guidelines for the area’s streetscapes and landscape design and where possible these were incorporated into the landscape and urban design. 22
2.6 Public areas
32. A large external courtyard/foyer space on the ground floor is a main feature of WMP2 and provides the main entrance to the building and a pleasant, semi-covered landscaped area that also serves as a breakout area for the shared meeting rooms. Staff are encouraged to use this area for informal meetings and lunch breaks through the provision of outdoor furniture and a permanent café counter. 23
33. The café counter is a services unit that will form the basis of an operator supplied counter arrangement. Expressions of interest were advertised in November 2010 to select an operator for this amenity. 24
2.7 Public art consultancy
34. No application for public art funding was made in connection to this project as during the construction of WMP1 a significant public art content was commissioned. 25
2.8 Office spaces
35. The small amount of partitioning for offices and support areas is constructed of modular glazed panels. Workstations are modular in design. 26
36. Joinery is generally modular and freestanding to provide flexibility. Floor covering in the office areas is carpet tiles for maximum durability and a combination of carpet tiles and non-slip floor tiles in public areas. 27
37. The office space is an open plan design, with standard workstations placed around the perimeter of the floor with the centre of the floor designated for built zones such as offices and support areas. 28
38. On each office level, the office and support areas are a standard and modular design to provide a flexible layout suitable for any agency that may occupy the space in the future. The central ‘built zone’ accommodates the offices, smaller meeting rooms and utility rooms in order to maximise the amount of flexible workstation space on the floor. The size and allocation of workstations and offices is in accordance with the Office Accommodation Management Framework. 29
22 Submission 6 Attachment 1: 21 23 Submission 6: 4 and Correspondence to PAPWC from Mr M Grierson, Director-General, DPW dated 1 November 2010: Attachment 24 Correspondence to PAPWC from Mr M Grierson, Director-General, DPW dated 1 November 2010: Attachment 25 Submission 6: 25 26 Submission 6: 4 27 Submission 6: 5 28 Submission 6: 4 29 Submission 6: 4
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39. Mobile (compactus) shelving has been provided for efficient office storage and the utility rooms contain office equipment (photocopiers and binders etc) to minimise noise in outside areas. 30
40. The overall design maximises natural light, allows flexibility for future changes by tenants and minimises the cost of reconfiguring office accommodation. 31
2.9 Support spaces
41. The ground floor has a number of large shared meeting rooms accommodating up to 40 people in different configurations. 32
42. Each floor has a kitchen area that provides hot and cold water, refrigerator, and tables and chairs for staff. 33
2.10 Toilets, showers and changing facilities
43. Each floor has toilet facilities, including accessible unisex facilities. 34
44. For those staff that use alternative transport methods, such as walking and cycling, ‘end of trip’ facilities, such as change rooms, showers, toilets and lockers, are provided on the ground floor. These facilities are also accessible by people with a disability. 35
2.11 Plant and related equipment
2.11.1 Communications services
45. The design and installation of telecommunications systems is based on Australian Standards, or where Australian Standards do not exist, on the relevant International Standards. In particular, cabling design uses enhanced copper cabling and optical fibre cabling. 36
46. The cabling design includes telecommunications risers, telecommunications closets, an equipment room, a building distributor incorporating the main distribution frame, floor distributors on each level and consolidations points. The use of consolidation points provides maximum flexibility to minimise costs associated with any future reorganisation. 37
47. Provision for 400 telephones, FM radio distribution and a master antenna television system have also been included. 38
30 Submission 6: 4 31 Submission 6: 4 32 Submission 6: 4 33 Submission 6: 4 34 Submission 6: 5 35 Submission 6: 5 36 Submission 6 Attachment 1: 95 37 Submission 6 Attachment 1: 95-96 38 Submission 6 Attachment 1: 100
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2.11.2 Electrical services
48. There is a standby generator of sufficient capacity to supply full power to the entire building with sufficient fuel to run the generator for three days in an emergency. 39
49. Electrical services include: High voltage distribution system Incoming cables and connection to supply authority reticulation are existing and remain in place to serve WMP2 Low voltage main switchboards and consumer mains cabling Standby diesel powered alternator sets complete with generator control panel, automatic transfer switches, control equipment, engine exhaust, cooling and ventilation systems and bulk fuel storage system Sub-circuit wiring of essential and non-essential lighting and power circuits Monitored single point emergency evacuation lighting system Lighting protection system 40
2.11.3 Fire services
50. The fire protection services have been designed and installed in accordance with relevant standards. Fire protection systems include: Automatic fire sprinkler systems Fire hydrant and fire hose reel systems Automatic fire detection systems Portable fire extinguishers. Emergency warning and intercommunications system Warden intercommunication points with each location providing storage for necessary equipment. 41
2.11.4 Hydraulic services
51. The design of the hydraulic services for the building was required to achieve a minimum of a 4 star rating under the green star rating scheme. 42
2.11.5 Lift and escalator services
52. There are four lifts that service all floors. One of these lifts is a combined passenger/goods lift that has access to the loading dock and car park area. 43
39 Submission 6: 5 40 Submission 6 Attachment 1: 47 41 Submission 6 Attachment 1: 85-86 42 Submission 6 Attachment 1: 79 43 Submission 6: 5
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2.11.6 Mechanical services
53. The air conditioning system uses a high efficiency chilled water refrigeration machine, along with associated pumps and a thermal energy storage tank to supply air conditioning to WMP2 and WMP1. Energy recovery systems have been incorporated in the air conditioning design to minimise energy use. The existing refrigeration equipment in WMP1 was retained to provide 100% standby capacity for the complex. 44
2.11.7 Security services
54. A Multi-Agency Counter is located in WMP1. Advantages of this concept include location, access, space and security. 45
3. Project Time Frames
55. The project timeframes were as follows:
Stage Date Status Planning for construction Commenced July 2007 Completed Guaranteed construction sum 14 July 2008 Completed agreed to and managing contractor appointed Commencement of early works 8 August 2008 Completed Commencement of construction September 2008 Completed work-on-site Construction period September 2008 to 30 July 2010 Completed (practical completion) Tenancies first occupancy date 12 August to 4 October 2010 Completed
Source: Submission 6: 6 and Correspondence to PAPWC from Mr M Grierson, Director-General, DPW dated 1 November 2010: Attachment
56. Early works commenced on 8 August 2008 and included the provision of a temporary off-site staff car park and access to the existing loading dock. 46
57. The completion of construction and full occupancy of WMP2 was timed to coincide with the expiry of the private sector accommodation leases for those agencies planning to occupy the new building. 47
58. The former Minister for Public Works and Information and Communication Technology officially opened the building on 5 November 2010. 48
44 Submission 6: 5 45 Submission 6: 7 46 Submission 6: 6 47 Submission 6: 6 48 Ministerial Media Statement, Minister for Public Works and Information and Communication Technology, Hon R Schwarten, ‘ Public Works Minister opens William McCormack Place Stage 2’ , 5 November 2010
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59. The following photographs illustrate the completed building, viewed from Hartley Street, as at 9 December 2010.
Source: PAPWC photographs taken 9 December 2010
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Committee comments
60. The project was completed in September 2010 and officially opened by the then Minister in November 2010. The committee is satisfied with the project construction schedule.
