Dr Gordon Moyes, along with other Members of the General Purpose Standing Committee No. 2, will investigate how the NSW Government has managed the Commonwealth’s Building the Education Revolution (BER) Program.
There have been numerous reports of BER school building projects costing thousands of dollars more than market cost and soaking up millions of dollars in project management fees. It has also been reported that large sums of money have been spent on very standard building designs.
The purpose of this Inquiry is to review the BER program and consider whether the outcomes of its construction projects are of acceptable quality and suitable to the needs of schools in NSW. The Committee will also look at the effectiveness of government oversight and review of contracts between contractors and the NSW Government.
GPSC No.2 will inquire into and report on the Building the Education Revolution (BER) Program, and in particular: 1. The levels and appropriateness of fees and charges imposed by various NSW Government agencies, 2. Whether costs charged for construction of BER projects are in line with industry standards, 3. The effectiveness of government oversight and review of contracts signed between Head Contractors and the NSW Government, 4. The use of local builders and tradespeople during the construction of BER projects, and 5. Whether outcomes were of acceptable quality and suitable to the needs of each individual school.
In 2009, to combat the GFC the Federal Government announced $42 billion in economic stimulus spending, including the BER which would deliver 24,000 new libraries, halls, classrooms, and science and language laboratories to the nation’s 9,500 schools.
The Australian has reported widespread criticism of the BER scheme, including claims of inflexibility, inflated prices and gouging from states and contractors, particularly those working on government schools. According to The Australian, many of the complaints about the BER have come from NSW where the State Government releases information about the progress of the scheme and last September created a team of auditors to keep track of the projects.
A small primary school located in eastern NSW could have been effectively rebuilt for almost $200,000 less than the cost of one prefabricated double demountable classroom under the BER program. Nashdale Public School in NSW authorised a local builder with costings and concept drawings to overhaul the school’s ageing facilities. According to Bruce Hackett, the local builder, it would cost $740,000 to substantially replace the existing school with two large brick buildings (three classrooms and a library) and administration centre (including staff room, principal’s office, sick bay, interview room and toilets), disabled facilities, ramps, verandas, reverse A/C and floor coverings.
The Australian reported that the NSW Department of Educating and Training informed Nashdale P&C that it could not “self-manage” the project and proceed with Mr Hackett’s quote as it did not have 10 per cent of the allocated budget of $900,000 already set aside in a trust account. As a result, the school was forced to proceed with the managing contractor, Laing O’Rourke, and a cookie cutter building design. Under those new plans, the school could afford only one modular double classroom, costed at $907,000.
Another issue of major concern is the issue of contractors. A group of major construction companies handling the Federal Government’s schools building program will reap more than $300 million in profits in the eastern states alone. Managing contractors in Victoria, NSW and Queensland will share in profits estimated at $313 million. NSW has the largest number of projects at 1,784 with a potential profit of $134 million. In NSW, managing contractors are paid a 2.85 per cent profit on all jobs and an “incentive fee” of between 1 and 3.25 per cent of all money allocated.
We encourage readers to send in their written submissions before Monday 7 June 2010. Submissions can be provided via email at [email protected] or by post to The Director, General Purpose Standing Committee No. 2, Parliament House, Macquarie Street, Sydney NSW 2000. Public hearings will be scheduled in late June.
Reference: D. Warne-Smith, School can be rebuilt for less than cost of two rooms, The Australian, 25/03/10.