Ms O’CONNOR – Thank you. So, there are – I mean, following on from the Chair’s questions, there are very significant question marks over the capacity of Mac Point Development Corporation to contribute towards the debt service and costs. As the minister responsible for MPDC, what assets do you think MPDC has that it would be selling in order to contribute towards debt servicing?
Mr ABETZ – There are very real opportunities, and our advice is that once the stadium is being undertaken, then there will be the opportunities to fully realise the commercial opportunities that Macquarie Point provides. That is in the area of a hotel. Anne Beach, the CEO, might have more detail – but it’s the opportunity of a hotel. I think the housing area, as well, at Regatta Point, we are looking at that private investment there. But, I’ll hand over to Ms Beach.
Ms BEACH – Through you, minister, thank you. So, the key areas are the residential development to the north and the commercial development zone to the east, which is around 17,000 metres square.
Ms O’CONNOR – Okay, and is the minister confident – I mean, they’re not necessarily very large assets, given the level of borrowings that will be loaded up onto MPDC, which is more than $400 million in this Budget. Do you admit, minister, that ultimately it will be the people of Tasmania, through the government of day, that pays this debt that’s been loaded on to MPDC?
Mr ABETZ – Well, look, the people of Tasmania will be paying that, but the people of Tasmania will also be getting all the benefits that flow from the stadium. So, there are two sides to the statement. You like looking at the loss side; I like looking at both the profit and the loss, and that is why it makes good sense.
Ms O’CONNOR – All the people of Tasmania will be paying for the $375 million that the state will borrow. They will be paying for the more than $400 million that MPDC will borrow. They will be paying for the borrowings that are required to meet interest repayments on those borrowings. I mean, ultimately, minister, the people of Tasmania will pay through the nose for this stadium, and as you know in the contract, any cost blowout, any delay, again will be covered by the people of Tasmania.
I mean, how can you – looking ahead at the net debt that we’ve got, and knowing that the services we have are already structurally underfunded in your budget – how can you sit there and say this is a responsible approach?
Mr ABETZ – Well, I don’t agree with you in relation to ‘structurally underfunded’ areas, but –
Ms O’CONNOR – We explored that this morning; it’s true.
Mr ABETZ – But let me remind you that if we don’t go ahead with this, we forego $600 million worth of money that was going to come our way, courtesy of the AFL and the federal government.
Ms O’CONNOR – False paradigm.
Mr ABETZ – Can I also say to you that the AFL will be a completely new business in its own right and estimated to have a payroll of about $44 million. And if my maths were right, that will just provide payroll tax of $2.6 mil per annum, as one would imagine, into perpetuity, because we anticipate the team will live and continue for a long, long time.
Ms O’CONNOR – Two-point-six million is a pittance relative to the debt.
Mr ABETZ – I can finish – yes, I fully agree the 2.6, but it is one of the many positive contributions that should be put on the other side of the ledger, which, with respect to the member for Hobart, is continually avoided.
The gaining of conventions of a larger size, that allows us to genuinely engage in the convention market, not only interstate but also internationally, will provide income. The fact that I have no doubt at least one new hotel will be constructed, if not two, as a result of the stadium going ahead – the benefit of that flowing into the state.
This is all income – money – coming into the state from outside sources, so there will be substantial benefits. But, it’s like if I want to own a house – yes, I do have to take out a mortgage for that and service it, but there are benefits in owning your own house and in the circumstances the stadium will be a great benefit to the people of Tasmania, culturally, socially and sporting.
Ms O’CONNOR – You say this, but I’ll just remind you that the Tasmanian Planning Commission final report was very clear that any benefits of the stadium is significantly outweighed by the dis-benefits. Your government has made an art of trashing the reputation of the TPC and it’s a good thing they’re coming in to talk to the Legislative Council next week or the week after.