4. Terms of Reference
4.1 Purpose of the work
61. The purpose of the work was to construct a new government office building that would provide office accommodation for various government agencies. It would consolidate individual and related government agencies in the Sheridan Street precinct and integrate government service delivery that would improve accessibility and convenience for the community when dealing with government agencies. 49
62. The building has a particular focus on environmental sustainability, water and energy efficiency, accessibility, life-cycle costing and the delivery of government services. 50
4.2 The necessity for, and the advisability of, the work
63. The need for the work was identified in a review of the demand for government office accommodation in the Cairns central business district (CBD), which was undertaken by DPW for the period 2006-2010. DPW also considered the age, condition and performance of its existing office properties in Cairns. The review produced the Regional Accommodation Strategy – Cairns .51
64. At the time of the review, the Queensland Government occupied 27,700m 2 of office space in the Cairns CBD with approximately 56% being leased, and 44% being accommodated in government-owned buildings. Based on agencies’ projected demand for office space, DPW identified a total increase of office space demand of 19%, to approximately 33,000 m 2 over the following four years. 52
65. The review recognised the following key demand issues: that government office accommodation was dispersed across 31 locations in the Cairns CBD there was a projected growth of approximately 5,300m 2 in demand mainly due to increased government services provided to the Cairns region there was a need to relocate agencies out of approximately 4,700m 2 of current office space which was unsuitable for agencies’ long-term requirements. 53
49 Submission 6: 8 50 Submission 6: 8 51 Submission 6: 9 52 Submission 6: 9 53 Submission 6: 9
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66. A number of submissions to the committee’s inquiry questioned both the cost and necessity for the construction of a new government owned building. DPW’s submission also noted that the project had drawn comment from sections of the real estate industry in Cairns. The main criticisms were the cost of the project and that the development would lead to an over-supply of A-Grade office space in Cairns.
67. Central Park Cairns Pty Ltd, a commercial developer, advised that the private sector is able to adequately accommodate any government expansion over time. 54 They advised the committee that the private sector has more than enough sites and impetus to build what the government requirement is without the government having to spend this money on a building. 55
68. Capital Globe Australia Pty Ltd, also a commercial developer, advised the committee that demand exists for office space of the calibre of WPW2, however, contested that it was unnecessary for the work to be undertaken by government when the private sector can do it. They considered that the government should withdraw from competing with the private sector for the provision of commercial office space and commit the funds to other infrastructure projects. 56
69. The Cairns Chamber of Commerce advised that the private sector is already providing A-grade office space to meet the stringent government office quality standards and features the latest in innovative energy and efficiency design. They questioned why the government why the government would consider investing in a project that is unnecessary. 57
70. The Northern Development Industry Association (NDIA), which represented the development community at the time but has since disbanded 58 , advised that the construction of WMP2, together with stock already under construction, could create a concerning over supply in the market and have a detrimental effect on the integrity, value and yield of existing assets. 59 The NDIA, however, confirmed that at the time of the hearing the vacancy rates for A-grade properties were around 1% and in the preceding years rentals had increased 30% to 40%. They advised that their concern was that the construction of WMP2 could produce a situation where there are vacancies in terms of other stock around the city with what was currently being developed. However, they were unable to articulate what effect the construction would have on the vacancy rates in the city. 60
71. DPW advised the committee that the decision to proceed with the development was not made without consideration for the local property market. 61 DPW countered the argument that the construction of the building would adversely impact upon the Cairns property market by providing advice that the agencies to be accommodated in the development would mostly be relocating from inadequate B and C grade stock and that there is a larger than anticipated demand for government accommodation in the city. 62
54 Submission 5: 1 55 Mr Kelly, Transcript, 31 October 2008: 3 56 Submission 2: 1 57 Submission 3: 1 58 Mr Wood, Transcript 31 October 2008: 3 59 Submission 1: 2 60 Mr Wood, Transcript 31 October 2008: 6 61 Mr Smith, Transcript 31 October 2008: 8 62 Submission 6: 24
12 Public Accounts and Public Works Committee William McCormack Place – Stage 2 project
72. DPW further advised that there was a high occupancy rate in the Cairns A-Grade office market and acknowledged that there would be a short term impact on the local real estate market. However, medium term growth projections for government accommodation suggested that the Queensland government would still rely on new private sector leases beyond 2010. 63
73. Arguments were also advanced that the state government would be competing against the private sector for a substantial proportion of office space within the Cairns environment due to a community understanding that the property would only be 50% occupied by government.64 DPW advised the committee that the property is 100% occupied by government. DPW confirmed that in 2006 when the business case was developed, there was a projection of an extra demand within Cairns of about 10,000m 2. By 2008, approx 9,700m 2 of those A-grade properties had already been occupied. The projected demand had already been absorbed by the private sector.65
74. Advance Cairns, a non-profit organisation funded by the Cairns Regional Council and the Ports North whose mission is to contribute to sustainable economic growth in Far North Queensland,66 also advised that the funds provided for the construction of WMP2 could be used for ‘desperately needed’ infrastructure needed to meet the future needs of the community. 67
75. DPW advised that there are two classes of assets. The department operates as a property manager acting on behalf of government. They borrow the required funds from Queensland Treasury Corporation (QTC) for that asset class and they are required to pay back loans the same as any other developer. If the funding were to go into another asset class, such as social infrastructure, then no return actually comes back for the funds expended. 68
76. One of the major criticisms of the project was the anticipated cost. A number of the submissions indicated that the private sector could construct the building to the same standards at a substantially reduced cost. All submissions based their assessment on a cost of $79.5million to provide 9,600m 2 of NLA equating to $8,281.25 per square metre. 69 The committee was advised that Central Park Cairns Pty Ltd was delivering its development for less than 40% of the proposed cost of WMP2. 70 It was subsequently clarified that the Central Park Cairns Pty Ltd property was for an unfitted out building. The committee was advised that the Central Park Cairns Pty Ltd property would cost approx $46.8million for 12,000m 2 compared with WMP2 at a cost of $45million for 9,600m 2 on an unfitted out basis. 71 DPW confirmed these figures and advised that the WMP2 price was a contract price whilst the other one was an estimate. 72
77. DPW noted that, at the time there had been no Green Star buildings constructed in Cairns and it was therefore not possible to establish direct cost comparisons with similar buildings in that city. 73
63 Submission 6: 24 64 Submission 1: 2 65 Mr Smith, Transcript 31 October 2008: 9 66 http://www.advancecairns.com/about-us/ [25 March 2011] 67 Submission 4: 1 68 Mr Smith, Transcript 31 October 2008: 10 69 Submission 5: 2; Submission 4: 1; Submission 3: 1; Submission 2: 1; Submission 1: 1 70 Submission 5: 2 71 Mr Byrne, Transcript 31 October 2008: 4 72 Mr Smith, Transcript 31 October 2008: 9 73 Submission 6: 21
13 Public Accounts and Public Works Committee William McCormack Place – Stage 2 project
78. DPW engaged the services of construction and management consultants, Turner and Townsend, to provide quantity surveying advice during the design and construction phases of the project. 74 They provided cost comparisons with seven private sector construction projects in Brisbane. Of the seven comparable projects, five had higher costs and two had lower costs. The total project cost also compared favourably with preliminary cost estimates of hypothetical developments provided by two private sector quantity surveyors in August 2008 that ranged from $86.4 million to $87.8 million. 75
4.2.1 Existing accommodation
79. A number of the existing accommodation leases did not meet government accommodation standards, with respect to space and energy efficiency, disability access and government service delivery standards. For those affected agencies the majority of their commercial leases were due to expire in 2009-2010. 76
