Parliamentary penthouse cost blowout

New office block building at 1 Bligh Street in Sydney. Source: Supplied

• See how the story unfolded at the bottom of this story

THE cost of lavish new parliamentary suites for the Prime Minister and other federal MPs in one of Sydney's most exclusive office towers has blown out 20 per cent to more than $25 million.

An investigation by News Limited can reveal a delay of at least six months in the fit-out of the 1 Bligh Street building - and there are concerns Julia Gillard may never get to use her upmarket suite before the election.

Senior MPs are demanding answers from the Finance Department amid concerns work on installing critical communications and security equipment has been "botched".

Finance initially tried to paper over the cost increase, claiming there were "no additional costs that are directly attributable to the revision" of the project timeframe.

But on Friday, the department in charge of clamping down on government waste admitted the original $21 million cost had soared to $25.43 million.

Taxpayers will fork out tens of millions of dollars a year for the Commonwealth to rent three levels of the Sydney office tower under a 25-year secretive leasing deal.

Finance is in charge of the move which will see the PM, Opposition leader and other Sydney-based MPs move from the current Phillip Street premises into one of the city's "greenest" buildings.

Foyer looking towards the sky in new office block building at 1 Bligh Street in Sydney.

The eco-friendly 27-storey building combines stunning views of Sydney Harbour with floor-to-ceiling glass and Australia's largest "green wall" on the ground level.

But the PM and her Cabinet - along with Tony Abbott and his senior colleagues - will be forced to cool their heels.

The scheduled transfer date - of December 2012 - has been pushed back to May, but sources familiar with the 1 Bligh Street project question whether even that timeframe is realistic.

The Commonwealth will lease three floors of the CBD building, dubbed Sydney's first six-star, green-rating skyscraper.

It will include suites for the Prime Minister, Opposition leader, a number of Federal Ministers and other MPs who need office location in Sydney.

The present Commonwealth offices - at 70 Phillip Street - are old and considered inadequate and a $9 million makeover was deemed too expensive.

New office block building at 1 Bligh Street in Sydney.

Instead, parliament's Public Works Committee signed off on the move to 1 Bligh Street last year, saying it was a "practical, long term solution that represents value for money for the Commonwealth".

But members of the committee are known to now have concerns about the 20 per cent increase in fit-out costs and will seek answers at a hearing next month in Canberra.

Finance, in response to questions from News Limited, initially played down concerns over the delay in the building fit-out.

It also denied that those in charge of the project had not allowed for cables and other equipment to be laid - causing the delay in the project.

Instead, Finance said that "certain key aspects of the fit-out design, including those related to sophisticated (information communications technology) and security provisions could not be finalised until after the Head Contractor (Schiavello) had commenced on site".

Finance also said the fit-out completion date "has been confirmed" for May 2013 and allowed for relocation "prior to the end of the financial year as originally planned".

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The following are News Limited's questions to the Department of Finance and Deregulation about a blowout in the cost of fitting out new parliamentary suites at 1 Bligh Street in Sydney, and their answers:

February 20, 11:06am:

• Q. Is it correct the Head Contractor and/or others involved in the fit-out of 1 Bligh Street did not allow for certain cables to be laid in the floor cavities?
• A: This is not correct. As previously advised, certain key aspects of the fitout design, including those relating to sophisticated ICT and security provisions, could not be finalised until after the Head Contractor had commenced on site. However, provision for all types of cabling had always been allowed for throughout the design and tendering processes. 

• Q: Is this the cause of the delay in the move by the Commonwealth into the new offices?
• A: See above 

• Q: What is the approx cost of the delay in the fit-out completion?
• A: See above

February 20, 5:34pm: 

• Q: When did the Head Contractor (Schiavello) commence work on site?
• A: The Head Contractor commenced on site on 18 October 2012. 

• Q: Is the Department aware that this matter - the anticipated delay in moving into 1 Bligh St premises - has been raised/discussed at a meeting of the parliamentary Public Works Committee?
• A: The matter went to a hearing before the PWC in May last year. At a later meeting the Department advised the PWC that, at the point in time that the Department was in a position to determine the final budget and timeframe, we would advise the Committee accordingly. It was noted that this would not be until after the engagement and commencement of the Head Contractor. The final budget and timeframe was determined in the week ending 15 February 2013. 

• Q: Again, I ask the Department to clarify the additional costs involved with the delay by the Commonwealth 1 Bligh Street.
• A: There are no additional costs that are directly attributable to the revision of the program date.

February 22, 1:18pm: 

• Q: Can the Department confirm it has been asked to appear before the public works committee to discuss/explain the ongoing issues with 1 Bligh Street?
• A: The Department has not been asked to appear before the Public Works Committee to discuss ongoing issues with 1 Bligh St. As previously advised, the Department met with the Public Works Committee subsequent to the hearing in May to update the Committee on the fitout's progress. The Committee was advised that at the point in time that the Department was in a position to determine the final budget and timeframe, we would advise the Committee accordingly. The final budget and timeframe was determined in the week ending 15 February 2013, and the Department has advised the Committee that we are now in a position to submit an update on the project .

• Q: If so, Can the Department explain/clarify why it has been asked to appear?
• A: See above.

• Q: Has the cost of the 1 Blight St fit-out - listed as $21.5 million - been increased? If so, by how much, and why?
• A: The final approved budget is $25.431 million. The revision of the budget is mostly attributable to the extensive acoustic, security and data provisions required for the premises, some of which involved major modifications to the base building services.

• Q: When was the original move-in date for the Commonwealth? Is it correct that it was December 2012?
• A: The Request for Tender package released for the Head Contractor included an aspirational target for practical completion in December 2012. During the Request for Tender period, the Department revised this date to 8 February 2013.

• Q: If so, when was the decision taken to delay the move, firstly to March and then May 2013?
• A: The appointed Head Contractor submitted a program with a practical completion date of 6 March 2013. As previously advised, certain key aspects of the fitout design, including those relating to sophisticated ICT and security provisions, could not be finalised until after the Head Contractor had commenced on site. Once the design was finalised and all procurement complete, the decision was taken to vary the practical completion date to May 2013 to allow adequate time for the required works.

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