❓ Minister addresses concerns about the City Rail project contract with Leighton Contractors, clarifying risk allocation and defending against accusations of misleading statements regarding the contract's fixed-price nature.
AnsweredQoN 806Legislative Assembly
QuestionView source ↗
CITY RAIL PROJECT - CONTRACT
Can the minister explain the nature of the contract with Leighton Contractors for the city rail project in my electorate and how she explained this contract at the time it was awarded? Ms A.J.G. MacTIERNAN
Can the minister explain the nature of the contract with Leighton Contractors for the city rail project in my electorate and how she explained this contract at the time it was awarded? Ms A.J.G. MacTIERNAN
AnswerView source ↗
I thank the member for Perth. I know he is a great supporter of the rail project, because he understands how absolutely vital it is to make our city a liveable, modern city. I will start off with an acknowledgment: I made an error. I can see the headlines. At home at six o’clock yesterday morning when I was talking to the ABC about the fact that we are now absolutely confident that we will be able to get the trains running for full services in July 2007, I said “as per the timetable that we revised late last year”. I must admit that was a mistake. I was four months out. We had revised that timetable in April. I do not consider it a material error, but if I have offended anyone, I do sincerely apologise. Mr Taylor can pass on my compliments to Mr Drummond, because at least once he got one fact right in his story. As for the rest of it, there now exists a narrative that Mr Drummond has been trying to build over time. The project is obviously successful and has a great deal of community support. Mr Drummond cannot allow this to go unchallenged, so he has to build a story about why it is bad. The story is that I lied about the nature of the contract. His line is that I said it was a fixed-price contract that would never move. We have gone through the documentation again. We have set this out for Mr Drummond on many occasions, but there are none so blind as those who do not wish to see. I think that that is the situation in this case. When we first announced the selection of Leighton Contractors Pty Ltd as a preferred proponent, we said that the vast bulk of the risk, including the construction risk, was with Leighton but that we, as a state government, had maintained a risk profile. We outlined what that risk profile was. We have done that time and again, as can be seen in Hansard . I have a copy of the relevant Hansard with me. I will not go through them all, but my good friend the member for Carine asked question after question, in answer to which the government pointed out the risk profile that it had retained. The West Australian was aware of it. I do not know whether Mr Drummond has access to the articles in The West Australian , but I have one of them with me. The headline states that the state is to bear the tunnel risk. The article outlines the areas of risk that the government said it was retaining. The question here is one of terminology, which was understood by that great luminary Wilson Tuckey! Mr J.H.D. Day : You tried to give the impression before the last election that it was a fixed price and then the truth came out. Ms A.J.G. MacTIERNAN : No. We have said time and again, right from the outset in October 2003 when we awarded the contract, that we were retaining some risk. The point that we were making is that the vast majority of risk, including the important risks, the construction risks and the risk for Leighton, rested with the contractor, but we did acknowledge that there were areas in which we retained some risk and that we had various sums, provisional sums and contingency sums, and a provision for rise and fall to cover that. That has all been set out. Not only did we set out that information, include it in the media statement, and supply it in answers to questions, but also we released seven boxes of documents and the contract. It was all set out in that contract. Mr M.W. Trenorden : All! There was a little bit of whiting out. Ms A.J.G. MacTIERNAN : There were a few items - Several members interjected. The SPEAKER : Order! Ms A.J.G. MacTIERNAN : As we said in the media release at the time, we were excluding some of the actual rates, not any of the terms or description of who had what risk, but some of the unit rates that Leighton was charging for particular jobs, as one would expect. It would be quite unfair to Leighton Constructions, which was tendering for other projects, for its unit prices to become a matter of public record. I have with me an article quoting Mr Tuckey, which was touted around at the time by the opposition. Mr Tuckey said that we were making a mistake by entering into a fixed-price contract and that we should be going down the path of an alliance contract. These are the options: a fixed-price contract which, within the terminology that is accepted in the construction industry does not mean at all that there is absolutely no area of risk that can be assigned to the principal, or an alliance contract under which the contactor is fundamentally guaranteed a profit. We decided we would not go with that alliance method. That has been a very sensible decision. Even if our wildest dreams were realised, we would still be in a better position than we would have been had we opted for an alliance contract. We made that decision precisely because we knew that this was a risky project and we wanted to ensure that a contractor existed that was prepared to sign off on that risk. We have been absolutely straightforward about this from day one. We have acknowledged that we kept within government portions of risk. Our story has been consistent the whole way through. The other beef of Mr Drummond is that I refuse to factor into our budget estimate all the claims of Leighton. We understand that Mr Drummond is allowing himself to be used as a vehicle by Leighton to try to put pressure on the government, and we will not buy it. We certainly will not be factoring into our budget wild and speculative claims that have been made certainly for the purpose of putting political pressure on us.