Mr ABETZ – Can I respond to those assertions? We have not trashed the reputation of the TPC. There were two elements to their report: those which are objective, those which are subjective. On the objective side, I remember getting all sorts of questions. What about the transport? What about safety concerns? What about this concern? All the practical side, the TPC has acknowledged can be delivered and is doable. Then there were three areas of subjective assessment where we, with respect, disagreed with the conclusion of the TPC. At the end of the day, we, as a government, are entitled to do that.
More importantly, this will be decided by the Parliament of Tasmania, and one House has already overwhelmingly supported it. It remains to be seen what the upper House does.
Ms O’CONNOR – Can I ask, it came up this morning, and you suggested that this might be the appropriate forum. When the Final Integrated Report came out, very quickly afterwards the Premier revised upwards the projected cost of the stadium from $945 million to $1.13 billion. Have there been further costings undertaken given that the costs of construction are rising by the day? Or is that still the current estimate, the fixed cost?
Ms BEACH – That’s the current estimate and it reflects the cost plan at 70 per cent design, so that is our current estimate, and it has been reviewed line by line to reflect their current drawings.
Ms O’CONNOR – The stadium is still only 70 per cent designed?
Ms BEACH – It’s 70 per cent detailed designed. What that means is we go through the design process ‑ starts at concept, then it goes to schematic and then into detailed design. Each of those is going through a further level of design and detail. For example, that concept design ‑ we’re working with users, we still need some flexibility around how the internal spaces work. As we get through detailed design, the stage where we are now, the next step is actually issued for construction, so we have a highly detailed design. It’s over 1500 pages of plans and reports and we’re at sort of 1 to 20 scale, so it’s hugely detailed. We can’t go any further without selecting specific products and that’s why we need to wait for the construction contract to be in place.
Ms O’CONNOR – Final question on this line of questioning. It is a near certainty that the cost of building a stadium, should it be approved, will be higher than $1.13 billion.
Ms BEACH – Through you, minister, the price includes contingencies, so design, client and construction contingencies of around $180 million –
Ms O’CONNOR – Didn’t the previous estimates also include them?
Ms BEACH – We’ve included additional contingencies there for clients, and we’ve also included further escalation costs to allow for the delay. It’s provided for flexibility in that design process and finalisation.
Ms O’CONNOR – That’s right, but initially the Premier said we will go to public‑private partnerships to help with shortfalls in funding. That fell through because the private sector is not interested.
Mr ABETZ – Well, there are other reasons in relation to timelines and as to when we got started, but you have heard from the official and Ms Beach that there is genuine private interest in this housing development, and Mr Healey –
Mr HEALEY – Through you, minister, I don’t think it’s correct to say that the private sector wasn’t involved in the stadium because there was no-one interested. The initial work said that it would be advantageous for the state to follow this line in terms of delivery of the stadium rather than seeking a private partner. I’m not sure that’s quite right to say that no-one was interested.
Ms O’CONNOR – So it never went out – there was never, as the Premier had flagged at the time, an approach to the private market?
Mr HEALEY – There absolutely was, there was market sounding, and that market sounding led to the view that the best way to deliver this stadium is through the mechanism of delivering this stadium.
Ms O’CONNOR – Yes, loading up the future generations with debt, but it is a reasonable observation that the government said shortfalls would be covered through public‑private partnerships with private investment. The private sector didn’t come to the party.
Mr HEALEY – Through you, minister, if I can, just on that front: what the market sounding said was that if you seek to commercialise land too early in the process, then the benefits that will flow to the state will be a lot less. The benefits to the state will be maximised by demonstrating the demand, as the minister said, for assets such as hotels and hospitalities once you’ve shored up the demand through the construction of the stadium. That was part of the reason that led the government to make the decision not to proceed with a precinct‑wide partner, because many of the elements of that opportunity were yet to be fully formed.
CHAIR – I will come back to Bec. She hadn’t quite finished. Have you got something on the specific point still?
Ms THOMAS – Keep going if you’re still on that point, that’s fine.
Ms O’CONNOR – That is fine. I will come back to it if Bec’s got other things. I have been waiting quite patiently though.
