Pil­bara sold a PUPP as costs blow out, Au­di­tor Gen­eral says

Pilbara News - - News - Peter de Krui­jff

The WA Au­di­tor Gen­eral’s re­port into the much maligned Pil­bara Un­der­ground Power Pro­ject found the pro­ject was poorly man­aged from the get go.

The pro­ject was orig­i­nally es­ti­mated to cost $130 mil­lion to un­der­ground power in the re­gion with a fin­ish date of De­cem­ber 2012.

This blew out to $230 mil­lion in 2012 and the Au­di­tor Gen­eral Colin Mur­phy’s re­port claimed it now stood at $252 mil­lion with a 2018 fin­ish.

A Hori­zon Power spokesman said the com­pany would spend up to $22 mil­lion in op­er­at­ing costs which in­cluded dis­man­tling of age­ing over­head in­fra­struc­ture.

“Ratepay­ers are not con­tribut­ing to these op­er­at­ing costs,” he said. “These costs have been fully dis­closed in Hori­zon Power fi­nan­cial state­ments which are avail­able to the public.”

The re­port said the De­cem­ber 2012 date was “un­re­al­is­tic” and “did not re­flect lo­cal con­di­tions.”

Mr Mur­phy said Hori­zon had rushed into the con­tract and went through unchecked since an over­sight com­mit­tee had no de­ci­sion mak­ing power and Hori­zon al­ready had the money.

Mr Mur­phy said the ben­e­fits were clear but the costs were in­ad­e­quate and had they been done prop­erly in the first place the gov­ern­ment may not have made the de­ci­sion to go through with it.

“We’ll never know the an­swer be­cause they were half­way through it,” he said.

“They started dig­ging be­fore re­al­is­ing all the es­ti­mates were widely in­ad­e­quate. The plan­ning prob­lems and the busi­ness case that was sub­mit­ted in 2009 would not sim­ply get through to­day’s pro­cesses and that’s the good thing.”

Mr Mur­phy also said there had not been any doc­u­mented rea­sons as to why the then-Of­fice of Energy’s rec­om­men­da­tion for Western Power to do the pro­ject was changed to rec­om­mend Hori­zon Power do the pro­ject.

The City of Kar­ratha’s con­tri­bu­tion went up from $21 mil­lion to $34.5 mil­lion af­ter the Hori­zon blowout.

Mayor Peter Long said with­out the ad­di­tional con­tri­bu­tion, the pro­ject could not be com­pleted.

More than 95 per cent of prop­er­ties in the city have made a pay­ment to­wards their PUPP ser­vices charge.

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.