Ms A.J.G. MacTIERNAN replied: I thank the member for Perth. I know he is a great supporter of the rail project, because he understands how absolutely vital it is to make our city a liveable, modern city. I will start off with an acknowledgment: I made an error. I can see the headlines. At home at six o’clock yesterday morning when I was talking to the ABC about the fact that we are now absolutely confident that we will be able to get the trains running for full services in July 2007, I said “as per the timetable that we revised late last year”. I must admit that was a mistake. I was four months out. We had revised that timetable in April. I do not consider it a material error, but if I have offended anyone, I do sincerely apologise. Mr Taylor can pass on my compliments to Mr Drummond, because at least once he got one fact right in his story. As for the rest of it, there now exists a narrative that Mr Drummond has been trying to build over time. The project is obviously successful and has a great deal of community support. Mr Drummond cannot allow this to go unchallenged, so he has to build a story about why it is bad. The story is that I lied about the nature of the contract. His line is that I said it was a fixed-price contract that would never move. We have gone through the documentation again. We have set this out for Mr Drummond on many occasions, but there are none so blind as those who do not wish to see. I think that that is the situation in this case. When we first announced the selection of Leighton Contractors Pty Ltd as a preferred proponent, we said that the vast bulk of the risk, including the construction risk, was with Leighton but that we, as a state government, had maintained a risk profile. We outlined what that risk profile was. We have done that time and again, as can be seen in Hansard . I have a copy of the relevant Hansard with me. I will not go through them all, but my good friend the member for Carine asked question after question, in answer to which the government pointed out the risk profile that it had retained. The West Australian was aware of it. I do not know whether Mr Drummond has access to the articles in The West Australian , but I have one of them with me. The headline states that the state is to bear the tunnel risk. The article outlines the areas of risk that the government said it was retaining. The question here is one of terminology, which was understood by that great luminary Wilson Tuckey! Mr J.H.D. Day : You tried to give the impression before the last election that it was a fixed price and then the truth came out. Ms A.J.G. MacTIERNAN : No. We have said time and again, right from the outset in October 2003 when we awarded the contract, that we were retaining some risk. The point that we were making is that the vast majority of risk, including the important risks, the construction risks and the risk for Leighton, rested with the contractor, but we did acknowledge that there were areas in which we retained some risk and that we had various sums, provisional sums and contingency sums, and a provision for rise and fall to cover that. That has all been set out. Not only did we set out that information, include it in the media statement, and supply it in answers to questions, but also we released seven boxes of documents and the contract. It was all set out in that contract. Mr M.W. Trenorden : All! There was a little bit of whiting out. Ms A.J.G. MacTIERNAN : There were a few items - Several members interjected. The SPEAKER : Order! Ms A.J.G. MacTIERNAN : As we said in the media release at the time, we were excluding some of the actual rates, not any of the terms or description of who had what risk, but some of the unit rates that Leighton was charging for particular jobs, as one would expect. It would be quite unfair to Leighton Constructions, which was tendering for other projects, for its unit prices to become a matter of public record. I have with me an article quoting Mr Tuckey, which was touted around at the time by the opposition. Mr Tuckey said that we were making a mistake by entering into a fixed-price contract and that we should be going down the path of an alliance contract. These are the options: a fixed-price contract which, within the terminology that is accepted in the construction industry does not mean at all that there is absolutely no area of risk that can be assigned to the principal, or an alliance contract under which the contactor is fundamentally guaranteed a profit. We decided we would not go with that alliance method. That has been a very sensible decision. Even if our wildest dreams were realised, we would still be in a better position than we would have been had we opted for an alliance contract. We made that decision precisely because we knew that this was a risky project and we wanted to ensure that a contractor existed that was prepared to sign off on that risk. We have been absolutely straightforward about this from day one. We have acknowledged that we kept within government portions of risk. Our story has been consistent the whole way through. The other beef of Mr Drummond is that I refuse to factor into our budget estimate all the claims of Leighton. We understand that Mr Drummond is allowing himself to be used as a vehicle by Leighton to try to put pressure on the government, and we will not buy it. We certainly will not be factoring into our budget wild and speculative claims that have been made certainly for the purpose of putting political pressure on us.
I thank the member for Perth. I know he is a great supporter of the rail project, because he understands how absolutely vital it is to make our city a liveable, modern city. I will start off with an acknowledgment: I made an error. I can see the headlines. At home at six o’clock yesterday morning when I was talking to the ABC about the fact that we are now absolutely confident that we will be able to get the trains running for full services in July 2007, I said “as per the timetable that we revised late last year”. I must admit that was a mistake. I was four months out. We had revised that timetable in April. I do not consider it a material error, but if I have offended anyone, I do sincerely apologise. Mr Taylor can pass on my compliments to Mr Drummond, because at least once he got one fact right in his story. As for the rest of it, there now exists a narrative that Mr Drummond has been trying to build over time. The project is obviously successful and has a great deal of community support. Mr Drummond cannot allow this to go unchallenged, so he has to build a story about why it is bad. The story is that I lied about the nature of the contract. His line is that I said it was a fixed-price contract that would never move. We have gone through the documentation again. We have set this out for Mr Drummond on many occasions, but there are none so blind as those who do not wish to see. I think that that is the situation in this case. When we first announced the selection of Leighton Contractors Pty Ltd as a preferred proponent, we said that the vast bulk of the risk, including the construction risk, was with Leighton but that we, as a state government, had maintained a risk profile. We outlined what that risk profile was. We have done that time and again, as can be seen in Hansard . I have a copy of the relevant Hansard with me. I will not go through them all, but my good friend the member for Carine asked question after question, in answer to which the government pointed out the risk profile that it had retained. The West Australian was aware of it. I do not know whether Mr Drummond has access to the articles in The West Australian , but I have one of them with me. The headline states that the state is to bear the tunnel risk. The article outlines the areas of risk that the government said it was retaining. The question here is one of terminology, which was understood by that great luminary Wilson Tuckey! Mr J.H.D. Day : You tried to give the impression before the last election that it was a fixed price and then the truth came out. Ms A.J.G. MacTIERNAN : No. We have said time and again, right from the outset in October 2003 when we awarded the contract, that we were retaining some risk. The point that we were making is that the vast majority of risk, including the important risks, the construction risks and the risk for Leighton, rested with the contractor, but we did acknowledge that there were areas in which we retained some risk and that we had various sums, provisional sums and contingency sums, and a provision for rise and fall to cover that. That has all been set out. Not only did we set out that information, include it in the media statement, and supply it in answers to questions, but also we released seven boxes of documents and the contract. It was all set out in that contract. Mr M.W. Trenorden : All! There was a little bit of whiting out. Ms A.J.G. MacTIERNAN : There were a few items - Several members interjected. The SPEAKER : Order! Ms A.J.G. MacTIERNAN : As we said in the media release at the time, we were excluding some of the actual rates, not any of the terms or description of who had what risk, but some of the unit rates that Leighton was charging for particular jobs, as one would expect. It would be quite unfair to Leighton Constructions, which was tendering for other projects, for its unit prices to become a matter of public record. I have with me an article quoting Mr Tuckey, which was touted around at the time by the opposition. Mr Tuckey said that we were making a mistake by entering into a fixed-price contract and that we should be going down the path of an alliance contract. These are the options: a fixed-price contract which, within the terminology that is accepted in the construction industry does not mean at all that there is absolutely no area of risk that can be assigned to the principal, or an alliance contract under which the contactor is fundamentally guaranteed a profit. We decided we would not go with that alliance method. That has been a very sensible decision. Even if our wildest dreams were realised, we would still be in a better position than we would have been had we opted for an alliance contract. We made that decision precisely because we knew that this was a risky project and we wanted to ensure that a contractor existed that was prepared to sign off on that risk. We have been absolutely straightforward about this from day one. We have acknowledged that we kept within government portions of risk. Our story has been consistent the whole way through. The other beef of Mr Drummond is that I refuse to factor into our budget estimate all the claims of Leighton. We understand that Mr Drummond is allowing himself to be used as a vehicle by Leighton to try to put pressure on the government, and we will not buy it. We certainly will not be factoring into our budget wild and speculative claims that have been made certainly for the purpose of putting political pressure on us.
