DEPARTMENT OF CONSTRUCTION AND INFRASTRUCTURE. Annual Report 2009/2010

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1 DEPARTMENT OF CONSTRUCTION AND INFRASTRUCTURE Annual Report 2009/2010

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3 Contents Introduction and Overview 1 Purpose of the Report...1 Letter to the Minister...2 Chief Executive s Message...3 Departmental Overview...4 The Territory Context...6 Organisational Chart...7 Corporate Governance 8 Three Year Corporate Plan...8 Executive Team...9 Management Board...10 Senior Leadership Forum Business Planning...12 Boards and Committees...13 Audits and Reviews...13 Legislation and Statutory Boards and Authorities...14 Access to Information...15 Information and Business Systems...16 Legal Services...16 Procurement Services...17 Financial Services...18 Corporate Communications 19 Community Consultation and Feedback...19 Corporate Communications Services...20 Our People 22 Overview...22 Our Staff in Profile...23 Staff Diversity...23 Indigenous Employment and Training Unit...24 Workforce Development...24 Employment Programs...26 Staff and Project Recognition...29 Reporting Against Employment Instructions...30 Occupational Health and Safety...32 Performance Reporting 34 Regional Highlights...34 Construction Division...39 Housing...42 Infrastructure and Major Projects Division...43 Financial Statements 46 Department of Construction and Infrastructure...46 Construction Division...74

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5 Introduction and Overview Purpose of the Report This annual report provides a record of the activities and achievements of the Department of Construction and Infrastructure and its Government Business Division for The report aims to inform the Legislative Assembly, Territorians and other stakeholders of: the primary functions and responsibilities of the department significant activities undertaken during the year highlighting specific achievements against budgeted outputs The department s fiscal management and performance. 1

6 The Hon Gerry McCarthy MLA Minister for Construction Parliament House DARWIN NT 0800 Dear Minister I am pleased to present you with the annual report of the Department of Construction and Infrastructure for the year ended 30 June The report describes the performance and key achievements of each of the department s output groups, as required by section 28 of the Public Sector Employment and Management Act. I advise, to the best of my knowledge and belief, that: a) Proper records of all transactions affecting the department are kept and employees under my control observe the provisions of the Financial Management Act, its regulations and applicable Treasurer s Directions. b) Procedures within the department afford proper internal control and a current description of such procedures is recorded in the accounting and property manual, which has been prepared in accordance with the requirements of the Financial Management Act. c) No indication of fraud, malpractice, major breach of legislation or delegation, major error in, or omission from, the accounts and records exists. d) In accordance with section 15 of the Financial Management Act, I advise that as at 30 June 2010, the department had adequate internal audit capacity and the results of all internal audit matters have been reported to me. e) The financial statements included in the annual report have been prepared from proper accounts and records and in accordance with Treasurer s Directions. f) All Employment Instructions issued by the Commissioner for Public Employment have been satisfied. Yours sincerely ALAN WAGNER Chief Executive Officer 18 October

7 Chief Executive s Message This has been a year of major change, with the creation of the new Department of Construction and Infrastructure in December The new department recognises the value of work provided by the Construction Division, formerly within the Department of Planning and Infrastructure, and emphasises the continued and growing role in delivering infrastructure projects for the Northern Territory. Since the formation of the department, much work has taken place to establish a corporate identity and strategic directions. That work has culminated in the development of the Corporate Plan , which was drafted in May The plan will guide our work over the coming three years and ensure that we continue to work effectively to deliver on Northern Territory Government priorities. It will also underpin the divisional plans that are currently being developed. The new department has already achieved much of which we can be proud. The number and dollar value of the projects we have delivered is significant: almost 1000 contracts, to the value of over $600 million, were awarded in the largest capital works program ever. We have introduced new contract delivery models including Early Contractor Involvement (ECI), which was used during the Tiger Brennan Drive project. ECI allows and encourages contractors input through the design phase, which can create cost efficiencies. The department has also started using staged works contracts, which allows commencement of site early works prior to detailed design completion and approval thereby accelerating delivery. The department s work in took place within a context of significant change as the Australian and Northern Territory governments responded to global and local issues. Some of the major initiatives to which we are contributing are outlined in the Departmental Overview in the next section of this report. Professional development, industry relationships and industry training and employment have, by necessity and by design, been a major focus in This will continue in as we deliver on government priorities throughout the Northern Territory. I thank all staff for their hard work and dedication during ALAN WAGNER Chief Executive Officer 3

