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TasNetworks – Outsourcing of Maintenance

Dr Rosalie Woodruff MP

Dr Rosalie Woodruff MP  -  Wednesday, 9 December 2020

Tags: TasNetworks

Dr WOODRUFF - Minister, increasing greenhouse gas emissions globally are causing a massive increase in climate heating and that, as you know, is already increasing the frequency and the length of bushfire periods each year. The relationship between the starting of bushfires and overhead power lines is well documented in a number of royal commissions around the country and it's a risk to manage.

I understand that TasNetworks contracts interstate companies to do line maintenance. Can you tell me what proportion of TasNetworks' line maintenance is collectively outsourced to interstate firms, and what are the names of those firms?

Mr BARNETT - You have raised a number of issues in that question. TasNetworks, as a government GBE, is subject to an overarching government policy of buying local and using local people wherever possible and appropriate. That's also a PESRAC recommendation the Premier has set up under the PESRAC advisory council to buy local and to support local wherever possible. That advice has been referred to TasNetworks, so they are aware of the importance of that.

Much of your question is technical so I will pass to the chair and/or the CEO. I will pass to the CEO through you, Chair.

Mr BALCOMBE - We outsource all our vegetation management. It's not a core skill that we have within our business. It was a decision that was made back in the times of Aurora. Pardon me, I'm working a bit from memory here. We have three regions that we outsource our work to and two networks. There's the distribution network, which is probably the cutting you're referring to, Dr Woodruff, as that poses the largest risk because we have many more assets and many more kilometres of distribution network. That spend is around $22 million a year between our transmission distribution. Transmission is different because we have much wider easements, they are much clearer. Transmission networks often act as firebreaks. We saw that occurring in the bushfires of January 2019, particularly with those fires up around Waddamana. That work is all outsourced.

We have some contracts on foot at the moment. All that vegetation management cutting is out to tender at the moment. We're about to award. I'm not in a position to announce that because we're in the final stages of contractual negotiations with the preferred providers. I can indicate that one of our contractors is a Tasmanian-based firm, as in Tasmanian owned. All the work is done on island by Tasmanian-domiciled contractors. They live in Tasmania. I think one of the firms might be a nationally owned business but they qualify as Tasmanian contractors because they employ Tasmanians.

Dr WOODRUFF - I did not hear the names of the ones that we already have, not the new ones.

Mr BALCOMBE - I've worked from memory. I can get the details for you. I can let you know later in the morning. I don't have them to hand right now. Pardon me.

Dr WOODRUFF - Thank you. With the interstate firms, how do you ensure quality and safety is achieved? We've had reports that some contractors - to you, minister - have been known to have a tick-and-flick approach to line maintenance. I can't give any substance to those observations but that would be a very concerning practice if that were the case. What does TasNetworks do to ensure quality and safety of line checking?

Mr BARNETT - TasNetworks as a GBE has health and safety as a top priority. I wouldn't want anybody listening to think that TasNetworks deal with this on a tick-and-flick basis. Lance, as the CEO, will emphasise how important that is. It's a very important aspect of the business. I will pass to the CEO.

Dr WOODRUFF - Can I clarify - I wasn't saying TasNetworks would ever endorse that. I'm asking how TasNetworks would make sure something like that could never happen?

Mr BALCOMBE - Dr Woodruff, you mentioned line maintenance. We are talking with regard to vegetation management here.

Dr WOODRUFF - Line maintenance includes, as I understand it - you're the experts and I'm not - looking at the quality of circuits and the quality of the lines. I am not just talking about overhead vegetation, I am talking about the quality of the line and the infrastructure.

Mr BALCOMBE - That clarifies two things so I might answer both. We have a strong internal workforce. We also engage accredited contractors to do overhead maintenance work. I think those contractors would be offended if they thought there was a suggestion that they were taking a tick and flick attitude to the work they do on our network. They operate to the highest standard. There are standards that they operate within with regard to the electricity rules and with regard to TasNetworks' own safety requirements, and inherent within the contractual arrangements are auditing procedures.

We have a group of auditors who go out on an ad hoc basis to review the work that is done, from the way the job starts, the way the job is set up, the way the job is constructed, how it is closed off and how it ends up in our records. We use a couple of contractors. One is Zinfra, a mainland operation but they operate nationally and they have a local workforce. They have two depots in this state, one at Cambridge and one in the north of the state. They employ many Tasmanians and spend lots of money in this state. They have a fleet of vehicles. They are a Tasmanian business, albeit they have a different ownership structure than a typical Tasmanian business. They are accredited to do switching on our network so they can actually create the network in accordance with the normal protocols, as do TasNetworks workers.

Why do we use contractors? We use contractors to package up specific areas of work where they can get a good run at it. A lot of our work is intermittent and it also gets interrupted by fault work. So we package up this work and give the contractors scale where they can leverage their skills and work on that uninterrupted.

With regard to vegetation management, we have a strong auditing regime and we're just about to change the way we undertake vegetation management under these new contracts. At the moment we pay our contractors by the hour, and that is inefficient. Basically, we administer all the work, we tell them where to go and cut the work, and then we do quality control reviews and checks. We are going to a new regime which will basically have three regions in the state, the north, the north-west and the south. Essentially, we hand over control of those zones to those contractors. They have prescribed requirements. The vegetation has to be cut to a certain standard and they then charge us by the span. That gives them unfettered access to the network, obviously within the safety constraints and operational constraints of the network. This is something that is being done right across the country right now because it drives efficiency.

Then we reassign the team that is currently dealing out all this work to do the quality controls in behind the contractors. If we find a span is not cut properly they recut it and don't charge us for that time. It drives efficiency. We think it will contribute close to a 20 percent saving once we get this new system up and running.

The other point about that is they use TasNetworks systems on that so all their workers are armed with TasNetworks laptops and all the data they are collecting is going into TasNetworks vegetation management system. We are driving good operational efficiency out of that as well as, we think, increasing the quality of that.

The other point I will make is we have just entered our bushfire season. TasNetworks' bushfire season starts on 1 December. It used to be 1 January but it is coming forward, and one of the things we do is cut our high bushfire consequence area, which is generally in the south-east. We cut that every year and I am pleased to report that that cut was completed on Thursday last week. All of those spans in that high bushfire consequence area have been cut to the appropriate clearances ahead of the bushfire season.