When we first announced the selection of Leighton Contractors Pty Ltd as a preferred proponent, we said that the vast bulk of the risk, including the construction risk, was with Leighton but that we, as a state government, had maintained a risk profile. We outlined what that risk profile was. We have done that time and again, as can be seen in Hansard . I have a copy of the relevant Hansard with me. I will not go through them all, but my good friend the member for Carine asked question after question, in answer to which the government pointed out the risk profile that it had retained. The West Australian was aware of it. I do not know whether Mr Drummond has access to the articles in The West Australian , but I have one of them with me. The headline states that the state is to bear the tunnel risk. The article outlines the areas of risk that the government said it was retaining. The question here is one of terminology, which was understood by that great luminary Wilson Tuckey! Mr J.H.D. Day : You tried to give the impression before the last election that it was a fixed price and then the truth came out. Ms A.J.G. MacTIERNAN : No. We have said time and again, right from the outset in October 2003 when we awarded the contract, that we were retaining some risk. The point that we were making is that the vast majority of risk, including the important risks, the construction risks and the risk for Leighton, rested with the contractor, but we did acknowledge that there were areas in which we retained some risk and that we had various sums, provisional sums and contingency sums, and a provision for rise and fall to cover that. That has all been set out. Not only did we set out that information, include it in the media statement, and supply it in answers to questions, but also we released seven boxes of documents and the contract. It was all set out in that contract. Mr M.W. Trenorden : All! There was a little bit of whiting out. Ms A.J.G. MacTIERNAN : There were a few items - Several members interjected. The SPEAKER : Order! Ms A.J.G. MacTIERNAN : As we said in the media release at the time, we were excluding some of the actual rates, not any of the terms or description of who had what risk, but some of the unit rates that Leighton was charging for particular jobs, as one would expect. It would be quite unfair to Leighton Constructions, which was tendering for other projects, for its unit prices to become a matter of public record. I have with me an article quoting Mr Tuckey, which was touted around at the time by the opposition. Mr Tuckey said that we were making a mistake by entering into a fixed-price contract and that we should be going down the path of an alliance contract. These are the options: a fixed-price contract which, within the terminology that is accepted in the construction industry does not mean at all that there is absolutely no area of risk that can be assigned to the principal, or an alliance contract under which the contactor is fundamentally guaranteed a profit. We decided we would not go with that alliance method. That has been a very sensible decision. Even if our wildest dreams were realised, we would still be in a better position than we would have been had we opted for an alliance contract. We made that decision precisely because we knew that this was a risky project and we wanted to ensure that a contractor existed that was prepared to sign off on that risk. We have been absolutely straightforward about this from day one. We have acknowledged that we kept within government portions of risk. Our story has been consistent the whole way through. The other beef of Mr Drummond is that I refuse to factor into our budget estimate all the claims of Leighton. We understand that Mr Drummond is allowing himself to be used as a vehicle by Leighton to try to put pressure on the government, and we will not buy it. We certainly will not be factoring into our budget wild and speculative claims that have been made certainly for the purpose of putting political pressure on us.
Mr J.H.D. Day : You tried to give the impression before the last election that it was a fixed price and then the truth came out. Ms A.J.G. MacTIERNAN : No. We have said time and again, right from the outset in October 2003 when we awarded the contract, that we were retaining some risk. The point that we were making is that the vast majority of risk, including the important risks, the construction risks and the risk for Leighton, rested with the contractor, but we did acknowledge that there were areas in which we retained some risk and that we had various sums, provisional sums and contingency sums, and a provision for rise and fall to cover that. That has all been set out. Not only did we set out that information, include it in the media statement, and supply it in answers to questions, but also we released seven boxes of documents and the contract. It was all set out in that contract. Mr M.W. Trenorden : All! There was a little bit of whiting out. Ms A.J.G. MacTIERNAN : There were a few items - Several members interjected. The SPEAKER : Order! Ms A.J.G. MacTIERNAN : As we said in the media release at the time, we were excluding some of the actual rates, not any of the terms or description of who had what risk, but some of the unit rates that Leighton was charging for particular jobs, as one would expect. It would be quite unfair to Leighton Constructions, which was tendering for other projects, for its unit prices to become a matter of public record. I have with me an article quoting Mr Tuckey, which was touted around at the time by the opposition. Mr Tuckey said that we were making a mistake by entering into a fixed-price contract and that we should be going down the path of an alliance contract. These are the options: a fixed-price contract which, within the terminology that is accepted in the construction industry does not mean at all that there is absolutely no area of risk that can be assigned to the principal, or an alliance contract under which the contactor is fundamentally guaranteed a profit. We decided we would not go with that alliance method. That has been a very sensible decision. Even if our wildest dreams were realised, we would still be in a better position than we would have been had we opted for an alliance contract. We made that decision precisely because we knew that this was a risky project and we wanted to ensure that a contractor existed that was prepared to sign off on that risk. We have been absolutely straightforward about this from day one. We have acknowledged that we kept within government portions of risk. Our story has been consistent the whole way through. The other beef of Mr Drummond is that I refuse to factor into our budget estimate all the claims of Leighton. We understand that Mr Drummond is allowing himself to be used as a vehicle by Leighton to try to put pressure on the government, and we will not buy it. We certainly will not be factoring into our budget wild and speculative claims that have been made certainly for the purpose of putting political pressure on us.
Ms A.J.G. MacTIERNAN : No. We have said time and again, right from the outset in October 2003 when we awarded the contract, that we were retaining some risk. The point that we were making is that the vast majority of risk, including the important risks, the construction risks and the risk for Leighton, rested with the contractor, but we did acknowledge that there were areas in which we retained some risk and that we had various sums, provisional sums and contingency sums, and a provision for rise and fall to cover that. That has all been set out. Not only did we set out that information, include it in the media statement, and supply it in answers to questions, but also we released seven boxes of documents and the contract. It was all set out in that contract. Mr M.W. Trenorden : All! There was a little bit of whiting out. Ms A.J.G. MacTIERNAN : There were a few items - Several members interjected. The SPEAKER : Order! Ms A.J.G. MacTIERNAN : As we said in the media release at the time, we were excluding some of the actual rates, not any of the terms or description of who had what risk, but some of the unit rates that Leighton was charging for particular jobs, as one would expect. It would be quite unfair to Leighton Constructions, which was tendering for other projects, for its unit prices to become a matter of public record. I have with me an article quoting Mr Tuckey, which was touted around at the time by the opposition. Mr Tuckey said that we were making a mistake by entering into a fixed-price contract and that we should be going down the path of an alliance contract. These are the options: a fixed-price contract which, within the terminology that is accepted in the construction industry does not mean at all that there is absolutely no area of risk that can be assigned to the principal, or an alliance contract under which the contactor is fundamentally guaranteed a profit. We decided we would not go with that alliance method. That has been a very sensible decision. Even if our wildest dreams were realised, we would still be in a better position than we would have been had we opted for an alliance contract. We made that decision precisely because we knew that this was a risky project and we wanted to ensure that a contractor existed that was prepared to sign off on that risk. We have been absolutely straightforward about this from day one. We have acknowledged that we kept within government portions of risk. Our story has been consistent the whole way through. The other beef of Mr Drummond is that I refuse to factor into our budget estimate all the claims of Leighton. We understand that Mr Drummond is allowing himself to be used as a vehicle by Leighton to try to put pressure on the government, and we will not buy it. We certainly will not be factoring into our budget wild and speculative claims that have been made certainly for the purpose of putting political pressure on us.
