Press conference

Interview

DCI027/2017

15 March 2017

Subjects: Mackay Ring Road funding

Reporter: Finally, this massive project for Mackay the funding has been approved. How much is it?

Darren Chester: Well it is great to be here with Michelle Landry and George Christensen. The $400 million Federal Government commitment to the Mackay Ring Road has been officially been signed off and now it is a question of getting on with the job. We need to work with the State Government on the final stages of the planning work that is required, the tenders required for the work, but we should see work start here in the middle of this year on a three year project.

Reporter: Is that on time with the original expectations or has there been some delay in getting this final tick off for the funding?

Darren Chester: No, there has been no delays in the final tick off. We have seen $400 million from the Federal Government committed to this project. There has been $50 million in savings identified through this process, which will allow for more projects to be undertaken on the Bruce Highway. Our commitment to the Bruce Highway over 10 years is an extraordinary commitment, improving safety, reducing congestion, improving productivity. It is a great project, it is a nation-building project, and that $50 million savings will be put to good use as well.

Reporter: The issues with the route or the proposed route and the impact on cane farms and the Mackay sugar farming area, have they been resolved? And are you happy with how they have been resolved?

Darren Chester: Well that is a question for the State Government to answer. The State Government obviously has primary responsibility for delivering the road projects. We provide 80 per cent of the funding for a project like the Mackay Ring Road, which is a great investment in the future of the Mackay region. It will improve safety, it will reduce congestion, and improve liveability for the broader community, and obviously, when this occurs there is direct impacts on local landholders. It is up to Queensland to deal specifically with the local landholders.

Reporter: But having said that, you are contributing 80 per cent. Are you happy with how that process has been handled?

Darren Chester: That's right, we are contributing 80 per cent, but the Commonwealth Government is not in a position to demand outcomes from the Queensland Government in terms of the route and that type of thing; we don't have that direct responsibility, we don't own the asset, we don't own the land involved.

Reporter: I have spoken to some cane farmers who have had their land taken off them for this project and they said they have been waiting for the funding since October. Can you put pressure on the State Government to hurry that process up?

Darren Chester: Well that is the first I have heard of those concerns and I'll certainly follow it up with the State Minister. Obviously when there is a resumption of land for a project like this we want to make sure the local landholders are treated with respect and receive their money as soon as possible, so I'll certainly raise those issues with the State Minister.

Reporter: Do you think that's fair to be waiting that long, since October?

Darren Chester: Well it is the first I have heard of it and I'll certainly raise those issues with the State Minister. I'm not sure where the legal negotiations have got to on that particular process. But certainly when there's landholder impacted by projects like this they need to be treated with respect and they need to be given the opportunity to be properly compensated if their livelihood's going to be impacted by a project like this. Inevitably when you are building major project—whether it is the Mackay Ring Road or other Bruce Highway upgrades—there are impacts on local landholders, and we want to make sure that those impacts are minimised as much as possible so the long-term benefits of those projects can be realised by the broader community.

Reporter: Are there any contingencies on the funding to the State? Do they need to meet certain goals or KPIs for the Federal Government to uphold its end of the funding agreement?

Darren Chester: Well the normal processes involved in these projects will be carried out on the Mackay Ring Road. We want to see, as much as possible, the short-term benefits in terms of local employment flowing onto the long-term benefits in terms of improved safety, reduced congestion, and better productivity in the region. So, I've heard the concerns raised by George, as the local Member of Parliament, in relation to local jobs. We want to see local benefits for these sort of projects. So that's a conversation I need to have with the State Minister in the future as well, making sure that local contractors, local workers have the opportunity as much as possible to benefit from these great infrastructure projects.

Reporter: Are you able to say to the state, when you put out the tender there must be a local component in terms of contractors and workers?

Darren Chester: The difficulty for the Federal Government in all these projects is that we are not actually delivering the projects. It is up to the States themselves to deliver the projects, but we are a major funder in this case and I can certainly put pressure on the State Minister and make it very clear to him that I want to see local benefits accrue from these sort of projects. We have got a situation in regional Australia where these unemployment issues are growing, and the Mackay region is no different in that regard. This is a major project where the benefits should flow as much as possible to the local community, both the short-term benefits in terms of employment and the long-term benefits in terms of improved safety, reducing congestion, and improving productivity.

Reporter: George, you got a response here from Mark Bailey—I believe you wrote him a letter almost four weeks ago now. Are you satisfied with the response?

George Christensen: Well no, I'm not quite satisfied with the response that I've got from Minister Bailey. While he does say that there are processes in place to try and assist local businesses, what we want from the State Government is a firm commitment that the lion's share of activity— whether it be direct employment or whether it be local businesses that have to be contracted—are coming from local businesses and local workers. We don't want to see, for instance, what sadly happened on another project in this region where the bulk of activity came out of Brisbane, Toowoomba and other centres. We want to see locals get the first bite, and a very big bite, at this cherry.

Reporter: What would you like this split to be in terms of the proportion of local workers, local businesses, in comparison to maybe other bigger businesses from around the state?

