The Department of Defence (Defence) seeks approval from the Committee to proceed with the Navy Capability Infrastructure Sub-program: Facilities and Infrastructure to Support New Navy Capabilities.
The 2016 Defence White Paper noted the Government’s commitment to ‘build a strong and sustainable naval shipbuilding industry.’ As part of this long-term plan, shipbuilding will commence with construction in Australia of Offshore Patrol Vessels from 2018 and Hunter Class Frigates from 2020. The shipbuilding capacity will be consolidated at the Australian Naval Infrastructure’s Osborne Naval Shipyard (SA), and at the Australian Marine Complex at Henderson (WA).
The proposed works will provide fit for purpose facilities and infrastructure to support the introduction into service of the nine Hunter Class Frigates and the 12 Arafura Class Offshore Patrol Vessels (OPV) at nine locations in Australia, and support the Navy Training Pipeline Simulation Requirements at HMAS Stirling (WA).
The estimated cost of the project is $1.8 billion (excluding GST).
The project was referred to the Committee on 10 September 2019.
Subject to Parliamentary approval, construction activities are expected to commence in 2020 and be completed by early 2027.
Conduct of the inquiry
Following referral, the inquiry was publicised on the Committee’s website and via media release.
The Committee received eight submissions and two confidential submissions. A list of submissions can be found at Appendix A.
On 20 November 2019, the Committee conducted a site inspection at HMAS Stirling, public and in-camera hearings. A transcript of the public hearing is available from the Committee’s website.
Need for the works
The project will support the two new capabilities, the Hunter Class Frigates and the Offshore Patrol Vessels, which will replace the Anzac class Frigates and the Armidale Class Patrol Boat in an extended transition up to the 2040s.
Defence told the Committee that the incoming fleet of Hunter Class Frigates will:
…provide the Australian Defence Force with the highest levels of lethality and deterrence that Australia’s major surface combatants need during times of global uncertainty…The Frigates will be able to conduct missions independently or as part of a task group, and will have sufficient range and endurance to operate effectively.
Defence noted that the Hunter Class Frigates ‘will also have the flexibility to support humanitarian assistance and disaster relief’.
With regards to the 12 Arafura Class OPV, Defence stated that the Patrol Vessels will:
…undertake constabulary missions, maritime patrol and response duties. State of the art sensors and command and communications systems will enable the vessels to operate alongside Australian Border Force vessels, other Australian Defence Force units and regional partners. The design of these vessels will support specialist mission packages, such as a maritime tactical unmanned aerial system. The range and associated operational endurance of the Arafura Class Offshore Patrol Vessels will permit support of most Australian Defence Force operations.
To support the introduction of these new capabilities, Defence undertook:
…comprehensive master planning, site investigations, stakeholder consultation, whole-of-life cost analysis and design development during the development phase of the project to establish the capital facilities and infrastructure works required to support the introduction into service and sustainment of these capabilities.
At the public hearing Defence explained:
The key drivers for the projects are: the berthing requirements for the new, larger ships; the increased crewing numbers for these ships; the implications of the Naval Shipbuilding Plan for training, logistics and maintenance; the facilities required to effectively support the integration of combat systems for these capabilities; and the opportunities for integrating the requirements. The primary deficiencies identified in existing facilities and infrastructures include: wharf structures and services that cannot accommodate the increased size or number of ships proposed at HMAS Stirling, HMAS Coonawarra and HMAS Cairns; a lack of capacity and operational support facilities for ship-specific training, maintenance and logistics to meet the significantly increased requirements of the new capabilities; and a lack of capacity in domestic support facilities, such as accommodation, to support the increased crew numbers.
Defence explained in their submission how these key drivers and deficiencies provided a rationale for this project to be undertaken in a program approach, where the overall facilities requirements would be undertaken as a single program of works.
Defence further stated that the ‘program approach…has been designed to optimise value for money and capability outcomes.’
The program approach categorised the elements of the project into functional groups:
Maritime Structures – wharves and associated structures and services required to support the berthing of vessels
Operational Support Facilities - a range of support functions and address requirements for the remote monitoring of berthed vessels
Ship Zero Facilities – proposed facilities will accommodate Class-specific training, sustainment, logistics, engineering and management of the evolution of these complex capabilities
Shipbuilding Facilities - support the mature requirements of the Ship Build Program Office, and Crew Zero
Domestic Support Facilities – include facilities for living in accommodation, recreation and fitness, messing and medical services
Engineering Services – required to be upgraded or installed at new development sites to support the new capabilities.
The project is taking place at nine locations around Australia:
WA - HMAS Stirling, Palmer Barracks, Henderson
NT - HMAS Coonawarra, RAAF Darwin
QLD - HMAS Cairns, Cairns
SA – St Kilda Transmitting Station, Osborne Naval Shipyards.
Defence described in their submission the range of design options for each of the functional groups which were considered.
They noted that the considerations included in some cases refurbishment, upgrading of existing facilities or building new facilities. In the case of marine structures, consideration was given to providing flexibility for future capability requirements.