Ms THOMAS – That’s okay, you go. I’m on a different topic so you keep going.
Ms O’CONNOR – Okay. It is reasonable to suggest that the private sector wasn’t particularly interested in investing in a loss‑making venture, which the stadium clearly would be?
Mr ABETZ – A lot of issues in that question, the premise of which I reject, and it was sort of the timing, and the advice was that the way to leverage the maximum benefit for the people of Tasmania was to wait, as Mr Healey indicated, so that was the commercial decision that was undertaken.
Ms O’CONNOR – So MPDC this morning – in Treasury estimates this morning, the Treasurer indicated that the car park was not necessary, the car park which is unfunded in the Budget, and there’s probably no need to do anything with the pedestrian access on Davey and Collins; am I paraphrasing you incorrectly, Treasurer?
Mr ABETZ – I think that’s correct, yes.
Ms O’CONNOR – So MPDC has now –
Mr ABETZ – And just for the record, Ms Beach, if you could say ‘yes’ rather than nod your head for the benefit of Hansard.
Ms BEACH – Yes.
CHAIR – Did she say yes?
Ms BEACH – Yes.
Mr ABETZ – Yes. I’m not verballing her.
Ms O’CONNOR – The project now won’t have the underground carpark and it won’t have the pedestrian improvements on Davey Street and Collins Street; is that correct?
Ms BEACH – Through you, minister: no pedestrian improvements are required. We’ve done dynamic modelling that models people from their seat to their destination within the city, and we haven’t identified a need to do any changes to Macquarie Street and Davey Street.
Ms O’CONNOR – So they would pour out of the stadium through the waterfront and down Davey, which is a four‑lane road, and the modelling that MPDC has done says that that is an appropriate pedestrian movement response after a game?
Ms BEACH – Through you, minister: there’s a seven‑metre‑wide space there, there’s a bus layover lane in front of Zero Davey that cuts into the footpath a small amount, a temporary overlay to put in a protective barrier there to allow that full seven metres to be available allows for that full movement. There would be some minor operational implementation required. For example, the section of Evans Street between Macquarie and Davey, if that’s temporarily closed for 30 to 45 minutes after an event, which is because most people leave all at one time, that allows for, effectively, a scramble crossing, and you get a large movement of people, but no capital investment is required.
Mr ABETZ – I think with information like that you can see how the TPC did come to the conclusion that these safety and transport issues were all manageable and doable. From the practical side, those things have been covered and looked at very carefully.
Ms O’CONNOR – There’s been some work done over the last 10 years or so, maybe 15 years, on site decontamination. We know that it’s historically a highly contaminated site. The works that were undertaken were for the original master plan for Macquarie Point. The TPC observed that the data that they were provided with about site decontamination wasn’t necessarily up to date or relevant to the stadium. Perhaps Ms Beach could talk us through what’s been taken off the site, what was found, and how safe it is from an environmental toxins point of view.
Ms BEACH – Through you, minister: the process started in 2015 when the Macquarie Point Development Corporation Act was amended, and that allowed for the first and only regulatory process for the certification of remediation in the state. It requires us to work with an environmental auditor who’s nominated from a list identified as accredited by the EPA. The process of remediation, as the member noted, is informed by the contamination that’s identified and the future purpose. A number of the reviews already undertaken by the environmental auditor were based on a previous master plan. We are going through a process with the environmental auditor to review those.
We looked at the current precinct plan to make sure if there are any further works required and to confirm the works that have been completed are consistent, noting that the uses are generally the same, they’ve just been reallocated across the site. We’re not anticipating any issues. We have completed all the physical remediation works, but we are doing some monitoring. Our remaining works are to work with the environmental auditor as they go through this review process and to do some monitoring of both soil and groundwater to make sure the outcomes that we’ve identified have been maintained.