Mr M.W. Trenorden : All! There was a little bit of whiting out. Ms A.J.G. MacTIERNAN : There were a few items - Several members interjected. The SPEAKER : Order! Ms A.J.G. MacTIERNAN : As we said in the media release at the time, we were excluding some of the actual rates, not any of the terms or description of who had what risk, but some of the unit rates that Leighton was charging for particular jobs, as one would expect. It would be quite unfair to Leighton Constructions, which was tendering for other projects, for its unit prices to become a matter of public record. I have with me an article quoting Mr Tuckey, which was touted around at the time by the opposition. Mr Tuckey said that we were making a mistake by entering into a fixed-price contract and that we should be going down the path of an alliance contract. These are the options: a fixed-price contract which, within the terminology that is accepted in the construction industry does not mean at all that there is absolutely no area of risk that can be assigned to the principal, or an alliance contract under which the contactor is fundamentally guaranteed a profit. We decided we would not go with that alliance method. That has been a very sensible decision. Even if our wildest dreams were realised, we would still be in a better position than we would have been had we opted for an alliance contract. We made that decision precisely because we knew that this was a risky project and we wanted to ensure that a contractor existed that was prepared to sign off on that risk. We have been absolutely straightforward about this from day one. We have acknowledged that we kept within government portions of risk. Our story has been consistent the whole way through. The other beef of Mr Drummond is that I refuse to factor into our budget estimate all the claims of Leighton. We understand that Mr Drummond is allowing himself to be used as a vehicle by Leighton to try to put pressure on the government, and we will not buy it. We certainly will not be factoring into our budget wild and speculative claims that have been made certainly for the purpose of putting political pressure on us.
Ms A.J.G. MacTIERNAN : There were a few items - Several members interjected. The SPEAKER : Order! Ms A.J.G. MacTIERNAN : As we said in the media release at the time, we were excluding some of the actual rates, not any of the terms or description of who had what risk, but some of the unit rates that Leighton was charging for particular jobs, as one would expect. It would be quite unfair to Leighton Constructions, which was tendering for other projects, for its unit prices to become a matter of public record. I have with me an article quoting Mr Tuckey, which was touted around at the time by the opposition. Mr Tuckey said that we were making a mistake by entering into a fixed-price contract and that we should be going down the path of an alliance contract. These are the options: a fixed-price contract which, within the terminology that is accepted in the construction industry does not mean at all that there is absolutely no area of risk that can be assigned to the principal, or an alliance contract under which the contactor is fundamentally guaranteed a profit. We decided we would not go with that alliance method. That has been a very sensible decision. Even if our wildest dreams were realised, we would still be in a better position than we would have been had we opted for an alliance contract. We made that decision precisely because we knew that this was a risky project and we wanted to ensure that a contractor existed that was prepared to sign off on that risk. We have been absolutely straightforward about this from day one. We have acknowledged that we kept within government portions of risk. Our story has been consistent the whole way through. The other beef of Mr Drummond is that I refuse to factor into our budget estimate all the claims of Leighton. We understand that Mr Drummond is allowing himself to be used as a vehicle by Leighton to try to put pressure on the government, and we will not buy it. We certainly will not be factoring into our budget wild and speculative claims that have been made certainly for the purpose of putting political pressure on us.
Several members interjected. The SPEAKER : Order! Ms A.J.G. MacTIERNAN : As we said in the media release at the time, we were excluding some of the actual rates, not any of the terms or description of who had what risk, but some of the unit rates that Leighton was charging for particular jobs, as one would expect. It would be quite unfair to Leighton Constructions, which was tendering for other projects, for its unit prices to become a matter of public record. I have with me an article quoting Mr Tuckey, which was touted around at the time by the opposition. Mr Tuckey said that we were making a mistake by entering into a fixed-price contract and that we should be going down the path of an alliance contract. These are the options: a fixed-price contract which, within the terminology that is accepted in the construction industry does not mean at all that there is absolutely no area of risk that can be assigned to the principal, or an alliance contract under which the contactor is fundamentally guaranteed a profit. We decided we would not go with that alliance method. That has been a very sensible decision. Even if our wildest dreams were realised, we would still be in a better position than we would have been had we opted for an alliance contract. We made that decision precisely because we knew that this was a risky project and we wanted to ensure that a contractor existed that was prepared to sign off on that risk. We have been absolutely straightforward about this from day one. We have acknowledged that we kept within government portions of risk. Our story has been consistent the whole way through. The other beef of Mr Drummond is that I refuse to factor into our budget estimate all the claims of Leighton. We understand that Mr Drummond is allowing himself to be used as a vehicle by Leighton to try to put pressure on the government, and we will not buy it. We certainly will not be factoring into our budget wild and speculative claims that have been made certainly for the purpose of putting political pressure on us.
The SPEAKER : Order! Ms A.J.G. MacTIERNAN : As we said in the media release at the time, we were excluding some of the actual rates, not any of the terms or description of who had what risk, but some of the unit rates that Leighton was charging for particular jobs, as one would expect. It would be quite unfair to Leighton Constructions, which was tendering for other projects, for its unit prices to become a matter of public record. I have with me an article quoting Mr Tuckey, which was touted around at the time by the opposition. Mr Tuckey said that we were making a mistake by entering into a fixed-price contract and that we should be going down the path of an alliance contract. These are the options: a fixed-price contract which, within the terminology that is accepted in the construction industry does not mean at all that there is absolutely no area of risk that can be assigned to the principal, or an alliance contract under which the contactor is fundamentally guaranteed a profit. We decided we would not go with that alliance method. That has been a very sensible decision. Even if our wildest dreams were realised, we would still be in a better position than we would have been had we opted for an alliance contract. We made that decision precisely because we knew that this was a risky project and we wanted to ensure that a contractor existed that was prepared to sign off on that risk. We have been absolutely straightforward about this from day one. We have acknowledged that we kept within government portions of risk. Our story has been consistent the whole way through. The other beef of Mr Drummond is that I refuse to factor into our budget estimate all the claims of Leighton. We understand that Mr Drummond is allowing himself to be used as a vehicle by Leighton to try to put pressure on the government, and we will not buy it. We certainly will not be factoring into our budget wild and speculative claims that have been made certainly for the purpose of putting political pressure on us.
