Introduction

This chapter provides a summary of the Government’s capital works program for 2000-01. The chapter covers new works for the budget and non-budget sectors including the works in progress to be carried over from 1999-2000 and previous years’ programs.

The draft program for 2000-01 was published in the draft budget papers and has been reviewed by the individual Portfolio Committees.  The recommendations from the Committee’s reports have been taken into account by the Government in finalising the 2000-01 final program.

Details of each agency’s individual capital works program for 2000-01 are included in their respective asset management plans.  These plans are incorporated into the Ownership Agreements tabled at the same time as the Budget.  The plans include information on individual projects by value of works, expected expenditure and completion dates and the financing requirements for 2000-01 and future years.

Information on each program is provided in the individual agency chapters in Budget paper No. 4.

 

Key Service Areas of the 2000-01 Program

The 2000-01 capital works program commits to a major program of works to improve road safety and address traffic congestion.  The value of the 2000-01 program has been expanded, both in value and financing, to accommodate a number of these projects.  The 2000-01 program also continues the Government’s priorities in a number of key service areas.

Traffic Congestion and Road Safety Improvement

This is a 5-year program to address access and traffic congestion across the city and in particular for Gungahlin, Woden/Weston Creek and Tuggeranong.  The program includes 20 projects for the construction of a number of new roads and the duplication and upgrading of a number of existing arterial roads and intersections across the city and particularly in the Gungahlin area.  Work will also be undertaken in Tuggeranong, Weston Creek and on major routes to the airport.

12 projects will be committed to forward design and/or construction in 2000-01 with a value of $22.310m and financing of $2.710m.  Further details of the program are provided later in this chapter.

Civic Revitalisation

The revitalisation of the Civic precinct is being undertaken in accordance with the measures identified in the 'Our City’ initiative.  The projects currently included in the 2000-01 program are:

·        City lighting strategy implementation ($0.7m)

This project is to complete the lighting upgrades in Civic’s main pedestrian area commenced under other refurbishment projects.

·        City Walk Petrie Plaza to Akuna Street ($1.5m)

This project will extend the landscape treatment of City Walk from Garema Place to Akuna Street to provide improved pedestrian connections from City West to City East and to strengthen City Walk as the main pedestrian spine of Civic.

·        Northbourne Plaza ($1.5m)

This project is one of the key strategic initiatives outlined in Our City strategy and will support and integrate with the work being undertaken at the bus interchange.

Public Library Refurbishments

The 2000-01 capital works program includes $1.904m for refurbishment works at various libraries, including the Dickson library refurbishment ($0.860m).

Local Centre Precinct Revitalisation

·        Hawker Stage 2 of 2 ($0.5m)

·        Shopping centre upgrades (Kippax, Watson, Yarralumla) ($0.460m)

Environment

·        West Belconnen landfill rehabilitation ($0.6m)

Education

·        Upgrade specialist science areas ($1.1m)

·        Upgrade specialist technology areas ($1.6m)

·        Older schools refurbishment ($2m)

Sport and Recreation

·        Amaroo District playing fields and pavilion ($2.8m)

·        Sportsground improvement program ($0.9m)

Health and Community Care

In line with the Government’s commitments to improve health outcomes, funding is made available to commence the following projects:

·        Replanning of non-inpatient and administrative areas - Stage 2 Calvary ($13.935m)

·        Tuggeranong Health Centre - dental refurbishment ($0.568m)

Traffic Congestion and Road Safety Improvement Program

High growth rates in Gungahlin and strong levels of economic activity in the Territory have led to increasing traffic volumes on Gungahlin access roads.  The traffic congestion is likely to increase progressively.  Pressure is particularly significant on the Barton Highway and Northbourne Avenue intersections and other roads in Belconnen and North Canberra used by vehicles to bypass these congested areas.  As a consequence congestion has also increased in the adjacent residential streets, which are currently used to bypass traffic hold-ups, thereby reducing safety and amenity.

The Commonwealth has agreed to the ACT Government’s proposal to accelerate the duplication of Barton Highway.  As announced in the 2000-01 Federal budget, the Commonwealth will provide funding for this project over two years, rather than the four years as previously planned.  This provides an opportunity for the ACT Government to build on this work by bringing forward other projects which complement this project in reducing traffic congestion and providing better access for Gungahlin.

