Channel Deepening: Auditor General Report figures in question

Discrepancy

Ms Pennicuik, Greens member of Victorian Parliament, has drawn attention to discrepancies between figures apparently given the Auditor-General by the Port of Melbourne Corporation and figures obtained from them by the Supplementary EES statement process and the hearings and the Standing Committee on Finance and Public Administration.

If it is true that 96% of ships were able to use the Port of Melbourne with no problems, does this discrepancy mean that the Auditor General will have to review his report and the validity of the PoMC's business case, quality of information and practice?

Dredging has cost Victorians enormously already financially, socially and environmentally. Confidence is not high in the PoMC. It is to be hoped that Ms Pennicuick will follow this matter up urgently. Any member of the public wishing to find out more could put questions to Ms Pennicuik to ask in Parliament.

Ms Pennicuick (Greens) (Southern Metropolitan)

"I am speaking today on the Auditor-General's report on the channel-deepening project. This project has been the subject of much public interest since it was first announced in 2002. That interest continues as, unfortunately, dredging is under way. It is a mega-project with a scale of dredging way above anything seen before in Port Phillip Bay -- or pretty well anywhere else in the world. "

"I have read through the Auditor-General's report on the channel-deepening project (CDP), and he concludes that after a very poor start the Port of Melbourne Corporation had developed an effective channel-deepening project. On page 2 of his report he says that the CDP included: "

" a robust business case, complying with better practice guidelines and providing government with the type and quality of information it needed to endorse the project "

" an environmental management plan that addressed the requirements of the environmental assessment process and was endorsed by ministers under the state and commonwealth environmental legislation "

" contracting arrangements, where the corporation followed sound processes in determining how works should be procured and the contractual terms. "

"The Auditor-General concluded that all of these were in order. "

"I am pleased that the Victorian Auditor-General's Office chose to audit the channel-deepening project, because due to public and community concern about the scale and risks of the project it certainly needed independent analysis, which has been sadly lacking hitherto. This report is a valuable contribution to the ongoing debate about the pros and cons of channel deepening, which, it must be remembered, is still happening. It is not a finished project, a point the Auditor-General himself acknowledges. It is still continuing, and he has not in fact audited a completed project. "

Was Channel Deepening needed or will it ever be needed?

"The Auditor-General's report is, perhaps, unable to answer some of the fundamental questions about channel deepening. The first question is: is it, was it or will it ever be needed? The second question is: will it provide any benefits to either exporters or importers or to the people of Victoria? These questions cannot be and are not answered by this report. "

"The fundamental question regarding the channel-deepening project has always been the need for it and the extent to which ships are actually depth constrained in the port of Melbourne. "

Wide range of figures has been quoted by PoMC

"Over the last few years the Port of Melbourne Corporation has quoted figures ranging from 25 per cent to 38 per cent of ships being unable to enter the bay fully loaded, but during the supplementary environment effects statement process and the hearings, and in the Report on Port Phillip Bay: Channel Deepening by the Standing Committee on Finance and Public Administration released last September, the port admitted that the true figure is around 4 per cent of ships that cannot come into the bay or leave it fully loaded. That means 96 per cent of ships are able to come in and out of the bay fully loaded. "

"The Auditor General's report states that 50 per cent of ships are unable to come into the bay fully loaded. I asked the Auditor-General at his briefing yesterday where he obtained that figure from; he replied that he had obtained it from the port. Elsewhere in this report it states -- in fact, it recommends -- that the Port of Melbourne Corporation start to collect figures on this. "

PoMC does not collect data on number of depth constrained ships entering/leaving Port Phillip Bay

"In fact it does not collect data on what ships are able to come in and out of the bay and are depth constrained. That was an assertion by the port, and it is unfortunate that that figure was used in this report. "

"The Auditor-General then went on to say that in order to measure the benefits the port should start collecting figures on what ships it feels has made use of the benefits of the project. "

Costs of shipping in Port Phillip Bay rising due to 'Channel-deepening levy'

"The other benefits of the project, as they were raised in the briefing, are to be measured by reduced costs to exporters and importers. Certainly information that has come to us is that costs to exporters are rising, because they are paying a $60 channel-deepening levy, whether they need it or not. Many exporters have said throughout the lead-up to this project that they did not need or want the project, and they did not want to be paying for it. They are now paying for it. "

"It will be interesting to see whether, through the life of the project, that measure -- the reduced costs to exporters and importers, when they are in fact rising -- ever comes to be seen. "

Source: Member Sue Pennicuik, Council, Statements on Reports, Auditor-General: The Channel Deepening Project, Hansard, 7 May 2009, p.2141