Sorry, my reference to Parramatta Light Rail in the previous post was to
Stage 2, not stage 1 which was built under the previous government and is
virtually ready to open.
Tony P
On Friday 19 April 2024 at 13:45:41 UTC+10 TP wrote:
> The public service can no longer attract the necessary talent for a
> project like this because of the uncompetitive pay rates and the
> constraints of the working environment. Nevertheless Sydney Metro (a
> government agency of TfNSW) is loaded with talent. Rather than turning to
> an auditors report prepared a few years ago just after the first section of
> metro had opened (*under budget*), one should turn to more recent
> information, notably the review of Sydney Metro commissioned by the Minns
> government.
>
> Let's look first at how the costs have panned out.
>
> Metro NW (36 km, 8 new and 5 converted stations), was estimated to cost $8
> billion in the business case, opened at $7 billion.
>
> Metro West (24 km, 10 stations, may increase to 11) still holding to its
> business case estimate of $25 billion, but this will rise due to Minns
> delaying procurement and the timeline by two years to make his state
> budgets look better.
>
> Sydney Metro City/SW (30 km, 7 new and 11 converted stations) began during
> the covid crisis, so suffered the extra costs, procurement issues and
> various other delays (including possession issues resulting from industrial
> action on the suburban system) flowing on from that. The business case was
> $12 billion and that's standing at $20 billion.
>
> Sydney Metro WSA (23 km, 6 stations). This is joint Commonwealth/State
> funded and I believe it's standing at its budget of $11 billion.
>
> The Sydney Metro independent Review commissioned by the Minns government
> had the following points, among others, to make about the management of the
> metro project:
>
> " Sydney Metro is planning and delivering world-class transport projects –
> with world-class specifications, and end-to-end customer accessibility
> excellence based on long-term capacity forecasts beyond 2056. While there
> may be opportunities to relax some select requirements of Sydney Metro West
> to potentially improve affordability, this should be considered on both an
> immediate value-for-money and more holistic outcomes basis. Several
> stakeholders have commented that the specifications of Sydney Metro, given
> its current scale within the market, have had a sector-wide outcome of
> ‘raising the bar’ (especially regarding sustainability, and health &
> safety). Relaxations to these standards may be possible (and fiscally
> desirable), provided that Government is alert to both direct and indirect
> consequences. Extensive Value Engineering has already occurred for Sydney
> Metro West as a means of self-managing increasing cost and escalation
> pressures, with further work still underway. One of the key remaining
> opportunities will be testing whether the assumption of designing for 2056
> patronage levels remains appropriate and affordable, including in relation
> to future costs associated with subsequent retrofitting/expanding;
>
> In our view, Sydney Metro are likely at a leading standard of Government
> experience and capability regarding megaproject delivery. This is not to
> suggest or indicate that all challenges will remain within-tolerances or
> that no further risks to the Sydney Metro West project will eventuate, but
> that this is a highly capable Agency with a robust internal environment of
> Board governance, transparency, knowledge sharing, continuous improvement,
> and an Executive with significant expertise in project integration – with
> regular engagements with national and international peer organisations;
>
> We suggest there are significant opportunities for the NSW Government to
> leverage both the skills and oversight functions of the Sydney Metro Board
> much more effectively. The Review Panel considers that the Sydney Metro
> Board and senior team have the capability, depth, and resourcefulness to
> deliver the overall infrastructure program to a very high quality and with
> all the necessary governance and probity safeguards that the NSW Government
> and community would expect. However, we are concerned that the organisation
> is under increasing stress – market volatility and contractual pressures,
> alongside an aggressively competitive labour market, with multiple directed
> changes to scopes of work, have added continual pressures on the senior
> team.
>
> Finally, despite having invested significantly in uplifting infrastructure
> market capability in New South Wales (especially for Metro-based projects)
> over the past decade, we note that there does not appear to be a specific
> and actionable longer-term pipeline in place beyond current projects. The
> NSW Government should aim to provide certainty on future extensions as a
> priority before potential sector-wide demobilisation begins around 2026.
> Having regard to the increased investments in energy-based projects,
> FY2025-2026 is considered to represent a critical turning point for
> maintaining construction-sector capabilities in transport infrastructure.
