Disaster fund buckles in the tempest

ONLY one in four applications for financial assistance to repair destroyed public infrastructure is being approved by the allotted time through a major natural disaster fund in Western Australia.

Further, 27 projects to rebuild infrastructure such as roads and bridges, damaged as far back as May 2020, are still waiting for state and federal funds, leaving some local governments to consider borrowing money to go it alone.

Those figures were detailed on a list of 71 applications to one tier of the Disaster Recovery Funding Arrangements made in WA between January 1 2020 and November 23 2023.

The DRFA is jointly funded by the state and federal governments to rebuild public infrastructure after natural disasters and, while the premise is well-supported, its application has caused frustration for councils.

“The process for making claims is designed and administered to meet the needs of auditors, not for councils and communities reeling from significant disasters like cyclones and floods,” WA Local Government Association president Karen Chappel said.

“The processes are not designed with the objective of quickly and cost-effectively restoring damaged transport connections.”

The list, obtained through freedom of information laws, outlines the deteriorating ability of the state Department of Fire and Emergency Services to respond to the most severe applications – named essential public asset reconstruction – in a timely manner.

Nine events in the 2019 financial year were all addressed by the approved deadline.

The following year, 14 of 18 applications were processed on time. One remained outstanding as of November 23.

None of the 18 claims made in the past three financial years had been processed on time.

Three applications made in FY23 could be processed on time if cleared by July.

How it works

The DRFA program is overseen by the federal National Emergency Management Agency and administered in WA by the state Department of Fire and Emergency Services.

In times of natural disaster, DFES confirms the event’s eligibility as a DRFA case with NEMA and lists the local government areas that can apply for assistance.

Joint federal-state funding falls under four umbrellas, ranging from individual support to holistic responses where communities are severely affected.

Repair and reconstruction work under the DRFA fits into three categories.

• Emergency works: urgent and temporary work to enable recovery of a community.

• Immediate reconstruction: work to fully reconstruct an asset to its pre-disaster function.

• Essential public asset reconstruction (EPAR): full reconstruction of a public asset where its value exceeds $250,000 and/or is a more complex project.

Data obtained by Business News covered the third category.

Under rules set out by DFES, cost estimates for essential public asset reconstruction must be approved by the agency within 12 months of the financial year in which the disaster occurred.

Repairs should be completed within 24 months of the cost estimate having been approved.

Once the affected local government undertakes a damage assessment and prepares a scope of works, it is assessed by DFES and Main Roads WA.

When that is approved, procurement for cost estimates by the local government takes place, which then needs to be approved by DFES.

It is a process DFES admits can take significant time.

Of the 44 EPAR applications approved since 2020, 15 estimates missed the DFES deadline.

Of 27 yet-to-be-approved applications as of November 23, four still fell within that deadline.

The department did not approve any applications from August to November 2023, but had since cleared five more to the tune of $5 million at the time Business News went to press.

At least $60 million worth of total DRFA claims remain under assessment, some linked to disasters that occurred in 2018.

The Shire of Ashburton alone was sitting on $5.5 million worth of EPAR work spread across four claims between May 2020 and June 2022.

System overload?

The increasing frequency and severity of natural disasters was singled out by DFES as a key factor affecting approvals: 32 declared disaster responses spanning 75 local governments were active at time of print.

In some cases, the delays are at least partially attributable to late or insufficient applications from local governments.

Five yet-to-be-approved claims had “information required from local government” written next to them as of November 23.

“The processing timeframes for Essential Public Asset Reconstruction claims are impacted by many factors, including the complexity and variations of a claim where sufficient evidence, including damage assessment, scope of works and cost estimates, are required to satisfy the requirements under the DRFA,” a DFES spokesperson said.

“The Department of Fire and Emergency Services works directly with activated local governments to help them assess the level of disaster impact on their communities and assets and support them in submitting eligible DRFAWA reimbursement claims.

“The approval of a local government EPAR claim requires a rigorous due diligence process for the state government to be satisfied the proposed repair works meet the DRFA criteria.”

The state government invested about $38 million last year to boost staffing and resources to meet disaster recovery and support demands.

The federal government tipped $93 million into advanced payments to support cash flow to local governments to cover the cost of repairing essential public assets.

A DFES spokesperson outlined several further measures to improve the disaster response system.

“Following a recent review, the state government has approved an increase in the upfront working capital payments from twenty to thirty per cent of the approved EPAR cost estimate value,” they said.

“A payment of up to seventy-five per cent of the value of completed EPAR works, following the preliminary assessment of the claim, has now also been approved by the state government.

“Given the increased frequency and severity of disasters in WA, funding has also recently been made available by both the Australian and WA governments to better support disaster-impacted local governments.”

Ms Chappel said while the extra staffing was welcome, progress on clearing the backlog remained slow.

“WALGA is frustrated and disappointed that there are thirty Disaster Relief Funding Assistance WA ‘legacy’ claims dating back to 2021 still sitting with DFES awaiting processing,” she said.

“Providing ‘sufficient’ evidence of pre-disaster condition, level of maintenance and direct impact of declared events is difficult, particularly when council and DFES staff leave jobs.