The program is to provide additional road capacity on major arterial routes which will reduce traffic congestion on these roads and the adjacent suburbs.  The reduction in traffic on residential streets, improved accessibility and upgraded conditions at the intersections on arterial roads will considerably enhance road safety.

Within the 2000-01 capital works program, expenditure of $2.710m will be incurred in relation to this initiative.

The value as well as the financing of the 2000-01 program has been expanded significantly to accommodate the roads program.  The component included in the 2000-01 capital works program is incorporated in the new works identified later.

Table 5.4.1 below provides the financial details of the program.

The forward design projects to be undertaken in 2000-01 are:

·        Gungahlin Drive duplication between Wells Station Road and the Barton Highway

·        Gungahlin Drive extension (subject to the outcome of planning considerations)

·        Cotter Road duplication between Streeton Drive and the Tuggeranong Parkway

·        Drakeford Drive duplication between Taverner Street and Erindale Drive

·        Majura Road safety upgrade

·        Fairbairn Avenue duplication

·        Intersection improvements on Northbourne Avenue at Ipima Street and Barry Drive

·        Intersection Upgrade of Barry Drive and Northbourne Avenue

·        Barton Highway Duplication*

In addition, construction will commence on the following projects:

·        Flemington Road extension

·        Intersection of Northbourne Avenue and Macarthur Street

·        Intersection of Monaro Highway and Sheppard Street

*  The duplication of the Barton Highway between Bellenden Street and the Federal Highway, will also be integrated into the program.  This project will be funded by the Commonwealth Government.

1999-2000 Budget Funded Capital Works Outcome

The 1999-2000 Budget provided for financing of $92.766m for capital works.  This includes additional financing of $3m for the Department of Health and Community Care for the construction of the ACT Hospice, which was appropriated through the second appropriation.

During 1999-2000, a number of projects experienced delays in construction commencement.  The potential underspend was partly addressed by accelerating other projects, and bringing forward some projects from the 2000-01 program.  This expenditure is identified in Tables 5.4.5, 5.4.6, and in the individual agency tables in Budget Paper No. 4.

The unspent funding has been deferred to 2000-01.  Table 5.4.2 provides a summary of expected outcomes for each agency, compared to budget allocations.

A total of $13.879m has been identified as underspent within the 1999-2000 capital works program, this underspend is attributable to agencies experiencing delays due to unforseen circumstances.  The majority of this financing has been deferred to the 2000-01 financial year.  Major projects contributing to each agency’s underspend include:

Chief Minister’s Department - $2.136m

·        ATSIC Cultural Centre - delayed due to continuing negotiations with the National Capital Authority.

Department of Health and Community Care - $6.719m

·        Secure Care Facility - delayed due to non-resolution of a number of issues between various stakeholders, including the siting of the facility.  The facility was finally endorsed in December 1999.

·        Day Surgery Modifications - the design development process was slowed due to the need to incorporate the objectives of establishing an integrated peri-operative service.

·        Energy Management Project - this project is currently in the design stage.  Delays in this project have been due to protracted assessment of the method of delivery of a broad range of energy saving strategies within an operational facility, for which a management plan is being established.

·        Psychiatric Unit Modifications - this project was the subject of a value management study to minimise design cost overruns, which was finished in December 1999.

Department of Education and Community Services - $2.586m

·        Belconnen Pool - delayed due to competition policy issues, and tender process taking longer than anticipated to complete.

·        Manuka Oval - initially delayed pending agreement between ACT Cricket and ACTAFL.  Further delays due to the complexity of design development for the project to address the needs of the two codes.

Department of Justice and Community Safety - $1.650m

·        Emergency Services Centre - the delay is due to the Emergency Services Bureau conducting community consultation with stakeholders in relation to the siting of the building prior to making the development application, which is subject to public comment.

Department of Urban Services - $0.650m

·        Duffy Stormwater Augmentation - $0.650m of savings against the total project cost returned to budget.

2000-01 Capital Works

Assessment of the 2000-01 final program

Agencies were required to prepare a business case for all projects with a value greater than $0.250m.  Projects under $0.250m were considered with other minor new works proposals.

Proposals were assessed against the following criteria:

·        business need, qualitative and other factors;

·        funding and resource implications;

·        link to whole of government strategies, outcomes and agency objectives; 

·        economic viability and adequate risk analysis; and

·        cost-benefit / cost effectiveness analysis for major projects.

Budget Funded New Works Program

The value of budget funded new works included in the program for 2000-01 is $99.058m, with a financing requirement in 2000-01 of $48.8m.