8 Departmental Overview The Department of Construction and Infrastructure was created in December 2009, comprising the Construction Division and Infrastructure planning elements of the former Department of Planning and Infrastructure. This significant change meant that much of the reporting period was a time of transition, consolidation and setting strategic directions. The appointment of a new Chief Executive Officer was pending at end of The National Context In response to the global financial crisis, the Australian Government introduced its Economic Stimulus Plan, which involves funding projects across the nation to boost local infrastructure and support jobs. The department has a key role in delivering these projects throughout the Northern Territory. More detail is provided below. Building the Education Revolution The Building the Education Revolution has three elements: st 1. Primary Schools for the 21 Century (P21) for all Australian primary schools to build facilities such as libraries, multipurpose halls or classrooms or to upgrade existing facilities. In the Territory, the total P21 package is $ million, including 134 schools. st 2. Science and Language Centres for 21 Century Secondary Schools for the construction of new science laboratories or language learning centres. In the Territory, $15.76 million is being spent to deliver these centres for 8 schools. 3. National School Pride program to fund minor capital works and maintenance projects in government and non-government schools in Australia. In the Territory, most of the Pride projects are being delivered by individual schools. The Construction Division is helping the Department of Education and Training deliver these projects on request. Overall there are 159 projects across 142 schools being delivered in the Northern Territory. The project planning process involved a good level of consultation with both urban and remote school communities, to ensure projects meet the needs of the school community. Design consultants have completed documentation on most projects, using design templates where possible to progress design. To date, 132 construction contracts have been let to the value of $146.9 million. Around $12 million has been committed to 113 consultancies covering design, certification, engineering, cost planning, project management, probity and contract surveillance. The Northern Territory has successfully used a different construction contract methodology to other jurisdictions. No managing contractors are involved. Existing Northern Territory Government procurement processes, based on ensuring value for money, have been used for awarding contracts. External building cost consultants (or quantity surveyors) provide an additional check to ensure the offer from the preferred tenderer is in line with market rates. 4

9 More than 500 local companies have received benefit from the DET Stimulus program, and 24 schools are now using their new buildings. At the request of the Australian Government, which asked that we defer some projects to , a total of seven projects with a budget of around $10 million will be held over to lengthen the stimulus effect. Most of these projects are now being designed and documented. Stimulus Housing Initiative The Social Housing Initiative covers 3 programs: 1. Repairs and Maintenance program In and , a total of $4.11 million was spent on repairs and maintenance of 292 separate dwellings in Darwin and regional areas of the Territory. The program was completed in May New Construction Stage 1 projects The design and construction of four four-bedroom houses, with one house in Darwin, two houses in Alice Springs and one house in Tenant Creek were completed in January 2010 for a cost of $1.94 million (covering construction, design, documentation and project management). A total of 18 duplex units were designed and constructed in Millner, Malak, Bakewell and Humpty Doo. The project cost was $5.67 million (covering construction, design, documentation and project management). 3. New Construction - Stage 2 projects A total of four projects were approved for non-government organisations in the Northern Territory and construction has commenced: Design and construction of eight new independent units of accommodation supporting the homeless and disadvantaged at Goyder Street, Alice Springs, for the Salvation Army (NT) Property Trust, for a contracted cost of $1.43 million. Design and construction of a new residence to accommodate 12 single bedrooms as independent living units supporting the homeless and disadvantaged at Henry Street, Stuart Park, for the Salvation Army (NT) Property Trust, for a contracted cost of $1.617 million. The design, documentation and construction of 10 x two bedroom duplexes totalling 20 units of accommodation for the homeless and disadvantaged at 107 Dick Ward Drive for the Saint Vincent de Paul (NT) Inc for a contracted cost of $5.83 million. The design, documentation and refurbishment of an existing three storey building in Alice Springs referred to as the Lodge owned by the Synod of the Diocese (NT) Inc for an estimated cost of $3.83 million. The refurbishment is designed to accommodate 35 people requiring renal dialysis treatment. The department is also involved in delivering five social housing developments sponsored by Department of Housing, Local Government and Regional Services (DHLG&RS). The projects commenced in May 2010 and are due for completion in December They are: a) Patterson Street, Alice Springs construction of transitional housing comprising eight units with manager s residence and communal support areas for a contracted cost of $2.1 million. 5

