DIBP Secretary Michael Pezzullo. Pic: YouTube.

Department of Immigration and Border Protection (DIBP) Secretary Michael Pezzullo has faced a barrage of questions at a public hearing over the $257 million fit-out of his department’s new Canberran headquarters.

The department currently leases more than 100,000sqm of office space spread across 12 buildings and four suburbs in Canberra and leases are due to end progressively between 2017 and 2020.

The aim is to consolidate staff across five buildings and two suburbs, while also reducing the amount of office space leased by 14,600sqm.

The reorganisation was sparked by the July 2015 integration of the Department of Immigration and Customs and the need to quickly mount sensitive joint operations securely.

Mr Pezzullo faced The Parliamentary Standing Committee on Public Works today (Monday) after senators questioned the project’s quarter of a billion dollar tab.

Many of the toughest questions came from senators asked him to justify relocating 2,000 staff to an office building at Molonglo Drive, near Canberra Airport.

The plan also includes retaining about 4,000 staff across three locations in Belconnen to avoid a negative impact on local businesses if there was a wholesale move out of the suburb.

But Labor Senator Alex Gallacher said he did not understand the department’s fascination with the Molonglo Drive site.  

“You’re paying the maximum rate that you would pay for a lease in Canberra, in an area where the building is eight years old and there is allegedly somewhere between a 20 per cent and 40 per cent occupancy rate. In a less tightly held area, why do you pay the top rate?”

But Mr Pezzullo defended the Headquarters Project which the department has said will save $236 million over 30 years, mostly through cutting the amount of office space leased, competitive procurement processes and more efficient whole of life costs.

“The Commissioner and I don’t drive around Canberra saying “well that would be a nice place to live in or work in or whatever,” Mr Pezzullo said.

“It’s not about its attraction. It’s what came through the process as representing the best fit for the operational requirements … the best value for money in terms of what the market had come back with in terms of fit-out costs and lease incentives and through the tender evaluation process. Its superiority relative to other market bids that had come back.”

He said there was “a massive net benefit to the Commonwealth” but this would have been even larger had the department been allowed to consolidate even more aggressively.”

The Department’s First Assistant Secretary of Corporate Services, Ben Wright, told the inquiry: “They gave us a good deal. It’s not just the rent rate, it’s also the lease incentive provided. They provided a rebate as well.

“When you take all that into consideration on a per square metre basis, it actually works out quite attractive.”

Mr Wright said the department had looked at sites in Civic, Airport, Belconnen and Lowden but the airport building was the best value for money and tender bid.

The department said in its submission to the inquiry that the modern, purpose-built fit-out would enable it to co-locate and integrate staff, particularly those involved with border monitoring and control operations.

It would be flexible enough to quickly establish task forces and sensitive joint operations and operate them continuously and securely.

“The proposed new office accommodation will be of modern design with large efficient floor plates to support future flexibility and provide an open office environment to promote collaboration and positive cultural renewal which has been highlighted as being a critical success factor for the Department’s accommodation objective,” the department’s submission said.

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