Mr BAYLEY - Going back to the budget for the Northern Midlands Scheme, I'm a little bit confused. On 11 September 2020, then minister Guy Barnett said 'the preferred design option for the $65.8 million Northern Midlands Irrigation Scheme is now being released'. A year later it was doubled at $147 million. The cost was reported in The Examiner in June this year as being $217 million. Your website currently says it's $217.9 million, but the annual report just released says it's $342 million. Is that wrong?
Mr KNEEBONE - I'm not sure about the $342 million. Here's the course of events, if I may.
Mr BAYLEY - I'm really interested in the reasons for the cost blowouts as well.
Mr KNEEBONE - It's a torturous course of events.
We have a preferred option, which was for a scale of about a 13 000 megalitre scheme. We took that to water sales during COVID and got overrun with applications. This is completely different to the other schemes we've got problems with. Here we had the opposite problem. We were oversubscribed. Now we were faced with a dilemma. We've put up a project and offered water entitlements at a price; can we now build it for the price at the scale that we've got that we have applications for? That was what originally moved it from, sorry - the numbers you quoted were?
Mr BAYLEY - From minister Barnett, $65.8 million to $147 million, to $217 million.
Mr KNEEBONE - The $147 million was the move to increase the scale to go to 25 500 megalitres. We developed our business case based on that.
At the time, we were moving our whole project model from being a design and construct approach to being a 'we do our own design and we have our own constructor under contract'. Apologies if I'm taking too much time.
In that, we had had the experience with the DON project of the project estimate that we had originally come up with being woefully inadequate. We had already submitted a business case, and we took an opportunity to revise the project budget to come up with something more robust. What we weren't doing well is that we weren't taking account of the cost implications of the time to construct and also the risks of delay. We now have come up with what we call a P50 and a P90 price, and the P90 is the $217 million. It had a P50 of, I think, $170 million. When we have gone to tender we have come in between those two.