> Within this context, we have conducted a strategic review of further
> investment opportunities and potential timings/phasing and offer a
> preliminary view on options for Government’s consideration – in short, we
> recommend a clear forward pipeline of staged Metro projects be developed
> and progressed within a financially sustainable long-term envelope. There
> are multiple additional considerations relevant in this regard to Sydney
> Metro’s overall workforce management strategy and retention of skills and
> experience.
>
> https://www.sydneymetro.info/media/document/38211
>
> Note: The suggestions for future projects referred to in the last
> paragraph has been redacted, presumably because the current government does
> want to feel pressured to commit to further projects. However, there is
> already a 2056 plan outlining several new/extended metro lines, but no
> prioritisation for them at this stage. The review is concerned that
> momentum will be lost and expertise dispersed if the program of projects is
> not continued. With a Labor government currently in NSW, this is a risk, on
> past record. The report's authors are highly experienced infrastructure
> professionals who worked for Federal and Queensland Labor governments. No
> doubt they were chosen by the NSW Labor government in the hope of digging
> up some dirt on the Coalition's metro record, but instead it's blown up in
> the government's face. No excuses now, but they will fudge and dither like
> the Carr government. At least they can't now crabwalk out of the committed
> current projects. As for that Herald report above, that issue was picked up
> in the review and has been resolved.
>
> For similar reasons, I wouldn't expect to see Parramatta Light Rail any
> time soon. It will be dragged out too. Again the current government was
> caught in a bind where it was expected they would continue the project in
> order to win Parramatta. Not some belated epiphany in which NSW Labor has
> gone 180 degrees and suddenly developed a passion for trams.
>
> Tony P
> On Friday 19 April 2024 at 11:02:28 UTC+10 Bob Pearce wrote:
>
>> Eons ago, the Govt of the day offered a payout to those who wanted to end
>> their working life years before they turned 65.
>>
>> Many middle management took the offer and away they went.
>>
>>
>>
>> All too soon, people higher up the food chain realised that those who
>> were left were formed of basically two groups: Those who didn’t know how,
>> and those who needed the information but didn’t have time to get it.
>>
>> As a result those who took the redundancy were asked to return on
>> contract to do the job they had just been paid to leave, and also teach
>> those left behind how to do the job.
>>
>>
>>
>> So then those on contract were being paid at a rate much better than they
>> received before the redundancy, while those being trained were put into the
>> vacant spots so they could do the job at the rate of pay that the
>> contractors had previously received.
>>
>>
>>
>> Then of course, people were hired to fill those places from which the
>> promotions came to fill the places left by those who took redundancy.
>>
>>
>>
>> Ain’t the public service marvellous.
>>
>>
>>
>> And, I’m sure that the Peter Principle is alive and well. That’s the
>> one where people rise to level of their own incomptetance.
>>
>>
>>
>> And, I’m almost positive that it is still happening today, in one form or
>> another.
>>
>>
>>
>> Bob in Perth
>>
>>
>>
>>
>>
>> *From:*tramsdo...@... tramsdo...@...> *On
>> Behalf Of *Mark Skinner
>> *Sent:* Friday, April 19, 2024 8:37 AM
>> *To:*tramsdo...@...
>> *Subject:* Re: [TramsDownUnder] The cost of NSW transport projects is
>> much higher than comparable projects in other Australian states and
>> overseas,
>>
>>
>>
>> In my humble opinion, much of the problem stems from the "efficiency
>> dividends" placed on the public sector.
>>
>>
>>
>> That is, politically it looks great to reduce the size of the public
>> sector. Further, the politicians mandate that front line contact has to
>> remain, such as ambulance, social workers, teachers. That means huge cuts
>> in the backroom support.
>>
>>
>>
>> It's the backroom support, or lack of it, that's coming back to bite the
>> small government people and taxpayers in the backside.
>>
>>
>>
>> There are very few people with the skills to administer the projects
>> properly. If someone on the front line wants something done, legitimately,
>> they ring the contractor to get it done. They neither know, nor care about
>> whether the contract is overspent or whether they should get quotes. They
>> are on the front line. They have a problem that needs solving. There's a
>> contractor available. As far as they are concerned, that's the end of the
>> story. I have a few friends in SA who know this is a big problem here too.
