Chapter 2 Proposed construction of a new Australian Embassy complex
including Chancery and Head of Mission residence in Bangkok, Thailand
The Department of Foreign Affairs and Trade (DFAT) seeks approval from
the Committee to build a new Australian Embassy Complex in Bangkok, including a
chancery and head of mission (HOM) official residence.
A key objective of the project is to construct an official residence to
house the Australian Ambassador to Thailand, the Ambassadors family members and
high level visitors. The residence will be capable of catering for a range of
The second key objective is to construct a new chancery building to serve
as Australia’s ongoing permanent mission to Thailand, which would be tenanted
by the following agencies:
n Department of
Immigration and Citizenship;
n Australian Federal
n Australian Trade
n Australian Agency for
n Australian Customs
n Department of
Agriculture, Fisheries and Forestry;
n Department of
Education, Employment and Workplace Relations;
n Department of
Infrastructure and Transport;
n Department of
The project was referred to the Committee on 15 September 2011.
Conduct of the inquiry
Following this referral, the inquiry was advertised nationally and
submissions sought from those with direct interest in the proposed project.
The Committee received one submission and one confidential supplementary
submission from DFAT. A list of submissions can be found at Appendix A.
The confidential submission comprised the project costings and sensitive
information which DFAT submitted could not be published for security reasons.
The Committee accepted DFAT’s submission in this regard and the selected
information was not authorised for publication, on DFAT’s advice.
The Committee conducted a public hearing on the project and an in-camera
hearing on the project costings on 4 November 2011 in Canberra. As the Committee
was not able to conduct a site inspection for the project in Bangkok,
DFAT provided the Committee with a private briefing on the project design and
elements just prior to the public hearing.
A transcript of the public hearing and a copy of DFAT’s public
submission to the inquiry are both available on the Committee’s website.
Need for the works
DFAT submitted that the new Embassy complex is required to provide the
n more secure
accommodation for DFAT and the nine other Government departments and agencies;
n an efficient and
effective modern office environment;
n a design which meets
requirements of the Building Code of Australia, the Disability Discrimination
Act and appropriate occupational health and safety standards;
n a complex which will
meet current and future operational and technological requirements; and
n a complex which will
act as a hub for other Australian missions in the region.
DFAT told the Committee that the driving need for the project was to
meet a security deficiency in the current facility:
The main driver or need for this project is to meet current
security requirements. Our existing embassy, unfortunately, does not meet the
security requirements of our embassy building in Bangkok. Since the Jakarta
Embassy bombing in 2004 new standards have been applied and threat assessments
made against all our overseas properties. The embassy in Bangkok was one of
those identified as being deficient. Substantial work was done in analysing
whether improvements could be made to that building to meet the current
security requirements but, unfortunately, given the nature of that building,
the method of construction and its proximity to busy roads, the only answer is
a relocation. That is the basis of this particular project.
The Committee was told that the National Security Committee of Cabinet
approved the relocation of the Bangkok Embassy on security grounds, following a
global review of physical security at Australia’s overseas missions. The
current Embassy complex would be relocated to a new site adjacent to the
Embassy of Japan in the Panthum Wan district of Bangkok.
DFAT submitted that the new site would enable the construction of
appropriate setbacks to the chancery and HOM buildings for blast mitigation
while the buildings themselves would also be designed to mitigate blast.
DFAT noted that the Australian Embassy in Bangkok was identified from
other Australian missions because it is a substantial Australian facility in
Thailand, with a regional role:
There are, as I mentioned earlier, the Department of Foreign
Affairs and Trade and nine other agencies represented in that building. The
relationship with Thailand is substantial. It goes across commercial, tourism
and in aid terms. The building that we currently occupy in Bangkok is a
substantial office building. It is near enough to 10,000 square metres. So, it
is a substantial presence and is a very important embassy for us. It is one
that we need to have proper facilities available for the Australian government's
The Committee is satisfied that there is a compelling need for the
Scope of the works
The proposed scope for the construction of a new Australian Embassy
complex in Bangkok is detailed in Submission 1: Department of Foreign Affairs
DFAT proposes to construct a new chancery on the chosen site to a size
of approximately 9,000 square metres. In addition, DFAT would construct an
official HOM residence, associated services and support buildings. All
buildings would be constructed in accordance with DFAT’s security requirements
and individual agency spatial and DFAT security requirements.
In addition to the main buildings, the scope of the works includes the
n two pedestrian and
vehicular access points;
n a main guard station
to provide vehicle and pedestrian screening;
n a smaller guard
station for the HOM residence to provide vehicle and pedestrian screening;
n an engineering and
maintenance services building;
n a perimeter security
wall, complete with CCTV and appropriate lighting;
n project specific
engineering services including mains electricity and back-up power supply,
mains water supply treated to World Health Organisation standards, storm water
drainage and harvesting, a sewerage treatment system and comprehensive ICT
n integrated office
fit-outs for each tenant agency, including security measures such as forced
entry and ballistic partitions, doors and glazing, security counters, security
air locks and doors and specialised door hardware;
n fixed work-stations,
workstation partitions, built-in joinery, compactus storage units, window
treatments, floor coverings, representational furniture for the HOM residence
and loose office furniture.