80. Two of the DPW owned commercial office properties, 36 Shields Street and 10-12 McLeod Street, were considered to be inadequate for long-term government accommodation. 77
81. The Shields Street building was constructed in 1985 with a NLA of 2,520m 2. It has an inefficient floor layout that restricts the flexibility of the fit-out, limits disability access and is not energy efficient. There is limited on-street parking and no on-site visitor parking. The basement car parking is limited, vulnerable to flooding, and is unsuitable for redevelopment as government office accommodation. 78
82. The age and condition of 36 Shields Street results in higher maintenance costs and the poor energy efficiency results in higher energy costs and increased emissions. The disposal of this property was not integral to the business case for the construction of WMP2, however authority was given for its disposal.79
83. The McLeod Street building, constructed in 1990, has a NLA of 3,760m 2. The long and narrow design of the building combined with internal columns and widely separated lift cores, results in inefficient and inflexible fit-out layouts. There is limited disability access and it is not energy efficient. In 2005 the air conditioning chillers were replaced and in early 2007 the lifts were replaced which improved the condition of the building in the medium term. The agencies located in this building had acceptable office space, but their identified future growth could not be accommodated in this building. In the long term the building was considered unsuitable for government accommodation. 80
74 Submission 6: 21 75 Submission 6: 23 76 Submission 6: 10 77 Submission 6: 10 78 Submission 6: 10 79 Submission 6: 10 80 Submission 6: 11
14 Public Accounts and Public Works Committee William McCormack Place – Stage 2 project
84. While the 10-12 McLeod Street building performs better than the 36 Shields Street building, the high maintenance costs and poor energy efficiency leads to higher energy costs and increased emissions compared to a more modern building. The completion of WMP2, enables DPW to undertake a further assessment of the future use of the building with the final decision on the retention or disposal of the property being dependant on market conditions and the government’s accommodation requirements at that time. 81
4.2.2 Agency requirements
85. DPW established the needs of the occupying agencies through a survey and then consultation, to identify key business drivers and the projected growth in service delivery. Based on the analysis of the agencies’ identified needs, the size, location and particular characteristics of a government building were determined. The common needs of the agencies in regards to their accommodation were: infrastructure that supports developing technology a contemporary and healthy work environment that is accessible for staff a CBD-located building with proximity to public transport a flexible office space that can adapt to meet organisational change, which reduces the costs previously associated with these types of changes 82
4.2.3 Options Study
86. DPW identified that to meet the projected demand for office accommodation in Cairns, up to 10,000m 2 of new government accommodation was required. DPW analysed three possible options: Option 1: Enter into an agreement with the private sector for the construction of a new building of 10,000m 2 (NLA) to be leased by the Queensland Government (pre-commitment lease). Option 2: Construct a new government office building of up to 10,000m 2 (NLA) on departmental land in Hartley Street, Cairns CBD. Option 3: Continue to source leased accommodation in response to agency needs on an ad hoc basis in existing developments within the Cairns CBD. 83
4.2.4 Option 1 – Pre-commitment lease option
87. The committee asked DPW whether they gave consideration to going to the market to get a cost for a pre-commitment lease. DPW advised that in developing the business case a detailed cost benefit analysis was undertaken to determine whether to proceed by way of construction or pre- commitment lease. Similar information and costs that developers would use in submitting a pre- commitment lease proposal (eg existing market rents, projected market rents, estimated construction costs and timing) were applied. This information was obtained from internal and external valuers, quantity surveyors, construction and project managers and the like. 84
81 Submission 6: 11 82 Submission 6: 11 83 Submission 6: 13 84 Correspondence to PAPWC from Mr M Smith, Deputy Director-General, DPW dated 1 December 2008: 4
15 Public Accounts and Public Works Committee William McCormack Place – Stage 2 project
4.2.5 Option 2 – Construct new government office building option
88. The Business Case for the Development of a New Government Office Building – Hartley Street, Cairns was developed in conjunction with Queensland Treasury and finalised in January 2007. 85 The committee has received and reviewed a copy of the Business Case.
89. The business case identified the accommodation supply and demand profile for the Cairns CBD and considered the options available to deliver the accommodation requirements. 86
90. The business case specifically considered: the anticipated demand for government office accommodation in the period 2006 to 2010 the existing leased portfolio the existing government-owned portfolio the office accommodation strategy and the plan to achieve that strategy the options available to deliver up to 10,000m 2 of new government office accommodation by 2010 87
91. The business case included a financial analysis of the various options including a net present value (NPV) cost to government of each option. The financial analysis considered the cost of delivering a new government-owned building compared to the cost of a pre-commitment lease in a private sector development of the same standard. To ensure that the two options could be compared on a like-for-like basis it was necessary to make a number of assumptions regarding the hypothetical developer’s costs, including a developer’s risk profile, cost of finance, profit requirements and ownership intentions. 88
4.2.6 Option 3 – Source leased accommodation option
92. While preparing the business case in 2006, DPW identified that there was little to no suitable office accommodation either available, or likely to be available, for lease in existing properties in Cairns that would meet all of the government’s accommodation standards. Space available was not contiguous, leading to space inefficiencies including duplication of reception, circulation and meeting areas with consequential impacts on fit-out costs, and the need to rent more space than would otherwise be necessary. For these reasons option 3 was not costed in the financial analysis section of the business case. 89
85 Submission 6: 13 86 Submission 6: 13 87 Submission 6: 13 88 Submission 6: 13-14 89 Submission 6: 14
16 Public Accounts and Public Works Committee William McCormack Place – Stage 2 project
4.2.7 Selected Option
93. It was determined that both Options 1 and 2 would deliver a government-owned building meeting all the project requirements and government accommodation standards, however, the NPV cost of option 1 was higher than that of option 2. Option 1 also carried a higher exposure to the private sector market with an elevated risk of rental fluctuations. 90
94. Option 2 was chosen as the preferred option as it allowed the government to achieve its objectives, such as consolidating the government precinct in Sheridan/Hartley Streets, the ability to co-locate government agencies and services through a multi-agency counter based in the complex and the government could demonstrate leadership in the delivery of an office building and fit-out that would achieve a 5-star Green Star rating in a tropical climate. 91
Committee comments
95. The committee agrees that information contained within the Business Case should remain commercial-in-confidence so as not to jeopardise future contractual negotiations.
96. The committee considers that the work was necessary.
4.3 The suitability of the work for its purpose
4.3.1 Location
97. WMP2 building is located on the corner of Sheridan and Hartley Streets, Cairns and forms part of the William McCormack Place complex in the Cairns CBD. It further enhances the area as a “government precinct” allowing the public to access a range of government services within the area. 92
98. The site is on freehold land owned by DPW and covers an area of 9,584m 2. The real property description of the site is Lot 7 on SP 102692. 93
90 Submission 6: 14 91 Submission 6: 14 92 Submission 6 : 15 . 93 Submission 6 : 3.
17 Public Accounts and Public Works Committee William McCormack Place – Stage 2 project
99. The following illustrates the site in relation to other major Cairns buildings:
Source: DPW Submission
4.3.2 Size
100. The building has a NLA of 9,622m 2.94
101. WMP2 was built in accordance with the identified government accommodation needs in Cairns and is of a size and scale appropriate for the site. WMP2 is designed to compliment the existing WMP1 building. 95
4.3.3 Design
102. Cox Rayner, in association with CA Architects, were the architects and principal consultants for WMP2.96
94 Correspondence to PAPWC from Mr M Grierson, Director-General, DPW dated 1 November 2010: Attachment 95 Submission 6: 15 96 Submission 6: 29 .
