'Cost Recovery' in Part IV
You may be aware that the DWER has been looking at cost-recovery in the Part IV space (EIA) for some time.
The discussion paper for cost recovery and the associated draft Regulations have recently been released (Part IV Cost Recovery) and are starting to cause some concern within industry.
Why?
Well, Talis has had a look at some of the basic detail within the discussion paper and was floored by some of the figures and costs that it suggests will be imposed on proponents for the EIA process.
$32,000 for a referral for starters…
The costs are based on various stages of assessment and include fixed costs for certain tasks as well as variable costs based on the complexity of the assessment process.
There are also costs for changes to proposals, RFIs and subsequent implementation and compliance work.
We’ve done a quick calculation on a project we’ve recently looked at. Whilst this project included an accredited EPBC process and offsets, we limited the number of RFIs and submissions and still came up with a total figure of $464,000.
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This seems to be more than cost-recovery to us, particularly when the base unit of effort is suggested to be $16,000, or 162 hours of work at about $100 per hour. If you look at the figure above, this equates to about 4,640 hours!! There are obviously a range of questions we had around how this has been calculated, particularly when you look at the suggested division of labour for this unit of effort.
I’m sure you’ll have some of your own questions to add to the list below once you've gone through the details, but here are a few thought-starters:
In principle, we agree with the concept of cost-recovery, but looking at what has been put forward for discussion, we’re thinking that the EPA process is now looking more like a consultancy than ever.
The turnaround on consultation with this is tight and the scheme is intended to be implemented on 1 January 2022 according to the Regulations.
What do you think?
We’d be happy to have a chat with you about any queries or concerns you might have about this or the impacts it might have on your project.
Principal Hydrogeologist and Site Contamination Specialist
3 年Surely needs to be widely consulted: the principle and the costs!
Director / Consulting Hydrogeologist at AQ2
3 年Very interesting analysis Andrew. 4000 plus person hours would be a generous desktop consultancy budget!!
Project Approvals Manager at Mineral Resources Limited
3 年Andrew - exactly my points. I did the same back of envelope calc for latest submission and assessment. ARI with bilateral and supplementary info for a 80 km haul road and it came to over $350,000. I see the value in cost recovery to support timely assessments but am concerned about the lag and also the ability for other busines sectors to afford this upfront cost. I think the base unit cost is over cooked which ups the recovery. Also there is a major lag in recruiting to support staffing at peak times so am not confident this addresses the outcomes businesses have been requesting. Wouldn’t it be better to have an accredited assessor scheme - which could be used by EPA at peak times or for complicated assessments? Then this could be cost recovered directly without the black box accounting. Proponents could opt into an accredited assessment.
Botanical and EIA Specialist
3 年Just another comment - what do you all think of the inclusion of significant species to include new or undescribed species, species or ecological communities categorised as P1 or P2, vegetation of regional significance, stygofaunal or troglofaunal communities? I think this is fundamentally flawed for inclusion in a pricing model and reflects a lack of scientific rigour and understanding of ecology and EIA!
Botanical and EIA Specialist
3 年Made me laugh with Jerry Maguire, but in all seriousness this is a big topic that needs far longer consultation and details as Peter Tapsell says. Where are the forums for discussions? Where are the details on how the costs have been derived? The costs for the EP act assessment will far outweigh those of a consultant to get a mine site approved (if a company so chooses to engage a consultant) including secondary approvals. New roads and rails are also costly when nothing has been budgeted - so now they government is robbing Peter to pay Paul? As you state Andrew Mack, reasonable cost recovery makes sense- proponents to pay rather than the general tax payer. But this looks like revenue raising! And this is all in unprecedented COVID times when arguably government’s role is to stimulate the economy and get things back on the right track!