- Guided Weapons and Explosive Ordnance Storage Program Tranche 2
Department of Defence
3.1The Department of Defence (Defence) seeks approval from the Committee to proceed with its proposed Guided Weapons and Explosive Ordnance Storage Program Tranche 2 project at Defence Establishment Orchard Hills (DEOH), New South Wales.
3.2The aim of the project is to support increased guided weapons and explosive ordnance (GWEO) storage requirements by providing earth covered buildings and associated infrastructure, including a non-explosive ordnance storage building, non-explosive dangerous goods stores, and engineering services at DEOH.
3.3The works will include:
- an increase to GWEO storage facilities through the provision of earth covered buildings
- increased non-explosive ordnance storage, including a non-explosive ordnance store, material handling and equipment building, and non-explosive dangerous goods store
- the upgrade and undergrounding of electrical supply infrastructure to address insufficient high voltage supply
- associated infrastructure and engineering services upgrades required for the new facilities.
- The total estimated cost of the project is $244.9 million (excluding GST).
- The project was referred to the Committee on 1 July 2024.
- Subject to Parliamentary approval, construction is expected to commence in late‑2024 and be completed by late‑2026.
Conduct of the inquiry
3.7Following referral, the inquiry was publicised on the Committee’s website.
3.8The Committee received five submissions, one confidential submission and one supplementary submission to the inquiry. A list of submissions can be found at Appendix A.
3.9On 25 September 2024 the Committee conducted a site inspection at DEOH. This was followed by a public and in-camera hearing on 26 September 2024 at Mulgoa Hall, Mulgoa. A transcript of the public hearing is available on the Committee’s website.
Need for the works
3.10The 2020 Force Structure Plan directed Defence to increase supplies of munitions through an increase in weapon inventory across the Australian Defence Force to ensure weapons stock holdings are adequate to sustain combat operations.
3.11The strategic location and supply of GWEO infrastructure and logistics allows for effective defence operations. The current GWEO network requires expansion to support Defence’s commitment to provide a self-reliant and resilient GWEO supply chain.
3.12The project supports an increase in weapon inventory by delivering additional modern explosive ordnance storage facilities, and supporting functionality and capability outcomes delivered by the procurement of next generation guided weapons.
3.13The works will see the storage capacity of DEOH increased by 45 per cent. It will allow for the storage of a greater range of ordnance, from small arms through to weapons.
Options considered
3.14In its submission, Defence outlined the options considered for the project:
1Do Nothing. This option does not deliver any works and does not provide the required GWEO storage capacity to meet Defence’s requirement.
2Reduced Capability. This option will deliver 12 earth covered buildings, supporting facilities and associated infrastructure. This option does not meet the GWEO storage capacity requirements for currently planned explosive ordnance stocks.
3Minimum Viable Capability. This option will deliver 14 earth covered buildings, supporting facilities and associated infrastructure. This option meets the minimum viable capability to support GWEO storage capacity requirements to Financial Year 2028-29.
4Full Scope. This option will deliver 17 earth covered buildings, supporting facilities and associated infrastructure. This option exceeds the minimum viable capability to support ongoing GWEO storage capacity requirements.
3.15Option 3 (Minimum Viable Capability) is the preferred option as it meets the minimum viable capability, is within the project’s approved budget and represents the best value for money solution for the Commonwealth.[9]
Scope of the works
3.16The proposed works under the preferred option are set out in the following work elements:
- Earth Covered Buildings: These buildings are the safest means for storage of GWEO.
- Non-Explosives Dangerous Goods Building: This building is required for the storage of dangerous goods and components of GWEO
- Non-Explosive Ordnance Storage Building: This building is required for the palletised receipt, dispatch, and storage of non-explosive ordnance goods
- Material Handling Storage: This building is required for the receipt, dispatch, and storage of materials handling and packaging equipment
- Civil Infrastructure: Vehicle and pedestrian pavements are required to access the new facilities
- Electrical Infrastructure: Upgrades to the base electrical infrastructure are required to remediate insufficient electrical supply to the new facilities.[10]
- If the project has savings through tendering or retirement of risk provision during delivery, the following below the line scope items may be delivered:
- additional earth covered buildings to support increased inventories of GWEO
- additional upgrades to electrical infrastructure to ensure facility resilience and continuous source of power.[11]
Potential impacts
3.18The Committee received submissions from several members of the public (addressing both this inquiry and the Explosive Ordnance Facilities Northern NSW Redevelopment project discussed in Chapter 2) that raised safety concerns about the explosive ordnance at the site. Mr Ken Mott summarised the main risks as being about proximity of the community to ‘safeguarding arcs’—the zones designated around GWEO for the protection of people and buildings:
While the risk of accidents at the facility might be rated low, that does not preclude the fact that the risk to people increases with the growth of communities in the adjacent areas. I understand that all housing developments lie outside of the “purple line” [a safeguarding arc] but risk still exists. Incidents around the world have demonstrated that the range of damage can be well beyond [the purple line].