10 b) Crerar Road, Berrimah construction of transitional housing comprising 18 units with manager s residence and communal support areas for a contracted cost of $5.7 million. c) Percy Court, Alice Springs construction of transitional housing comprising 28 units with manager s residence and communal support areas for a contracted cost of $6.4 million. d) Willshire Street, The Gap, Alice Springs construction of four social housing units for a contracted cost of $1 million. e) Duplexes at Bellamack construction of four duplexes, totalling eight units on four separate allotments, for a contracted cost of $2.1 million. Planners were consulted extensively to ensure a smooth approval process in obtaining planning approvals for the projects in March and April The final Stimulus Housing package is the Wirrina Affordable Housing complex comprising 45 units at an estimated cost of $13.5 million. Territory construction company Sitzler was announced as the successful contractor in June The Territory Context Territory 2030 The Northern Territory Government s 20-year strategic plan, Territory 2030, sets priorities for the future in six core areas: Education; Health and Wellbeing; Society; The Environment; Economic Sustainability; and Knowledge, Creativity and Innovation. As the NT Government s major deliverer of public infrastructure, the department helps achieve the outcomes of Territory Over the past 12 months some of the key projects delivered or commenced included: Government Employee Housing Housing the Territory Palmerston Super Clinic Healthy Territory Rosebery Schools A Smart Territory Tiger Brennan Drive Stage 2 Growing the Territory Palmerston Boat Ramp Great Territory Lifestyle Alan Walker Radiation Oncology Centre Healthy Territory Remote Police Stations A Safe Territory Victoria Highway Upgrade Growing the Territory Tanami Road Upgrade Growing the Territory Various projects at Alice Springs Hospital Healthy Territory In the coming year, the department will continue to work on delivering public infrastructure projects and contributing to Territory 2030 targets, including involvement in the 20 Growth Towns project under the Working Future strategy. 6

11 Organisational Chart Chief Executive of DCI Construction Division Infrastructure and Major Projects Division Corporate Services Division General Manager Construction Division Deputy Chief Executive Officer Executive Director Corporate Services Buildings Alice Springs Region Infrastructure Services Financial Services Building Assets Tennant Creek Region Stimulus Human Resources and Organisational Development Roads and Civil Katherine Region Services Delivery Coordination Unit Procurement Services Major Projects and Design Nhulunbuy Region Information and Business Systems Corporate Communications Audit / Probity and Risk Management Legal Services Business Support 7

12 Corporate Governance Three Year Corporate Plan A Corporate Plan was developed by senior management across the department in May It articulates a clear vision, mission and key objectives. Vision To be recognised as the expert in government, achieving best practice infrastructure programming, procurement and construction, while maximising the use of Territory business and resources. Mission Government infrastructure delivered on time and within budget. Major objectives 1. Deliver quality government infrastructure 2. Total asset management 3. The building industry has the capacity to respond effectively to government s needs in the regions 4. A professional, agile and high performing organisation. The corporate governance arrangements outlined in this section were developed in December 2009 as an interim measure to support the new departmental structure. The arrangements will be fully implemented in now that a permanent Chief Executive has been appointed. 8

13 Executive Team The Executive Team leads the department by setting the strategic direction, and reviewing and approving initiatives that align with government direction and priorities. Its role is to ensure that the department drives government priorities including Territory 2030, 20 Growth Towns, Indigenous Employment; Election Commitments and Key Projects. The Executive Team meets fortnightly, with the capacity to consider urgent matters outof-session. Its members are: Chief Executive (Chair) Deputy Chief Executive Officer General Manager, Construction Division Executive Director, Corporate Services. Progress of key initiatives is reported to the Management Board and communicated through the monthly departmental newsletter. Executive Team Profiles Chief Executive Alan Wagner Alan Wagner joined the department in July He is a former Deputy Director General of Queensland s Department of Education and Training and has qualifications in electrical engineering, project management, business administration and strategic asset management. Alan also has an enviable record of public works provision in regional and remote areas of Queensland, including programs delivering employment opportunities for Indigenous people. Deputy Chief Executive Mike Chiodo Mike Chiodo joined the department in January 2008, having worked as senior executive with a number of organisations including Coles Myer, Thakral Property Holdings, the City of Sydney and Sydney Harbour Foreshore Authority. Before joining the department Mike developed a successful consulting business providing services including corporate strategic planning, business planning, major project management, asset management, property management and construction program delivery. General Manager, Construction Division Fiona Williams Fiona Williams has extensive experience in senior roles in the Northern Territory Public Sector. She has worked with the former departments of Planning and Infrastructure, and Business, Economic and Regional Development. Fiona has a Bachelor of Commerce and has worked interstate in roles focusing on project management, financial management, audit and quality management with organisations such as IP Australia, Department of Defence, the Health Insurance Commission and the Department of Industry, Tourism and Resources. Executive Director, Corporate Services Lisa Watson Lisa Watson has been with the Construction Division for 14 years, eight of which were in Alice Springs. This gives her a strong appreciation for the regional environment 9

