The Department of Defence (Defence) seeks approval from the Committee to proceed with the SEA1654 Phase 3 Maritime Operational Support Capability Facilities Project.
The estimated cost of the project is $220.5 million (excluding GST).
The project was referred to the Committee on 7 December 2017.
Conduct of the inquiry
Following referral, the inquiry was publicised on the Committee’s website and via media release.
The Committee received two submissions and one confidential submission. A list of submissions can be found at Appendix A.
On 6 March 2018, Defence conducted a site inspection at HMAS Stirling, Western Australia where the majority of proposed works will occur. The Committee also conducted a public and in-camera hearing on this date. A transcript of the public hearing is available on the Committee’s website.
Need for the works
The Royal Australian Navy regularly operates far from the Australian mainland. When in operation, they need fuel replenished, along with other supplies such as water, food and explosive ordnances (munitions containing explosives such as bombs, missiles and artillery). Currently the need to support the wider Navy fleet is met by two supply vessels: HMAS Success and HMAS Sirius.
The current ship HMAS Sirius [on the west coast] really can only resupply marine diesel fuel and aviation fuel. It carries very limited foodstuffs, very limited spare parts and it can carry no explosive ordnance. And that is a consequence of the fact that Sirius is a converted merchant tanker; it was never built as a dedicated replenishment ship. But she is designated as an auxiliary oiler rather than these new ships which are auxiliary oiler replenishment.
HMAS Success on the east coast was a purpose-built dedicated replenishment ship but she's ageing. She was the last ship built at Cockatoo Island Sydney back in the early eighties and she is just reaching the end of her operational life and will be replaced by the new ship. …
In 2016, the Australian Government entered contracts to purchase two new supply ships to replace Success and Sirius, known as Maritime Operational Support Capability (MOSC) vessels. The new MOSC ships are both the same class of Auxiliary Oiler Replenishment vessel and share the same systems. They will both have the same capability of being able to carry fuel, water, stores and explosive ordnances. Unlike Sirius and Success, the new MOSC ships will each have a combat management system. This is a computer system that connects vessels with onshore centres and potentially other craft such as other ships and helicopters. Combat management systems enable the near real-time sharing of data to improve the interoperability of the support fleet and wider Navy.
Defence further explained that:
…the current ships, HMAS Success and HMAS Supply, only have very basic communications systems and rudimentary bridge navigation systems, very similar to a commercial ship. Their ability to actually maintain a situational understanding of the environment and any unfolding operational scenario is quite limited. The [new] ships will have a Saab-designed combat management system, which will allow them to really understand the tactical picture that has also been shared by the warships they are there to support. It helps them to be in the right place, and to do the right thing, at the right time—that's the essence of it—more than being a fighting system.
Defence noted the considerable efficiencies gained by having two ships of the same class in terms of training, maintenance support and spare parts efficiencies. Defence further clarified:
We all realise fleet efficiencies from having a single class for both vessels.
The proposed works will provide suitable facilities and infrastructure to support the two new MOSC vessels. The new ships have different capabilities to the existing vessels Success and Sirius and as such have different support requirements. The proposed works are at one location on the west coast (HMAS Stirling) and two locations on the east coast (Garden Island Defence Precinct and Randwick Barracks).
The proposed scope comprises seven project elements and includes:
HMAS Stirling, WA:
Extending the Armament Wharf;
Upgrading the engineering services at Diamantina Pier;
Constructing additional Living in Accommodation (LIA);
Constructing a shared-use facility, including systems program office working accommodation, accommodation for crew support and remote monitoring station for the MOSC vessel’s integrated platform monitoring system (IPMS); and
Constructing a maintenance hardstand area (MHA).
The current Armament wharf can only berth vessels up to a displacement of approximately 6,000 tonnes. The new MOSC vessels have a displacement of approximately 19,620 tonnes. Extending the wharf will allow for this greater displacement. The extension includes a 156 metre quay line, plus the addition of two berthing and one mooring dolphins. This will allow for other larger ships to berth at the Armament Wharf in the future.