18 Public Accounts and Public Works Committee William McCormack Place – Stage 2 project
103. WMP2 was designed to meet the various office accommodation needs of a range of government agencies. The rectilinear floor plates have an east-west orientation to best capture the natural light and views while minimising heat loadings. 97
104. The office floors have a NLA of approximately 1,285m 2 with large open areas. The built zones are restricted to a central spine. Each floor has their wet points and lunch rooms located in standard positions. The central fire stair was designed to provide an inviting alternative to lift usage. 98
105. WMP2 was constructed adjacent to WMP1 and shares some of the existing facilities (loading dock and security desk) and services (substation and plant rooms). It provides enhanced air conditioning services to both buildings improving the energy efficiency of the WMP1.99 The committee was advised similar systems to those installed in WMP1 were put into WMP2, albeit with newer technology. 100
106. DPW also advised the committee that the air-conditioning system in WMP2 will also supply the air-conditioning chilled air for WMP1. The idea is that it enables the ability to tap into the additional efficiency being achieved for a new building. The existing plant and equipment in WMP1 will be stand-by equipment to serve both buildings. 101
4.3.4 Vehicular and pedestrian access
107. Access to the car park is controlled by boom gates and a roller shutter door. Some car parks have been designed for smaller vehicles to encourage the use of more fuel efficient vehicles. 102 The car park is hidden behind the office tower. The first two levels of the tower share the car park level. 103
108. The NDIA, in their submission, noted that there has been growing concern within the city about car parking standards and the number of parties parking on vacant land around the development. They advised that car parking is becoming a significant issue within the city of Cairns and whilst there is no need to provide spaces above those ordinarily required, some consideration should be given to these circumstances as part of the overall development. 104
109. The committee sought clarification regarding the reduced quantity of car parking facilities. 105
110. DPW advised the committee that the Cairns Regional Council car parking requires one car park per 50m 2 of NLA 106 and the WMP2 car parking provides one car park per 73m 2.107 The combined NLA of WMP1 and WMP2 is 14,206m 2. On this basis, the Cairns town planning requirements required 284 car parks – an additional 90 car parks. 108
97 Submission 6: 15 . 98 Submission 6: 15 and Correspondence to PAPWC from Mr M Grierson, Director-General, DPW dated 1 November 2010: Attachment 99 Submission 6: 16. 100 Mr Messenger, Transcript 31 October 2008: 13 101 Mr Messenger, Transcript 31 October 2008: 13 102 Submission 6: 17; Correspondence to PAPWC from Mr M Grierson, Director-General, DPW dated 4 February 2010: 5 103 Mr Messenger, Transcript 31 October 2008: 11 104 Submission 1: 3 105 Correspondence to Mr M Grierson, Director-General, DPW from PAPWC dated 10 November 2009 106 Correspondence to PWC from Mr M Smith, Deputy Director-General, DPW dated 1 December 2008: 2 107 Submission 6: 17 . 108 Correspondence to PWC from Mr M Smith, Deputy Director-General, DPW dated 1 December 2008: 1
19 Public Accounts and Public Works Committee William McCormack Place – Stage 2 project
111. The site has Ministerial designation under the Integrated Planning Act 1997 . Therefore, there was no requirement for the government to fully comply with town planning requirements. However DPW does, wherever possible and practical, endeavour to fully comply with town planning requirements. 109
112. DPW further advised that in making the decision to restrict the car parking to 194 cars there were four significant factors that were considered: Providing an additional 90 car parks would cost in excess of $2 million (based on the provision of 50% more car park area and the current car park cost of $3.6 million). The current design with 194 car parks had a main building height of 38 metres and a podium height of six metres. The addition of two levels of car parking would increase the height of the building to 44 metres for the main building and 12 metres for the podium, well in excess of the maximum building height of 30 metres and podium height of 11.5 metres set in the Cairns Town Plan for buildings in this location (precinct 2). The presence of acid sulphate soils on the site, along with the high water table and flood risk, considerably increases the risk and cost of basement car parking rather than podium level car parking and was not considered viable. Early design concepts for WMP2 considered the inclusion of additional levels of car parking to provide 284 car parks, however the architects advised that the mass of the resultant four storey podiums would create a canyon effect at street level and on the adjoining boundaries, would adversely affect the visual amenity from Hartley Street and neighbouring properties and the building's relationship to WMP1. The NLA to gross floor area efficiency of the building would also be adversely affected through the need to include two further mezzanine level office tenancies on the car park levels. Designers of Green Star rated buildings encourage a decreased reliance on traditional vehicular transport to buildings by way of a reduction in the amount of car parking available in a building and the provision of smaller car parks to encourage the use of smaller, fuel efficient cars. They also encourage healthy transport options through the provision of end- of-trip facilities for cyclists and pedestrians. During the planning and design phases of the complex it was identified that agencies, who were to occupy the building, would not need the full number of car parks required under the Cairns Town Plan for official government cars. 110
113. In addition to the above, the committee was advised that there is a reluctance to provide public car parking in a government building because there are security issues in control of people who park there. 111
114. The committee queried the proximity of public transport and was advised that the building is a centrally located site and there are regular buses.112
109 Correspondence to PWC from Mr M Smith, Deputy Director-General, DPW dated 1 December 2008: 2 110 Correspondence to PAPWC from Mr M Grierson, Director-General, DPW dated 4 February 2010: 6 111 Mr Messenger, Transcript 31 October 2008: 10-11 112 Mr Smith, Transcript 31 October 2008: 12
20 Public Accounts and Public Works Committee William McCormack Place – Stage 2 project
4.3.5 Disability access
115. WMP2 was designed to exceed the mandatory requirements stipulated in the Australian Building Code thus providing access for a greater proportion of people with a disability. The building, its environs, services and facilities is accessible to persons with a disability on an equitable basis. 113
4.3.6 Fire protection
116. In accordance with AS1670, WMP2 is equipped with a fire detection and alarm system incorporating smoke detectors, thermal detectors and manual call points. The building also is equipped with an Emergency Warning Intercom System in accordance with AS2220 and is equipped with fire hydrants, hose-reels and extinguishers. 114
4.3.7 Maintainability
117. The project brief specified that all openings in the building fabric be protected from intense solar radiation and be of a durable and maintenance free material. It also specified that roofing and rainwater goods be of durable long lasting pre-finished material. 115
118. The committee was advised that the one big advantage of building a sustainable building is that they tend to be fairly simple. There is more emphasis on getting the passive design correct, such as shading etcetera. They advised that once that is right, the machinery and the air-conditioning systems can be smaller.116
4.3.8 Occupational health and safety
119. WMP2 complies with all relevant Workplace Health and Safety requirements. The building provides high quality indoor comfort, low levels of harmful emissions, and good access to views and day-lighting. 117
120. The external areas of the building adhere to the principles of ‘Crime Prevention Through Environmental Design’ to ensure the safety of staff and visitors. 118 This concept includes the following key principles: the goal of surveillance the goal of legibility the role of territoriality the goal of personal and community ‘ownership’ of the outcomes the issue of management, and the idea of vulnerability. 119
113 Submission 6: 16 114 Submission 6: 16 115 Submission 6 Attachment 1: 14-15 116 Mr Messenger, Transcript 31 October 2008: 13 117 Submission 6: 16. 118 Submission 6: 16 119 Queensland Government, Crime Prevention through Environmental Design – Guidelines for Queensland – Part A: Essential features of safer places , October 2007: 4
21 Public Accounts and Public Works Committee William McCormack Place – Stage 2 project
4.3.9 Security
121. The access control system uses ‘proximity’ type access cards to control access to secure areas (eg car parks) and includes alarms to perimeter doors. After hours access to the building and use of the lifts is controlled by access cards. The security design provides for tenant agencies to extend the building access control and alarm functions to their tenancy areas. 120
122. Cameras and recording equipment monitor key locations within the building and exterior. 121
123. The Building Services Coordinator, who provides security services to the complex and acts as the Chief Fire Warden, provides these services to the whole complex from a redesigned security desk located in the main foyer area. 122
4.3.10 Flexibility of internal reconfiguration of spaces
124. The interior floor plates and layouts have been designed to provide for flexible fit-out configurations and are suitable for future use by any government agency requiring office accommodation. 123
4.3.11 Consideration to future development of the building and site
125. The size and proportion of WMP2 is considered to optimise the potential of the building and no consideration has been given to further develop the building. The site is fully utilised and will not be suitable for further development during the life of the existing buildings. 124
Committee comments
126. The committee considers that the work will be suitable for its purpose. The construction of WMP2 will consolidate individual and related government agencies in the Sheridan Street precinct and will provide an opportunity to integrate government service delivery and improve accessibility and convenience for the community when dealing with government agencies.