The process of remediation is identifying and doing investigative works of what’s required section by section, looking at those historic uses and then going through a certification process after we’ve done that work and monitoring between. In regard to your question about what’s being treated and removed, there have been 85,000 tonnes of contaminated soil excavated that’s either been removed or beneficially reused, so after treatment, so there’s that –
Ms O’CONNOR – Where would you reuse something like that, that’s got sort of hydrocarbons and leads and other toxins in them?
Ms BEACH – There are a variety of levels in the assessment, from level 1 to level 3. We can do soil farming on site to treat some of the contaminants. Of that soil, 72,000 tonnes have been removed or beneficially reused. There’s been 2.3 million litres of contaminated groundwater removed, over 2000 soil samples and over 175 groundwater wells. We have 700 bore sites onsite from all of our testing. There’s been 1400 soil samples to confirm the anticipated soil decontamination has been successful, and we’ve removed nearly a kilometre of ageing oil and diesel pipelines.
In terms of the specific contaminants that you asked for: we have removed asbestos-containing materials, spent fuel, coal tar, E. coli, arsenic, copper, lead, zinc, and other heavy metals, which have all been removed. There has been, in our most recent works in the south-west corner of the site, where the old gasworks used to be, we have also done some in situ solidification. That’s similar to the works that happened at Bridgewater Bridge, pumping in a concrete slurry in through an excavator, and it mixes up the soil below ground and it stops any contamination of the groundwater, which is really important to maintain those environmental outcomes.
Ms O’CONNOR – To what depth are the 2000 soil samples being taken?
Ms BEACH – There are a variety across the site. We have done drilling down to check the distance, the composition and quality of bedrock, and have sampled down to that level.
Ms O’CONNOR – What level – sorry, what distance? To the bedrock, so –
Ms BEACH – It varies across the site. In the western side of the site, the dolerite is quite close. It is a reclaimed site; around two-thirds of the site is reclaimed, and around a third is original land and was original shoreline. It was progressive depth and the farthest would be around 19 metres.
CHAIR – Nineteen metres to bedrock at the deepest point, is that what you’re saying?
Ms BEACH – Yes.
Ms O’CONNOR – And of the tonnage of contaminants that was removed, was it all sent to Copping? The material that wasn’t, as you say, beneficially reused? That contaminated fill went to Copping?
Ms BEACH – Some, but not all. Level three contaminants go to Copping. The level two can go into other locations. Some has gone into McRobies Gully, for example.
Ms O’CONNOR – McRobies – to the tip? Hobart Tip? Okay, alright. And can you heading up the MPDC absolutely ascertain the site is decontaminated to the extent it doesn’t pose any risk to human health?
Ms BEACH – The remediation is all around what’s in the contamination type and the future use. That’s why we use an environmental auditor to verify that. For example, we need to cap the soil, so once it’s fully developed, we don’t have to worry about runoff, where it’s something we do need to manage while it’s a construction site to minimise that harm and that risk. Once it’s capped, it provides a protection. It’s important that we check not just soil and groundwater quality, but also gas vapours, because that’s a key risk we need to mitigate.
I am confident in the process that’s gone through. There’s a lot of corporate knowledge in the team in going through this process, and we’ve worked with an environmental auditor throughout. They review our work before we do it, after we do it, the outcomes, and post monitoring, which is a rigorous process.
Ms O’CONNOR – And final question on this line of questioning: The MPDC is working with the environmental auditor, but is there oversight from the EPA?
Ms BEACH – The environmental auditor is selected from a list of people who are accredited by the EPA. That’s a very short list, being Tasmania, but it is a certified list from the EPA. They review the sample results that come out when soil is removed, it’s then stored and then sampled to check that it is actually the contaminant levels we expected, and then that’s informed before we determine where it goes off-site.
Ms O’CONNOR – Do you think all the contaminated soils that can be removed from the site have been? Notwithstanding what you said earlier, about capping the site.
Ms BEACH – The caveat to that is it depends what you build. If excavations are required, then some of that historical fill may need to be removed as well. That is something that we would be looking at, for example, in the stadium development, is managing historical fill.
