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Townsville water security project springs a leak between Mayor and industry leaders – Exclusive.

townsville water security - Mayor Cr Jenny Hill applying pressure to Council executive to deliver water pipeline on time

Mayor and A/CEO in hot water of Townsville water security project

The $225 million Townsville water security project principally managed by the Infrastructure and Planning department of the Townsville City Council (TCC) has been delayed even before the project gets started.

The Mayor Cr Jenny Hill speaking at the Townsville Water Security Infrastructure Local Industry Forum (“the forum”) this week provided conflicting reports with the acting CEO Mr. Mike Chiodo in front of over 120 industry representatives at the Reid Park conference rooms.

Cr Hill asked Mr. Chiodo and the water projects director, Mr. Scott Morehead if the Expression of Interests (EOI) documents will be ready today. The acting CEO and TCC Director of Infrastructure and Operations, Mr. Chiodo responded that “they will be ready soon.”

Despite the urgency expressed by Cr Hill to deliver the water project on time, the Chairman of the Townsville Water Security Taskforce (TWST) Mr. Brad Webb has appealed for more time.

Mr. Webb wants to delay the stage 1 project by 6 months to enable the setup of local manufacturing businesses to build the 36 kilometres of 1.8 metre water pipes in Townsville.

The senior executive of the TCC, leaders in the infrastructure and manufacturing industry and Chairman of the TWST appear to be driving a wedge between the community and the Mayor, already under pressure on the Adani airstrip deal and a fickle allegiance with the anti-Adani caretaker Premier, Annastacia Palaszczuk.

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In a recent rebuttal to the Mayor’s leadership on the $18.5 Adani airstrip deal, fellow Labor Cr Paul Jacobs, dissented against the vote and later took temporary leave to run as the State Labor candidate in the seat of Hinchinbrook.

With the CEO Ms. Adele Young on recreation leave believed to be assisting with the State Labor party’s election campaign, the Director for Planning and Development Mr. Mike Chiodo has taken on the acting duties.

However, the pressure from the Mayor and interests of the industry community were clearly on display at the “the forum” this week. Mr. Chiodo said, “I’m a reluctant CEO as Adele Young is taking a break.”

Mr. Chiodo acknowledged the work of Brad Webb, the Chairman of the TWST who said, “it feels like this project has taken 10 years off my life.”

Mr. Webb said that “Council will run projects and break up the contracts. I will need the support of every single person in the room because politicians are difficult to deal with.”

Mr. Chiodo said he has been in the director’s job for 7 months. “The water security issue has become personal to me,” he said.

Mr. Chiodo was visibly anxious during his address and commented that he “wants as many local contractors as possible on the project. I am happy to be made personally accountable.” he stated.

The acting CEO asked some of the brightest minds in the manufacturing, infrastructure and construction industries present at “the forum” to “consider what skills development is needed to achieve growth.”

Mr. Morehead commented that Council is open to suggestions from industry about the best business model to manage the design, engineering, management, construction, and other aspects of delivering jobs. “We have no fixed ideas how to deliver this”, he said.

The TCC executive was seeking help to determine the best joint ventures, consortium structures and alliances with industry and with the Council to deliver water security and build a manufacturing industry in Townsville for jobs growth.

“Council is managing a shell. How can industry work together?”, Mr. Morehead asked.

As “the forum” information session broke up into two groups, one for professional service providers and the other for contractors, suppliers and manufacturers, the broad scope of deliverables were consistent with the City Deal economic performance criteria.

However, the TCC was fetching answers from the industry representatives about how best to model the expressions of interest packages.

Instead of providing clear information to those in attendance as the industry representatives were expecting, the TCC’s water project leadership left many of Townsville’s leading contractors and consultants confused and bewildered.

After the meetings had been completed, a few industry contractors who preferred not to be named commented, “well that was a waste of time”. Another said, “I knew more about this thing before I come.”

