The NBN cost of $43B came from the back of an envelope..No one...

The NBN cost of $43B came from the back of an envelope..
No one will ever convince me that Government will
build the NBN for less than $43B, just double that for starters..


The Australian Business Australian IT
Higher Education

School BER costs double quoted price Justine Ferrari, Education writer From: The Australian March 18, 2010 12:00AM
"THE cost of projects under the federal government's $16.2 billion school infrastructure program more than doubles from initial estimates by the time builders start work.
A breakdown of costs for individual projects in NSW, the only government or school sector to provide the information, shows initial estimates for school buildings do not include the associated construction costs, and reveals the extent of fees and charges paid to managing contractors and builders.

At Hastings Public School at Port Macquarie on the NSW north coast, the school is building a new covered outdoor learning area and a two-classroom building with its grant of $3m from the Building the Education Revolution.

The outdoor area, known as a COLA in educational parlance, was initially budgeted for $400,000, but by the time students are running around under its shade, the structure will cost closer to $1m.

The double classroom was initially budgeted at $2.6m but, apparently to offset the rising cost of the COLA, this has been reduced to $1.8m.

The experience at Berridale Public School near Cooma in southeast NSW is similar. Granted $850,000 to build a library, the school was originally told the building would cost $285,000.

But the estimated project cost is now almost $896,000, including the management cost paid to the NSW government of $11,000.

Pressure has been building on the federal government over continuing stories of mismanagement and inflated costs of the BER, with the federal Coalition last year securing an inquiry by the Commonwealth Auditor-General's Office. Its report is expected in the next couple of months.

The NSW opposition, with the support of the Greens and Family First, yesterday succeeded in forcing an upper house inquiry into the BER in the state to assess the fees and charges levied by government agencies and managing contractors, and whether building costs are in line with industry standards.

The Senate is holding its own inquiry into the primary school building program, the largest component of the BER.

The Coalition is attempting to turn the schools building program into another political battlefield for the government, like the bungled $2.45bn roofing insulation scheme, by highlighting waste and cost overruns.

Tony Abbott is asking the Prime Minister whether Deputy Prime Minister Julia Gillard is a "first-class minister" in a parody of Mr Rudd's description of Environment Minister Peter Garrett before he was stripped of the suspended insulation scheme.

Using reports from individual schools of bungled building plans, exorbitant quotes from contractors and excessive state government charges, the opposition is trying to build a political case against Ms Gillard in parliament.

The federal education department yesterday said all state and territory education departments were subject to audits by their own audit offices as a normal part of delivering funding programs and, in the case of the BER, the internal audit team in state education departments.

In addition, governments and private school authorities are required to report monthly to the federal education department on the progress and expenditure of their BER projects, and submit annual financial statements that detail costs for each project.

The establishment of a parliamentary inquiry in NSW follows the call by the NSW Teachers Federation for a public inquiry in a letter to the state's auditor-general earlier this week. In a letter to its members detailing the request to the auditor-general, the federation says the "much-needed and long overdue BER investment in public schools' infrastructure is being undermined by a number of implementation problems".

NSW Education Minister Verity Firth said she formed an audit squad last year to conduct spot checks on BER projects, with more than 100 already conducted. The government had provided information on all the projects and their costs on the state's BER website.

"This is probably the most heavily audited and transparent program of public expenditure in Australia's history," Ms Firth said.

"Last year the NSW opposition demanded every piece of paper related to the NSW govenrment's delivery of the BER and more than 300 boxes were produced at a cost to the taxpayer of $500,000.

"Every relevant document was put before the upper house and is still available to the public and the opposition. There's no reason for holding another inquiry into the BER other than for political purposes by an opposition that has always opposed it."

As reported in The Australian in June, Hastings Public School built a COLA in 2003 for $40,000 and the principal was reported at the time as questioning how "what is essentially a weather shelter" could cost $400,000. Now the school community is asking how it could cost about $954,000.

The cost breakdown for Hastings Public School reveals the biggest cost for the school's COLA project is the structure itself, coming in at $471,000, which includes all the framing and roof structures and all the internal fixtures.

The next biggest item is the "design documentation, field data and site management" worth about $111,000. The explanatory notes define this item as covering professional construction documents from architects, engineers, surveyors and statutory planners and the site surveys to finalise the scope of the project and the preferred site. It also covers the planning approval process.

The cost of "preliminaries" at Hastings Public School are estimated at almost $108,000, said to cover the costs to establish and run the construction site.

"Preliminaries are a necessary cost on every construction project and include things like scaffolding, security fencing, site security, the construction site office and toilet facilities, site access requirements such as temporary roads . . . and personal protection equipment for workers," the website says.

Then, the design and price risk, a contingency payment, is worth $77,000; the site works, such as clearing the site and external works like paving, paths, walkways, stairs and landscaping, is worth $62,000; and the site services, including connecting the building to the power, water and sewer systems, is worth about $58,000. None of these costs is technically the project management cost, which is listed separately as $38,000 for the COLA and $72,000 for the classrooms, plus incentive payments worth about $37,000 if the managing contractor finishes the project on time and within budget.

On top of all of this, the NSW Integrated Program Office, which is overseeing the BER, receives 1.3 per cent, worth $39,000 to cover contract administration, scope and nomination management, variations process and reporting to the federal government.

The Education Department has conducted a spot audit at Hastings Public, which a spokesman said would be finalised soon and include a quantity surveyor looking at costs incurred and whether they were reasonable.

At Berridale Public School, the cost breakdown lists the price of the modular building to be installed at more than $385,000 with site services costing $168,000. The preliminaries to prepare the site account for $62,000, the design documentation, field data and site management is worth $60,000 and the school has a network substation allowance of $50,000 to upgrade the electrical works in the school to take account of the extra demand from computers and interactive whiteboards.

An education department spokesman said the initial cost of $285,000 was a very early estimated intended to provide preliminary advice about the likely cost of a shell-only building at the factory and not installed on the site.

It excluded the associated construction costs and does not take into account rises in construction costs over the past year."