Auditor General Report: Managing Major Projects

Written on the 24 October 2012

I am pleased to speak this evening and comment on the Victorian Auditor-General's report of October this year Managing Major Projects. At the outset I say that this report, which my colleague Mr Ondarchie has just spoken on, demonstrates a litany of disasters from the previous government in relation to managing major projects. As the audit performance was taken over 12 years, it covers the 11 years of the Labor government. A number of factors in the report are of concern and have had major impacts on what the coalition government inherited when it came to power in November 2010.


Numerous examples of project blow-outs are highlighted throughout the report.


I am talking about those ones well known to the Victorian public -- myki; the desalination plant, which is costing us in the vicinity of $1.8 million each and every day for the next 30-odd years; the Melbourne Markets project -- it just goes on and on. It is an absolutely damning indictment of those who were in control of Victorian taxpayer funds in the previous government and how they managed them.


A number of issues in the report go to the heart of my concerns. They relate to the contractors, employment aspects and human resources that were applied to a number of projects. On page 16 the report talks about some extraordinary examples of what happened with appointed contractors. I will quote one:


For example: An employee resigned in December 2005, with MPV engaging them as a contractor in 2006. Precise dates are unknown due to a lack of documentation. Since 2006, MPV has paid this contractor around $1.67 million in contract fees.


That is an extraordinary amount of money and an extraordinary series of events surrounding how people were employed and used when conducting major projects.


One major project the report highlights is in my electorate of Southern Metropolitan Region. It talks of the Princes Pier renewal. This project highlights the absolute mismanagement of Major Projects Victoria and the previous government's administration in this area. It firmly indicates that there was no project plan, it was four years behind schedule, and it was 142 per cent over budget. It is another mess that the coalition government has inherited and has had to fix up. As I said, it relates to pylons and projects at Princes Pier. I again quote from the report:


The project did not have a complete, comprehensive and coherent plan, and the project was completed significantly over time and budget. It was originally scoped as a five-stage project with initial funding of $14 million to complete stages one and two with additional funding of $6 million estimated to complete stages three, four and five. All five stages were intended to be completed by April 2008. The project was completed in December 2011 at a total cost of $32.5 million.


That is an extraordinary cost blow-out in both time and taxpayers money. It absolutely indicates the total mismanagement that was so obvious from so many projects under the previous government. The example of that particular project in my electorate of Southern Metropolitan Region says it all. It is an extraordinary indictment of how projects were managed throughout the state. The previous government should be absolutely appalled by its handling of taxpayers money. It cost the Victorian taxpayer billions of dollars. I am pleased that the government has looked at this report and will be taking up all the recommendations the Auditor-General has laid out in it.

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