Cairns Marine Precinct Common User Facility $466m cost blowout puts project in jeopardy

A $466m cost blowout has thrown into doubt a critical infrastructure upgrade for the Cairns Marine Precinct, promised for three years.

The $360m Cairns Marine Precinct Common User Facility, which was supposed to be delivered in 2028, is under review by the state government after costs blew out in the order of $466m. Photo: NORSTA Maritime

A $466m cost blowout has thrown into doubt a critical infrastructure upgrade for the Cairns Marine Precinct, promised for three years.

The Cairns Marine Precinct Common User Facility was co-funded in a 50-50 split by the state and federal governments as a $360m project.

On Wednesday, new Transport Minister Brent Mickelberg accused the former government of lying to Far Northerners, as he revealed the budget for the project had blown out to $826m.

Mr Mickelberg said the project had “sat idle” in the Labor cabinet for three years before it was “handed over to Ports North in late September, weeks before the election”.

“Labor knew the cost was blowing out by hundreds of millions of dollars six months ago but kept it a secret from Queenslanders in a bid to keep votes. It was total deceit,” Mr Mickelberg said.

Barron River MP Bree James, Transport Minister Brent Mickelberg and Mulgrave MP Terry James, walking by the Ports North office after revealing the budget for the Cairns Marine Precinct Common User Facility had blown out to $826m. Picture: Arun Singh Mann

“We know how important the marine industry is to the region’s employment and economic growth, which is why Ports North are in discussion with stakeholders to pave a way forward.”

Mr Mickelberg said the cost blowouts were “across a wide range” of areas, and the primary issues were the initial design and concept was not fit for purpose, its benefits to the industry were in doubt, and it could not be delivered within funding allocated.

“The design for the business case was not where it needed to be,” he said.

But Mr Mickelberg said he would “like to think we can avoid starting a business case from scratch”.

“Simple things like the design needed for the buildings that this project will require, that’s the sort of information that I would have thought is pretty straightforward to ascertain,” he said.

Asked if the “restart” of planning works would require the project to be valued at less than $826m for this government to consider it viable, Mr Mickelberg did not specify his performance markers but said it “needs to meet the needs of the community”.

Mr Mickelberg was asked on numerous occasions if the new LNP state government was preparing to axe the project but insisted he was committed “to infrastructure for Far North Queensland”.

Federal Treasurer Jim Chalmers visited the Cairns Marine Precinct, to promote the $360 million expansion to the industry, equally funded by the federal and state governments. Norship defence operations manager Stuart Hodgson shows Treasurer Jim Chalmers, Member for Cairns Michael Healy Norship defence operations manager Stuart Hodgson and Austral General Manager for Queensland Phil Growden inspect work being undertaken on Australian Defence Force vessels. Picture: Brendan Radke

He said his government would work through a “systemic process” to “better understand the needs” of the marine industry.

Mr Mickelberg said that would include lobbying the federal government for additional funding.

A spokeswoman for the minister confirmed early works such as geotechnical works which had commenced on the project would continue and said the funding already committed had not been withdrawn.

Tropical Reef Shipyard business development manager Andrew Wagner said the cost blowout didn’t surprise him when compared to a similar project at Darwin, but didn’t believe the facility was designed incorrectly, but rather was subject to changing government strategies, including the length of navy vessels.

“I think it’s just getting eclipsed now, as new news comes out, the new general purpose frigates could be anywhere from 120 to 145m, depending on which one is selected,” he said.
Mr Wagner said on the plans he had seen, the facility seemed fit for purpose for the maintenance of super yachts and maintained it would have been “overkill” for commercial fishing boats, despite the minister stating the latter industry would need to be a beneficiary.

Ports North CEO Richard Stevenson will work to find a way forward for the CUF. Brendan Radke

Ports North chief executive Richard Stevenson said the authority would continue to “work with government and key stakeholders to assess project options to determine the best way forward for the Cairns Marine Precinct and the broader marine industry”.

Cairns MP Michael Healy said he had been made aware of the budget blowout but didn’t know to what amount, labelling the $826m figure as “shocking”.

Mr Healy would not be drawn on blaming the State Development Department, but said if there were major design issues he would have expected to be notified either by a senior bureaucrat or the minister.

He said during meetings with the local industry or the department, he was not made aware of design issues and already made a request for a briefing to outline what design issues had occurred from the new Transport Minister.

He also pointed to Townsville’s CopperString project which had blown out from $5bn to $9bn, stating a promise to “still go ahead” and fund the powerline meant Cairns deserved its fair share.

Originally published as Cairns Marine Precinct Common User Facility $466m cost blowout puts project in jeopardy