Nyet! Australia evicts Moscow amid Canberra spy spat

Russia has been stripped of a prime embassy site amid fears it had sought to bring in spies to work on the building.

The new Russian embassy under construction in Canberra.

Australia has seized control of a prime Canberra site allocated to Russia for a new embassy, sparking a diplomatic row amid fears the Kremlin had sought to bring in spies to work on the building and speculation Moscow had run out of money to finish the project.

The National Capital Auth­ority, a statutory planning agency, revealed on Wednesday that Russia had been stripped of the block in Canberra’s diplomatic precinct after failing to complete its new embassy there during the 14 years it had held the site.

The ruling denies Vladimir Putin’s government the opportunity to build a modern ­facility, with greater espionage potential, on the block at a later date.

The Australian can reveal the embassy had sought to bring in its own contractors in the past two years, to check the work of local firms. But the Department of Home Affairs denied entry to the contractors, believing they would include members of Russia’s Federal Security Service, tasked with ensuring the site was free of listening devices and other security problems.

“They put them down as contractors to make sure the build was certified to Russian standards,” a source said.

“But you can infer that they would include Russian security services members who would ensure the security of the building.”

 

The decision came despite the approval of a large number of Chinese contractors under the Rudd/Gillard government to work on a nearby residential complex for Chinese diplomats. The approval of the Chinese workforce followed bitter complaints from Beijing over the bugging of its embassy by Australian and US intelligence ­officers when it was constructed in the late-1980s.

The Russian construction project was also hit by financial problems, with workers complaining earlier this year they were owed $1.5m by its head contractor.

As well as being one of the closest diplomatic sites to Parliament House, the block is located near the US, British, Canadian and South African embassies, and the city’s Commonwealth Club, which is frequented by senior public servants.

A senior national security source said it was preferable that Russia was removed from the site for contractual reasons “as ­opposed to having to try to create a security reason”.

“They are very good at the ­intelligence game,” the source said. “To have a modernised ­embassy that would facilitate all the malicious things that they do would have been very undesirable.”

The NCA terminated Russia's lease on the site under its “use it or lose it policy”, branding the ­un­finished embassy an eyesore.

The decision comes amid Australian government sanctions on more than 500 Russian individuals and entities due to Vladimir Putin’s invasion of Ukraine.

The current embassy of Russia in Canberra. Picture: Facebook

The Russian Federation has been given 20 days to clear the site, which will be returned to the pool of land available for diplomatic purposes. NCA chief executive Sally Barnes said: “The block is a premium site in central Canberra. Ongoing unfinished works detract from the overall aesthetic, importance and dignity of the area reserved for diplomatic missions and foreign representation in the national capital.”

Ms Barnes said that with so few blocks available for diplomatic purposes, lease holders must “demonstrate a willingness and ability to develop the site” or be forced to surrender it.

“While initial works have commenced, the block in question has been sitting as a building site with unfinished construction for many years now,” Ms Barnes said.

The NCA had been in discussion with the Russian Federation about the lack of progress on the site, and “in the absence of a ­commitment to a completion date, the NCA decided to terminate the lease”.

Russia was granted a lease to the site in December 2008 and received approval to build a new embassy there in 2011, to replace its current one in the Canberra suburb of Griffith.

It agreed under the lease to finish the project within three years, but managed to construct only one small building on a corner of the block.

Russian President Vladimir Putin. Picture: AFP

A Russian embassy spokesman flagged potential legal action over the decision, arguing steady progress had been made on the project over the past two years.

“The embassy would refrain from detailed public comments for now and will first of all seek legal advice on the unprecedented and highly unwelcome move by the NCA,” he said.

The spokesman agreed there had been “multiple problems and delays through several years, but said there had been “constructive and frank consultations” between the embassy and the NCA.

“It is really puzzling why the NCA chose to terminate the lease now that the construction process at Yarralumla site has been steadily going on uninterrupted for the last two plus years with results already very much visible and prospects rather clear,” he said.

Canberra is home to the ­greatest number of spies – both domestic and foreign – of any city in Australia, with the pace of ­intelligence and counter­espionage work escalating ­rapidly amid heightened geopolitical competition.

In the mid-1990s, it was revealed Australian and US intelligence operatives had for years conducted a sophisticated bugging operation against the Chinese embassy, after installing an elaborate network of fibre optic-linked devices in the embassy’s walls some years earlier.

China tore out the devices and barred Australian contractors from its embassy facilities ever since. During the Cold War, ASIO had an intelligence-gathering site at a funeral parlour opposite the embassy in Griffith, constantly photographing people coming and going.