Motion - Select Committee on the Operations of TasWater - Report - Consideration & Noting

Tuesday 16 November 2021

[12.43 a.m.]

Ms ARMITAGE (Launceston) - Madam Deputy President, I thank the committee for the report, which I have read. I thought it was a very good report.

In starting I, too, thank Mike Brewster. While I have always had some issues with TasWater, particularly in engineering areas, Mike Brewster and Ruth Dowty without doubt have been tremendous in solving general constituent issues I have had. I cannot remember one issue for a constituent - apart from, as I said, actual engineering works - that TasWater has not resolved. I certainly thank them for that; they have been tremendous. There is not an issue that I could say that I have had to go back to a constituent and say we could not sort out. They have really worked well in that area.

The main area I have is procurement, and the transparency of procurement - and, as the member for McIntyre mentioned, the CDO, the Capital Delivery Office. Hopefully that might make some improvements; the fact that one of the recommendations is that we have an immediate review of that office does not sound like it is, which is a bit disappointing.

As has been mentioned in the terms of reference, by the member for McIntyre, following the establishment of the CDO, the relationship between TasWater and Tasmanian contractors is fractured. Well, it has been fractured for a long time.

The first letter that I note in my files was from 2014, when I had issues from engineers about the transparency of procurement. The concern they have is that while they may get the work - they are not saying they do not get to do the work, but if they tender for the job, they do not get it. So, the only way they can actually get it - they have discovered this is the only way they can do it - is to team up with a mainland firm. So, the mainland firm puts in a tender and they team up with them. They end up doing the work - but the unfortunate part, as they say, is that if they put in the original tender and got the work, it would be a lot cheaper for the people of Tasmania. At the end of the day, the mainland firms got the work, and the Tasmanian crew are still doing the work, but there is an extra layer of money going on top of it, which is really quite unfortunate.

I am not going to mention names, because I have been asked time and time again, please do not mention who I am or the name of my engineering firm or who we are - some are big, some are small - because they feel they certainly will not get any more work.

This is from 30 October 2014:

The organisation in my opinion is currently out of control and there is a massive impact occurring on the community. Key things I am concerned about include transparency of procurement.

The next one I have is 2017. This was regarding the takeover of TasWater:

I am fully supportive of the takeover. However, I am deeply concerned if it is not done correctly then the issues won't be fixed. And instead, it would just draw mainland firms over the next five years, hence Tassie firms will not get any benefit from the takeover. And in the long term it will be a complete negative to the state's economy.

Still talking about actual local firms getting the work.

Questions in 2019 with regard to the CDO:

One of the stated aims of the CDO was to provide work for local consultants and contractors. Question. What does this mean for the engineering sector? The CDO appears to be lumping the capital projects into very large packages which will require multidisciplinary teams to deliver. What does this mean for small engineering consultancies?

Next:

To have the opportunity to participate in projects, do businesses need to form consortiums or align with multidisciplinary firms? If not, what is the likely mechanism for them to participate in project design work?

And it goes on. I did ask questions in this House, and I did after some time get some answers. I appreciate it is difficult for the Government to answer questions about TasWater, only having a 2 per cent interest in TasWater - and, of course, we have the owner councils.

So, what are the answers to my question regarding how much work is given to local contracts? Quite a few different engineering firms have come to me with concerns - not all northern, but all definitely statewide, and definitely made up of local contractors.

Ms Rattray - They certainly stood shoulder to shoulder when they presented to the committee.

Ms ARMITAGE - Absolutely. And they were delighted when I was able to tell them that you had the committee formed. My local members were very pleased that they would be able to come along and put in a submission and speak to it, because it has been a concern for a long time, and certainly for as long as I can remember.

In one of the answers to questions about the CDO, it was said 84 per cent of contracts were awarded to local people. The comment that came back from one of my engineering firms said they had not awarded many, so it is skewed by the Mikany and Henderson projects, which I believe are dams, which was $20 million of the $26 million awarded; 84 per cent of very little is still very little. It also said they do not detail the money paid to the CDO. I am not sure whether -

Ms Rattray - We could not get that information.

Ms ARMITAGE - The member could not get that information either. The further comment about staffing is interesting, that they think the majority are locals. If there was a skills shortage as they claim, why have they been able to source the skills locally anyway? I suspect they count them as local if they relocate. The issue is they do not relocate, they are doing fly-in, fly-out.

I know from questions I have asked in the past, if a mainland firm has a local office - which many do, many hire an office, it may not be manned or they might have one person in it, but all of a sudden, they are classed as a Tasmanian firm. They bring many of their workers from interstate. That is the main concern I have had with TasWater, of mainland firms getting the contracts, then employing local people to do the work, but when local people put in the tenders, they do not get it unless they are aligned with a mainland firm. That is quite disappointing.

Another recent one I had is with regard to, it is hard to describe and I guess you would call it cutting and shutting of pipes for new businesses. The charges are beyond the realms of your imagination. Some of the prices I have been told of for building works, for example, coming into the mall where a business is changing slightly and they need to change some of the pipe work. In order to even close a street when they are doing the work at night to cut and shut a few pipes is hugely expensive, many thousands of dollars for something they say takes a very short time. It is really impacting on a lot of developers.

