❓ A parliamentary question regarding a cost blowout on the Peel Deviation project. The Minister acknowledges cost increases due to the economic boom and design refinements, promising a final decision soon.
AnsweredQoN 349Legislative Assembly
QuestionView source ↗
I refer to the minister’s mismanagement of the Peel deviation and to her admission that the project will incur a significant cost blow-out. (1) Is the advice I have received that the cost of the Peel deviation project has now blown out from the original estimate of $340 million by $120 million to $460 million correct? (2) Is part of the reason for the cost blow-out the government’s indecisiveness and the delays caused in getting the project up and running because of the massive increase in the cost of limestone and other raw materials? Ms A.J.G. MacTIERNAN
AnswerView source ↗
(1)-(2) As I have acknowledged before today, the costs that were provided in April 2004 are not static. We provided the federal government with some preliminary cost estimates in April 2004. Even under the federal government’s proposal, it was never intended that construction of this road would start until the very end of 2006. It is true that a very substantial increase in construction costs has taken place in Western Australia as a result of the economic boom. It is a fact of life that construction costs for civil construction projects have increased by around 25 per cent. Since April 2004 we have been refining the design work, which we had undertaken to do in 2004. We now have a clearer idea of the design parameters. At the same time, we have been making updated cost estimates on that project. It is an absolute nonsense to think that a preliminary cost estimate can be done in early 2004 dollars and expect those costs to hold in this type of economic environment for two or three years. Of course that is not the case. Any sound and prudent economic planner, including the federal government, would understand that. We are finalising those cost estimates. I hope to be in a position to make a final decision on the scope of works and the cost of that by mid-July, when we will make some announcements.
(1) Is the advice I have received that the cost of the Peel deviation project has now blown out from the original estimate of $340 million by $120 million to $460 million correct? (2) Is part of the reason for the cost blow-out the government’s indecisiveness and the delays caused in getting the project up and running because of the massive increase in the cost of limestone and other raw materials? Ms A.J.G. MacTIERNAN replied: (1)-(2) As I have acknowledged before today, the costs that were provided in April 2004 are not static. We provided the federal government with some preliminary cost estimates in April 2004. Even under the federal government’s proposal, it was never intended that construction of this road would start until the very end of 2006. It is true that a very substantial increase in construction costs has taken place in Western Australia as a result of the economic boom. It is a fact of life that construction costs for civil construction projects have increased by around 25 per cent. Since April 2004 we have been refining the design work, which we had undertaken to do in 2004. We now have a clearer idea of the design parameters. At the same time, we have been making updated cost estimates on that project. It is an absolute nonsense to think that a preliminary cost estimate can be done in early 2004 dollars and expect those costs to hold in this type of economic environment for two or three years. Of course that is not the case. Any sound and prudent economic planner, including the federal government, would understand that. We are finalising those cost estimates. I hope to be in a position to make a final decision on the scope of works and the cost of that by mid-July, when we will make some announcements.
(2) Is part of the reason for the cost blow-out the government’s indecisiveness and the delays caused in getting the project up and running because of the massive increase in the cost of limestone and other raw materials? Ms A.J.G. MacTIERNAN replied: (1)-(2) As I have acknowledged before today, the costs that were provided in April 2004 are not static. We provided the federal government with some preliminary cost estimates in April 2004. Even under the federal government’s proposal, it was never intended that construction of this road would start until the very end of 2006. It is true that a very substantial increase in construction costs has taken place in Western Australia as a result of the economic boom. It is a fact of life that construction costs for civil construction projects have increased by around 25 per cent. Since April 2004 we have been refining the design work, which we had undertaken to do in 2004. We now have a clearer idea of the design parameters. At the same time, we have been making updated cost estimates on that project. It is an absolute nonsense to think that a preliminary cost estimate can be done in early 2004 dollars and expect those costs to hold in this type of economic environment for two or three years. Of course that is not the case. Any sound and prudent economic planner, including the federal government, would understand that. We are finalising those cost estimates. I hope to be in a position to make a final decision on the scope of works and the cost of that by mid-July, when we will make some announcements.
Ms A.J.G. MacTIERNAN replied: (1)-(2) As I have acknowledged before today, the costs that were provided in April 2004 are not static. We provided the federal government with some preliminary cost estimates in April 2004. Even under the federal government’s proposal, it was never intended that construction of this road would start until the very end of 2006. It is true that a very substantial increase in construction costs has taken place in Western Australia as a result of the economic boom. It is a fact of life that construction costs for civil construction projects have increased by around 25 per cent. Since April 2004 we have been refining the design work, which we had undertaken to do in 2004. We now have a clearer idea of the design parameters. At the same time, we have been making updated cost estimates on that project. It is an absolute nonsense to think that a preliminary cost estimate can be done in early 2004 dollars and expect those costs to hold in this type of economic environment for two or three years. Of course that is not the case. Any sound and prudent economic planner, including the federal government, would understand that. We are finalising those cost estimates. I hope to be in a position to make a final decision on the scope of works and the cost of that by mid-July, when we will make some announcements.