The risks of an event during the transport of ordnance must also be increasing as the population in western Sydney grows and with that an increasing volume of traffic and road incidents.
I would like to continue to believe that the risk of conflict for Australia is low, however, consideration should still be given to the fact the [DEOH] would be a strategic target, whether by military or terrorist attack.
3.19At the public hearing, Defence explained that the increase in GWEO storage capacity at DEOH will not result in increased risk, either to Defence personnel on base, or the surrounding community. Although more GWEO could be stored, the new storage facilities are safer, and therefore the ‘safeguarding arcs’ do not need to increase.
3.20More specifically, the design of the new storage facilities provides a reduced side and rear exposure zone, compared to the storage facilities currently on site:
Basically, the earth covered buildings provide a greater level of protection. They actually provide the maximum level of protection to the contents that are inside a facility. We don't always store explosives in earth covered buildings; we can have light frangible buildings of various designs. These particular facilities are being built here to accommodate the types of weapons that we need to maintain on site. The safeguarding arcs that these will generate, given their design, will fall within the current boundary of the facility.
And we can also build these facilities closer together compared to the existing facilities. There's a reduced chance of ignition or detonation of explosive ordnance stored in adjoining earth covered buildings—which is what we refer to these as—because of the design of these buildings. You can put a lot more ordnance in a smaller space, which is one of the reasons why the safety arcs aren't being expanded out.
3.21The increase in GWEO storage at DEOH means an increase in the amount of GWEO being transported to the base. At the public hearing, the Committee heard that this is unlikely to pose risk to the surrounding community:
…Defence applies the Explosive Transport Regulations. We have to comply with those regulations. They are very strict regulations in how we move explosives around the countryside. That covers a range of things, from the types of vehicles we use and the drivers we use to the process and procedures that we have to follow. So quite extensive regulations are already in place that we have to adhere to when we move explosive ordnance.
The majority of the movements there [of GWEO] will be between the maintenance facilities, as they go through their regular maintenance sites, and they will leave site only when they are needed for operation or training purposes... But the majority of these movements for these weapons is that, as they go through their normal life, they need to have routine, periodic maintenance. That's why we place them close to the maintenance facilities. It's so that we're not having to transport them a large distance just to come down and go through their maintenance and go back into deep storage somewhere else. That is the theory behind reducing the number of movements. The particular weapons we have here will only leave when we're actually going to use them for operation or training. It's expected that there will be more stocks moving, but it's not going to be 50 per cent more movements off the base here.
3.22Mr Bob Wheeldon from Defence Neighbours Association also raised the risk of bushfire for DEOH and the surrounding bushland. Defence advised the Committee that the new storage facilities will better manage bushfire risk. They are rated to a bushfire attack level of 40, which is the highest rating that can be obtained. Defence provided further information at the public hearing:
…the earth covered buildings that we do are extremely fire resistant, and that is the reason we're moving towards the new structures. They are more contemporary and give us greater security and safety features than the aged facilities that we currently have.
3.23At the public hearing, Defence also explained how bushfire risk is further minimised:
There is a bushfire management plan for the site. There are a number of strategies that are used to address bushfire risk and fire risk in general. Fuel hazard management obviously is the main one. We're talking about fuel hazard management of dry grass and other flora. We have contracted Greater Sydney Local Land Services to manage the environmental offset area in the buffer zones at Orchard Hills, and they perform regular cultural burns in that offset area. As well as that, inside the explosive storage area we have regulations around how clear we have to keep the site. We keep the grass at a very minimal height, [200] millimetres, to reduce the fire load there.
We will fight bushfires wherever possible. As I said, we deal with local fire response services. If there's a fire in the vicinity of an explosives facility, we would only fight that from a distance. We don't put people at risk in case an explosives facility initiated due to a fire.