>>
>>
>>
>> It's bad enough where people just want to get a job done honestly, and
>> don't care about riffling paperwork. However, the potential for abuse is
>> unlimited. So, one can only assume that there's rampant corruption as well.
>>
>>
>>
>> Let's then add the "efficiency dividend" the stripping of planning and
>> technical expertise.
>>
>>
>>
>> A perfect storm of uninformed buyers, opportunities for corruption, no
>> oversight. The downsizing of the public sector is now costing way more than
>> the salaries saved.
>>
>>
>>
>> I'm mildly pleased that the Auditor General has only found this much.
>>
>>
>>
>> Mark Skinner
>>
>>
>>
>> On Thu, 18 Apr 2024, 8:41 pm Greg Sutherland, gregsut...@...>
>> wrote:
>>
>> Why is the cost of major transport projects such as METRO and Light Rail
>> so much higher in NSW than in other Australia states and overseas?
>>
>>
>>
>> It is well known that the cost of NSW transport projects is much higher
>> than comparable projects in other Australian states and overseas,
>>
>> But “Why is it so?”
>>
>> Do we need a full and frank Auditor General’s report?
>>
>> Should the NSW Independent Commission Against Corruption (email at
>>ic...@...) investigate?
>>
>>
>>
>> Here is some interesting reading:
>>
>> *Auditor General’s Report 11 June 2020*
>>
>> “CBD South East Sydney Light Rail follow-up performance audit”
>>
>>
>> https://www.audit.nsw.gov.au/our-work/reports/cbd-south-east-sydney-light-rail-follow-up-performance-audit
>> Conclusion
>>
>> *“Transport for NSW has not consistently and accurately updated CSLER
>> project costs, limiting the transparency of reporting to the public. In
>> line with the NSW Government Benefits Realisation Management Framework,
>> TfNSW intends to measure benefits after the project is completed and has
>> not updated the expected project benefits since April 2015.*”
>>
>>
>>
>>
>> Sydney Metro has 42 ‘contracts of concern’. One jumped in value 2811%
>>
>>
>> https://www.smh.com.au/politics/nsw/sydney-metro-has-42-contracts-of-concern-one-jumped-in-value-2811-percent-20240318-p5fd9d.html
>>
>> An internal Sydney Metro investigation found widespread risks of “fraud
>> and corruption” within the agency, including deals with private companies
>> that increased by more than 10 times their original value, undisclosed
>> conflicts of interest and multimillion-dollar payments made to third
>> parties with no record of why.
>>
>> In September, Sydney Metro’s fraud and corruption unit handed the agency
>> the results of an investigation it had carried out into 42 “contracts of
>> concern”. It followed a series of internal Metro probes into its governance
>> that raised concerns about the agency’s use of public funds and prompted a
>> crackdown on the use of private contractors by the Minns government.
>>
>>
>>
>> An internal Sydney Metro investigation uncovered a litany of issues
>> regarding the use of public money by the multibillion-dollar agency.*Credit:
>> Rhett Wyman*
>>
>> The internal investigation outlines a string of defects in the awarding
>> of tens of millions of dollars in taxpayer funds, including cases in which
>> professional service contractors employed by Metro had failed to declare a
>> financial interest in companies that had won work with the agency.
>>
>> The document, obtained by *The* *Sydney Morning Herald* via a
>> parliamentary order, also details how concern about the use of those
>> professional service contractors had found their way to Sydney Metro chief
>> executive Peter Regan as early as August 2021.
>>
>> It found the agency failed to follow internal sign-off protocols when
>> approving significant increases in the value of contracts, including one
>> deal analysed by the anti-corruption unit in which a contract originally
>> valued at $3.2 million inflated to $21.3 million without proper
>> authorisation.
>>
>> It also found that Metro regularly gave “insufficient value for money”
>> justifications when approving “substantial” variations in contracts, and
>> failed to adequately document reasons for approving and extending 18 of the
>> deals it examined.
>>
>> One example cited by the internal probe noted that a contract with a
>> private company originally worth $276,000 was varied to more than $8
>> million, an increase of about 2800 per cent, without documentation
>> explaining the change.
>>
>> The internal probe also uncovered what it described as “inappropriate
>> procurement practices” with some contracts awarded to private firms,
>> including agreements “varied to over 10 times the original contract value”.