…the actual length of the wharf can accommodate up to 330 metres. That allows for future larger ships to be berthed including the largest, which is the LHD at the moment, to be berthed alongside this wharf.
The extension also includes widening the wharf to enable heavy rigid vehicles (that deliver explosive ordnances such as torpedos) to perform 180 degree U-turns on the wharf. The deck level will be raised 0.85 metres above the existing wharf to allow for sea level rise over the 100 year design life.
Whilst the berths at the Diamantina Pier can accommodate the physical size and displacement of the new supply vessels, improvements to the engineering services infrastructure are needed. This includes alterations to the cope point boxes to connect the integrated platform management system back to the Shared User Facility. The IPMS is a sophisticated control system that may control propulsion, electrical, HVAC and damage control systems of a vessel through one platform.
The scope at HMAS Stirling also includes construction of a shared-use facility, including systems program office (SPO) working accommodation, accommodation for crew support and remote monitoring station for the vessel’s IPMS. This will be a two storey building providing approximately 1,300 square metre gross floor area. The facility will include space for the duty watch to work and sleep, and include office areas, meeting rooms and training rooms that will also be used by the SPO attachment.
Defence explained the efficiencies gained in removing crew from the docked vessel and working from the shared-use facility:
Remaining on board introduces some additional requirements. You have to maintain galley equipment to feed them. You have to run certain services on board the ship to give them a level of habitability and safety on board, but it does expose that small number of people on board a ship to a level of risk which you can mitigate by having them accommodated ashore in a crew support facility. The key bit to be able to do this is an integrated platform management system which can be remotely monitored from the shared-use facility that has been proposed under this project. So the small-duty watch, ashore in the shared-use facility, will be able to maintain monitoring of the temperatures, fluid levels and all the other elements of running machinery on the ship and can intervene if required, but they're doing it from a safe location and a more comfortable environment ashore, on the wharf.
Defence explained that the need for the construction of additional LIA was due to limited existing accommodation options on base:
The accommodation that’s at the current standard that’s utilised for defence living-in personnel is sitting at a very high percentage of, I think, 90-plus per cent at any one time. This additional accommodation that we’re putting in is to cater for the fact that the new ship has an extra crew of around about 60 extra personnel, which is what has driven the need for extra accommodation on this project.
Randwick Barracks, NSW: constructing a new training centre
This component will be an integrated two-storey extension of the existing Navy Training Systems Centre, providing approximately 3,480 square metre gross floor area. It will provide working space for MOSC staff responsible for Through Life Support functions – which refers to supporting the MOSC vessels system platform throughout its entire lifecycle, to reduce costs and increase performance. The existing supply ships Success and Sirius do not have a Through Life Support facility – and as such this facility is a new requirement.
The extension will include space for specialist training rooms and equipment for MOSC staff and trainees. The facility will require special power supply to service the test equipment and training systems. Additionally, separate communications rooms will be provided for classified and unclassified systems.
Defence explained that the new MOSC vessels share a common designer (Spanish ship builder Navantia) with the existing fleets of air warfare destroyer and amphibious ships, making the extension of the existing Navy Training Systems Centre the best option:
…there is a high degree of commonality in terms of systems between those ship classes, which allows us to build upon the existing facilities to extend the training capacity rather than building a standalone facility, which would have inefficiencies to it and cost overheads. We’re actually able to reuse some of the facilities that are already in place supporting those other ship classes.
Garden Island Defence Precinct, NSW: refurbish part of Building 122
The refurbishment will modify existing work stations in Building 122 and reconfigure the existing electrical, lighting and communications services to enable the space to be used as a remote monitoring station for the vessel’s IPMS.
The Committee received evidence relating to the impact of the works at HMAS Stirling, WA on the local marine flora and fauna. An independent environmental consultant completed an Environmental Report, that noted that environmental and heritage impacts were low and a referral under the Environmental Protection and Biodiversity Conservation Act 1999 was not anticipated at this stage.
The most significant work at this site is the extension of the Armament Wharf. A survey of the seagrass beds was completed in August 2017 and concluded that there is no seagrass in the footprint of the wharf extension. Defence stated that further assessment of the potential impacts to the seagrass beds will be required.