Ms A.J.G. MacTIERNAN : As we said in the media release at the time, we were excluding some of the actual rates, not any of the terms or description of who had what risk, but some of the unit rates that Leighton was charging for particular jobs, as one would expect. It would be quite unfair to Leighton Constructions, which was tendering for other projects, for its unit prices to become a matter of public record. I have with me an article quoting Mr Tuckey, which was touted around at the time by the opposition. Mr Tuckey said that we were making a mistake by entering into a fixed-price contract and that we should be going down the path of an alliance contract. These are the options: a fixed-price contract which, within the terminology that is accepted in the construction industry does not mean at all that there is absolutely no area of risk that can be assigned to the principal, or an alliance contract under which the contactor is fundamentally guaranteed a profit. We decided we would not go with that alliance method. That has been a very sensible decision. Even if our wildest dreams were realised, we would still be in a better position than we would have been had we opted for an alliance contract. We made that decision precisely because we knew that this was a risky project and we wanted to ensure that a contractor existed that was prepared to sign off on that risk. We have been absolutely straightforward about this from day one. We have acknowledged that we kept within government portions of risk. Our story has been consistent the whole way through. The other beef of Mr Drummond is that I refuse to factor into our budget estimate all the claims of Leighton. We understand that Mr Drummond is allowing himself to be used as a vehicle by Leighton to try to put pressure on the government, and we will not buy it. We certainly will not be factoring into our budget wild and speculative claims that have been made certainly for the purpose of putting political pressure on us.
The other beef of Mr Drummond is that I refuse to factor into our budget estimate all the claims of Leighton. We understand that Mr Drummond is allowing himself to be used as a vehicle by Leighton to try to put pressure on the government, and we will not buy it. We certainly will not be factoring into our budget wild and speculative claims that have been made certainly for the purpose of putting political pressure on us.
Ms A.J.G. MacTIERNAN replied: I thank the member for Perth. I know he is a great supporter of the rail project, because he understands how absolutely vital it is to make our city a liveable, modern city. I will start off with an acknowledgment: I made an error. I can see the headlines. At home at six o’clock yesterday morning when I was talking to the ABC about the fact that we are now absolutely confident that we will be able to get the trains running for full services in July 2007, I said “as per the timetable that we revised late last year”. I must admit that was a mistake. I was four months out. We had revised that timetable in April. I do not consider it a material error, but if I have offended anyone, I do sincerely apologise. Mr Taylor can pass on my compliments to Mr Drummond, because at least once he got one fact right in his story. As for the rest of it, there now exists a narrative that Mr Drummond has been trying to build over time. The project is obviously successful and has a great deal of community support. Mr Drummond cannot allow this to go unchallenged, so he has to build a story about why it is bad. The story is that I lied about the nature of the contract. His line is that I said it was a fixed-price contract that would never move. We have gone through the documentation again. We have set this out for Mr Drummond on many occasions, but there are none so blind as those who do not wish to see. I think that that is the situation in this case. When we first announced the selection of Leighton Contractors Pty Ltd as a preferred proponent, we said that the vast bulk of the risk, including the construction risk, was with Leighton but that we, as a state government, had maintained a risk profile. We outlined what that risk profile was. We have done that time and again, as can be seen in Hansard . I have a copy of the relevant Hansard with me. I will not go through them all, but my good friend the member for Carine asked question after question, in answer to which the government pointed out the risk profile that it had retained. The West Australian was aware of it. I do not know whether Mr Drummond has access to the articles in The West Australian , but I have one of them with me. The headline states that the state is to bear the tunnel risk. The article outlines the areas of risk that the government said it was retaining. The question here is one of terminology, which was understood by that great luminary Wilson Tuckey! Mr J.H.D. Day : You tried to give the impression before the last election that it was a fixed price and then the truth came out. Ms A.J.G. MacTIERNAN : No. We have said time and again, right from the outset in October 2003 when we awarded the contract, that we were retaining some risk. The point that we were making is that the vast majority of risk, including the important risks, the construction risks and the risk for Leighton, rested with the contractor, but we did acknowledge that there were areas in which we retained some risk and that we had various sums, provisional sums and contingency sums, and a provision for rise and fall to cover that. That has all been set out. Not only did we set out that information, include it in the media statement, and supply it in answers to questions, but also we released seven boxes of documents and the contract. It was all set out in that contract. Mr M.W. Trenorden : All! There was a little bit of whiting out. Ms A.J.G. MacTIERNAN : There were a few items - Several members interjected. The SPEAKER : Order! Ms A.J.G. MacTIERNAN : As we said in the media release at the time, we were excluding some of the actual rates, not any of the terms or description of who had what risk, but some of the unit rates that Leighton was charging for particular jobs, as one would expect. It would be quite unfair to Leighton Constructions, which was tendering for other projects, for its unit prices to become a matter of public record. I have with me an article quoting Mr Tuckey, which was touted around at the time by the opposition. Mr Tuckey said that we were making a mistake by entering into a fixed-price contract and that we should be going down the path of an alliance contract. These are the options: a fixed-price contract which, within the terminology that is accepted in the construction industry does not mean at all that there is absolutely no area of risk that can be assigned to the principal, or an alliance contract under which the contactor is fundamentally guaranteed a profit. We decided we would not go with that alliance method. That has been a very sensible decision. Even if our wildest dreams were realised, we would still be in a better position than we would have been had we opted for an alliance contract. We made that decision precisely because we knew that this was a risky project and we wanted to ensure that a contractor existed that was prepared to sign off on that risk. We have been absolutely straightforward about this from day one. We have acknowledged that we kept within government portions of risk. Our story has been consistent the whole way through. The other beef of Mr Drummond is that I refuse to factor into our budget estimate all the claims of Leighton. We understand that Mr Drummond is allowing himself to be used as a vehicle by Leighton to try to put pressure on the government, and we will not buy it. We certainly will not be factoring into our budget wild and speculative claims that have been made certainly for the purpose of putting political pressure on us.
