Senate Finance and Public Administration Legislation Committee [Part 2], , 1:51:55 to 2:02:18
The committee discusses the handover of Victoria Barracks in Sydney and the associated maintenance and remediation costs. Officials clarify the role of KPMG as a property advisor and the process for managing expressions of interest.
Topics: Infrastructure, Land management, Procurement
Speakers: Senator The Hon Katy Gallagher, Speaker 9, Speaker 10, Unknown Speaker
>> Ah yes
>> just have a few questions on that
please. >> Sure. Forgotten about that little
Minister, have you been given a timeline of when Victoria Barracks will be handed over to the Department of Defense? Victoria Barracks, Sydney, sorry, Department of Finance.
>> Uh, not definitively. I know defense is my understanding is working to um you know relocate people who are currently working there uh by the end of this year um but we haven't got a formal or final date.
>> Okay. Cuz I I have it has been indicated to me that it might be in the next sort of month or so. Is that not correct?
We have not got a final >> uh date, but I do I do know that defense is working towards being off as much as they can off that site by the end of the year.
>> Yes. Have you made any preparations to take over the maintenance of Victoria
>> Well, that'll all be subject to those final discussions between finance and defense. Um, and some of the work that I've been doing, I I visited Victoria Barrett's first time I've ever been in there because it's not publicly accessible.
>> Oh, [clears throat] sorry. It It is, but anyway,
>> not really. I mean, you can
>> It is. You can go there every week. You can go there to Wong. You can go there
for tours museum every single week.
Couple of times a week. It is. went
there last Thursday to have a look and to as I'm trying to do to get around the other I think 67 sites. I'm trying to visit all of them. Uh they are all quite different. There's some that have been vacant for a long time. Um you know old training facilities all the way up to those that have significant heritage value like Victoria Barracks in Sydney uh and in Melbourne. Um so it's quite a varied um locations and sites. Um but we're doing all the work uh that you would expect us to do. Um defense is doing some of that. Um when they're handed over to finance um as that final decisions are made there will be uh agreement about maintaining the sites uh in all of their varied form
uh I noted in your letter to me that uh you estimated that there were going to be $3 billion in remediation costs. Have you done any costings on Victoria Barrack Sydney as to the remediation?
>> Uh, look, I think that we drew that figure from um the report that had been done. Um I um I think I've just checked, but I think I do have a figure in my head. I just want to make sure that it's right. Um >> I think there was in the report. >> Yeah. Yeah. Uh but we we haven't verified a number. Um but that was a figure we're very conscious part of we're very conscious of the ongoing um cost associated with maintaining all of these sites not one in particular but all of them and how we best utilize um that investment into defense operational capability
>> cuz the the defense minister has put it as a $200 million bill um for maintenance or ongoing cost
>> that's the figure I had which I think was from the independent report that was
actually that was actually from the defense minister. The um security and estate group who is overseeing uh the devestment process has said to us a number of times but also on Thursday uh last week they confirmed that they don't manage a budget for upkeep sight by sight. So they don't actually have those figures per site. What happens is you have a maintenance program that's spread over the entire site. You get a contract for the sorry the entire state. you get a contract for the entire state and all the estate in there. So, I'm just wondering if you're aware of where the defense minister got that figure for Victoria Barrack, Sydney, the $200 million figure, because uh previously it was uh $50 million over 5 years. Uh now it's doubling uh to $200 million over 10 years.
>> I'll see if there's anything I can help. I'm just trying to That's the number I had in my head, too. I'm just trying to locate it for you.
>> So, So Department of Finance hasn't done anything. No costings. No costings on anything.
>> No senator.
>> Any costings on relocation?
>> No.
>> So nothing on
>> So relocating staff or
>> Well, there's relocating staff, there's relocating infrastructure.
>> So that's being managed by defense and we that's being managed by defense. We will not be doing any of that. We have a very specific role which is when uh the properties are ready uh to be handed over to finance that they are done. So that we expect some some due diligence probably not all of it to be done and then it will come to finance uh for decisions about uh you know next decisions about the sale of those facilities.
>> Okay. So what sort of due diligence will be done by department of finance?
>> Sorry what
>> what sort of due diligence what are you
We piti first assistant secretary commercial group. So senator that due diligence would typically involve and this would be sight specific. It would typically involve uh doing the building reports uh assessing conditions of of the buildings looking at heritage and u ecological overlay of of the sides. are doing the heritage and assessments looking at site valuations uh looking at any contamination uh estimating cost of any remediation and so on.
>> Okay. So you will be doing the costings on remediation all that sort of stuff. Uh so that will happen with Victoria barracks as soon as defense is moved out. Is that correct?
>> We will we will commence that due diligence process when defense moves
out. Is KPMG doing the due diligence pro? So you're not actually doing it yourselves. KPMG has been engaged to do the due diligence.
>> Property advisor. Y
>> we have engaged uh KPMG to manage the due diligence process.
>> Okay. And and how much is that contract
So the KPMG contract as our strategic uh industry advisor is 16.7 million uh from March 26 until 31 January 2028
>> and that contract was entered into prior to the issues that have emerged around
Have you received any expressions of interest for the purchase of Victoria
future use form which is where people express uh interest with either uh uh concrete proposals or ideas how to use the sites. So we received uh 90 91 feedback and future use forms and we have also received 18 general inquiries for big barrack Sydney. So the
general inquiries any any of those are actual potential buyers or they they just have >> typically be people wanted to know about >> Have you had any engagements with potential buyers?
>> Not not at this stage.
>> And neither have I.
>> Okay. Just there are reports earlier in the year uh when these were first announced uh somebody approached uh the Albanese government uh with a $5 billion proposal to buy all 67 sites. You aware of that? That was reported in
uh >> come to me?
>> No, you're not aware of it. That was in the AFR
>> okay. I'm look I know there's sensitivities about a number of the sites um but the vast m there's many of them where there is a lot of community support for different um you know roles and you know housing for example there's a lot of interest from state governments so we're working through that we're going to be sensible methodical um the issues around heritage and uh um and history are really important. they will be dealt with very carefully that you know it we will be I think there's some concern that I've seen raised about you know these buildings not existing anymore that's just not true um you know they are historically significant um but they are no longer required uh to position the defense force for the operational um practicalities that they need um going forward forward and so we are doing uh the work that's required uh the careful and thoughtful work including me visiting all of the I will visit all of the sites I've probably done 15 maybe and I'm trying to get around to all of them and I'm meeting like I went to Penguin last week um met with some of the staff that work there but also met u the mayor joined me um so tal talked with her about communities issues. So, I'm really trying very hard to get across what everybody's views is and it is very there's a lot of mixed views and I'm getting all of that feedback. I