120 Submission 6: 16 121 Submission 6: 16 122 Submission 6: 16 123 Submission 6: 18 124 Submission 6: 18
22 Public Accounts and Public Works Committee William McCormack Place – Stage 2 project
4.4 The cost, recurrent costs, revenue and value for money of the work
4.4.1 Project cost
127. The project was originally approved in the 2007-2008 State Budget for $79.5 million. 125 Supplementary funding of $500,000 was approved in the 2009-10 State Budget, due to the anticipated rise in the cost for steel in the project. However, this escalation did not eventuate and additional funding will be shown as a project saving. 126 The Minister has advised a final construction cost of $79.5million. 127
128. Funding was provided across four financial years as follows:
Financial Year Budgeted Amount Funds Expended Cumulative Balance 2007-08 $7.0 million $4.5 million $4.5 million 2008-09 $40.5 million $20.386 million $24.886 million 2009-10 $42.1 million $42.7 million $67.586 million 2010-11 $11.9 million To be confirmed To be confirmed Total $79.5 million
Source : Queensland Budget Papers, Capital Statements 2007-08, 2008-09, 2009-10, 2010-11 http://www.budget.qld.gov.au/index.shtml [25 March 2011]
129. DPW has provided the committee with a detailed break-up of the budget. The WMP2 contract had a guaranteed construction sum (GCS) which included the Managing contractor’s fees and overheads and site establishment costs. 128
130. In the design of the project there was a focus on minimising construction and operating costs over the full life cycle of the building. Materials and services were chosen on the basis of initial value for money in the construction phase and long term (whole-of-life) maintenance and capital replacement cost. The design of services such as the electrical and air conditioning systems was simplified where possible to minimise capital and maintenance costs. 129
131. The committee was advised that one of the community concerns was that there should be some obligation on the government to advise the community as to what the effective rate per square metre of the building will be. The NDIA advised the committee that when WMP1 was developed they had correspondence from the government advising what the face rent would be to make sure that the valuation and finance community had an understanding of what those figures would be. They requested that this also occur for WMP2. 130 DPW advised that at the time of the hearing the rent would be approximately $400 per m2. DPW advised that this figure is effectively the market rate for Cairns. The reason for this is that if they were charging their tenants more than market rent then they would not be happy. 131
125 Submission 6: 18 126 Correspondence to PAPWC from Mr M Grierson, Director-General, DPW dated 4 February 2010: 1 127 Ministerial Media Statement, Minister for Public Works and Information and Communication Technology, Hon R Schwarten, ‘ Public Works Minister opens William McCormack Place Stage 2’ , 5 November 2010 128 Correspondence to PAPWC from Mr M Grierson, Director-General, DPW dated 4 February 2010: 1 129 Submission 6: 19 130 Mr Wood, Transcript 31 October 2008: 2 131 Mr Smith, Transcript 31 October 2008: 9
23 Public Accounts and Public Works Committee William McCormack Place – Stage 2 project
4.4.2 Recurrent costs
132. Recurrent costs include cleaning, electricity, security, local government charges, and maintenance. These costs are recouped from tenants through recharging for cleaning, security and electricity, with the balance of the recurrent costs being funded from the revenue stream. 132
133. Passive and active design features were incorporated into the building to improve the efficiency of the building services and to minimise energy use over the life of the building. Passive design features include incorporating shading and natural light to reduce the lighting and air conditioning requirements and the use of a highly efficient air conditioning system that incorporates heat recover technologies to greatly reduce the energy cost of the building. 133
134. Transaction cost efficiencies are being gained through the reduction in the total number of leases and corresponding processing of landlord payments and subsequent tenant recovery for rent, tenant costs and outgoings. 134
4.4.3 Revenue
135. Agencies occupying WMP2 are charged rent at a market rate commensurate with the quality of accommodation for office space, car park spaces, and storage area. Rents are reviewed to market every two years. 135 Occupying agencies will also be charged for outgoings. 136
136. Revenue from WMP2 (after deduction of operating costs) is remitted to Queensland Treasury through the DPW trust account. 137
4.4.4 Value for money
137. The committee’s assessment of value for money included consideration of: Cost related factors – including whole-of-life costs and transaction costs Non cost factors – including fitness for purpose, quality service and support and Contribution to the advancement of government priorities
138. DPW adopted a number of measures to ensure that value for money was achieved throughout the project. 138 Measures included: using private sector quantity surveyor advice regarding construction costs and trends when setting original budgets a thorough analysis of procurement options during the project planning phase engagement of a private sector building contractor in the early design phase to provide buildability advice and cost control
132 Submission 6:18. 133 Submission 6: 20 134 Submission 6: 20 135 Submission 6:18 . 136 Correspondence to PAPWC from Mr G Messenger, Manager Major Projects – Strategic Development Group, DPW dated 3 August 2010 137 Submission 6:18 . 138 Submission 6: 19
24 Public Accounts and Public Works Committee William McCormack Place – Stage 2 project
the agreed GCS being the maximum price payable. The managing contractor being liable for all costs in excess of the agreed GCS contractor incentives within the ‘Managing Contractor Form of Contract’ to ensure subcontractor packages are tendered competitively. Where the total of the subcontract packages was less than the GCS then the difference was shared on the basis of a stated formula progressive cost and design auditing of the project by Project Services (a business unit of the DPW) to ensure that the work achieves both design and budget objectives involvement of prospective tenants in the design stage to deliver an integrated fit-out at practical completion, minimising costly post-construction changes clearly established material quality requirements which include consideration of life cycle costs a requirement that the building design achieve a minimum five-star National Australian Built Environment Rating System (NABERS) energy rating which will reduce the ongoing operating costs of the building compliance with the State Procurement Policy 139
139. Throughout the planning and design stages of the project a private sector Quantity Surveyor was engaged to monitor the design and associated cost issues leading up to the negotiation of the GCS. A protracted value management process was also applied to the project to ensure that the quality and cost of the project was kept in alignment with the allocated budget. 140
140. The Quantity Surveyor continued to monitor costs and progress throughout the construction phase of the project to ensure that contractual obligations were being met and any cost variations were properly accounted for. 141
141. Fitness for purpose is being demonstrated via the provision of quality and efficient government office accommodation enabling the collation of government agencies within the Sheridan Street government precinct. This has resulted in the efficient and convenient delivery of government services. 142
142. The completion of the construction of WMP2, will enable DPW to subsequently dispose of one or more surplus Cairns buildings currently in DPW’s office portfolio. This consolidation will lead to the improvement of the overall value, efficiency and performance of the portfolio. The improvement in energy efficiency in WMP2 will also contribute to the reduction in emissions and the carbon footprint of the portfolio. 143