“Local governments can be forced to borrow money for cash flow.” WALGA wants the state government to work on a new approach to tap limited federal funds available to improve infrastructure resilience.

Hardest hit

The Shire of Upper Gascoyne is the most disaster-prone region in WA, recording 11 eligible events since 2013 and a damages bill of at least $26.8 million since 2020.

Two further applications from flooding, in 2022 and 2023, are yet to be approved and could push that figure closer to $30 million.

It is a large and sparsely populated area mostly habited by pastoral workers and Indigenous communities.

The Gascoyne River flows through the middle of the shire and along the edge of its only town, Gascoyne Junction, population 65.

In the Goldfields, the Shire of Wiluna has been eligible for six DRFA events.

In 2020, it put forward a $25 million EPAR claim in the wake of tropical cyclone Blake, the most expensive single claim on the list.

That application was approved quickly.

Five local governments submitted EPAR claims totalling $30 million following tropical cyclone Damien in February 2020.

All bar one claim in Port Hedland were processed on time.

Signs the system was unravelling came to the fore after a tropical low skirted the north-west coast in early 2021.

About $50 million worth of EPAR claims were made in response to that event. Half missed the deadline.

Since 2020, Upper Gascoyne (seven), Ashburton (six) and the Shire of Derby West Kimberley (six) have borne the brunt of severe weather events, according to DRFA data.

Every regional local government in WA has been hit at least once since 2013, and a few metropolitan councils have also been caught out.

That includes Mundaring and Swan (three events), Belmont (two), and Cambridge, Bayswater, Melville, and Wanneroo (one each).

Resilience test

Issues accessing the DRFA are part of a bigger picture around how to ensure public infrastructure can stand up to the rigours of increasingly severe weather events in WA.

It is an issue government and industry are grappling with.

Spanish engineering giant Acciona, which has a suite of infrastructure projects in WA, was this month ranked among the top 5 per cent of more than 9,400 firms on ESG standards by S&P Global.

Part of its core focus is to build more resilient infrastructure. Acciona Australia chief executive Bede Noonan said government procurement often stood in the way of innovative thinking.

“What we are used to seeing in Australia is the government departments very strongly specifying exactly what they want, which then means we can’t really give them alternatives,” he said.

“It is sort of the nature of our forms of government that, because of good governance we have processes … that actually guard against us doing stuff sometimes.

“Where we are able to get involved earlier and change the actual physical work that might occur, we are really able to have a game-changing approach.

“I feel there is a journey to be had where we have got to collaborate more to enable smart solutions and plan to deal with this stuff further in advance so society is not caught on the hop.”

Severe weather is front of mind for many infrastructure projects today, evident in climate risk assessment workshops being held for projects in areas prone to adverse conditions.

But climate is not the only threat to public infrastructure, with wear and tear from heavier vehicles and more frequent use also a factor.

“Lots of structures, bridges, roads, which were built fifty to 100 years ago actually need to be lifted, need to be built differently,” Mr Noonan told Business News.

“In order to be efficient, our society has moved on, and yet our assets haven’t necessarily been upgraded.”

Mr Noonan said international knowledge could deliver lighter, cheaper and greener builds, should procuring agencies be open to listening.

“Resilience meaning ‘let’s make sure the structure withstands the future’,” he said.

“That doesn’t actually mean it has to be the biggest amount of concrete and steel, and that tends to be where some people’s minds go.

“It is not the concrete structure that fails, it’s the fact that it’s not high enough; it’s how they’re able to handle the flood.

“Government delivery agencies are getting better, but they have got a journey to go to feel more comfortable in allowing experienced construction contractors and experienced designers to say ‘You know what, we can actually give you some alternatives’.”

High bar

Reconstruction of the Fitzroy Bridge following last year’s flood has set a high bar.

The Georgiou Group, BMD Constructions and Main Roads alliance completed the build in just nine months, with the structure opened six months ahead of schedule.

The new bridge is taller and stronger to stand up to the risk of flooding even more severe than what washed the original structure away last year.

At the bridge’s reopening in December, Transport Minister Rita Saffioti listed measures to expedite the process, such as cutting the nine-month procurement process to eight weeks, material prioritisation, and local employment.

Mr Noonan said that project was a good example of what could be achieved when industry and government worked together in the early stages.

“I would imagine it would have taken Minister Saffioti, to actually get personally involved to bang heads of departments to actually get them to approve stuff in a way that they have never done before,” he said.

“For the future, the right answer is having construction companies – it might be a panel – work with (government) and think about where the next Fitzroy Bridge is, what are the other things where, before something goes wrong, we actually have a planned approach to dealing with floods?”

As for the WA government’s efforts in general to work with industry, Mr Noonan was full of praise.

“Our ability to connect and talk with the deputy premier and the heads of departments is closer in WA than it is in other states of Australia and New Zealand,” Mr Noonan said.

“When I speak to any politician in Australia, I really do encourage them to be more like WA and say [to them] ‘We need to be engaging with you, especially on the big stuff because you are the ones that are going to get phone calls from voters if they’re not happy’.

“Not overtaking the role of the delivery agency, but [politicians] have got to be engaged and I do feel in WA, probably they are the best example of being engaged.”

In that regard, he said, the construction industry still had a way to go to encourage out-of-the-box thinking.