14 and related issues. Lisa has extensive experience in project administration and business and commercial management. She holds a Bachelor of Business, majoring in management, and has also completed the Professional Management Program. Management Board The Management Board provides input and makes decisions that align with government priorities and direction with respect to departmental strategic and governance matters. Its role is to: ensure the department drives government priorities consider issues that will impact on the department ensure consistency with the department s strategic direction and governance framework review business proposals and policies make decisions and recommendations as required. The Management Board meets monthly, with the capacity to consider urgent matters out-of-session. Its members are: Chief Executive Deputy CEO General Manager, Construction Division Executive Director Corporate Services Director Civil Construction Director Building Assets Director Building Director Major Projects Senior Director lnfrastructure Services Director Financial Services Director Human Resources and Organisational Development Chief Information Officer Solicitor Regional representative. Records of the Management Board Meetings and progress of key initiatives are communicated as appropriate through the monthly departmental newsletter. 10

15 Senior Leadership Forum The Senior Leadership Forum fosters a collaborative leadership team to inspire and communicate change within the department and allow for networking in relation to current projects and future directions. Its role is to: provide updates on key priorities of government and ensure they are driven throughout the department provide regional networking opportunities provide regional and business unit updates present key initiatives and projects to other members. The Senior Leaders Forum is held quarterly in different locations throughout the Territory. Each forum comprises senior leaders from across the department who have been nominated by Executive and Senior Management. Records of the Senior Leaders Forum are reported to the Executive Team and communicated as appropriate through the monthly newsletter 11

16 Business Planning Process Plans Timeframes Executive Management develop 3 Year Corporate Plan 3 Year Corporate Plan May 2010 The three year Corporate Plan is presented to the Management Board and the Divisional Plans are developed Divisional Plans Infrastructure Services Division Corporate Services Division Construction Division August 2010 The Divisional Plans are presented to relevant staff, and Business Plans are developed Business Plans September 2010 Managers conduct PDPs with staff incorporating their respective Business Plan Personnel Development Plans (PDPs) October / November 2010 Progress on plans is reported quarterly and updates are made available on the Intranet. Completed actions are highlighted in the newsletter Quarterly updates due: September 2010 December 2010 March 2011 June 2011 The Corporate Plan will form the basis of divisional plans for Construction Division, Infrastructure Services Division and Corporate Services Division. The groups started developing their plans at the end of , to align with the overall plan and provide direction at a more operational level. After completion of divisional plans, unit business plans will be developed to guide staff in the coming 12 months and assist in the personal development plans process. Progress against plans will be reported quarterly. All plans will be made available on the intranet and promoted through the staff newsletter. 12

17 Boards and Committees In preliminary planning work took place to establish an Information Management Committee, Organisational Development Committee and Audit and Risk Committee. The committees will meet regularly throughout and further details will be included in the annual report. OH&S Committee The Workplace Occupational Health and Safety Committee was formed in December 2009 through the election process detailed in the Workplace Health and Safety Act. The OH&S Committee meets quarterly and comprises representatives from Highway House with regional representation to be implemented. External Boards and Committees Our people represent the department and the Northern Territory on a range of external boards and committees. They include: Joint Australasian Procurement and Construction Council and Australian Construction Industry Forum (Lisa Watson, Fiona Williams) Interdepartmental working group Building our Strengths, a Framework For Action for Women in the Territory (Fiona Williams and Lisa Watson) COAG Infrastructure Working Group (Cate Lawrence) COAG Critical Infrastructure Working Group (Cate Lawrence) Audits and Reviews Auditing is a key component of the department s governance framework, in line with legislation and Treasurer s Directions. Prior to December 2009, this agency was part of the former Department of Planning and Infrastructure s governance framework and as such, participated in their Risk Management and Audit Committee. The new department has embarked on a review of current internal audit and risk practices to ensure progress towards compliance with the Institute of Internal Auditors Australia s International Professional Practices Framework (IPPF). Specialised independent review consultants are assisting with the integration of enterprise wide risk management and risk based internal audit activities. In January 2010 the department employed a consultant to act as the Chief Audit Executive and the Probity Manager who currently works closely with the Audit and Risk Advisor. Internal Audit continued to work across all divisions in with the primary role of assuring executive management that: systems and operations comply with appropriate, accepted and documented governance policies, standards and procedures, and legislative and other regulatory requirements systems and business processes are conducted in an efficient and effective manner 13