>> Four of those contracts were “single sourced”, it said, meaning a
>> competitive tender had not been undertaken. Those contracts each had
>> significant increases over time; one from an initial value of $107,400 to
>> $1.4 million over seven years. Another increased from $2.5 million to $13.2
>> million.
>>
>> “Allowing single-sourced contracts to be substantially varied to a
>> higher value provides avenues for corrupt conduct or potential
>> maladministration,” the investigation stated.
>>
>> It added “less scrutiny is anecdotally afforded” to assessing
>> single-sourced contracts, and raised concerns that a “lower value” might be
>> given to a contract in some cases to circumvent competitive tenders.
>>
>> “The contract can then be varied, and the competitive process can be more
>> easily avoided,” the investigation stated.
>>
>> Sydney Metro chief executive Peter Regan and Transport Minister Jo Haylen
>> last year.*Credit: Wolter Peeters*
>>
>> The internal investigation did not make specific findings over the
>> contracts, but was “intended to identify opportunities for system
>> improvements”. While many of the contracts it examined had been “secured
>> some time ago”, it said it would investigate any suspected fraud or
>> corruption separately.
>>
>> The previously unreported details of Metro’s record-keeping follow separate
>> revelations by this masthead
>> https://www.smh.com.au/link/follow-20170101-p5e1vy into the use of
>> private contractors at the multibillion-dollar agency. In some cases,
>> senior managers were allowed to run private companies that recruited
>> contractors to the agency on salaries well over $500,000.
>>
>> The *Herald* has also detailed how a separate internal probe into
>> allegations of “conflicts of interest and … corrupt conduct”
>> https://www.smh.com.au/link/follow-20170101-p5f753 by senior
>> executives at the agency had been referred to the Independent Commission
>> Against Corruption.
>>
>> The September investigation detailed 10 cases in which employees engaged
>> as professional service contractors at Metro did not disclose they were
>> shareholders or directors of companies engaged by the agency on contracts
>> worth as much as $7 million.
>>
>> While it did not suggest those individuals were responsible for hiring
>> staff through their own companies, it found that the failure to disclose
>> the conflicts created the “potential for inappropriate benefits to
>> individuals or supplies with mutual personal interests”.
>>
>> It also found a “potential for unauthorised access” to tender documents
>> by “personnel who will influence decision-making in favour of a supplier of
>> interest”.
>>
>> The investigation reveals concerns about the use of professional service
>> contractors within Metro date back to at least March 2021, when a
>> previously unreported internal investigation code-named Aoede was
>> commissioned. At the same time, an internal audit also raised “further
>> concerns” over the use of private contractors which were elevated to Regan
>> in August 2021, the document states.
>>
>> Greens MP Cate Faehrmann, who secured the release of the document through
>> parliament, said it was proof that “senior management at Sydney Metro have
>> known about this rorting for years,including that it was breaching
>> multiple codes and protocols”.
>>
>> “Who at Sydney Metro decided that the rules which apply to all public
>> servants don’t apply to them? How far back does this culture of
>> non-compliance and making personal gain from public money go?” she said.
>>
>> “With multiple metro projects underway in Sydney and billions of dollars
>> still to spend, the minister needs to do more to assure herself that
>> measures are now in place that prevent this type of behaviour.”
>>
>> In a statement, a spokeswoman for Sydney Metro said all recommendations
>> from the September review had been adopted, and noted that since it was
>> released the agency had banned employees from acting as directors of
>> professional services contractor companies.
>>
>> The spokeswoman noted that decision had followed a review ordered by
>> Transport Minister Jo Haylen in November last year to assess Metro’s use of
>> private contractors. The review also led to changes that lowered the value
>> at which contracts needed the chief executive’s sign-off.
>>
>> “The independent legal adviser was satisfied that an appropriate level of
>> care is given by Sydney Metro into the scope of investigations regarding
>> Professional Services Contractor allegations and complaints,” the
>> spokeswoman said.
>>
>>
>>
>>
>> Sydney Metro farms out jobs worth $2000 a day
>>
>>
>> https://www.smh.com.au/national/nsw/sydney-metro-farms-out-jobs-worth-2000-a-day-20230904-p5e1vy.html
>>
>> Sydney Metro is allowing senior managers to run private companies that
>> recruit contractors to the agency on salaries well over $500,000 a year as
>> the state government searches for ways to rein in cost blowouts on rail
>> mega-projects.