143. Some recent studies have shown that the provision of good quality office accommodation can lead to improved productivity, improved staff retention, and reduced absenteeism. It is anticipated that there will be improvement in the effectiveness of service delivery by the tenant agencies. 144
139 Submission 6: 19 140 Submission 6: 19 141 Submission 6: 19 142 Submission 6: 20 143 Submission 6: 20 144 Submission 6: 20
25 Public Accounts and Public Works Committee William McCormack Place – Stage 2 project
144. The State Procurement Policy, and the previous State Purchasing Policy, requires agencies to seek to advance Queensland Government priorities through its procurement process. 145
145. The project will support current government objectives which include: a) STRONG – Creating a diverse economy powered by bright ideas – encouraging innovation in the construction industry to meet nationally sustainable benchmarks including Green Star and NABERS target ratings; b) GREEN – Protecting our lifestyle and environment – improving the sustainability of government office accommodation and reduce greenhouse gas emissions through targeting Australian best practice benchmarks in NABERS and Green Star ratings; c) SMART – Delivering world class education and training – placing contractual obligations on contractors to provide apprenticeships and training opportunities in the construction of WMP2; d) HEALTHY – Making Queenslanders Australia’s healthiest people – encouraging alternative transport methods through the inclusion of cycle storage and end of trip facilities for staff and the provision of cycle racks for visitors; and e) FAIR – Supporting safe and caring communities – providing improved capacity for agencies to coordinate service delivery to families and communities through the collocation of services and the provision of a multi-agency counter in the complex. 146
Committee comments
146. The committee agrees that the detailed budget information should remain commercial-in- confidence until completion of the project on the basis that the government’s ability to negotiate the relevant contracts may be detrimentally effected. However, the justification for this information to remain commercial-in-confidence is mitigated once the project is complete.
147. The committee is satisfied that the department took all steps necessary to ensure that the project provided value for money.
Recommendation 1
The committee recommends that the Department of Public Works table in the Parliament a detailed schedule providing actual and budgeted costs for the WMP2 project.
4.5 The impact of the work on the community, economy and environment
148. When investigating public works, the committee believes it is essential to listen to the views of end users, as well as those held by people and organisations either affected by or with an interest in a particular project.
145 Queensland Government, State Procurement Policy , September 2010: 3 146 Submission 6: 20-21
26 Public Accounts and Public Works Committee William McCormack Place – Stage 2 project
4.5.1 Community
149. The completion of WMP2 has further consolidated the availability of government services in the Sheridan Street precinct and in particular within the complex. 147 DPW stated that WMP2 would deliver a cost effective outcome that would meet the government’s requirements as a long term owner, manager and user of the building. 148
150. As part of the project, WMP1 had a fit-out of a Multi-Agency Counter in the existing ground floor. The counter is designed to provide a single point of contact for a range of government services, and caters for a range of public/government interfaces from simple cash transactions to case management of social issues. The services provided through the counter are not limited to services provided by the tenants of the complex. 149
151. A number of submissions agreed that the project would have positive impacts on the community, economy and environment by creating an environmentally friendly and efficient working environment for government employees and creating employment during construction. 150 They also noted that the community welcomed any investment in building and infrastructure as investments of this nature provide employment opportunities and add a positive sense of progress for the city during a period of questionable economic certainty. 151
152. The local community had considerable discussion regarding the need for WMP2. The construction of three other projects raised the concern as to whether there was enough demand for the increase in available office space or whether the over abundance of available office space would lead to a lower rental cost. 152
153. DPW was criticised for not consulting with the local community before proceeding with the development. 153 The NDIA advised the committee that they were not aware of any consultation about the project. As an industry body they were not aware that the development was on the radar and they only heard about it when the announcement was made that the building would be built. They expressed surprise as they worked in tandem with government in the development of WMP1. The NDIA advised that they felt, as a development community, that the issue was not given fair and open public scrutiny and whatever information may have been put forward did not take into account current circumstances. 154
154. DPW advised that they undertook a market analysis involving local valuation groups, such as Knight Frank and Herron Todd White. These groups were aware of the project as part of the consultation process. 155 DPW advised that they considered that the marketplace would have been aware of the project by the nature of the way the market place works. DPW did, however, accept the criticism that they did not go out and consult with the community because they believed that the community that would have been consulted would have been the same group that already knew. DPW conceded that they do not have enough evidence to suggest that they ‘went out’, in a formal sense, to consult with the community. 156
147 Submission 6: 24 148 Submission 6: 23 149 Submission 6: 24 150 Submission 5: 2 151 Submission 2: 2 152 Mr Byrne, Transcript 31 October 2008: 1-2 153 Submission 1: 1 154 Mr Wood, Transcript 31 October 2008: 5 155 Mr Flynn, Transcript 31 October 2008: 10 156 Mr Smith, Transcript 31 October 2008: 10
27 Public Accounts and Public Works Committee William McCormack Place – Stage 2 project
155. DPW advised the committee that the department adopted a consultation mechanism based on what information should be communicated, to whom, and how information consistent with the need to protect commercial-in-confidence information should be made available for public knowledge. They advised that there was a need to maintain equity and probity in the marketplace by ensuring that information which may be commercially advantageous to developers or owners to the detriment of the State is kept confidential. 157
156. They advised that the decision making process for WMP2 commenced in 2006. Consultation included commissioning a market report by Herron Todd White. Other consultations involved private sector firms that provided cost consultancy advice. The report outlined market conditions, anticipated supply and demand and the impact of a new government office building in Cairns. The consultation process included an assessment of the impact on the property market should the project proceed. 158
4.5.2 Economy
157. The construction of WMP2 had a number of positive impacts on the economy including the creation of local employment and training opportunities and demand for materials and services during the design and construction phases of the project. In particular: approximately 32,400 person weeks of employment was created by the project, mainly in Queensland in general and in the Cairns region in particular as most of the consultants and contractors involved in the project were Cairns based much of the material required in the construction of the project was sourced locally training opportunities were created that increased the skills and experience of participants and lead to further employment opportunities at the completion of WMP2, employment was created in the building for operational and maintenance personnel such as cleaners and maintenance technicians 159
