❓ Mr. Kelly questions the Minister for Water regarding a $130 million contract guarantee to RCR Tomlinson following their purchase of Water Corporation's engineering division, specifically concerning the apparent contradiction between agreed commercial terms and unsigned contracts. The Minister clarifies that while a pipeline of work was agreed upon, specific projects for years 2 and 3 are subject to change and negotiation.
AnsweredQoN 686Legislative Assembly
QuestionView source ↗
WATER
CORPORATION — RCR TOMLINSON
686. Mr D.J. KELLY to the
Minister for Water:
I refer the minister to, firstly, RCR Tomlinson's
statement to the ASX on 14 August in which it said that as part of the deal for
it to buy the engineering and construction division of the Water Corporation,
it is guaranteed $130 million worth of construction work over the next three
years; secondly, her own statement on ABC radio on 27 August when she said that
taxpayers' exposure via that ongoing work for RCR Tomlinson was
protected because the commercial terms are agreed; and, thirdly, the answer she
gave yesterday in the Legislative Council when she said that the contracts for
the $130 million worth of work have not yet been signed.
(1) How can the
commercial terms of this $130 million worth of work be agreed, as the minister
said on radio, if the contracts have not been signed?
(2) How can the
taxpayers be protected if RCR Tomlinson is guaranteed $130 million worth of
work, as it told the ASX, but the terms of that work have not been finalised?
CORPORATION — RCR TOMLINSON
686. Mr D.J. KELLY to the
Minister for Water:
I refer the minister to, firstly, RCR Tomlinson's
statement to the ASX on 14 August in which it said that as part of the deal for
it to buy the engineering and construction division of the Water Corporation,
it is guaranteed $130 million worth of construction work over the next three
years; secondly, her own statement on ABC radio on 27 August when she said that
taxpayers' exposure via that ongoing work for RCR Tomlinson was
protected because the commercial terms are agreed; and, thirdly, the answer she
gave yesterday in the Legislative Council when she said that the contracts for
the $130 million worth of work have not yet been signed.
(1) How can the
commercial terms of this $130 million worth of work be agreed, as the minister
said on radio, if the contracts have not been signed?
(2) How can the
taxpayers be protected if RCR Tomlinson is guaranteed $130 million worth of
work, as it told the ASX, but the terms of that work have not been finalised?
AnswerView source ↗
(1)–(2)
As the member for Bassendean has stated, as part of the sale process, a
pipeline of work was agreed to so that we could provide ongoing work for a
significant number of employees who have transitioned from the Water Corporation
to RCR Tomlinson. Part of that package was that that first year of work was
known. Obviously, the Water Corporation's forward capital works change
from time to time, so it will be reliant on the exact projects being negotiated
in years 2 and 3. That is my understanding. RCR will need to meet the terms of
the original contract that has been signed, which is for $130 million worth of
work. The projects are yet to be defined for years 2 and 3 because those
projects change from time to time. There is a known project list in the first
year, but there will be no further exposure for the taxpayer. This has meant
that a significant number of Water Corporation employees would otherwise have
been made redundant. The Water Corporation board made the decision to seek to
sell that branch, along with a pipeline of work, and test the market, and it
found it to be positive in terms of somebody taking them on. That means that
those employees now have employment beyond what they would have had with the
Water Corporation given the changing nature of the capital works at the
corporation.
As the member for Bassendean has stated, as part of the sale process, a
pipeline of work was agreed to so that we could provide ongoing work for a
significant number of employees who have transitioned from the Water Corporation
to RCR Tomlinson. Part of that package was that that first year of work was
known. Obviously, the Water Corporation's forward capital works change
from time to time, so it will be reliant on the exact projects being negotiated
in years 2 and 3. That is my understanding. RCR will need to meet the terms of
the original contract that has been signed, which is for $130 million worth of
work. The projects are yet to be defined for years 2 and 3 because those
projects change from time to time. There is a known project list in the first
year, but there will be no further exposure for the taxpayer. This has meant
that a significant number of Water Corporation employees would otherwise have
been made redundant. The Water Corporation board made the decision to seek to
sell that branch, along with a pipeline of work, and test the market, and it
found it to be positive in terms of somebody taking them on. That means that
those employees now have employment beyond what they would have had with the
Water Corporation given the changing nature of the capital works at the
corporation.
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