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Australian Government - Department of Foreign Affairs and Trade

Advancing the interests of Australia and Australians internationally

Australian Government - Department of Foreign Affairs and Trade

Advancing the interests of Australia and Australians internationally

Program 3.2: Overseas property

Program 3.2 Objective

  • To ensure a secure Australian Government presence overseas through the effective management of the Commonwealth's overseas owned estate.

Program 3.2 Deliverables

  • Efficient and effective management and delivery of a substantial construction and refurbishment program in the overseas property estate, including:
    • making progress in construction of a new chancery, residential accommodation and a Head of Mission residence in Jakarta; construction of a new chancery and Head of Mission residence in Bangkok; and refurbishment of the chancery in Paris.
  • Efficient and effective management of the overseas property estate to meet the Government's requirements and maintain conditions and service capabilities.
  • Effective management of outsourced property contract arrangements.

Program 3.2 Key performance indicators

  • Completion of construction and refurbishment projects within an agreed timeframe and budget.
  • Effective and accountable management of the property services contract and construction project contracts.
  • Achieve a portfolio condition and utility rating of good or better.
  • The majority of tenants rate the performance of the service provider and the Overseas Property Office as good or better.
  • Asset management plans are in place for all owned properties in the estate.
  • Achieve a management expense ratio appropriate to the unique nature of the Commonwealth's overseas owned estate.

Program 3.2 Overseas property

Overview

The department, through the Overseas Property Office (OPO), managed the Government's owned and leased properties overseas, providing and maintaining office and staff residential accommodation for government agency tenants. We carried out maintenance and refurbishment programs and undertook new projects to maintain owned properties, which were valued at $1.59 billion at June 2012. The condition of 97 per cent of properties in the overseas owned estate achieved a rating of good or better, an increase from 86 per cent in the preceding year.

The department maintained regular contact with all posts through OPO's estate managers and project specialists. We identified long-term requirements of the overseas estate through annual property inspections by our contracted property services provider, UGL Services Pty Ltd.

OPO continued its dedicated compliance program, implementing remediation measures to ensure work, health and safety compliance standards were met in our overseas properties. Where problems of non-compliance were identified, remedial programs were undertaken, including in the chanceries in Yangon and Noumea.

OPO worked over the year to implement revised governance, financial and forward strategic planning measures for the management of the overseas estate. These measures were recommended by a 2009–10 review of OPO undertaken jointly by the department and the Department of Finance and Deregulation (DoFD) and approved by the Government in May 2011.

Security of the overseas estate remained an important aspect of property management, and the department ensured that new projects fully met security requirements.

Personal Profile:

Epeli Seruvatu

Photo of Epeli Seruvatu

As Corporate Services Manager at the Australian Consulate-General in Los Angeles, Epeli Seruvatu is a locally engaged staff member responsible for operations at post, including finance, human resources, property and IT support. Since his arrival in Los Angeles in May 2009, Epeli has also provided SAP training and assistance to other posts in the Americas.

Epeli began work with the Department of Foreign Affairs and Trade in May 1988 at the Australian High Commission in Suva, training staff on the use of computers and software.

In Suva, Epeli held a variety of positions, including Property Officer, Accounts Officer, HR Officer and Office Manager, and formed part of the team that implemented SAP in Port Moresby, Honiara, Port Vila and Noumea. From 1995–2009, Epeli worked as part of the Finance Helpdesk for the South Pacific, travelling widely throughout the region training staff on the use of SAP and assisting with regional finance workshops.

Construction program

Through OPO the department managed a substantial program of construction in the overseas estate.

In the owned estate, the department refurbished the head of mission residences and residential apartments in Tokyo and Beijing. We completed the upgrading of 12 staff apartments in Port Moresby. We began planning for a new head of mission residence in Colombo.

The department completed new leased office fit-outs in Chennai, Mumbai, Lima and Ho Chi Minh City, and undertook forward planning for the relocation of the leased chancery offices in Brussels and a new leased chancery for the planned consulate-general in Chengdu.

We continued preparatory work on the new embassy complex in Jakarta. Construction is scheduled to commence in September 2012 and to be completed in 2015. The project will provide for 20 000 square metres of office space for 140 Australia-based staff from 14 Australian government agencies and 273 locally engaged staff, a new head of mission residence, residential accommodation for 32 diplomatic personnel and their families, recreational facilities and a medical clinic.

