Senate Environment and Communications Legislation Committee, , 8:13:45 to 8:21:15
Snowy Hydro CEO Dennis Barnes explains the three main elements of the project's cost reassessment, including contractor and shadow forecasts.
Topics: Snowy Hydro, Government spending, Infrastructure
Speakers: Dennis Barnes, Dean Smith, Linda McGrath, Unknown Speaker, Ms Linda McGrath
can. Thank you, Minister. So, turning to the cost reassessment report, am I correct to assume, Mr. Barnes, that that has been provided to you and the
So the cost reassessment report is provided as advice from the snowy hydro board to our shareholding ministers. It's not as simple to say that it's a uh piece of uh analysis. It is summarized in advice to government and there are many many supporting
Can you give me an indication of what are the elements of the cost assessment report? So what are the various analyses or sub reports that might make up the or that do make up the cost assessment report?
>> So the most so there's probably three elements of note. One is the instruction to our contractor to do a line by line reassessment of the costs and provide that to us under the contract as a formal uh cost to Uh we didn't have full confidence in that. So we separately did a review of the cost to complete bottom up with our own independent experts. And then the third element is uh an advisor that assured the snowy hydro board that the process had been done in a thorough and diligent way. The contractor then separately employed some probabilistic analysis consultants that underpinned some of the report and then separately the departments have engaged their own independent assessors of our work. But from our perspective there's probably three major elements. The contractor's forecast, our own shadow forecast and a process shortity
document. And when was that transmitted to the shareholder ministers?
>> Uh the 30th of September.
>> Sorry,
>> 30th of September.
>> The 1st of 30th of September. Thank you. Uh very much. Has the department completed its review or analysis of the cost assessment before providing advice?
>> Uh we haven't yet provided advice to government. Those processes are still to
So, are you in the process of still reviewing the cost assessment report
>> Uh, the way I'd describe it is that we've worked closely uh throughout the process. Um, uh, like the um, uh, Mr. Barnes was just saying um the departments as as in ourselves together with the department of finance had engaged um an independent assurer of the the cost reassessment. So we've been involved throughout as part of that.
>> So would it be fair to say that the department is still going through an independent assurance process over the cost assessment report documentation that's been provided to it?
Uh I think it's fair to say yeah we're still getting independent advice to support um to support our advice then to government.
>> Okay. And the department's advice to government's not yet been made available to the minister.
>> It would go through the the normal processes you'd expect for government.
Does is it one piece of advice that goes to the Minister for uh Finance and Minister Bowen or is it Department of Finance takes its own advice to the Minister for Finance and Minister Bowen takes its own advice to Minister Bowen on the cost assessment report
>> So I can't I mean this will go through a normal government process as you'd expect. Um I can't I don't want to talk specifically to what that advice might look like but uh what I would say as a general rule uh ourselves and department of finance um do try to provide consistent advice to ministers uh although as as you can expect there's different uh we each emphasize different elements um based on our roles. So that
independent assurance is that the same person or body providing that assurance process to finance and to you or is it
>> that's right they're jointly engaged or
>> Okay. That's
>> certainly jointly funded.
>> Okay. So when Minister Bowen has given a commitment that when he gets it the report he will release it he's not able to fulfill that commitment yet because he's not got the report from you >> or the advice from you about the report.
>> That would be correct. Yes,
>> that's right. And just for clarity that the cost cost assessment report documentation has not gone to Minister Bowen prior to your advice going to him.
>> Sorry, could you repeat that? So,
Minister Bowen has not seen the cost assessment report documentation independently of advice going up from the department to him.
>> That's not correct. Uh this is Snowy Hydro. Um and maybe Mr. B will speak to
this. Um I mean the Snowy Hydro board uh wrote to both shareholding ministers with advice on the forecast cost to complete that will be supported that wasn't provided in that advice to the ministers but is available to departments with a range of independent and detailed reports. But the cost to complete advice is is in the form of a a letter from the Snowy Hydro Board to the shareholding ministers.
>> Okay. Um would you mind just expanding on that for me a little more just well perhaps repeating uh what you just
shared with me? So throughout the course of the last year once we announced we were uh not going to achieve the target cost and we were requiring this piece of work to be done we have engaged with the departments on what level of detail they would require. However it's a job for the snowy hydro board to prepare that work and provide the advice to ministers. So the advice to ministers or the letter advice might be the wrong phrase in this forum. The letter from the snowy hydro board to ministers summarize the work uh and requested support uh to conclude the project and then there's a whole heap of supporting documents that the uh departments have available to them.