This is an issue I have ready to go to TasWater, I am not sure I am going to have any great success. Mike Brewster has been great with constituent work, but I have not had a lot of success when it comes to tendering, procurement and areas such as that.

Ms Rattray - It is the big areas.

Ms ARMITAGE - I think they are really outside the scope of his ability. They probably come under the board. I have had discussions with Miles Hampton in the past, and we have had to agree to disagree. I am sure if Mike Brewster could have helped, he would, but I do not know that it is within the realms of what he can do.

Ms Rattray - I would have thought Mr Brewster would have had direct input into those areas. I do not know exactly how the functions of the board and their relationship work.

Ms ARMITAGE - It is the only area where I have not had success with TasWater. I have to say Mike Brewster and Ruth have been absolutely fabulous with other constituent issues, but when it comes to procurement, engineering and the development works, I have not had a great deal of success. It has been more of an individual constituent having an issue and they have been fabulous, they have resolved every issue without fail.

The other area mentioned and which is a bit difficult, is the new secondary treatment plant at Ti Tree Bend we would desperately like in Launceston, the $285 million promised in March 2016. I really believe it belongs to the members for Windermere and Rosevears, that river is more in your area than mine. I am hoping you do something about it, perhaps lobby the 2 per cent the government owns -

Ms Rattray - It is a small thing to deal with.

Ms Forrest - I thought council were the owners, bash up the councils.

Ms ARMITAGE - The river really is not mine. Unfortunately, you can see it from my electorate but it does belong to the other two members. That $285 million for a secondary treatment plant from 2016 has probably blown out to about $350 million now. It is unfortunate and I would have to say it is a disgrace we have raw sewerage still being discharged into our Tamar River at times of high flood.

Ms Forrest - Does your electorate -

Ms ARMITAGE - It does. Probably the raw sewerage comes from my electorate. I have to admit that -

Ms Forrest - You are responsible, after all.

Ms ARMITAGE - We have over 9000 houses in the Greater Launceston electorate with joint sewer and water which causes the problem in times of high flood when the current system cannot cope with.

Mr Valentine - The problem is the stormwater and sewerage are conveyed in walls in some areas in your electorate. It is not an easy solution.

Ms ARMITAGE - I have to admit my house is one of the culprits.

Ms Forrest - There you go - fall on your sword.

Ms ARMITAGE - I know. Our house, built in 1930, has joint sewer and water. With over 9000 houses it is a real impossibility for councils to change that system. There is certainly no way they can dig up that many gardens, concrete paths and driveways - the cost would certainly be more than the $250 million quoted in 2016.

Mr Valentine - I think I might be in the same boat.

Ms ARMITAGE - I think you might be. I have the understanding Hobart has very similar problems and it certainly is an issue.

Mr Valentine - It is why Salamanca goes the way it does occasionally.

Ms ARMITAGE - Yes. Obviously, we have had lots of those problems in the city so that from time to time there are sewerage spills.

I am going off track a little bit, but I can recall being in real estate and seeing raw sewage running down the side of a house. It was in the member for Rosevear's electorate because of the many old pipes. This is also a difficulty for TasWater as it had been for council, in that a lot of the old clay pipes crack, move and it does not take much for something to get caught in those pipes and all of a sudden, they overflow and cause a lot of grief. It certainly is not an easy one. All in all the report was not something I particularly wanted to be part of -

Ms Rattray - I remember asking you and you turned me down flat.

Ms ARMITAGE - I do recall that. It was not that long before we had the inquiry into TasWater and the takeover by the Government which I chaired and I really thought I had my share of TasWater at that stage.

I am very happy to read your report and as I was saying, hopefully a lot of the recommendations will get -

Ms Rattray - It is only 11 so it is not insurmountable.

Ms ARMITAGE - I am very pleased to see there certainly appears to be support, as the member was saying for an inquiry or -

Ms Rattray - A review of the CDO.

Ms ARMITAGE - into the CDO, because I asked a lot of questions of the CDO and while some were answered, I cannot say they were answered all that well.

I am trying to find the questions, if you would indulge me for a moment, Mr President; I am trying to get finished before 1 o'clock and we can start afresh. Most of the CDO questions were answered probably in 'political speak' - they were answered, but did they really get answered? Possibly not. I accept it is difficult for a government to answer questions about an entity such as TasWater, mainly owned by the local councils, and on that note -

Ms Rattray - It was difficult to find out which minister should respond.

Ms ARMITAGE - Who is the minister responsible?

Ms Forrest - No-one's responsible.

Mr Valentine - I would say it is the Treasurer, because they are the ones who provide the money.

Ms ARMITAGE - They are the ones who took over.

Ms Forrest - It used to be the minister for Infrastructure, but maybe it is the Treasurer now.

Mrs Hiscutt - I believe it still is the minister for Infrastructure.

Ms Forrest - Mr Ferguson - it is his job.

Ms ARMITAGE - I will not go into these because there is probably no great benefit in pointing out the answers not answered from the CDOs. I appreciate the opportunity to speak to the report of the member for McIntyre and am hopeful the concerns my constituents have, particularly with regard to previously, and now with the CDO, the way that tenders were put out and who actually got the work, will be addressed and looked at in the not too distant future.