(1)-(2) As I have acknowledged before today, the costs that were provided in April 2004 are not static. We provided the federal government with some preliminary cost estimates in April 2004. Even under the federal government’s proposal, it was never intended that construction of this road would start until the very end of 2006. It is true that a very substantial increase in construction costs has taken place in Western Australia as a result of the economic boom. It is a fact of life that construction costs for civil construction projects have increased by around 25 per cent. Since April 2004 we have been refining the design work, which we had undertaken to do in 2004. We now have a clearer idea of the design parameters. At the same time, we have been making updated cost estimates on that project. It is an absolute nonsense to think that a preliminary cost estimate can be done in early 2004 dollars and expect those costs to hold in this type of economic environment for two or three years. Of course that is not the case. Any sound and prudent economic planner, including the federal government, would understand that. We are finalising those cost estimates. I hope to be in a position to make a final decision on the scope of works and the cost of that by mid-July, when we will make some announcements.
(1) Is the advice I have received that the cost of the Peel deviation project has now blown out from the original estimate of $340 million by $120 million to $460 million correct? (2) Is part of the reason for the cost blow-out the government’s indecisiveness and the delays caused in getting the project up and running because of the massive increase in the cost of limestone and other raw materials? Ms A.J.G. MacTIERNAN replied: (1)-(2) As I have acknowledged before today, the costs that were provided in April 2004 are not static. We provided the federal government with some preliminary cost estimates in April 2004. Even under the federal government’s proposal, it was never intended that construction of this road would start until the very end of 2006. It is true that a very substantial increase in construction costs has taken place in Western Australia as a result of the economic boom. It is a fact of life that construction costs for civil construction projects have increased by around 25 per cent. Since April 2004 we have been refining the design work, which we had undertaken to do in 2004. We now have a clearer idea of the design parameters. At the same time, we have been making updated cost estimates on that project. It is an absolute nonsense to think that a preliminary cost estimate can be done in early 2004 dollars and expect those costs to hold in this type of economic environment for two or three years. Of course that is not the case. Any sound and prudent economic planner, including the federal government, would understand that. We are finalising those cost estimates. I hope to be in a position to make a final decision on the scope of works and the cost of that by mid-July, when we will make some announcements.
(2) Is part of the reason for the cost blow-out the government’s indecisiveness and the delays caused in getting the project up and running because of the massive increase in the cost of limestone and other raw materials? Ms A.J.G. MacTIERNAN replied: (1)-(2) As I have acknowledged before today, the costs that were provided in April 2004 are not static. We provided the federal government with some preliminary cost estimates in April 2004. Even under the federal government’s proposal, it was never intended that construction of this road would start until the very end of 2006. It is true that a very substantial increase in construction costs has taken place in Western Australia as a result of the economic boom. It is a fact of life that construction costs for civil construction projects have increased by around 25 per cent. Since April 2004 we have been refining the design work, which we had undertaken to do in 2004. We now have a clearer idea of the design parameters. At the same time, we have been making updated cost estimates on that project. It is an absolute nonsense to think that a preliminary cost estimate can be done in early 2004 dollars and expect those costs to hold in this type of economic environment for two or three years. Of course that is not the case. Any sound and prudent economic planner, including the federal government, would understand that. We are finalising those cost estimates. I hope to be in a position to make a final decision on the scope of works and the cost of that by mid-July, when we will make some announcements.
Ms A.J.G. MacTIERNAN replied: (1)-(2) As I have acknowledged before today, the costs that were provided in April 2004 are not static. We provided the federal government with some preliminary cost estimates in April 2004. Even under the federal government’s proposal, it was never intended that construction of this road would start until the very end of 2006. It is true that a very substantial increase in construction costs has taken place in Western Australia as a result of the economic boom. It is a fact of life that construction costs for civil construction projects have increased by around 25 per cent. Since April 2004 we have been refining the design work, which we had undertaken to do in 2004. We now have a clearer idea of the design parameters. At the same time, we have been making updated cost estimates on that project. It is an absolute nonsense to think that a preliminary cost estimate can be done in early 2004 dollars and expect those costs to hold in this type of economic environment for two or three years. Of course that is not the case. Any sound and prudent economic planner, including the federal government, would understand that. We are finalising those cost estimates. I hope to be in a position to make a final decision on the scope of works and the cost of that by mid-July, when we will make some announcements.
(1)-(2) As I have acknowledged before today, the costs that were provided in April 2004 are not static. We provided the federal government with some preliminary cost estimates in April 2004. Even under the federal government’s proposal, it was never intended that construction of this road would start until the very end of 2006. It is true that a very substantial increase in construction costs has taken place in Western Australia as a result of the economic boom. It is a fact of life that construction costs for civil construction projects have increased by around 25 per cent. Since April 2004 we have been refining the design work, which we had undertaken to do in 2004. We now have a clearer idea of the design parameters. At the same time, we have been making updated cost estimates on that project. It is an absolute nonsense to think that a preliminary cost estimate can be done in early 2004 dollars and expect those costs to hold in this type of economic environment for two or three years. Of course that is not the case. Any sound and prudent economic planner, including the federal government, would understand that. We are finalising those cost estimates. I hope to be in a position to make a final decision on the scope of works and the cost of that by mid-July, when we will make some announcements.
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