>>
>> A *Herald* investigation has found scores of contracts to hire staff for
>> Sydney Metro on more than $2000 per day. These and many other Metro
>> contracts are conducted under “limited” tender conditions
>> https://info.buy.nsw.gov.au/supplier-guidance/supply-to-government/tenders
>> where the agency approaches a supplier or suppliers directly for services.
>>
>> Permitting companies whose directors are senior managers at Sydney Metro
>> to provide staff known as “professional services contractors” raises a
>> potential conflict of interest due to their access to commercially
>> sensitive information and fails the “pub test”, experts claim.
>>
>> The two senior Sydney Metro managers’ companies have won $20 million
>> worth of contracts in total since 2021, tender documents show.
>>
>> They are among more than half a dozen companies whose directors worked in
>> senior roles at Sydney Metro and have been awarded contracts to provide
>> staff.
>>
>> A small company founded by Sydney Metro utilities director Paul Rogers in
>> 2014 – a year before he started working on Metro projects – has won $13.3
>> million worth of work since August 2021 to provide staff with pay rates
>> ranging from about $280 to $390 an hour
>>
>> Six “professional services contractors” hired through Rogers’ Pro
>> Consultants reported directly to him at Sydney Metro’s interface division,
>> which is overseeing the $25 billion Metro West
>> https://www.smh.com.au/link/follow-20170101-p5dszp and $11 billion
>> Metro Western Sydney Airport
>> https://www.smh.com.au/link/follow-20170101-p579yh rail lines.
>>
>> Sydney Metro interface management director Barry McGrattan is also the
>> managing director of Bellgrove Advisory, which has won $6.6 million worth
>> of work to provide about 10 staff for the agency.
>>
>> Rogers and McGrattan had no involvement in Sydney Metro’s decision to
>> award contracts to those companies or setting the salaries for those roles,
>> and they played no part in the project’s cost blowouts. The *Herald*
>> does not suggest any wrongdoing on the part of Rogers and McGrattan.
>>
>> One of those hires, James Hayward, is Sydney Metro’s interface management
>> acting director, contracted on more than $600,000 a year, almost as much as
>> the agency’s chief executive. He is the partner of Amanda Hayward,
>> publisher of the bestseller *Fifty Shades of Grey. *The *Herald* also
>> does not suggest any wrongdoing on the part of Hayward.
>>
>>
>>
>> The construction site for the Parramatta metro station.*Credit: Wolter
>> Peeters*
>>
>> Quizzed about the arrangements concerning Rogers, McGrattan and Hayward
>> during a NSW upper house inquiry into the government’s use of consultants,
>> Sydney Metro chief finance and commercial officer Fiona Trussell said
>> contractors and professional service providers were not in decision-making
>> roles and did not have any delegated authority.
>>
>> “They all report ultimately into government employees so their ability to
>> hire and recruit people is not an authority that they have,” she said.
>> “Those decision-making authorities sit with government employees within our
>> delegation.”
>>
>> The NSW Auditor-General raised concerns in a March report
>> https://www.audit.nsw.gov.au/our-work/reports/nsw-government-agencies-use-of-consultants
>> about government agencies hiring consultants, citing concerns about the way
>> spending on contractors is reported publicly and how agencies engage in
>> contracts with them.
>>
>> The rules that require most agencies to estimate the value of a contract
>> – including any potential extensions and renewals – do not apply to Sydney
>> Metro.
>>
>> The cost of the Metro City and Southwest rail line between Chatswood and
>> Bankstown via the CBD is almost double the original forecast at about
>> $21.6 billion. https://www.smh.com.au/link/follow-20170101-p5dsrmNSW
>> Premier Chris Minns has also cast doubt
>> https://www.smh.com.au/link/follow-20170101-p5dqv9 on the future of the
>> Metro West https://www.smh.com.au/link/follow-20170101-p5drnn line
>> under construction between the CBD and Parramatta.
>>
>>
>>
>> Rogers and McGrattan did not respond to questions about potential
>> conflicts of interest or how much their companies earn from contracts to
>> provide staff. Hayward also did not respond to questions.