Where new facilities are required, Defence ensured that there were no suitable or surplus facilities existing. Where Defence is required to purchase land for new facilities, they will ensure that the land is located appropriately to complement the function.
Scope of the works
The proposed facilities and infrastructure involve new works and refurbishment or upgrading of existing facilities and infrastructure at each of the proposed locations.
Proposed Work Elements
There are 22 work elements with two being included as below the line items. The proposed scope of the project are listed by location and work element:
Element 1 -Maritime Structures – extension of the Parkes and Oxley Wharves and provision of shore power
Element 2 - Operational Support Facilities – construction and expansion of maintenance and logistics support facilities
Element 3 - Ship Zero Facilities – construction of a new training precinct
Element 4 - Domestic Support Facilities - construction of medium density living in accommodation and upgrades to existing facilities
Element 5 - Engineering Services Infrastructure – extend existing services to support new, upgraded or refurbished facilities.
Element 6 - Operational Support Facilities – construction of crew support areas
Element 7 - Ship Zero Facilities – construction of a capability centre
Element 8 – Shipbuild Program Facilities - below the line item
Element 9 - Engineering Services Infrastructure – new engineering services infrastructure for each facility.
Element 10 - Operational Support Facilities – below the line item
Element 11 -Maritime Structures – dredging, wharf works and provisions of services to support berthing.
Element 12 - Operational Support Facilities – construction of support facilities
Element 13 - Engineering Services Infrastructure – extend existing services to support new, upgraded or refurbished facilities.
Element 14 - Operational Support Facilities – construction of new explosive ordnance storage building
Element 15 -Maritime Structures – construction of a new wharf and upgrade and extension of existing wharf services.
Element 16 - Operational Support Facilities – construction of new facilities and upgrade of existing facilities
Element 17 – Cadet Facility – demolition of existing facilities and new facilities constructed
Element 18 - Engineering Services Infrastructure – extend existing services to support new, upgraded or refurbished facilities.
Element 19 - Operational Support Facilities – construction of new explosive ordnance facilities and upgrade of existing facilities
Element 20 – Shipbuild Program Facilities - construction of new facilities
Element 21 - Engineering Services Infrastructure – new engineering services infrastructure for the new development.
St Kilda Transmitting Station
Element 22 – Shipbuild Program Facilities - construction of a land based test site.
These work elements will be undertaken to support the location of the vessels:
The fleet of Hunter Class Frigates will be homeported at HMAS Stirling (WA) and at the Garden Island Defence Precinct (NSW).
The fleet of Arafura Class Offshore Patrol Vessels will be homeported at HMAS Stirling (WA), HMAS Coonawarra (NT) and HMAS Cairns (QLD).
Defence also noted that they intend to acquire and develop properties at Henderson (WA), in the Cairns area, and at Osborne (SA).
In its submission to the Committee, Defence stated it had conducted a wide range of consultations with local residents and other interested stakeholders, both external and internal.
Defence advised that there was general support for the project from the consultation process but advised that there were two issues raised during the consultation which were specific to location.
The first issue related to the demolition of a particular building at HMAS Cairns which the Cairns Navy League considered had heritage value. Defence responded that they are assessing whether the building has any heritage value.
The second issue related to traffic in the Rockingham area, particularly the traffic to and from HMAS Stirling. The Mayor of the City of Rockingham indicated a concern about the traffic but also noted that the concern is related to the level of classification of the road, which has been raised with the WA Government. Mayor Sammels also provided a letter of support for the project to the Committee.
Defence noted that during the consultation for the facility at St Kilda, a significant percentage of the local population attended. The local population were interested in whether there would be any provision of sewage lines as part of the project and Defence indicated that they have provided a response for this.
The Committee received a range of letters of support for the project.
Cost of the works
The Navy Capability Infrastructure Sub-program has an estimated cost of $1.8 billion, exclusive of GST.
Defence provided further details on project costings in its confidential submission and during an 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 Navy Capability Infrastructure Sub-program is an ambitious program of works that aims to support the introduction of the new capabilities, the Hunter Class Frigates and the Armidale Class Offshore Patrol Vehicles.
The Committee was interested to hear the relationship between this project and the Naval Shipbuilding Plan. The ongoing projects to build the new capabilities, while outside the remit of the Committee, will add capacity to the areas of Osborne in South Australia and Henderson in Western Australia and the Committee is pleased to see the work that Defence is doing to ensure in this area.
In relation to the size of the project and the program based approach which has been taken by Defence, the Committee was pleased to hear that the program will be split into 11 contracts. The opportunity for a wide range of local builders to the area, including tier 2, to be able to be involved in the project is encouraging.
The community consultation undertaken for this project over the nine locations was extensive and the Committee is encouraged by the number of letters of support it received in support of the project.
The Committee did not identify any issues of concern with the proposal and is satisfied that the project has merit in terms of need, scope and cost.
Having 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.
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: Navy Capability Infrastructure Sub-Program.
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 a project completion. A report template can be found on the Committee’s website.
Hon Dr John McVeigh MP