By all means, the report of the Western Australian Auditor General into the construction of the Perth Arena project in 2010 was damning.
“Our audit of the Perth Arena project is not a good news story,” it began, going on to talk about cost estimates being announced before realistic assessments were done, inadequate governance and oversight, poor decisions, agencies being unable to explain how taxpayer money was being spent and why, and an overall attitude of circumventing normal processes for the sake of expediency.
The project cost around 3.5 times original estimates ($548 million as opposed to $160 million) and was finished in November 2012, almost four years after the initial January 2009 completion date.
This has not been the only project disaster Western Australia has experienced. Around $6 million (of an initial budget of $9.2 million) was wasted during the Identity Access Management project. That was one of a number of interrelated projects at the Fiona Stanley Hospital which was supposed to deliver a paperless environment before the Department of Health stopped development on the project in October 2013 after it could not see any deliverables from it.
Planning was deficient, the Auditor General said, whilst clinical technical dependencies and difficulties regarding its feasibility were not identified in a timely manner, and the department did not even have a business case to support their decision to invest funds in the project when it began in 2008. Tendering processes were poor. Suitable governance structures were never established.
These projects, however, have one difference. The Identity Access project is one of 26 which will be examined by a Commission of Inquiry into decision-making processes, transparency and financial consequence announced by the newly elected Labor government in Western Australia. Despite having a dollar value nearly 60 times greater, the Perth Arena project is not.
Tellingly, the contracts for Identity were signed during the reign of the former Liberal government, and those for Perth Arena signed earlier under the previous Labor government.
Under the terms of reference for the inquiry, former Under Treasurer John Langoulant AO will examine governance arrangements and decision making processes behind 26 significant public sector projects with respect to which major contracts signed by the former Liberal government. These include health and hospital IT and construction projects, land and major projects (including Elizabeth Quay and land asset sales), power and electricity and regional development projects.
This will include an analysis of contracts entered into during a period spanning 2008 (when the former Barnett government was elected) and March 11, 2017 – the exact day voters booted Barnett out. In other words, this Labor initiated inquiry will look only at contracts signed during the reign of the former Liberal government. Nothing signed when Labor was previously in power will be considered. This includes Perth Arena, which was so poorly delivered.
Politically, this should deliver ammunition from which Labor can attack the prior record of its opponents. On some projects, such as the Perth Children’s Hospital, finding examples of things gone wrong will not be hard.
Furthermore, if done well, genuine project evaluation delivers substantial value in terms of improved practices on future projects and greater accountability to taxpayers for money spent on projects.
For two reasons, however, this is a disappointing exercise which makes a mockery of public sector project evaluation.
First, with its focus on projects of its political opponents, any genuine lessons the government could derive will be secondary in focus to ways in which Labor could use this to gain political mileage. If Labor really wanted to learn lessons from projects, why not look at some of its own as well? Perth Arena would provide some great learnings.
Second, by turning this into a blatant political exercise, Labor is eroding confidence in public sector project evaluation.
Genuine project evaluation delivers value to taxpayers. Political exercises do not.
If Labor really wants to learn lessons, let it do so from its own mistakes as well as those of its opponents.