>>
>> Sources close to Sydney Metro who spoke on the condition of anonymity
>> because they are unauthorised to discuss the project with the media said
>> companies providing staff to the agency can earn between 7.5 per and 12 per
>> cent of the hourly rate of a contract’s value.
>>
>> Critical accounting academic professor John Dumay said fees to provide
>> contractors of about 10 to 12 per cent of the contract value was “about
>> right”.
>>
>> Dumay, who ran his own consultancy business and worked as a management
>> consultant before moving to academia, said Sydney Metro allowing managers
>> to bid via private companies to provide contracted staff did not pass the
>> “pub test”.
>>
>> “When you bring in these labour hire companies and/or consultants, we
>> ultimately lose transparency because there’s no legal obligation for any of
>> these companies to disclose anything publicly,” he said.
>>
>> Centre for Public Integrity director Geoffrey Watson, SC, said Sydney
>> Metro managers whose private companies were bidding for work from the
>> agency might have access to information other bidders didn’t.
>>
>> “I’m astonished that this would be allowed,” he said.
>>
>> “It is just a minefield of ethical concerns in so far as there are
>> obviously potential conflicts of interest. [They] aren’t measured by the
>> outcome – they are measured by the potential.”
>>
>> Former NSW auditor-general Tony Harris said the private companies of
>> senior managers at Sydney Metro winning contracts with the agency raises
>> potential conflict of interest issues. “It is so obviously not on that it
>> doesn’t require much thought,” he said.
>>
>> A spokeswoman for Transport Minister Jo Haylen said “procurement and
>> delivery models for Sydney Metro overseen by the previous Liberal
>> government” had caused cost overruns on metro projects.
>>
>> “The engagement of contractors should be a short-term solution. The
>> government is concerned about the long-term use of contractors, especially
>> if they are being used for longer engagements better suited to public
>> sector roles,” the spokesperson said.
>>
>> Sydney Metro did not answer specific questions about why it allows senior
>> managers to use their own companies to tender for contracts, how many
>> professional services contractors it uses, their cost, or if it has
>> investigated these arrangements, but said “the procurement of contractors
>> and consultants was wholly managed by government employees”.
>>
>> “Contractors have no authority (decision-making rights) to approve the
>> engagement of other contractors or variations/extensions to contractors,”
>> it said.
>>
>> “Due to the size and complexity of our projects, there will always be a
>> need for specialist input and contractors to supplement our workforce,
>> including on a part-time basis.”
>>
>> The agency said it required all consultants to complete a “statement of
>> interests and associations” declaring professional and personal interests.
>> They manage conflict of interest risk through governance structures and
>> take appropriate action when required.
>>
>> One contract
>> https://www.tenders.nsw.gov.au/?event=public.cn.view&CNUUID=3C712C23-EE37-B779-12966F0BA8400708
>> for “project management services for Sydney Metro West” worth $639,540 runs
>> for 12 months from May this year and was evaluated by the “tenderer’s
>> candidate’s availability, capacity and capability”.
>>
>> Another tender
>> https://www.tenders.nsw.gov.au/?event=public.cn.view&CNUUID=CA879446-F658-4F97-6A887E83C1A2A6AB
>> worth $1,288,320 over two years and three months for “project management
>> services” was judged on the tenderer’s “candidate and price”.
>>
>> Greens treasury spokeswoman Abigail Boyd said when key management roles
>> were outsourced to consultants, who then benefit from critical information
>> that they could use to win more work, potential conflicts of interest arise.
>>
>> “Once you allow consultants to be embedded into a government agency, they
>> become extraordinarily difficult to extract. The agency becomes so reliant
>> on the individual that it drives up that individual’s bargaining powers,”
>> Boyd, a former UBS investment banker, said.
>>
>>
>>
>> Construction of Barangaroo Metro.*Credit: Rhett Wyman*
>>
>> Sydney Metro is charged with delivering the country’s largest public
>> transport project.*Credit: NSW government*
>>
>> Sydney Metro interface management director Barry McGrattan (left) and
>> utilities director Paul Rogers.*Credit: *
>>
>> Paul Rogers with his team from Pro Consultants.*Credit: LinkedIn*
>>
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>