TREN asked Mr. Chiodo why the $225 million budget for the project has omitted $15 million, as $200 million was budgeted for the pipeline construction and $10 million for water management? Mr. Chiodo said, “this is a contingency and is included in the construction budget.”

The TWST Interim report claimed that the Stage 1 pipeline construction would cost $193 million. TCC is now claiming publicly $215 million is allocated to the construction. But some industry consultants are doubting this amount will be enough if the project is delayed and the pipes are manufactured locally.

Mr. Chiodo offered to provide an updated budget report showing the $215 million has been accounted for. Despite TREN’s follow up with Mr. Chiodo’s office, no revised budget has been received at the time of publishing.

 

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Based on the information provided at the water security forum, there are substantial variables and risks in the water security supply chain, especially the piping that must come from either Melbourne or China and the specialist welding technology needed.

Furthermore, access agreements with four property owners on the pipeline corridor are still unsecured by the TCC. Management is yet to confirm when the property owners will permit access to survey contractors.

Skills acquisition and specialist engineering tasks that local company’s said in the breakaway sessions they could not supply with local capability. They will have to develop or acquire the skills with companies outside of Townsville as joint ventures. However, this is not consistent with the “local jobs” policy of Townsville.

TREN asked the acting CEO “Is the $22 million contingency fund going to be sufficient to complete Stage 1 of the project on time?” No answer has been given by the TCC.

Contractors from the Burdekin and Charters Towers attending “the forum” expressed concerns about the “local jobs” policy being Townsville only.

At least two industry representatives asked “Is the “local jobs” policy going to include the Burdekin and Towers?” Another contractor suggested the whole of North Queensland should be treated as Townsville local including Mount Isa. The TCC executive could not answer the questions about the definition of the policy.

Townsville City Deal

Despite the fact Townsville water security is a critical part of the Townsville City Deal, the forum did not discuss the capability of the federal government’s interest in the project.

In TREN’s request to the TCC for a statement, Mr. Chiodo was asked, “Water infrastructure as a critical component of the value-add proposition in the Smart City Deal was not raised or discussed during the local information session. It was not included in the agenda of any session. However, it is defined as a “key transformative infrastructure” that the federal government committed will be supported.”

Mr. Morehead was asked, “where would the smart city project interface with the water security project?” He said, “I would like water flow sensors to be installed but I’m not sure this would happen.”

The terms of the City Deal and principles of the MoU that Council signed with the federal government must support the federal and state government to improve productivity and liveability of the City and create more knowledge-based jobs and investment.

Again, TREN sought comment from Mr. Chiodo whether the Council has initiated loan documents with the Northern Australia Infrastructure Fund or Clean Energy Finance Corporation for the $230 million for stage 2 and $100 million for stage 3 of the water security project. And again, no reponse was given.

In a statement to Domanii Cameron from the Townsville Bulletin yesterday, Cr Hill said, “The $215 million oversized pipeline to guarantee Townsville’s future water security was on track to be delivered within 26 months.”

Cr Hill said, “there was no delay to the pipeline project and the 26-month timeline included provisions to maximise the amount of local content used.”

TREN’s request for a statement from the acting CEO in response to our questions is pertinent to the job opportunities for Townsville as the community expects the politicians and industry leaders want to work with all stakeholders to fast-track funding and resources into the Townsville community.

Potentially $10 billion in federal funding for critical infrastructure needs council and state submissions before the loans or grants can be approved by the relevant Boards.

Why is the Mayor and acting CEO saying they want urgent delivery of State-funded projects, but not give attention to lucrative funding from federal resources?

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Aaron M, Editior

Aaron is the founder and editor of TREN eMagazine with 15 years experience in the real estate industry investing and helping investors seek value, leverage value and capitalise on value, developing professional and technical skills and capabilities that have enabled his success in business from startups, adoption, asset growth, management and community leadership projects. Aaron also loves travelling, sports, his partner Jodie and helping people discover their “why” and find their few “what’s” in life that realise the “wows.

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