I thank the member for Perth. I know he is a great supporter of the rail project, because he understands how absolutely vital it is to make our city a liveable, modern city. I will start off with an acknowledgment: I made an error. I can see the headlines. At home at six o’clock yesterday morning when I was talking to the ABC about the fact that we are now absolutely confident that we will be able to get the trains running for full services in July 2007, I said “as per the timetable that we revised late last year”. I must admit that was a mistake. I was four months out. We had revised that timetable in April. I do not consider it a material error, but if I have offended anyone, I do sincerely apologise. Mr Taylor can pass on my compliments to Mr Drummond, because at least once he got one fact right in his story. As for the rest of it, there now exists a narrative that Mr Drummond has been trying to build over time. The project is obviously successful and has a great deal of community support. Mr Drummond cannot allow this to go unchallenged, so he has to build a story about why it is bad. The story is that I lied about the nature of the contract. His line is that I said it was a fixed-price contract that would never move. We have gone through the documentation again. We have set this out for Mr Drummond on many occasions, but there are none so blind as those who do not wish to see. I think that that is the situation in this case. When we first announced the selection of Leighton Contractors Pty Ltd as a preferred proponent, we said that the vast bulk of the risk, including the construction risk, was with Leighton but that we, as a state government, had maintained a risk profile. We outlined what that risk profile was. We have done that time and again, as can be seen in Hansard . I have a copy of the relevant Hansard with me. I will not go through them all, but my good friend the member for Carine asked question after question, in answer to which the government pointed out the risk profile that it had retained. The West Australian was aware of it. I do not know whether Mr Drummond has access to the articles in The West Australian , but I have one of them with me. The headline states that the state is to bear the tunnel risk. The article outlines the areas of risk that the government said it was retaining. The question here is one of terminology, which was understood by that great luminary Wilson Tuckey! Mr J.H.D. Day : You tried to give the impression before the last election that it was a fixed price and then the truth came out. Ms A.J.G. MacTIERNAN : No. We have said time and again, right from the outset in October 2003 when we awarded the contract, that we were retaining some risk. The point that we were making is that the vast majority of risk, including the important risks, the construction risks and the risk for Leighton, rested with the contractor, but we did acknowledge that there were areas in which we retained some risk and that we had various sums, provisional sums and contingency sums, and a provision for rise and fall to cover that. That has all been set out. Not only did we set out that information, include it in the media statement, and supply it in answers to questions, but also we released seven boxes of documents and the contract. It was all set out in that contract. Mr M.W. Trenorden : All! There was a little bit of whiting out. Ms A.J.G. MacTIERNAN : There were a few items - Several members interjected. The SPEAKER : Order! Ms A.J.G. MacTIERNAN : As we said in the media release at the time, we were excluding some of the actual rates, not any of the terms or description of who had what risk, but some of the unit rates that Leighton was charging for particular jobs, as one would expect. It would be quite unfair to Leighton Constructions, which was tendering for other projects, for its unit prices to become a matter of public record. I have with me an article quoting Mr Tuckey, which was touted around at the time by the opposition. Mr Tuckey said that we were making a mistake by entering into a fixed-price contract and that we should be going down the path of an alliance contract. These are the options: a fixed-price contract which, within the terminology that is accepted in the construction industry does not mean at all that there is absolutely no area of risk that can be assigned to the principal, or an alliance contract under which the contactor is fundamentally guaranteed a profit. We decided we would not go with that alliance method. That has been a very sensible decision. Even if our wildest dreams were realised, we would still be in a better position than we would have been had we opted for an alliance contract. We made that decision precisely because we knew that this was a risky project and we wanted to ensure that a contractor existed that was prepared to sign off on that risk. We have been absolutely straightforward about this from day one. We have acknowledged that we kept within government portions of risk. Our story has been consistent the whole way through. The other beef of Mr Drummond is that I refuse to factor into our budget estimate all the claims of Leighton. We understand that Mr Drummond is allowing himself to be used as a vehicle by Leighton to try to put pressure on the government, and we will not buy it. We certainly will not be factoring into our budget wild and speculative claims that have been made certainly for the purpose of putting political pressure on us.
When we first announced the selection of Leighton Contractors Pty Ltd as a preferred proponent, we said that the vast bulk of the risk, including the construction risk, was with Leighton but that we, as a state government, had maintained a risk profile. We outlined what that risk profile was. We have done that time and again, as can be seen in Hansard . I have a copy of the relevant Hansard with me. I will not go through them all, but my good friend the member for Carine asked question after question, in answer to which the government pointed out the risk profile that it had retained. The West Australian was aware of it. I do not know whether Mr Drummond has access to the articles in The West Australian , but I have one of them with me. The headline states that the state is to bear the tunnel risk. The article outlines the areas of risk that the government said it was retaining. The question here is one of terminology, which was understood by that great luminary Wilson Tuckey! Mr J.H.D. Day : You tried to give the impression before the last election that it was a fixed price and then the truth came out. Ms A.J.G. MacTIERNAN : No. We have said time and again, right from the outset in October 2003 when we awarded the contract, that we were retaining some risk. The point that we were making is that the vast majority of risk, including the important risks, the construction risks and the risk for Leighton, rested with the contractor, but we did acknowledge that there were areas in which we retained some risk and that we had various sums, provisional sums and contingency sums, and a provision for rise and fall to cover that. That has all been set out. Not only did we set out that information, include it in the media statement, and supply it in answers to questions, but also we released seven boxes of documents and the contract. It was all set out in that contract. Mr M.W. Trenorden : All! There was a little bit of whiting out. Ms A.J.G. MacTIERNAN : There were a few items - Several members interjected. The SPEAKER : Order! Ms A.J.G. MacTIERNAN : As we said in the media release at the time, we were excluding some of the actual rates, not any of the terms or description of who had what risk, but some of the unit rates that Leighton was charging for particular jobs, as one would expect. It would be quite unfair to Leighton Constructions, which was tendering for other projects, for its unit prices to become a matter of public record. I have with me an article quoting Mr Tuckey, which was touted around at the time by the opposition. Mr Tuckey said that we were making a mistake by entering into a fixed-price contract and that we should be going down the path of an alliance contract. These are the options: a fixed-price contract which, within the terminology that is accepted in the construction industry does not mean at all that there is absolutely no area of risk that can be assigned to the principal, or an alliance contract under which the contactor is fundamentally guaranteed a profit. We decided we would not go with that alliance method. That has been a very sensible decision. Even if our wildest dreams were realised, we would still be in a better position than we would have been had we opted for an alliance contract. We made that decision precisely because we knew that this was a risky project and we wanted to ensure that a contractor existed that was prepared to sign off on that risk. We have been absolutely straightforward about this from day one. We have acknowledged that we kept within government portions of risk. Our story has been consistent the whole way through. The other beef of Mr Drummond is that I refuse to factor into our budget estimate all the claims of Leighton. We understand that Mr Drummond is allowing himself to be used as a vehicle by Leighton to try to put pressure on the government, and we will not buy it. We certainly will not be factoring into our budget wild and speculative claims that have been made certainly for the purpose of putting political pressure on us.
