Presented by Robert Clark MP		www.robertclark.net

AUDITOR-GENERAL EXPOSES FEDERATION SQUARE BUNGLING

News Release - Wednesday, 6 June, 2001

The Auditor-General's Report on Ministerial Portfolios tabled in Parliament today has confirmed that the Bracks Government presided over an eight month gap in management arrangements for Federation Square following turmoil arising from the western shard controversy, as well as cost blowouts, quality cuts, funding shortfalls, industrial disputes and delays.

Findings and recommendations of the Auditor-General include the following:

-    it took until November 2000 for project management responsibilities to be assigned to the Federation Square Management company (para 3.7.20) following the resignation of the previous project manager, Damien Bonnice, in March 2000 in protest over the Government's handling of the shards issue

-     it took until October 2000 for professional project managers to be engaged to assist with project management at Federation Square, and until March 2001 for contractual arrangements with those managers to be finalised (para. 3.7.24) and that engaging external project managers had added $1.8 million to costs (para. 3.7.32)

-     the quality of materials used in parts of Federation Square is being reduced in order to cut costs (para. 3.7.28) and that modifications should not compromise the durability, ambience and design aesthetics that the original design proposals envisaged (para 3.7.35)

-     the current cost estimate of $369 million for the project (which the Minister for Major Projects announced to a Parliamentary Committee only last week) may be exceeded due to insufficient contingency funds to meet possible future cost escalations (para 3.7.33)

-     the Government intends to rely on unspecified "loans" to help meet a $31 million shortfall in funding for the project (para 3.7.38)

-     the Government will defer completion of elements of Federation Square if it cannot attract sponsorships, loans or joint venture arrangements to cover this shortfall (para. 3.7.38)

-     the expected completion date for Federation Square has blown out from May 2001 to March 2002 since last year's Auditor-General's report (para 3.7.47)

-     private sector funding is no longer available for two buildings at Federation Square estimated to cost $14 million, and additional fit-out, furniture and fixture costs of $7.5 million have had to be incurred at the Square (para. 3.7.32). (The Government was warned of the risk of loss of private sector funding prior to deciding to scrap the western shard.)

-     changes in project scope, delays and industrial disputes are among the factors contributing to additional project costs of $62.7 million (para. 3.7.32)

The Shadow Minister for Major Projects, Robert Clark, said that these findings by the Auditor-General showed that the Government's bungled interference over the western shard was the main cause of the massive cost blowouts and delays which have occurred at Federation Square.

"When the cost of Federation Square rose under the Kennett Government, it was mainly due to new features being added, like the Museum of Australian Art and Cinemedia. When the cost has risen under the Bracks Government, it has been mainly due to meddling and incompetence," Mr Clark said.