❓ Mr. Johnston questions the Premier regarding conflicting statements about cost overruns in the Muja AB refurbishment project. The Premier acknowledges the project's failure and significant cost increases due to engineering issues.
AnsweredQoN 236Legislative Assembly
QuestionView source ↗
MUJA AB —
REFURBISHMENT
236. Mr W.J. JOHNSTON to the Premier:
I refer to the Premier's view reported on ABC
television on 8 February 2013 that there had not been a cost blowout in the
Muja AB project.
(1) Does the
Premier agree with the Department of Treasury's view of this project
contained in the Pre-election Financial
Projections Statement that there have been ''cost overruns relative
to previous forecasts''?
(2) Does the
Premier agree with Hon Peter Collier's comments on ABC radio on 8 February
2013 in which, when asked whether there had been a cost blowout on the Muja AB
project, he said, ''Oh yes, absolutely, it has''?
(3) Does the
Premier agree with his Minister for Energy's comments to this chamber
on 21 May 2013 that this project ''is just way over budget''?
(4) If the
Premier does agree with the comments of the department, his former minister and
his current minister, does he still maintain the view that there has not been a
cost blowout?
REFURBISHMENT
236. Mr W.J. JOHNSTON to the Premier:
I refer to the Premier's view reported on ABC
television on 8 February 2013 that there had not been a cost blowout in the
Muja AB project.
(1) Does the
Premier agree with the Department of Treasury's view of this project
contained in the Pre-election Financial
Projections Statement that there have been ''cost overruns relative
to previous forecasts''?
(2) Does the
Premier agree with Hon Peter Collier's comments on ABC radio on 8 February
2013 in which, when asked whether there had been a cost blowout on the Muja AB
project, he said, ''Oh yes, absolutely, it has''?
(3) Does the
Premier agree with his Minister for Energy's comments to this chamber
on 21 May 2013 that this project ''is just way over budget''?
(4) If the
Premier does agree with the comments of the department, his former minister and
his current minister, does he still maintain the view that there has not been a
cost blowout?
AnswerView source ↗
(1)–(4)
Clearly, that project has not gone well. That is probably a great
understatement; it has not gone well. The decision to bring Muja A and B on—old
units—was made after the Varanus Island explosion and other situations
that threatened power supplies. There has been a failure in the engineering on
that project. The generation units, I understand, have been able to be
restored, but the boiler system there—I think I am correct—has
failed; therefore, the cost of rehabilitating Muja A and B is way above what
was estimated. That is a failure within the engineering side and the planning
of that. I think the member should have asked the question of the Minister for
Energy, who could have given him an absolute update on where that project is. I
accept that. In good faith, the government went down the line of that project
and supported Muja A and B coming on. It was a mistake, if the member wants to
say so. It has not worked out. It has cost a lot more money, and I think there
have been some serious failings within the utility and the engineering
contractors on that project to identify the sort of risk that eventuated. It
has evolved and, yes, I guess if we had had the knowledge, we would not have
gone down Muja A and B again, quite clearly. But, with hindsight, no-one
anticipated a failure in the other components of that plant.
Clearly, that project has not gone well. That is probably a great
understatement; it has not gone well. The decision to bring Muja A and B on—old
units—was made after the Varanus Island explosion and other situations
that threatened power supplies. There has been a failure in the engineering on
that project. The generation units, I understand, have been able to be
restored, but the boiler system there—I think I am correct—has
failed; therefore, the cost of rehabilitating Muja A and B is way above what
was estimated. That is a failure within the engineering side and the planning
of that. I think the member should have asked the question of the Minister for
Energy, who could have given him an absolute update on where that project is. I
accept that. In good faith, the government went down the line of that project
and supported Muja A and B coming on. It was a mistake, if the member wants to
say so. It has not worked out. It has cost a lot more money, and I think there
have been some serious failings within the utility and the engineering
contractors on that project to identify the sort of risk that eventuated. It
has evolved and, yes, I guess if we had had the knowledge, we would not have
gone down Muja A and B again, quite clearly. But, with hindsight, no-one
anticipated a failure in the other components of that plant.
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