The project for a new chancery complex in Bangkok was considered by the Joint Parliamentary Standing Committee on Public Works and approved by Parliament in March 2012. The project will provide office accommodation for 53 Australia-based and 157 locally engaged staff, as well as a new head of mission residence. Project construction is scheduled to begin in 2013 and be completed in 2016.

The department completed design work and planning for upgrading essential building services in the Paris chancery and began works on the project, the first substantial refurbishment of this major owned property since it was completed in 1977. The project is scheduled for completion in 2014.

Photo of The Secretary, Mr Dennis Richardson AO, at the opening of the Overseas Property Office exhibition in Canberra in April 2012.

The Secretary, Mr Dennis Richardson AO, at the opening of the Overseas Property Office exhibition in Canberra in April 2012.

Effective and accountable contract management

Risk analysis was a key element in the development of construction projects and estate management programs. OPO's Project Management Manual (PMM) was used as a guide to project delivery. The PMM is framed against the requirements of the department's risk management policy and DoFD's Best Practice Guide to Risk Management.

Risk strategies included identification of local risk in business cases for all new projects, probity and legal reviews of contracts, performance bonds and time penalties to ensure minimum risk to government funds and project quality and timeliness. We engaged on-site Australian project managers to ensure delivery of capital works to required construction and performance standards.

With the exception of the project for refurbishment of staff residential apartments in Port Moresby—which was delayed by local industry and labour supply circumstances—we completed all projects within budget and agreed time frames.

Under the department's contract with UGL for the provision of outsourced property services, UGL provided property management and financial services for the overseas owned property estate. UGL managed procurement and contractor services in maintaining the estate, as well as providing financial management through revenue collection, payment processing and IT and reporting support services. UGL also provided advice and assistance to OPO and to posts on leased chanceries and head of mission residences, including annual inspections, technical assessments and advice to post managers on compliance and building safety.

These services were delivered through a network of 22 facilities managers employed by UGL at overseas posts. Work carried out by UGL was undertaken in accordance with Commonwealth procurement requirements and the department's risk management framework.

The current contract with UGL commenced in 2008. The department agreed in October 2011 to exercise the option to extend the contract for four years until 30 June 2016. We reviewed aspects of the UGL contract to bring it up to date with legislative and administrative changes and to reflect fully current operational arrangements.

Tenant satisfaction with UGL's performance is measured by a survey of all posts each year. In addition, posts are surveyed annually on their satisfaction with OPO's service delivery. The surveys conducted in 2011–12 indicated a high proportion of posts gave a rating of good or better to both UGL's and OPO's performance.

In meeting the Government's overseas property needs, we achieved a management expense ratio of 1.568 per cent, which is appropriate to the unique nature of the Commonwealth's overseas owned estate.

Implementation of outcomes of the joint DFAT/DoFD review of OPO

Implementation of the recommendations of the joint review of OPO by the department and DoFD, which is to be completed by 1 July 2013, remained a major focus for OPO.

In accordance with the Government's decision to accept the recommendations of the review, new key performance indicators to effect these changes were introduced in 2011–12. These include the development of rigorous asset management plans for all properties to support OPO's strategic planning framework.

Key changes under the review were to remove the obligation for OPO to operate on a commercial model. Instead, tenant agencies, including the department, are now charged market-based rents determined by independent valuations. OPO continues however to operate through the Overseas Property Special Account. Tenant agencies were consulted and briefed individually on the new arrangements, including the required transition of current Memorandums of Understanding (MOUs) with agencies to market rents. By 30 June 2012, transition of more than half of the existing MOUs had been effected, with the remainder to be transferred by 1 July 2013.

Under the review, forward planning mechanisms in the overseas estate have also been strengthened.

Outlook

Management of the two major construction projects in the overseas owned estate—the chancery and residential complex in Jakarta and the new chancery and head of mission residence in Bangkok—will be a significant part of OPO's work in 2012–13.

We will continue a substantial project management, maintenance and refurbishment program to support the Government's overseas property needs and to sustain the value and effectiveness of the Government's overseas property estate.

Completing implementation of the joint review of the Overseas Property Office by the department and DoFD by the end of June 2013 will remain a major focus for OPO.

Department of Foreign Affairs and Trade