❓ WA Parliament QoN regarding Water Corporation's decision to cancel Aroona Consortium contract and in-source operations. Questions focus on the business case, costs, advice, contract termination, staff transfer, and ministerial direction. The response indicates a negotiated termination, potential savings, and a strategic shift towards in-house expertise.
AnsweredQoN 5816Legislative Assembly
QuestionView source ↗
(1) What was the business case for Water Corporation cancelling the contract with Aroona Consortium and when will it be published? (2) How much will Water Corporation's annual operation and maintenance costs change across the forward estimates when work carried out by the Aroona Consortium is completely in-sourced? (3) What was the expected cost for work being carried out by Aroona Consortium across the forward estimates? (4) How much money is expected to be saved annually by Water Corporation across the forward estimates by in-sourcing the work from the Aroona Consortium? (5) Who provided advice to Water Corporation on the decision to cancel the contract with the Aroona Consortium: (a) When was this advice provided to Water Corporation? (6) What was the nature of the external advice given to Water Corporation on this matter? Was the advice about how the contract could be terminated or was it about the business case for terminating the contract? (7) When were the Aroona Consortium partners informed that their contract with Water Corporation was going to be terminated? (8) What was the contractual basis for Water Corporation terminating the contract with the Aroona Consortium partners? (9) Will the work transferred from the Aroona Consortium to Water Corporation be subject to the same key performance indicators as were applied to the Aroona Consortium? (10) Will the work transferred from the Aroona Consortium to Water Corporation be subject to the same annual efficiency dividend that was applied to the Aroona Consortium? (11) What annual efficiency dividend will be applied to the work in-sourced to Water Corporation from the Aroona Consortium? (12) How much compensation will be paid to the external partners of the Aroona Consortium for the cancellation of their contract with Water Corporation? (13) How much will it cost Water Corporation to transfer staff from the Aroona Consortium to the Water Corporation? (14) Will Aroona Consortium personnel transferred to Water Corporation be paid at the same rate as that before they were transferred? (15) If the staff transferred to Water Corporation are being paid at different rates, what are the differences in the rates? (16) If the staff transferred to Water Corporation are being paid at different rates, what is the difference in total pay (as a total amount) for those staff? (17) Did the Minister provide any direction to Water Corporation to re-examine and/or cancel their contract with the Aroona Consortium? (18) If the Minister did not provide direction to Water Corporation on this matter, what was the commercial basis given by Water Corporation for cancelling the contract with the Aroona Consortium across the forward estimates? (19) If the Minister did not provide direction to Water Corporation on this matter, what is the net financial benefit to the state across the forward estimates gained by cancelling the contract with the Aroona Consortium?
AnswerView source ↗
Answered
19 March 2020
Responded by
Minister for Water
Response time
13 days
1) The Water Corporation Business Case identified the preferred option for the future would be to bring in-house the operation and maintenance of water, wastewater and recycling plants, dams, groundwater bores and trunk mains in Perth. The business case contains sensitive commercial information and as such it has been redacted.
[See tabled paper no.]
2) The annual operation and maintenance cost varies on an annual basis depending on the work demand.
3) This work will no longer be done by Aroona and the cost of the work varies on an annual basis.
4) The decision wasn’t made on the basis that there would be savings. However, the Water Corporation Board estimates annual savings of approximately $2 million.
5) The business case was developed by the Water Corporation between April and June 2019, with input from a range of sources.
6) Advice was provided from a range of sources about options available for the future provision of metropolitan production and treatment services and the process through which they would be best implemented.
7) Suez and Broadspectrum were informed of the Water Corporation’s decision in November 2019.
8) The Water Corporation, Suez and Broadspectrum have agreed to end the contract through an orderly transition approach.
9) Yes
10) Yes
11) The operations and maintenance activities will be subject to ongoing efficiency targets consistent with those set for the full scope of Water Corporation operations.
12) Nil. The Water Corporation, Suez and Broadspectrum have agreed to end the contract through an orderly transition approach.
13) Final employment contracts have not yet been issued and negotiated with employees.
14) Final employment contracts have not yet been issued and negotiated with employees.
15) Final employment contracts have not yet been issued and negotiated with employees.
16) Final employment contracts have not yet been issued and negotiated with employees.
17) No.
18) The Water Corporation, Suez and Broadspectrum have agreed to end the contract through an orderly transition approach. The Water Corporation’s Business Case identified the preferred option for the future would be to bring in-house the operation and maintenance of water, wastewater and recycling plants, dams, groundwater bores and trunk mains in Perth. This is expected to result in a more holistic approach to water services across the entire water cycle, building our people capability to create a fully integrated, state wide centre of expertise.
19) The benefits to the State are detailed in the Business Case summarised in (18).
[See tabled paper no.]
2) The annual operation and maintenance cost varies on an annual basis depending on the work demand.
3) This work will no longer be done by Aroona and the cost of the work varies on an annual basis.
4) The decision wasn’t made on the basis that there would be savings. However, the Water Corporation Board estimates annual savings of approximately $2 million.
5) The business case was developed by the Water Corporation between April and June 2019, with input from a range of sources.
6) Advice was provided from a range of sources about options available for the future provision of metropolitan production and treatment services and the process through which they would be best implemented.
7) Suez and Broadspectrum were informed of the Water Corporation’s decision in November 2019.
8) The Water Corporation, Suez and Broadspectrum have agreed to end the contract through an orderly transition approach.
9) Yes
10) Yes
11) The operations and maintenance activities will be subject to ongoing efficiency targets consistent with those set for the full scope of Water Corporation operations.
12) Nil. The Water Corporation, Suez and Broadspectrum have agreed to end the contract through an orderly transition approach.
13) Final employment contracts have not yet been issued and negotiated with employees.
14) Final employment contracts have not yet been issued and negotiated with employees.
15) Final employment contracts have not yet been issued and negotiated with employees.
16) Final employment contracts have not yet been issued and negotiated with employees.
17) No.
18) The Water Corporation, Suez and Broadspectrum have agreed to end the contract through an orderly transition approach. The Water Corporation’s Business Case identified the preferred option for the future would be to bring in-house the operation and maintenance of water, wastewater and recycling plants, dams, groundwater bores and trunk mains in Perth. This is expected to result in a more holistic approach to water services across the entire water cycle, building our people capability to create a fully integrated, state wide centre of expertise.
19) The benefits to the State are detailed in the Business Case summarised in (18).
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