18 management of business information is high quality controls over the technological environment are operational and effective physical security over assets and personnel is of an acceptable standard. Internal Audits The department conducted a range of internal audits including: Seven Control Self Assessments Eight Probity Audits Fifteen Compliance Audits One Efficiency/Effectiveness Review Two Post Construction Reviews External Audits Compliance Audit Office of the Australian Building and Construction Commissioner National Code of Practice for the Construction Industry (National Code) Tiger Brennan Drive Extension Stage 2. Completed National Code of Practice for the Construction Industry (National Code) Royal Darwin Hospital Radiation Oncology Unit. Completed National Code of Practice for the Construction Industry (National Code) Project Not Confirmed. Commencement Prior June Audit conducted by the Auditor-General A compliance audit was conducted by the authorised auditors of the Auditor-General s office in to ascertain whether the department has implemented and maintained proper internal procedures that assist in complying with the requirements set out in the Financial Management Act, Treasurers Directions, Procurement Act and other applicable legislation and regulations. The following audits were conducted and finalised by the Auditor-General s office during the year. Financial and Compliance Audits Northern Territory Office of the Auditor-General Financial Statements Audit: Construction Division Financial Statement Audit Financial Statements Audit: Construction Division Interim Financial Statements Audit Compliance Audit: End of Year Department (DPI) 2009 All responses were considered satisfactory by the auditors and will be reviewed in the Auditor-General audit. All findings will be monitored by the new Audit Committee. Legislation and Statutory Boards and Authorities The department is not responsible for administering any legislation, statutory boards or authorities. 14

19 Access to Information Information Act Under Section 11 of the Information Act 2010, the agency is required to annually prepare a report detailing: Its structure and functions; The kinds of government information it usually holds and whether that information may be accessed; Its procedures for providing access under Part 3 (Access and Correction Rights) to government information it holds; and Its procedures for correcting under Part 3 personal information it holds. The information on the department s website lists all the information held by the Department of Construction and Infrastructure and is available to assist persons interested in making application under the Act. Within the department, the Construction Division is a recognised Government Business Division and is subject to the Act for personal information only under Part 1 Section 5 (4). Accessing Information The agency has policies and procedures to enable people to access information and to request corrections to personal information. The policies and procedures are available at Applications must be in writing and identify the name of the applicant; provide sufficient details to identify the information sought or the information to be corrected; specify an address to which correspondence regarding the application may be sent and where applicable include the application fee of $ Information Officer Department of Construction and Infrastructure Information & Business Systems GPO Box 61 PALMERSTON NT 0831 Tel: (08) Fax: (08) Applications can be lodged via post, facsimile or Request for Access to Information in Information Act Requests Applications carried over from previous year 0 Applications to access personal information 1 Applications to access government information 3 Requests Withdrawn 0 15

20 Responses completed within 30 day period 0 Responses completed exceeding 30 day period 1 Applications on hand as at 30 June 0 Records and Archives Management Pursuant to Part 9 of the Act, the department has been actively pursuing improvements in records management practices, procedures and policies to improve compliance with the requirements of Records Management Standards of the NT Government and the Act. Types of Government Information Held by the Agency The Agency s Information Management strategy centres on ensuring compliance with Part 9 of the Act that take place within the Strategic Records Unit, in line with advice and standards provided by the Northern Territory Archives Service. The agency is developing processes and procedures to ensure all types of records are captured accurately. A comprehensive list of the agency s publications is available on the internet. Information and Business Systems Achievements 2009/2010 Transition of Information Technology, Information Management and Business Systems services to DCI. Priorities for 2010/2011 Establishment of an agency Information Management Committee to govern information management for the agency through developing policies, setting ICT strategic directions and reviewing and endorsing ICT initiatives to ensure alignment with the agency s ICT architecture and business objectives. Development of an agency s ICT Strategic Plan which will include the technology and systems to support the business requirements for the agency. Implementation of video conferencing services to all DCI sites to enhance client and customer relations, increase communications across the Territory and to reduce travel costs and carbon footprint. Legal Services The department has a lawyer who is employed by the Solicitor for the Northern Territory and based at Highway House. The lawyer manages the delivery of legal services including providing legal advice and representation, drafting and reviewing legal documentation, participating in negotiations, referring matters to the Department of Justice central office or to private law firms where specific expertise or services are required and managing private firms engaged to perform legal services. The lawyer is a member of, and reports to, the Management Board on legal matters affecting the department. 16

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