Mr J.H.D. Day : You tried to give the impression before the last election that it was a fixed price and then the truth came out. Ms A.J.G. MacTIERNAN : No. We have said time and again, right from the outset in October 2003 when we awarded the contract, that we were retaining some risk. The point that we were making is that the vast majority of risk, including the important risks, the construction risks and the risk for Leighton, rested with the contractor, but we did acknowledge that there were areas in which we retained some risk and that we had various sums, provisional sums and contingency sums, and a provision for rise and fall to cover that. That has all been set out. Not only did we set out that information, include it in the media statement, and supply it in answers to questions, but also we released seven boxes of documents and the contract. It was all set out in that contract. Mr M.W. Trenorden : All! There was a little bit of whiting out. Ms A.J.G. MacTIERNAN : There were a few items - Several members interjected. The SPEAKER : Order! Ms A.J.G. MacTIERNAN : As we said in the media release at the time, we were excluding some of the actual rates, not any of the terms or description of who had what risk, but some of the unit rates that Leighton was charging for particular jobs, as one would expect. It would be quite unfair to Leighton Constructions, which was tendering for other projects, for its unit prices to become a matter of public record. I have with me an article quoting Mr Tuckey, which was touted around at the time by the opposition. Mr Tuckey said that we were making a mistake by entering into a fixed-price contract and that we should be going down the path of an alliance contract. These are the options: a fixed-price contract which, within the terminology that is accepted in the construction industry does not mean at all that there is absolutely no area of risk that can be assigned to the principal, or an alliance contract under which the contactor is fundamentally guaranteed a profit. We decided we would not go with that alliance method. That has been a very sensible decision. Even if our wildest dreams were realised, we would still be in a better position than we would have been had we opted for an alliance contract. We made that decision precisely because we knew that this was a risky project and we wanted to ensure that a contractor existed that was prepared to sign off on that risk. We have been absolutely straightforward about this from day one. We have acknowledged that we kept within government portions of risk. Our story has been consistent the whole way through. The other beef of Mr Drummond is that I refuse to factor into our budget estimate all the claims of Leighton. We understand that Mr Drummond is allowing himself to be used as a vehicle by Leighton to try to put pressure on the government, and we will not buy it. We certainly will not be factoring into our budget wild and speculative claims that have been made certainly for the purpose of putting political pressure on us.
Ms A.J.G. MacTIERNAN : No. We have said time and again, right from the outset in October 2003 when we awarded the contract, that we were retaining some risk. The point that we were making is that the vast majority of risk, including the important risks, the construction risks and the risk for Leighton, rested with the contractor, but we did acknowledge that there were areas in which we retained some risk and that we had various sums, provisional sums and contingency sums, and a provision for rise and fall to cover that. That has all been set out. Not only did we set out that information, include it in the media statement, and supply it in answers to questions, but also we released seven boxes of documents and the contract. It was all set out in that contract. Mr M.W. Trenorden : All! There was a little bit of whiting out. Ms A.J.G. MacTIERNAN : There were a few items - Several members interjected. The SPEAKER : Order! Ms A.J.G. MacTIERNAN : As we said in the media release at the time, we were excluding some of the actual rates, not any of the terms or description of who had what risk, but some of the unit rates that Leighton was charging for particular jobs, as one would expect. It would be quite unfair to Leighton Constructions, which was tendering for other projects, for its unit prices to become a matter of public record. I have with me an article quoting Mr Tuckey, which was touted around at the time by the opposition. Mr Tuckey said that we were making a mistake by entering into a fixed-price contract and that we should be going down the path of an alliance contract. These are the options: a fixed-price contract which, within the terminology that is accepted in the construction industry does not mean at all that there is absolutely no area of risk that can be assigned to the principal, or an alliance contract under which the contactor is fundamentally guaranteed a profit. We decided we would not go with that alliance method. That has been a very sensible decision. Even if our wildest dreams were realised, we would still be in a better position than we would have been had we opted for an alliance contract. We made that decision precisely because we knew that this was a risky project and we wanted to ensure that a contractor existed that was prepared to sign off on that risk. We have been absolutely straightforward about this from day one. We have acknowledged that we kept within government portions of risk. Our story has been consistent the whole way through. The other beef of Mr Drummond is that I refuse to factor into our budget estimate all the claims of Leighton. We understand that Mr Drummond is allowing himself to be used as a vehicle by Leighton to try to put pressure on the government, and we will not buy it. We certainly will not be factoring into our budget wild and speculative claims that have been made certainly for the purpose of putting political pressure on us.
Mr M.W. Trenorden : All! There was a little bit of whiting out. Ms A.J.G. MacTIERNAN : There were a few items - Several members interjected. The SPEAKER : Order! Ms A.J.G. MacTIERNAN : As we said in the media release at the time, we were excluding some of the actual rates, not any of the terms or description of who had what risk, but some of the unit rates that Leighton was charging for particular jobs, as one would expect. It would be quite unfair to Leighton Constructions, which was tendering for other projects, for its unit prices to become a matter of public record. I have with me an article quoting Mr Tuckey, which was touted around at the time by the opposition. Mr Tuckey said that we were making a mistake by entering into a fixed-price contract and that we should be going down the path of an alliance contract. These are the options: a fixed-price contract which, within the terminology that is accepted in the construction industry does not mean at all that there is absolutely no area of risk that can be assigned to the principal, or an alliance contract under which the contactor is fundamentally guaranteed a profit. We decided we would not go with that alliance method. That has been a very sensible decision. Even if our wildest dreams were realised, we would still be in a better position than we would have been had we opted for an alliance contract. We made that decision precisely because we knew that this was a risky project and we wanted to ensure that a contractor existed that was prepared to sign off on that risk. We have been absolutely straightforward about this from day one. We have acknowledged that we kept within government portions of risk. Our story has been consistent the whole way through. The other beef of Mr Drummond is that I refuse to factor into our budget estimate all the claims of Leighton. We understand that Mr Drummond is allowing himself to be used as a vehicle by Leighton to try to put pressure on the government, and we will not buy it. We certainly will not be factoring into our budget wild and speculative claims that have been made certainly for the purpose of putting political pressure on us.
