Industry hit by $20 million project blow out

29.5.13

Industry will pick up the lion's share of a second $10 million blow out in six months to the cost of development for a Government computer system, along with a 12-month delay in completion.

In Senate estimates this week, officers from the Department of Agriculture, Forestry and Fisheries (DAFF) confirmed the project cost would increase by $10 million again, this time from $46 million to $56 million.

That follows an admission as a result of questions at the February Senate estimates that the initial estimated project cost of $35.7 million would increase to $46 million with a completion date of June 2013.

There is still no certainty around the final cost.

Senator Richard Colbeck said: "Not only are the continued delays and cost blow outs of the project of concern, so is the extra cost to industry. And we've been unable to establish this week whether the Government has even consulted with industry about the hikes they'll face."

DAFF is developing the system, BICON, to modernise the process of applying for import permits.

Under Government's current agreement, industry will meet 75% of the cost of BICON with $16.7 million already been deducted from the Industry Equalisation Reserve (IER).

The Current cost projections will see industry stumping up an additional $25.3 million.

"The IER has been considerably eroded over recent years falling by $16.3 million from a surplus of $8.9 million to a projected deficit of $ 7.4 million," Senator Colbeck said.

"Taking out a further $25.3 million blows an even bigger hole in the reserve.

"The only way to restore the IER is an increase in fees - an increase in cost to industry.

"This Government is very good at spending other people's money and it simply doesn't understand the impacts of these increased costs to business.

"Cost of government to industry has become a feature of the way this government operates, whether it be the cost of the carbon tax to agriculture or increases in export fees and charges."

290513Industry hit by $20 million project blow out
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