158. The WMP2 project was subject to the Local Industry Participation Policy and the Managing contractor was required under the terms of the contract to prepare a Local Industry Participation Plan. This was prepared in consultation with Industry Capability Network (ICN) who had a reporting role on the compliance with the Local Industry Policy (LIP) and reporting to the Department of Tourism, Regional Development and Industry (DTRDI).160
159. The construction contract required that apprentices, trainees or cadets were engaged for a minimum number of hours as calculated by a formula, and that the managing contractor report such employment to Construction Skills Queensland within the Department of Education, Training and the Arts (DETA) in accordance with a prescribed regime. 161 The formula provided a quantum of work that approximated 10% of the project’s labour force. 162
157 Correspondence to PWC from Mr M Smith, Deputy Director-General, DPW dated 1 December 2008: 2 158 Correspondence to PWC from Mr M Smith, Deputy Director-General, DPW dated 1 December 2008: 2 159 Submission 6: 26 160 Submission 6: 26 161 Submission 6: 26 162 Submission 6: 26
28 Public Accounts and Public Works Committee William McCormack Place – Stage 2 project
4.5.3 Environment
160. The site was designated under section 2.6.1 of the Integrated Planning Act 1997 on 30 March 2001. Under this act, an environmental impact assessment was not required as WMP2 is within the Cairns CBD and the development was a permitted use. 163
161. There are no significant environmental issues associated with the site and the site is not a contaminated site. 164
162. An important goal for WMP2 was to achieve at least a 5-star rating under the Green Building Council of Australia’s Green Star rating scheme. A 5-star rating under the scheme is deemed to be Australian Excellence and prior to WMP2 there were no projects in Cairns that were rated under the scheme. 165
163. The building was also designed to achieve at least a 5-star rating under the NABERS (the National Australian Built Environment Rating System) Energy (formally the Australian Building Greenhouse Rating – ABGR) scheme that measures energy performance in relation to greenhouse gas emissions on an ongoing basis. 166
164. The committee was advised that there is a substantial investment in preparing a green star submission, however, there is an expectation that is now the way the government does business. 167
165. The main benefit to be gained from achieving a 5-star NABERS energy rating will be a direct reduction in the energy use and subsequent recurrent energy costs when compared to other buildings. Initial computer modelling of the anticipated energy use in WMP2 indicates that the building will achieve a slightly higher energy efficiency than WMP1 and will save close to 50% in energy costs. 168
166. The project received a 6 star Green Star rating in the Office Design V2 Category achieving 79 out of 100 points. The building includes an innovative air conditioning system with features such as energy recovery, thermal storage, off-peak cooling and the use of ceiling fans throughout office areas to circulate cool-air. The building design incorporates the extensive use of natural light and intelligent lighting controls, water efficient appliances and fittings with an integrated water management system and passive design features such as high ceilings.169
167. WMP2 incorporates a number of passive and active features designed to minimise energy use, minimise waste, improve the indoor environment for staff and visitors and minimise the carbon footprint of the building. 170
163 Submission 6: 27 164 Submission 6: 27 165 Submission 6: 27 166 Submission 6: 27 167 Mr Smith, Transcript 31 October 2008: 12 168 Correspondence to PWC from Mr M Smith, Deputy Director-General, DPW dated 1 December 2008: 5 169 Ministerial Media Statement, Minister for Public Works and Information and Communication Technology, Hon R Schwarten, ‘ Public Works Minister opens William McCormack Place Stage 2’ , 5 November 2010 170 Submission 6: 27
29 Public Accounts and Public Works Committee William McCormack Place – Stage 2 project
168. Passive features included: the orientation of the building on the site, wide roof overhangs and extensive window shading to minimise direct exposure to the sun façade design and choice of materials to minimise heat transfer to the interior spaces external courtyard/foyer to significantly reduce the volume of air conditioned and lit space in the building high ceilings and windows to make best use of natural lighting of the office spaces use of sub-metering on electrical and water systems to provide accurate monitoring and reporting capability material selection to favour recycled, recyclable, and low emission products integrated fit-out by the contractor during construction to minimise waste and rework end of trip facilities such as cycle racks, showers and lockers to encourage alternative staff transport options facilities for separation and storage of waste streams to encourage staff to recycle waste and minimise landfill a proportion of smaller car park spaces to encourage the use of small cars 171
169. Active design features included: a highly efficient air conditioning system, designed to minimise energy consumption and make use of off peak electricity. The system incorporates chilled water storage, energy recovery technology, ceiling fans and intelligent controls highly efficient light fittings and intelligent lighting controls to make best use of natural lighting harvesting, storage and treatment of rain water and air conditioning condensate for use in toilets and landscaping highly efficient plumbing fixtures to minimise water use 172
170. The building incorporates a 64kW photovoltaic array on the building roof which will provide approximately 90,000 kW hours of solar electricity to the building annually. The photovoltaic array consists of 336 panels mounted on a purpose build roof structure which will not be visible from the street and will have no visual or glare impact on surrounding buildings. It is anticipated that the solar energy produced by the system will fully offset the annual energy usage and greenhouse gas emissions associated with tenancy lighting in the building. 173
171 Submission 6: 27-28 172 Submission 6: 28 173 Department of Employment, Economic, Development and Innovation, Office of Clean Energy, Solar Energy Case Studies, ‘ William McCormack Place, Stage Two, Cairns ’, http://www.cleanenergy.qld.gov.au/zone_files/Office_of_Clean_Energy/william_mccormack.pdf [22 March 2011]
30 Public Accounts and Public Works Committee William McCormack Place – Stage 2 project
171. The following photograph shows the building from the rear, highlighting the car parking podium, some of the passive environmental features as well as the proximity and links to WMP1:
Source: Australian Institute of Project Management, Project Management Achievement Award Submissions, http://www.aipm.com.au/html/2010-pmaa-QLDP18.cfm [22 March 2011]
Committee comments
172. The committee considers that a great deal of the adverse public reaction to the project could have been avoided had the department undertaken a more considered approach to its public consultation methods early in the development process. Whilst the committee does not expect the department to consult other property developers, it does expect that a thorough analysis of the community expectations is undertaken. The committee recommends that the department review its consultation methods in order to ensure that similar problems are avoided in the future.
173. Overall, the committee is satisfied that the work will have a positive impact on the community, economy and the environment.
Recommendation 2
The committee recommends that the Department of Public Works review its consultation methods to ensure that adequate public consultation is undertaken prior to the commencement of future projects.