Ms O’CONNOR – The stadium itself will require some excavations?
Ms BEACH – Yes.
Ms O’CONNOR – So, is there more contaminated fill to remove from under the footprint of the stadium?
Ms BEACH – Yes. There will be fill that we need to manage.
Ms O’CONNOR – How much, do you think? What’s a rough estimate on how much there might be?
Ms BEACH – I’ll need to check the amount. We are about to release a tender to work-start that process of the bulk excavation.
Ms O’CONNOR – The bulk excavation. And you don’t have any idea at this stage how much – what tonnage we’re looking at?
Ms BEACH – I would want to check before giving you a number, but I can certainly get it for you.
Ms O’CONNOR – I put that on notice. Thank you.
Ms O’CONNOR – Has there been any discussion with Marvel Stadium which also has a roof which is retractable. As I understand it, because they tried to make their grass grow under grow lights, and in the first few months of operation, the power bill to grow the grass at Marvel Stadium was $300,000. Has that been factored into projections on the operational costs of the stadium?
Ms BEACH – We have allowed space for up to 19 grow lights, but one of the things that’s important around the impact on light is the size of the structure. By keeping the stadium only at 22.5 metres high, whereas Marvel is significantly higher, it creates a larger shadow. There’s a large area of that field that needs to be constantly managed through grow lights. We would expect to have a significant reduction. I would need to check if it’s been part of our modelling, but there have been some operational costs including this.
Ms O’CONNOR – Marvel Stadium has to constantly renew its turf and lay new turf every time it’s used for an event or something like that. Have those costs also been factored into the stadium?
Ms BEACH – Through you, minister: yes, and it also depends on the frequency of events and the types of events. Working through with Stadiums Tasmania, they will be supporting turf management and replenishment. There will be a curator supporting all that work and turf farming to support ‑
Ms O’CONNOR – Not costed yet though, is it?
Mr ABETZ – That’s part of the operational –
Mr AVERY – Through you, Minister: we have it in our operating costs. We’ve allocated as part of our operating model turf maintenance, including turf replacement, at $1.6 million per annum, and that includes 500,000 per annum for unknown aspects related to turf replacement. We actually have –
Mr ABETZ – A substantial contingency.
Mr AVERY – We do, and we also have a curation team already operating at our other venues. In fact, our general manager of northern venues, who operates both venues in the north for us, worked at Marvel for 15 years in a whole range of capacities. We have been speaking to the venue regularly and we have quite a bit of information there.
CHAIR – What’s your provision for energy?
Mr AVERY – We have maintenance and utilities costs, and that’s standard general maintenance of 2.7 million per annum.
CHAIR – How much of that is energy?
Mr AVERY – I’d have to take that on notice to get that smaller breakdown.
CHAIR – The percentage of the –
Mr AVERY – In relation to power.
CHAIR – Yes, the power costs. What section was it under, did you say?
Mr AVERY – That’s under maintenance and utilities costs.
CHAIR – Utilities would be in it, power, plus water and sewerage.
Mr AVERY – Power, gas, water, waste.
CHAIR – Can you provide a breakdown of the energy component of that, or maybe a full breakdown of what you’ve allowed for that in the operating costs of utilities?
Mr AVERY – Yes, happy to do that, through you, minister.
CHAIR – We will write to the minister on this.
Mr ABETZ – To remind us. Thank you.
CHAIR – Okay, we are out of time, so –
Ms BEACH – Through you, minister: there were two noted items that I said I’d follow up that I can provide an update on, Chair. In terms of energy requirements projected for the stadium, the minimum load is 7.5 megawatts and a maximum of 9.74. In terms of the historical fuel projected site excavation volumes is 130,000 metres cubed.
Ms O’CONNOR – 130,000 metres of potentially contaminated fill under the footprint of the stadium?
Ms BEACH – Historic fill, yes.
Ms O’CONNOR – Thank you.