George Christensen: Well the majority, and a sizeable majority at that. Where a local can do the job and the differential in terms of cost is neither here nor there, the locals should get the job. In terms of employment, I would be staggered apart from the upper managerial level if not 100 per cent of the employment was coming out of the Mackay region.

Reporter: Have you seen the tender documents? Is there a clause in there that has that local component?

George Christensen: Well the State Government have a local criteria within the whole tender process. So yes, they do have some weight on that, but it is not binding, and that is what I want the State Minister to come out and say. I mean, the State Government is the one that is responsible for delivery of the Mackay Ring Road, for choosing the successful tenderer; they should come out and say that this is going to be wholly local employment and the vast bulk of activity, in terms of contracting, is going to come from local businesses.

Reporter: Would you push to, I guess, put a halt on that money from you guys if there wasn't enough local work?

George Christensen: Yeah, look I understand there actually are constitutional issues in terms of what we can do or can't do, because road construction actually isn't one of the powers of the Commonwealth in the Constitution. We rely heavily on the State Government now. If they turned around and said, well, we are not changing our processes, where does that leave us? Does that leave us with no ring road constructed, no potential future Walkerston Bypass? I mean, these projects need to happen in their own right. The secondary benefit, not to understate it, is the economic activity that it will bring to the region. So the 600 jobs that this will create, we want to see local; the vast bulk of activity from contracting, we want to see local. I'm going to continue discussions with Minister Chester that he can bring up with the State Minister Mark Bailey that we can see that realised. I mean, obviously the state and federal agreements regarding road constructions are already in place. There's overarching agreements which extend to all different sort of state and federal road infrastructure construction agreements, and in this one the funding has been signed off on. So I don't know that we can force it, but we can certainly strongarm them.

Reporter: Have you been give an explanation as to why the local contractors were out of the contest, back in, and then out again?

George Christensen: Look, I'm told that the local contractor who was removed from the short list can actually find out why they were removed from the short list. But it does seem strange that they were removed and put back in and then removed once again. There hasn't been an explanation behind that and there has been no explanation given to me as to why they weren't able to tender for the project. I would have thought that, you know, they shortlisted it to five tenders. Having seven, does that really matter much, having seven rather than five? I mean, having seven in place actually means more competition and maybe you might have got a better price. But again, it is all up to the State Government. Just because we have a big company from down south that might be delivering it, it doesn't mean that locals can't be involved. Normally these big companies will sub-contract a lot of their works, and that's what we then want to see is that that sub-contracting go to locals. So it's not all over just because a JV that had a local business in it didn't get up. That local business in fact is a big construction, road construction business in this region and hopefully will be involved at the end of the day when the tender is sorted.

Michelle Landry: Look, I'm pleased that the Federal Government has signed off on this $400 million project. It is something that the residents of Mackay and outlying areas have been waiting for for a long time. It certainly is going to relieve the traffic congestion around the Mackay area. We have promised a lot of road projects around here and also things like out at Walkerston, the bypass out there. We have put considerable funds into the Peak Downs Highway with the range there as well. So really pleased to see this going ahead, and I think this is going to be wonderful for the Mackay area.

Reporter: The State Government has said that they also have a focus on local jobs. Are you confident that they will come through and ensure that local contractors and local workers do have a fair crack at this?

Michelle Landry: Look, it is something that I am certainly pushing and I support George all the way with the comments he has made. It was very disappointing that up at the Peak Downs on the highway there that a lot of those jobs did go to people from out of town. Part of doing these roads besides from helping the residents that live in the area is about jobs. We have had massive job losses in these areas with the downturn in mining, and we want to see local people employed with these projects.

Reporter: Obviously, this project opens up or makes way for the Walkerston Bypass. I mean you guys committed funding to that in the lead up to the election. Where are we at in terms of that project? We know there was a bit of feuding going on between Federal Government and State Government.

Michelle Landry: Look, I believe the Minister has been in negotiations with Queensland. So probably stay tuned for what's going to be happening there. But it is something that's extremely important. We were out at Walkerston yesterday and that is very, very dangerous, the highway going right through the middle of that town and we are very lucky that there hasn't been a serious accident, really, around there. So something that we are certainly pushing for. We do have a Queensland election coming up this year so I'm quite sure that there will be announcements made, and as soon as we have our candidates for the State in this area I'll be discussing with them about, you know, if an LNP government wins, that we want this project to go ahead.

Reporter: People are talking from this local road action group—because they wanted this Walkerston Bypass kind of to happen sooner and not be confined by the Ring Road project—a thought of change of path, have you heard about that?

Michelle Landry: I know that there has been discussions. But that does come down to Main Roads, so their engineers have to look at that and I know that they looked at the different options available. So the first thing is about safety. You know we have to make sure that it is safe for our residents, particularly when you've got schools on either side of that road. So I believe there is a couple of options available there and I think the RAAG group, the option that they put forward is actually a cheaper version. I believe that they are looking into all the options that are on the table at the moment.