Review Slams WA Arena planning

Western Australia Auditor General Colin Murphy has delivered a scathing review of the Perth Arena development.
The WA Auditor General's report into the 14,000-seat indoor stadium, found that the Department of Housing and Works (the Department was responsible for scoping, planning, tendering and contracting for the Arena) under the previous Labor government had much to answer for.
Murphy today said the project was not properly scoped or planned, and that key parts of the normal processes were either skipped or rushed. He added that there was little consideration of the potential risks to the State or any alternative options to the final tender offer.
Auditor Colin Murphy stated "the initial estimates of the cost and opening date for the Arena were unrealistic and made before the project was well understood or defined.
"The effect of these failings has resulted in the Arena project budget increasing to $483 million, three times more than originally budgeted and scheduled to open in November 2011, almost three years later than planned.
"There also remains a risk of further delays and cost increases."
Murphy said the final contract negotiated between the Department of Housing and Works and the successful tenderer, BGC Construction, differed from original requirements, with the Western Australia Government taking responsibility for cost increases and delays resulting from design changes.
"Major changes to the Arena design were made during contract negotiations without a good understanding of what this would cost or the impact on the project schedule. These have resulted in cost increases and delays" he said.
"The contract price was at risk from the start."
In the final contract, provisions were made for design changes that could not be costed including the car park which had a provisional cost of $20 million but was now $54 million.
The final Arena budget price also assumed that $34 million would be saved through "design engineering" but only $2 million of savings had so far been achieved.
The changes were not reported in writing to the Minister and Cabinet.
"DHW did not implement governance and project management arrangements required to control a major project like the Arena," Murphy continued.
"A lack of transparency and oversight on the Arena project meant that warning signs of the project going wrong were not heeded and opportunities to put the project back on track were missed.
"The lack of documented evidence means the agency cannot explain how and why key decisions were made, or who made them. That is wholly unsatisfactory.
"Parliament and the community need to know that the state's resources are well managed and that they are getting the best value for their dollar. I can't provide that assurance on this project."
Current WA Treasurer Troy Buswell said the project was "a completely scandalous misuse of taxpayer money in Western Australia."
Treasurer Buswell added it is now time for the Government to learn from the mistakes of the Perth Arena in the way it plans future projects.