It was noted that individual Australian Government agencies would
provide office supplies such as photocopiers, computers and other devices.
Subject to Parliamentary approval of the project, it is anticipated that
construction would be complete by late March 2016, with occupation of the new
complex scheduled around the end of June 2016.
The Committee finds that the proposed scope of works is suitable to meet
Cost of the works
DFAT initially estimated the total out-turn cost of the proposed project
to be approximately $193.4 million. However, DFAT subsequently
revised its estimate of the total out-turn cost to $190.8 million, having
regard to savings offsets mandated by the Department of Finance and
DFAT provided evidence to the Committee on the costings prepared for the
project, through a supplementary confidential submission and during the
The cost estimate provided by DFAT includes construction, integrated fit-out,
construction contingency, furniture and other related design and project
The items excluded from the cost estimate included office and business
machines, computers, artworks, white goods and interest charges.
DFAT submitted that the cost estimate does not include Thai Government
Import Duty as goods imported for the Embassy project are anticipated to be
nil. The cost estimate does include Thai Government VAT, however DFAT noted it
would endeavour to receive any VAT payable using reciprocal arrangements
between the Thai and Australian Governments.
The Committee is satisfied that the costings of the project provided to
it have been adequately assessed by the proponent agency.
Land ownership and leasing arrangements
DFAT submitted that the site proposed for the new Embassy complex has
been procured on a long term lease agreement between the Commonwealth and the
Crown Property Bureau of Thailand.
The Committee was interested in the parameters of the lease arrangement and
requested that DFAT outline how it had mitigated any risk in the handover of
land to the Australian Government.
DFAT detailed the leasing arrangement to the Committee:
The lease we have on the new site is a 30-year lease with an
option to exercise a further 30 years. So, in effect, we have a 60-year lease
on the land. That lease is with the Crown Property Bureau, a commercial entity
in Bangkok. The terms of the lease are that for the first three years, during
the construction phase, we pay approximately $330,000 each year and, at the end
of construction, we formally enter into a 30-year lease and we pay a sum of
funds upfront for the 30 years. At current exchange rates it is about $30
million. At the 27th year of that lease, we have a two-year window to exercise
a further 30-year lease on terms to be agreed between the parties at that time.
So, in effect, we have a 60-year arrangement.
DFAT noted that the handover of the site would be expected in December
2011, as existing buildings on the site had to be removed and site remediation
works were to be conducted. The lease arrangement directed that the Crown Property
Bureau hand over the site in uncontaminated form.
The Committee was satisfied with the evidence provided to it on the
leasing arrangements for the proposed new embassy site in Bangkok and the
protective measures DFAT has undertaken to ensure the desired land is provided
to it in an uncontaminated form.
Construction in Bangkok
In the Committee’s view, one issue pertinent to the success of the
proposed new Embassy complex in Bangkok was DFAT’s ability to engage and
consult with local authorities and the construction industry in Bangkok,
including the issuing of tenders and abiding by local regulations and laws.
Consultation with local authorities
DFAT submitted to the Committee:
There will be a very substantial series of approvals required
that will go to the nature of the building itself but also to the provision of
utilities and all of those issues. We have only had very preliminary exposure
at the moment.
DFAT noted that the Bangkok Metropolitan Administration (BMA) was the
controlling authority for approval of planning and building works and that they
would be consulted throughout the design development phase to ensure DFAT
complied with local authority requirements. DFAT informed the
Committee that they had undertaken preliminary investigations with the BMA to
ensure the form, size and height of the proposed new building would comply with
local planning requirements.
Preliminary discussions had also been held with local supply authorities
to determine capacity of adjacent infrastructure.
DFAT explained to the Committee that one way they would manage their
consultations with local industry and the local authorities was to engage a
local partner, being a reputable architectural practice of Australian origin,
who would guide them through the town planning issues as well as administrative
and legal issues regarding construction.
Consultation with local industry and contractors
DFAT submitted to the Committee that there were reliable contractors in
Bangkok who could be engaged as part of the construction process, should the
new Embassy complex be approved to proceed.
DFAT told the Committee:
… there are many with Australian connections and there are
reputable international contractors there. To mitigate the procurement risk we
are going to a lump sum tender arrangement. We will undertake a two-stage
procurement of the head works contractor where we will call for expressions of
interest. We will assess those expressions of interest, we will shortlist and
then we will go to tender with the shortlisted organisations. Having a fully
developed design with an internationally recognised lump sum form of contract
gives us the surety before we actually start the works in terms of the levels
of quality that we are getting from the design documentation. Also, from a
financial perspective, a lump sum gives us the surety we require moving forward
through the construction phase.
