Praeco - Object FAQ

What are the costs of the project?

The project capital cost is approx $300 million, which includes the buildings, infrastructure, land and the Command, Control, Communications, Computing and Intelligence systems. Under the PPP arrangements, Praeco will finance, build, service and maintain the facility, before transferring ownership back to the Commonwealth in 2036.

What is the significance of financial closure?

Achieving financial close is an important milestone, paving the way for detailed design planning to begin, with construction scheduled to commence onsite by October 2006.

How many people will be employed during construction?

Approximately 400 during peak construction.

Who is providing the contracted services?

Praeco has sub-contracted Spotless Services Australia to provide facility management services. This includes access control, cleaning, administrative and clerical support, waste removal, catering, grounds maintenance and general maintenance services.

What will be Praeco's ongoing charge for providing contracted services?

The first annual service payment is a part-year payment in 2008-09 that commences from when the facility is commissioned in late 2008. The first full-year payment in 2009-10, including both capital and operating components, will be $39.99 million excluding GST. Annual payments will continue for the 28 year operations period. With the exception of insurance, the cost of these services will be benchmarked every five years to ensure continuing value for money. Insurance costs will be benchmarked every three years. This is a standard approach for Public Private Partnership transactions.

What responsibilities will Defence have during that time?

Defence will retain responsibility for the procurement, installation and maintenance of the command, control, communications, computing and intelligence (C4I) systems for the facility.

Will Defence outsource C4I work?

Yes. Five companies have been short-listed to respond to the Request for Tender for the C4I Prime System Integrator contract for the project. Signing is expected in November 2006. The Prime System Integrator will be contracted to procure and install the command, control, communications, computing and intelligence systems into the new facility.

When are Defence staff expected to begin occupying the facility?

Towards the end of 2008.

What is being done to reduce the risk to Defence staff and other road users on the Kings Highway?

The project includes construction of an intersection with the Kings Highway which will be designed to Australian Standards and the Austroads Guidelines for the anticipated traffic conditions, and will be lit for night and poor visibility. Responsibility for all other improvements and maintenance to the Kings Highway rests with NSW and ACT governments.

What is the advantage to the Commonwealth from this type of deal?

There has been controversy recently surrounding PPPs – Sydney's Cross City Tunnel for example. Private financing offers the cost-effective transfer of risk to the private sector; improvements to financial and risk management through the life of the facility and reduced financial exposure because lease payments will not be required until the facility is successfully handed over to Defence. Private financing also provides for lower operating costs through the life of the project than would be obtained under normal procurement methodology.