By comparison, the value of the new works program in 1999-2000 was $87.817m.  This included $10m for computer cabling as part of the IT modernisation program across the Government.

The most notable differences in the composition of the 2000-01 program from that of 1999-2000 is a greater funding commitment to the forward design of projects, and the significantly higher level of funding provided by way of grants, mainly for work to be undertaken at the Calvary Hospital.

Off Budget New Works Program

The value of off budget new works for 2000-01 is $90.377m, with a financing requirement in 2000-01 of $90.377m.  The off budget projects are to be financed by ACT Housing and ACTEW from own-sourced revenues.

Works in Progress

The financing requirement for works in progress in the 2000-01 Budget is $33.366m.

During 1999-2000, a number of projects experienced delays due to unforeseen circumstances.  The financing of these projects has been deferred to 2000-01 works in progress.  A total of $15.359m of works in progress and new works financing relates to such projects.  The total expenditure on works in progress is therefore expected to be $48.725m in 2000-01.

The financing requirements of the 2000-01 program, including works in progress, are summarised in table 5.4.5.

The budget funded works in progress from 1999-2000 include the value of the original program of $27.032 and some additional projects approved after the finalisation of the 1999-2000 capital works program.  These are:

·        $1.6m for ACT Hospice, which was included in the program after the Appropriation Act (No. 2) 1999-2000 was passed; and

·        $0.326m for the carpark at Block 7 Section 22 in Barton, to provide off-site car parking.

·        A number of projects in the Urban Services portfolio were identified with an underspend projection in 1999-2000.  As a consequence financing for these projects was rolled into the 2000-01 works in progress program, with financing for several new works projects brought forward from the 2000-01 program into 1999-2000 to offset these delays (as detailed below).

Table 5.4.7 outlines the proposed program of 2000-01 construction projects.

 

The forward design component of the new works program has a value of $7.925m, and provides financing of $3.485m in 2000-01 and $4.440m in 2001-02 for design of projects prior to commitment to construction.

Feasibility studies recognise the longer lead times involved in major construction activities, and provide agencies with capacity to undertake preliminary feasibility and policy development work associated with larger and complex proposals.  They also set a framework for a more complete business case assessment of the viability of options and alternatives, including linkages to the Government’s service delivery objectives.

The inclusion of grants within the capital works program recognises the nature of the payment to non-Government organisations for work of a capital nature.

Table 5.4.10 outlines the proposed capital grant payments to be made by the Government during 2000-01.  The projects listed below for the Department of Health and Community Care represent works to be undertaken at the Calvary Hospital and funded by way of grants.

The 2000-01 capital works program will incorporate a number of new measures aimed at reducing the incidence of project delays and maintaining the level of budgeted expenditure on capital works.  A greater emphasis has been placed on forward planning within the program.  The value of forward design projects in 2000-01 is $7.925m, which is significantly higher than the 1999-2000 forward design program of $1.566m.

As part of developing the 2000-01 capital works program, the Government has also agreed to a Supplementary Capital Works Program.  The Supplementary Program is to provide agencies with individually identified capital works projects “on the shelf” to substitute delayed or cancelled projects in 2000-01.  This program will ensure that the Government’s budgetary commitments on investment in assets are achieved and the output delivery as planned and indicated in the budget is sufficient.

The supplementary program will be a rolling program where projects are identified in the development of capital works program for each particular year.  This “secondary” capital works project list will largely consist of projects that normally would be included in the forward years indicative program.

These projects will be available to substitute for any delayed projects within the main financial year program following a mid-year review of the capital works program in December, or at any time during the year where an agency has identified delays.

Projects that are committed from the supplementary program as part of the review process, will be deemed to be part of the next year’s program authorisation.  Supplementary projects that are not utilised within the identified financial year will automatically roll over and form part of the next year’s program.

This policy ensures that:

·        the expenditure on capital works is maintained at the level set in the Budget, and endorsed by the Legislative Assembly;

·        the program authorisation is maintained at the limits set by Government across two years; and

·        the development of the Capital Works Program takes on a more strategic direction than simply year on year spending.

The forward estimate for financing all budget funded capital works projects in 2001-02 is $80m.  The supplementary program puts forward construction-ready proposals with a value of $15.8m available for substitution into the 2000-01 program if a department anticipates project delays or program underspends.  The authorisation for the supplementary program will be offset against the 2001-02 program.