Ms A.J.G. MacTIERNAN : There were a few items - Several members interjected. The SPEAKER : Order! Ms A.J.G. MacTIERNAN : As we said in the media release at the time, we were excluding some of the actual rates, not any of the terms or description of who had what risk, but some of the unit rates that Leighton was charging for particular jobs, as one would expect. It would be quite unfair to Leighton Constructions, which was tendering for other projects, for its unit prices to become a matter of public record. I have with me an article quoting Mr Tuckey, which was touted around at the time by the opposition. Mr Tuckey said that we were making a mistake by entering into a fixed-price contract and that we should be going down the path of an alliance contract. These are the options: a fixed-price contract which, within the terminology that is accepted in the construction industry does not mean at all that there is absolutely no area of risk that can be assigned to the principal, or an alliance contract under which the contactor is fundamentally guaranteed a profit. We decided we would not go with that alliance method. That has been a very sensible decision. Even if our wildest dreams were realised, we would still be in a better position than we would have been had we opted for an alliance contract. We made that decision precisely because we knew that this was a risky project and we wanted to ensure that a contractor existed that was prepared to sign off on that risk. We have been absolutely straightforward about this from day one. We have acknowledged that we kept within government portions of risk. Our story has been consistent the whole way through. The other beef of Mr Drummond is that I refuse to factor into our budget estimate all the claims of Leighton. We understand that Mr Drummond is allowing himself to be used as a vehicle by Leighton to try to put pressure on the government, and we will not buy it. We certainly will not be factoring into our budget wild and speculative claims that have been made certainly for the purpose of putting political pressure on us.
Several members interjected. The SPEAKER : Order! Ms A.J.G. MacTIERNAN : As we said in the media release at the time, we were excluding some of the actual rates, not any of the terms or description of who had what risk, but some of the unit rates that Leighton was charging for particular jobs, as one would expect. It would be quite unfair to Leighton Constructions, which was tendering for other projects, for its unit prices to become a matter of public record. I have with me an article quoting Mr Tuckey, which was touted around at the time by the opposition. Mr Tuckey said that we were making a mistake by entering into a fixed-price contract and that we should be going down the path of an alliance contract. These are the options: a fixed-price contract which, within the terminology that is accepted in the construction industry does not mean at all that there is absolutely no area of risk that can be assigned to the principal, or an alliance contract under which the contactor is fundamentally guaranteed a profit. We decided we would not go with that alliance method. That has been a very sensible decision. Even if our wildest dreams were realised, we would still be in a better position than we would have been had we opted for an alliance contract. We made that decision precisely because we knew that this was a risky project and we wanted to ensure that a contractor existed that was prepared to sign off on that risk. We have been absolutely straightforward about this from day one. We have acknowledged that we kept within government portions of risk. Our story has been consistent the whole way through. The other beef of Mr Drummond is that I refuse to factor into our budget estimate all the claims of Leighton. We understand that Mr Drummond is allowing himself to be used as a vehicle by Leighton to try to put pressure on the government, and we will not buy it. We certainly will not be factoring into our budget wild and speculative claims that have been made certainly for the purpose of putting political pressure on us.
The SPEAKER : Order! Ms A.J.G. MacTIERNAN : As we said in the media release at the time, we were excluding some of the actual rates, not any of the terms or description of who had what risk, but some of the unit rates that Leighton was charging for particular jobs, as one would expect. It would be quite unfair to Leighton Constructions, which was tendering for other projects, for its unit prices to become a matter of public record. I have with me an article quoting Mr Tuckey, which was touted around at the time by the opposition. Mr Tuckey said that we were making a mistake by entering into a fixed-price contract and that we should be going down the path of an alliance contract. These are the options: a fixed-price contract which, within the terminology that is accepted in the construction industry does not mean at all that there is absolutely no area of risk that can be assigned to the principal, or an alliance contract under which the contactor is fundamentally guaranteed a profit. We decided we would not go with that alliance method. That has been a very sensible decision. Even if our wildest dreams were realised, we would still be in a better position than we would have been had we opted for an alliance contract. We made that decision precisely because we knew that this was a risky project and we wanted to ensure that a contractor existed that was prepared to sign off on that risk. We have been absolutely straightforward about this from day one. We have acknowledged that we kept within government portions of risk. Our story has been consistent the whole way through. The other beef of Mr Drummond is that I refuse to factor into our budget estimate all the claims of Leighton. We understand that Mr Drummond is allowing himself to be used as a vehicle by Leighton to try to put pressure on the government, and we will not buy it. We certainly will not be factoring into our budget wild and speculative claims that have been made certainly for the purpose of putting political pressure on us.
Ms A.J.G. MacTIERNAN : As we said in the media release at the time, we were excluding some of the actual rates, not any of the terms or description of who had what risk, but some of the unit rates that Leighton was charging for particular jobs, as one would expect. It would be quite unfair to Leighton Constructions, which was tendering for other projects, for its unit prices to become a matter of public record. I have with me an article quoting Mr Tuckey, which was touted around at the time by the opposition. Mr Tuckey said that we were making a mistake by entering into a fixed-price contract and that we should be going down the path of an alliance contract. These are the options: a fixed-price contract which, within the terminology that is accepted in the construction industry does not mean at all that there is absolutely no area of risk that can be assigned to the principal, or an alliance contract under which the contactor is fundamentally guaranteed a profit. We decided we would not go with that alliance method. That has been a very sensible decision. Even if our wildest dreams were realised, we would still be in a better position than we would have been had we opted for an alliance contract. We made that decision precisely because we knew that this was a risky project and we wanted to ensure that a contractor existed that was prepared to sign off on that risk. We have been absolutely straightforward about this from day one. We have acknowledged that we kept within government portions of risk. Our story has been consistent the whole way through. The other beef of Mr Drummond is that I refuse to factor into our budget estimate all the claims of Leighton. We understand that Mr Drummond is allowing himself to be used as a vehicle by Leighton to try to put pressure on the government, and we will not buy it. We certainly will not be factoring into our budget wild and speculative claims that have been made certainly for the purpose of putting political pressure on us.
The other beef of Mr Drummond is that I refuse to factor into our budget estimate all the claims of Leighton. We understand that Mr Drummond is allowing himself to be used as a vehicle by Leighton to try to put pressure on the government, and we will not buy it. We certainly will not be factoring into our budget wild and speculative claims that have been made certainly for the purpose of putting political pressure on us.
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