DFAT noted that to ensure construction proceeded in accordance with
their design and on schedule, tenders would be assessed for compliance with the
agency’s brief. DFAT would also engage a project management organisation to
oversee the construction personnel.
The local construction industry in Thailand has the capacity
to undertake a project of this complexity although a high degree of supervision
will be required by the Australian based consultant team along with the project
manager and client representatives.
The Committee is satisfied that DFAT has undertaken all necessary preliminary
investigations regarding the local authorities who would be consulted over the
design and construction phase of the proposed project. Further, the Committee
is pleased that DFAT will engage a local partner to ensure compliance with the
local planning and construction requirements.
Flood mitigation and civil works
With Bangkok’s history of floods, and with the 2011 Bangkok floods at
the forefront of the Committee’s mind at the time of the public hearing, the
Committee was concerned to ensure that DFAT had appropriately assessed and
mitigated the risk of flood.
DFAT submitted to the Committee:
Bangkok is subject to periodic local flooding after heavy
rain. The site levels and storm water management strategy will be designed to
minimize reliance and impact on the local storm water infrastructure and to
mitigate the impact of locally flooded roads. This will be achieved by raising
the site grade levels and by retaining and delaying storm water discharge from
the site via ponds and swales in the landscaping.
DFAT expanded on their assessment of flood risk during the public
hearing, noting that there was no evidence of substantial flooding in the area:
We had an assessment that it was not part of a likely
floodplain—we were advised that. That has been borne out to some extent by the
recent floods they have had in Bangkok, where this site remains above the
waters. It has not been affected by the floods. Our design for the building
does make provision for flood protections. We will be building it about one
metre above the current ground level.
DFAT noted that the site was approximately two metres above sea level and
approximately 2.3 kilometres from the river. DFAT submitted they had reviewed
the history of the site and would construct the building at least another metre
above the existing reference level. Finally, the intense design and strong
perimeter wall would also tend to withstand any water inundation.
The Committee noted DFAT’s plans to undertake a comprehensive geological
survey to confirm subsoil conditions once the Commonwealth took possession of
the proposed site.
The Committee recognised that geological surveys are different to hydrological
surveys. The Committee is of the view that, due to known flood risks and events
in Bangkok, DFAT should prioritise flood mitigation as an issue which requires
further investigation, prior to construction, to ensure that the building would
withstand intense flooding.
During the course of the public hearing, DFAT committed to undertake a
thorough hydrological survey of the site to assess the risk of flooding and
then report the results of this investigation to the Committee.
The Committee welcomes DFAT’s prompt response to its concerns raised
during the public hearing and is satisfied that DFAT will take the necessary
steps to ensure the risk of flooding is minimised as far as possible.
||The Committee recommends that the Department of Foreign
Affairs and Trade conduct a hydrological survey of the site of the proposed
new Embassy complex in Bangkok, as one part of a thorough review and
investigation into the risk of flooding on the proposed site, and investigate
further measures which may be undertaken to mitigate the risk. The Committee
requests that the results of the hydrological survey be provided to the
Committee at the earliest opportunity, along with details of any further
steps required to reduce the risk of flooding, and any additional costs
associated with these actions.
Existing security arrangements
Noting DFAT’s proposal that the Bangkok Embassy complex be rebuilt at an
alternate location, the Committee sought clarification on any interim measures
which were in place to ensure the ongoing safety of personnel within the
current complex, until such time as the mission relocated to the new complex.
DFAT responded as follows:
When this first came up, from the initial review, this
mission in particular had some upgrades made to the security, to the best level
it could within the framework of the building. The other thing we have done for
the interim, before the new chancery and HOM residence is built, is put a lot
of emphasis on operational security—which I will not go into much further—which
has a lot to do with helping with practices and procedures, and how the mission
runs today. So we have done everything we possibly can.
Final Committee comment
The Committee was satisfied with the evidence provided by DFAT during
the public and in-camera hearings regarding the security arrangements for the
current Bangkok Embassy complex, pending DFAT’s planned relocation to the new
The Committee was impressed with the extensive detail provided to the
Committee by DFAT, as contained in their public and confidential submissions
for the inquiry, and the evidence provided during the public and in-camera
In particular, the Committee was assisted greatly by the representatives
who attended the hearings, all of whom had specific areas of expertise which
covered the breadth of the Committee’s questioning regarding the proposed
The Committee is satisfied, having regard to the evidence before it,
that this project has merit and would meet the project objectives and need to
improve security for the ongoing operations of the Embassy complex. The
Committee is further persuaded that the anticipated scope and cost is
sufficient to meet the need and signifies value for money for the Commonwealth.
Accordingly, the Committee considers that it is expedient that the
proposed works proceed.