‘Look out, Minister! War Memorial drops heavy hints about needing more money for its big build’, Honest History, 8 December 2022
When a project runs over the original cost estimate, the proponent has to tell the parliamentary Public Works Committee (PWC). This was the case with the Australian War Memorial and its $498m, now $548m, redevelopment project (para 2.267). Heritage Guardians had written to the PWC about this matter.
The report (23 pages, dated October) has quietly landed, noticed by Sarah Basford Canales at the Canberra Times. Much of the document is the usual glossy pictures and puffery of the new development, but six pages on ‘market conditions’ include some scary graphs on materials price increases, wages increases, and pricing uncertainty, plus some factors special to this project, as well as words about Covid and the Ukraine War.
Comparing para 2.1 of this report with para 5.1 of the Memorial’s September 2020 ‘Final Preliminary Documentation’, we note that ‘total new space’ delivered by the project now stands at 17 783 square metres, down from 24 744 square metres. Most of the change is due to space in the Bean Building Extension and Research Centre being reclassified as ‘refurbished’ rather than ‘new’.
Why this change has come about is not clear from the report. (Perhaps it’s covered in the Memorial’s ‘Function Design Brief’ referred to in para. 2.1. We have not been able to find this document; perhaps it’s the same as the ‘Functional Design Brief’ mentioned in the September 2020 document and elsewhere. Perhaps the Memorial can enlighten us.) The amount of ‘new gallery space’ goes up slightly this time around – 7488 square metres compared with 6877 in the preliminary documentation.
The report includes lots of words about cost controls, contingencies, and quality assurance. It fudges, however, the shenanigans associated with the secret $50m given by the then government to the project, merely stating (para 3.2) that the money has been distributed across the estimates for the project.
As to the overall spend, at para 4.1 of the report we are told, ‘From commencement to start October 2022 the Project has committed $250m in contracts and expended $120m’. The sting in the tail comes at para 7.2 in relation to ‘unlet works’ as at the date of the report:
The current budget allocation to complete these works has been re-estimated, based on current designs and (Q3 2022) market prices, at a value of $245.0m; this is forecast as being achievable within the current $548.7m budget (excluding abnormal market movements). [Emphasis added.]
Those final four words are notable, given that much of the document has been about ‘abnormal market movements’. So, look out, Minister Keogh. What the Minister has said previously about the government keeping a close eye on the Memorial project is particularly poignant.
In associated matters, we note that the report was done just before the deal was struck with the third of the construction companies, adding to the value of contracts committed. The report explains (para 6.2) why the contract process took longer than expected as the Memorial battled to ensure value for money from contractors.
The report (para 2.2) also reminds us that this is not a single ‘project’ but actually a ‘program’, with five Main Works Packages plus the installation of galleries in the new Anzac Hall and the Main Building. Experienced observers have noted the co-ordination issues that this raises for the Memorial’s own team – as the report itself says.
Finally, the Memorial’s latest Annual Report has a brief report on the big build (pages 26-27). The Senior Executive remuneration table (page 21) shows that the total remuneration for Executive Director (Development) Hitches is some $30 000 more than that for Director Anderson.
*David Stephens is editor of the Honest History website and has been convener of the Heritage Guardians group, opposed to the War Memorial redevelopment.