Construction mitigation measures – such as ceasing noise generating activities if marine mammals are sighted near the construction area – will mitigate any impacts on the sea lions, southern right whales and little penguins found on and around HMAS Stirling.
The Environmental Report also assessed potential impacts of aqueous film forming foams and the associated potential for impacts by per- and poly-fluoroalkyl substances (PFAS) at HMAS Stirling.
There has been PFAS found through the bores in the groundwater. The only locations where that’s anywhere near that for this project would be the shared-use facility and the hardstand. Given the nature of constructing a hardstand, we don’t think there’s any chance that we’d be getting anywhere near groundwater for that as part of the construction. If that were to occur for the shared-use facility—we still think it’s quite a minor risk that that would happen—then it would be closely monitored. If there was groundwater that had to be removed, we would be looking at measures such as bringing in a water treatment plant to be able to deal with that. But we see that as being a very low probability on this particular project.
The Committee also received evidence about the presence of asbestos at Randwick Barracks, NSW. This is due to the historical placement of asbestos-containing fill material within utility trenches across the site.
Defence noted it is possible asbestos and hydrocarbon contamination will be encountered during the extension of the Navy Systems Training Centre at Randwick Barracks, stating:
Further assessment is currently being completed by the projects design consultants, in conjunction with geotechnical investigations, to determine whether remediation or management measures will be required during construction.
Defence submitted that the proposed works will generate ‘significant short-term employment opportunities predominantly in the building, construction and labour markets in the Rockingham [WA] and Sydney [NSW] areas’.
Defence further explained the number of local tradespeople expected to be employed at HMAS Stirling where the majority of works will occur:
In terms of people on site, there has been an estimation of what we’d be looking at by way of contractors working. So, for HMAS Stirling, we’re looking at up to 140 on the site at its peak but, over the course of construction, on average, about 50 a day. For Randwick Barracks, it is a peak of 60 at the most but, on average, 15 throughout the life of the project. When it comes down to local industry content, the lessons that we’ve had so far from the HMAS Stirling redevelopment project that’s currently underway are that, as of January, five of nine subcontract packages had been let and, of those five, a total value of around 76 per cent of the dollar figure has gone to a local firm as defined by WA. That should be a good indication of what we’d be able to achieve on this next project…
Cost of the works
Regarding costs, Defence explained:
The total cost of the proposed works is $220.5 million excluding goods and services tax, with the exception of the living-in accommodation component, which is GST inclusive. This cost estimate includes construction costs, professional management and design fees and charges, and furniture fittings and equipment, together with appropriate allowances for contingencies and escalation. Subject to parliamentary approval of the project, detailed design is scheduled to be completed in 2018, with construction to commence mid this year for completion by late 2020.
The Committee also received evidence relating to cost breakdowns in the in-camera hearing.
The Committee is satisfied that the costings for the project provided to it have been adequately assessed by the proponent entity.
The Committee notes that the investment in the new MOSC vessels is significant and that appropriate infrastructure is needed to support and maintain these new vessels. The Committee understands that adopting a single class of supply vessel – that also shares similar systems with other vessels across the Navy – will result in greater efficiencies for staffing, training and maintenance and ultimately reduce costs.
The majority of the proposed works will occur at HMAS Stirling, WA. The Committee notes that 18 per cent of naval personnel are based at this site. The growth of the Royal Australian Navy will see two thirds of its entire future fleet based on the west coast in the next 40 years. The Committee understands the importance of improving facilities on the west coast due to its proximity to the Indian Ocean and the access it provides to Asia and the Middle-East. The Committee also notes the importance of having an Armament Wharf facility on the west coast for the loading and unloading of explosive ordnances, as currently there is only one such facility (located on the east coast).
The Committee understands that Defence personnel have changing accommodation needs and that access to appropriate accommodation is an important factor for Defence recruitment and retention. The Committee notes that having crew live on land, rather than on board, mitigates risk.
Having regard to its role and the 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.
The 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: SEA1654 Phase 3 Maritime Operational Support Capability Facilities 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 the project completion. A report template can be found on the Committee website.
Mr Scott Buchholz MP