31 Public Accounts and Public Works Committee William McCormack Place – Stage 2 project
4.6 The procurement methods for the work
174. DPW used a two stage managing contractor arrangement for the procurement of WMP2.174
175. The first stage (design) was the appointment of design consultants (including the builder) to complete the design of the building and deliver a GCS (GCS). 175 The State’s audit quantity surveyor then confirmed that the GCS was the maximum price payable by the State for the tendered design. 176
176. The second stage included the appointment of the managing contractor and the subsequent construction of the building through competitively let trade packages (minimum of three quotes). Where the Actual Construction Sum (ACS) (total of all of the trade packages) was less than the GCS, the difference was shared between the managing contractor and the State on the basis of a stated formula in the contract. If the ACS was greater than the GCS then the managing contractor was liable for the overrun. 177
177. DPW determined that the two stage managing contractor arrangement offered the best outcomes for WMP2 particularly in regard to risk and the delivery of a Green Star project on time and within budget. 178
178. DPW advised the committee that the two stage process of appointing the managing contractor, firstly as a building consultant, and finally as a contractor reduced the risk to government in the event of an acceptable GCS not being negotiated. The department advised that they followed all appropriate procedures to ensure that the requirements of the State Purchasing Policy were met. 179
4.6.1 Engagement of consultants
179. The engagement of the major consultancies was procured on the basis of Single Select Tendering. The consultants were selected on their previous experience in the design and construction of WMP1 in order to expedite the WMP2 project and to take full advantage of the knowledge gained through the earlier project. 180
180. This procurement option was determined to be appropriate due to the close physical proximity of WMP2 to WMP1 on the site and also as the two buildings would share facilities and systems, including air conditioning, electrical, fire systems, and building management and security systems. 181
174 Mr Smith, Transcript 31 October 2008: 8 175 Submission 6: 28 176 Submission 6: 29-30 177 Submission 6: 28-30 178 Submission 6: 31 179 Mr Smith, Transcript 31 October 2008: 8-9 180 Submission 6: 28 181 Submission 6: 28
32 Public Accounts and Public Works Committee William McCormack Place – Stage 2 project
181. The single select tender option provided the following important benefits: the consultants already had an intimate knowledge of WMP1 which saved considerable time in the design process the existing building systems which had proven to be highly effective in energy efficiency would be used as a platform for developing the systems in WMP2 reduced risk of services conflicts arising as a result of integration of the new building with the existing building and its systems existing familiarity with the DPWs office accommodation requirements and objectives established working relationship as a design team, and demonstrated ability as a team to deliver a project within time and under budget 182
182. Cox Rayner, as the principal consultant, engaged the following consultants 183 : Architects and Principal Consultants – Cox Rayner in association with CA Architects Building Consultant (design stage) – Laing O’Rourke Australia Construction Pty Ltd Electrical Engineering – MGF Consultants Hydraulics Consultants – Gilboy Hydraulics Mechanical Engineering – MGF Consultants Structural and Civil Engineers – Arup
183. With the exception of Architects Cox Rayner, all the other consultants have a physical presence in Cairns while Cox Rayner has an established association with a Cairns based architectural firm, CA Architects.184
184. DPW initially engaged the selected consultants for the duration of the project. However, as required under the terms of the managing contractor arrangement, when the Managing contractor for the construction stage was appointed, the selected contractors were novated to the Managing contractor.185
4.6.2 Engagement of the managing contractor
185. At the time the WMP2 project was initiated, the Queensland construction industry was overheated and there was limited availability of major contractors. DPW formally canvassed all major builders registered on the Pre-Qualified Contractor system to determine where capacity lay for undertaking this project. The outcome was that just one contractor with acceptable technical and financial capacity (Laing O’Rourke Australia Construction Pty Ltd) registered an Expression of Interest for the delivery of WMP2.186
182 Submission 6: 28 183 Submission 6: 29 184 Submission 6: 29 185 Submission 6: 29 186 Submission 6: 29
33 Public Accounts and Public Works Committee William McCormack Place – Stage 2 project
186. DPW reviewed the project and determined that a non-traditional managing contractor arrangement through direct negotiation with Laing O’Rourke Australia Construction Pty Ltd be used. This provided some advantages as they had been the managing contractor for WMP1.187
187. Prior to acceptance, Laing O’Rourke Australia Construction Pty Ltd was required to provide an auditable value for money tender including provision of a supporting submission responding to the selection criteria of: capability and commitment, management fees, methodology and resources. 188
188. Non price criteria were assessed for acceptable technical capacity and fees (approximately 20% of project cost) and were benchmarked against a range of similar projects to determine that value for money was being achieved in the tender. 189
4.6.3 Trade package selection
189. Laing O’Rourke Australia Construction Pty Ltd procured the trade packages in accordance with the Local Industry Participation Policy. 190
190. In conjunction with the government support agency Industry Co-ordination Network, advertisements were placed in the Cairns Post calling for trade contractors to register their interest in tendering for the various work packages. Trade contractors were assessed on the basis of: Queensland Building Services Authority (QBSA) licensing; local presence/capacity; and ability, knowledge and past experience relevant to the project. 191
191. In consultation with Project Services, a list of suitable trade contractors was assembled based on the submissions received from the newspaper advertisement and from the Laing O’Rourke Australia Construction Pty Ltd’s existing database. Where sufficient, suitably experienced local contractors existed; no external contractors were registered. 192
192. Received trade package tenders were assessed solely on price and technical merit and were approved by Project Services on behalf of the DPW prior to appointment. 193
Committee comments
193. The committee considers that the procurement method selected and process being followed to be reasonable in the circumstances.
187 Submission 6: 29 188 Submission 6: 29 189 Submission 6: 29 190 Submission 6: 30 191 Submission 6: 30 192 Submission 6: 30 193 Submission 6: 30
34 Public Accounts and Public Works Committee William McCormack Place – Stage 2 project
4.7 The balance of public and private sector involvement in the work
194. The majority of the project was undertaken by the private sector. The managing contractor, principal consultant, majority of sub consultants and majority of trade contractors were from the private sector. The public sector involvement was estimated at $2.14 million. Statutory charges and project reserve were estimated at $900,000. 194
195. The public sector roles were coordinated by DPW via the Queensland Government Accommodation Office for the project director and tenant liaison officers and by Project Services for the project management, interior design and project auditing roles. 195
196. A number of criteria were considered in the procurement strategy and allocation of work to the public and private sector, namely: value for money, allocation of risk, compliance with the State Procurement Policy, capacity to perform and previous performance and knowledge of project. 196
197. Roles undertaken by Project Services provided a degree of risk allocation in favour of protecting the Government’s interests as they were familiar with the Government ‘Office Accommodation Management Framework’ and had established working relationships with agencies which suggested that they could deliver value for money services with reduced risk. 197
Committee comments
198. The committee is satisfied with the balance of public and private sector involvement in the works.
4.8 The performance of the constructing authority, the consultants and contractors for the work
199. DPW advised the committee that it is satisfied with the performance of each of the consultants and contractors involved with WMP2. All work has been designed in accordance with the design brief and the requirements established during the Sketch Design phase of the project. The work has being constructed in accordance with the specifications and was on time, within budget and in accordance with contractual obligations. 198
Committee comments
200. The committee is satisfied with the performance of the constructing authority, the consultants and contractors.
194 Submission 6: 31-32 195 Submission 6: 31 196 Submission 6: 32 197 Submission 6: 32 198 Submission 6: 32
35 Public Accounts and Public Works Committee William McCormack Place – Stage 2 project
Appendix 1 – Copy of Inquiry Information Paper
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37 Public Accounts and Public Works Committee William McCormack Place – Stage 2 project
Replacement page
Appendix 2 – Submissions Received
1. Northern Development Industry Association
2. Capital Globe Australia Pty Ltd
3. Cairns Chamber of Commerce
4. Advance Cairns
5. Central Park Cairns Pty Ltd
6. Department of Public Works
38 Public Accounts and Public Works Committee William McCormack Place – Stage 2 project
Appendix 3 – Public hearing held Friday 31 October 2008 at the Sebel Harbour Lights Hotel, Cairns
Name Title Organisation Mr Kevin M Byrne Executive Director Capital Globe Pty Ltd Mr Paul A Kelly Project Manager Central Park Cairns Pty Ltd Mr Gregory S Wood Former Chairman Northern Development Industry Association Mr Max Smith Deputy Director-General (Works) Department of Public Works Ms Karen Lyon Reid Executive Director, Portfolio Group, Department of Public Works Queensland Government Accommodation Office Mr Terry Flynn Director, Portfolio Group, Queensland Department of Public Works Government Accommodation Office Mr Graham Messenger Manager, Major Projects, Queensland Department Of Public Works Government Accommodation Office
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Appendix 4 – Building Floor Plans
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41 Public Accounts and Public Works Committee William McCormack Place – Stage 2 project
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