Stakeholder consultation
3.24In its submission, Defence reported engaging with a variety of internal and external stakeholders during project development to date, including:
- Federal Member for Lindsay, Mrs Melissa McIntosh, MP
- State Member for Badgerys Creek, Ms Tanya Davies, MP
- Penrith City Mayor, Councillor Mr Todd Carney
- Deerubbin Local Aboriginal Land Council, Mr Athol Smith, Chair (no response received)
- Darug Ngurra Aboriginal Corporation, Ms Corina Wayali Norman (no response received).
- Defence ran community consultation to ensure local communities and other stakeholders were informed about the project and provided with the opportunity to raise concerns. Two community information sessions were on 9 May 2024 at Glenmore Park Shopping Centre in New South Wales. The sessions addressed this project as well as the Explosive Ordnance Facilities Northern NSW Redevelopment project. The 12 attendees were a mix of local residents, Defence employees and job seekers. Key points raised by the community were:
- Project scope and the inclusion of further explosive ordnance training/activities
- The movement of personnel from Danallam House (Defence leased premises in Penrith, NSW)
- Traffic management along The Northern Road
- Western Sydney Airport and the perception of impacts of new flight paths on the Project works
- Opportunities for job seekers in the proposed work.
Cost of the works
3.26The total capital out-turned cost of the project is $244.9 million (excluding GST). This cost includes project management and design fees, construction, information and communications technology, furniture, fittings, equipment, contingencies, and a provision for escalation.[22]
3.27There will be ongoing operating and sustainment costs resulting from the proposed works. This is due to the new buildings and facilities being constructed under the project.[23]
3.28Defence provided further details on project costs in its confidential submission and the Committee was satisfied with the information.
Revenue
3.29No revenue is expected to be derived from this project.[24]
Public value
3.30Defence submits that this project’s public value includes:
- Meeting capability needs – the proposed facilities will contribute to the on-going effectiveness of Australia’s Defence capability by directly supporting operations and training activities.
- Economic impacts – the project expenditure will support the Australian economy, primarily in the construction and professional services sectors in Western Sydney and surrounding regions.
- Employment opportunities – the project will employ a diverse range of skilled consultants, contractors, and construction workers, and is expected to generate opportunities for up-skilling and job training to improve individual skills and employability on future projects.
- Local industry and Indigenous business involvement opportunities – Defence and the Head Contractor will actively promote opportunities for small and medium local enterprises through construction trade packages. The Head Contractor will develop a Local Industry Capability Plan and an Indigenous Participation Plan to detail local industry engagement and maximise opportunities for local industry and Indigenous businesses, while providing value for money to the Commonwealth.
Committee Comment
3.31No issues or concerns with the proposal were identified by the Committee, and the Committee is satisfied that the project has merit in terms of need, scope, and cost.
3.32The Committee appreciates the risk management that has been undertaken to mitigate the serious risks of storing GWEO at this site. As discussed in Chapter 2, given the encroaching residential community now neighbouring DEOH, the Committee urges Defence to maintain a high standard of community consultation about these works, as well as upcoming DEOH activities as they relate to guided weapons and explosive ordnance. Defence should, wherever possible, provide detailed information to the public to enable better understanding of the works.
3.33As mentioned in Chapter 2, while the Committee understands the necessity of the works, and the requirement that they take place at this particular site, the Committee suggests that Defence consider the future of the base in the longer term.
3.34Having regard to its role and responsibilities contained in the Public Works Committee Act 1969, the Committee is of the view that this project signifies value for money for the Commonwealth and constitutes a project which is fit-for-purpose, having regard to the established need.
3.35The Committee recommends that the House of Representatives resolve, pursuant to section 18(7) of the Public Works Committee Act 1969, that it is expedient to carry out the following proposed works: Department of Defence — Guided Weapons and Explosive Ordnance Storage Program Tranche 2 project.
3.36The Committee notes that additional earth covered buildings are included as below the line items to be completed if savings are made during the project. As for the project in Chapter 2, the Committee considers that completing these additional works at the same time would result in time and money savings. In addition, the nature of these works means that construction will result in a substantial disruption to the day-to-day work of DEOH. Completing all the works at the same time would be more efficient.
3.37The Committee recommends that the project funding be increased to allow the additional earth covered buildings which are currently below the line items to be completed as part of this project.
Proponent entities must notify the Committee of any changes to the project scope, time, cost, function or design. The Committee also requires that a post implementation report be provided within three months of project completion. A report template can be found on the Committee’s website.
Mr Graham Perrett MPChair