ACT News

Lodge renovation costs grow to $11.61 million as auditors called in

The cost of renovations at the prime minister's official Canberra residence has increased to $11.61 million, growing by $2 million in two weeks. 

Amid reports Prime Minister Malcolm Turnbull has launched audits of the project, the Department of Finance said professional fees, architect fees and departmental staff costs brought the total cost as of January 31 to $11.61 million. 

Prime Minister Malcolm Turnbull and his wife, Lucy, at The Lodge.
Prime Minister Malcolm Turnbull and his wife, Lucy, at The Lodge. Photo: Andrew Meares

The project had an approved government budget of $11.69m for the full scope of works.  

On Monday, The Australian Financial Review reported Prime Minister Malcolm Turnbull had launched an independent audit of the refurbishment of The Lodge, amid concerns the total cost blow out to $15 million.

Mr Turnbull and his wife Lucy Turnbull moved into the historic Deakin property in late January, as bureaucrats told journalists the three-year project had cost $9.4 million. 

Sources told Fairfax Media the Department of Finance has engaged firm Projects Assured to undertake an independent project review, due to concerns about how variations to the original contract were made.

The Department of Prime Minister and Cabinet has also reportedly engaged heritage and environment lawyer David O'Donnell to oversee a $20,000 review process due to report by the end of the month.

The review would focus on multiple contract variations since September 2013 and seek to "determine the percentage of costs which can be reasonably attributed to latent conditions, design omissions or increase in scope."

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The upgrades, commissioned under the former Labor government in 2013 had an expected cost of $3.2 million, and originally included asbestos removal, replacement of the degraded slate roof and decaying internal wiring, as well as health and safety improvements.

Former prime minister Tony Abbott approved an expanded scope of works on the advice of bureaucrats, including upgraded security systems, refurbished living areas and bathrooms and replacement of run-down Australian Federal Police guard houses.

Rumours suggest interventions in the project by senior figures in the government could have led to repeated contract variations.

In 2014 Mr Abbott's office blocked the release of information on the project, telling Finance Department officials not to provide any explanation for giving purposefully vague responses to requests for information from the media. 

A senior Finance official said Mr Abbott's staff could be concerned about privacy or a poor reaction to the information being made public. 

Last month, Department of the Prime Minister and Cabinet deputy secretary Elizabeth Kelly estimated about 50 per cent of the $9.4 million cost related to health and safety improvements, while about 25 per cent each related to interior refurbishments, including bathrooms and a new industrial kitchen, and to security improvements.

The 1927 property was originally intended to be home for the prime minister and family members for five years, but the recent upgrades are the first significant refurbishment in nearly 90 years. Among other recent additions are a luggage lift, balcony balustrades, new soft furnishings and interior decoration. 

The renovation is expected to be raised in Senate Estimates hearings on Tuesday.

"We are currently working through our project closure and review processes – including finalising invoicing – so are unable to provide a more detailed breakdown at this time," a Finance spokeswoman said. 

"The previously reported head contractor costs also include some essential maintenance costs undertaken in conjunction with the project and were inclusive of GST." 

Mr Abbott's decision to extend the project saw him become one of three prime ministers never to live at The Lodge since Stanley Melbourne Bruce moved to the new national capital in 1927. James Scullin considered the newly built official residence "a wicked waste of money" and never moved in, while Ben Chifley opted to stay at the Hotel Kurrajong.

Originally known as the Prime Minister's Cottage, the house was built by James Taylor of Sydney at a cost of more than £28,000.