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ANNUAL REPORT 2015–16Capital Metro Agency

II Capital Metro Agency: Annual Report 2015-16

ISSN: 2204-3756

Creative commons

© Australian Capital Territory, Canberra 2016

This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without written permission from the Transport Canberra and City Services Directorate.

Prepared by Publishing Services for the Transport Canberra and City Services Directorate, September 2016.

Telephone: (02) 13 22 81

Website: www.tccs.act.gov.au

For information regarding the Capital Metro Agency Annual Report 2015-16 please contact the Governance and Business Solutions Branch on 6205 8479.

ISBN 978 0 642 60655 6

Publication number: 16/1134

AccessibilityThe ACT Government is committed to making its information, services, events and venues accessible to as many people as possible. If you have difficulty reading a standard printed document and would like to receive this publication in an alternative format – such as large print and audio – please call the Canberra Blind Society on (02) 6247 4580.

If English is not your first language and you require the translating and interpreting service, please call the Telephone Interpreter Service on 131 450. If you are deaf or hearing impaired and require assistance, please call the National Relay Service on 133 677.

This report is also available online at www.tccs.act.gov.au

http://www.tccs.act.gov.au

III

Accessibility ii

Contents iii

SECTION A - Transmittal Certificate 1Compliance Statement 4

SECTION B - Organisation Overview and Performance 7B.1 - Organisation Overview 8

B.2 - Performance Analysis 21

B.3 - Scrutiny 22

B.4 - Risk Management 24

B.5 - Internal Audit 25

B.6 - Fraud Prevention 26

B.7 - Work Health And Safety 27

B.8 - Human Resource Management 29

B.9 - Ecologically Sustainable Development 31

SECTION C - FINANCIAL MANAGEMENT 35C.1 - Financial Management Analysis 36

C.2 - Financial Statements 44

C.3 - Capital Works 82

C.4 - Assets Managed And Office Accommodation 83

C.5 - Government Contracting 84

C.6 - Statement Of Performance 88

Glossary 92

CONTENTS

IV Capital Metro Agency: Annual Report 2015-16

Transport Canberra and City Services Directorate acknowledges the Ngunnawal people as the traditional owners and custodians of the Canberra region and that the region is also an important meeting place and significant to other Aboriginal groups. We respect the Aboriginal and Torres Strait Islander peoples, their continuing culture, and the contribution they make to the Canberra region and the life of our city.

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SECTION A: TRANSMITTAL CERTIFICATE

2 Capital Metro Agency: Annual Report 2015-16


COMPLIANCE STATEMENTThe Capital Metro Agency (CMA) Annual Report must comply with the 2015-16 Annual Report Directions (the Directions). The Directions are found at the ACT Legislation Register: http://www.legislation.act.gov.au/ni/annual/2015.asp.

The Compliance Statement indicates the subsections, under the five Parts of the Directions, which are applicable to the CMA, and the location of information that satisfies these requirements.

PART 1 - DIRECTIONS OVERVIEWThe requirements under Part 1 of the Directions relate to the purpose, timing and distribution, and record keeping of annual reports. The CMA Annual Report complies with all subsections of Part 1 under the Directions.

In compliance with Section 13 Feedback, Part 1 of the Directions, contact details for the CMA are provided within the CMA Annual Report to provide readers with the opportunity to provide feedback.

PART 2 - AGENCY ANNUAL REPORT REQUIREMENTSThe requirements within Part 2 of the Directions are mandatory for all directorates and the CMA complies with all subsections. The information that satisfies the requirements of Part 2 is found in the CMA Annual Report as follows:

> Section A - Transmittal Certificate, see page 3;

> Section B - Organisational Overview and Performance, inclusive of all subsections, see pages 7-33, noting the following:

• Subsection B.8 Human Resource Management, workforce recruitment and separation data was not supplied. Due to a small sample size, the data was not statistically valid or reliable.

> Section C - Financial Management, inclusive of all subsections, see pages 35-91, noting the following:

• Subsection C.4 Assets Managed and Office Accommodation, the CMA managed no assets as at 30 June 2016. The CMA leased office accommodation at Level 1 and a portion of Level 2, Telstra House, 490 Northbourne Avenue, Dickson, ACT 2602 and all office furniture in the premise remained the property of the lessor. All information, communications and technology equipment was leased.

As at 30 June 2016, the total space occupied was approximately 853.94m² including meeting rooms, staff facilities, circulation areas and work stations for consultants and contractors. As at 30 June 2016, 60 CMA officials (including consultants, contractors and ACT Public Service (ACTPS) employees) occupied this space with the approximate average space per official being 14.23m².

PART 3 - REPORTING BY EXCEPTIONThe CMA had nil information to report by exception under Part 3 of the Directions for the 2015-16 reporting period.

PART 4 - AGENCY SPECIFIC ANNUAL REPORT REQUIREMENTSThere are no agency specific annual report requirements applicable to the CMA.

http://www.legislation.act.gov.au/ni/annual/2015.asp

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PART 5 - WHOLE OF GOVERNMENT ANNUAL REPORTINGAll subsections of Part 5 of the Directions apply to the CMA. Consistent with the Directions, the information satisfying these requirements is reported in the one place for all ACTPS directorates, as follows:

> Section M Community Engagement and Support - see the 2015-16 Annual Report of the Chief Minister, Treasury and Economic Development Directorate;

> Subsection N.1 Bushfire Management - on the whole, responsibility for bushfire management in the Territory sits with the ACT Emergency Services Agency adhering to the Bushfire Operational Plan prepared by the Territory and Municipal Services Directorate. The CMA is neither the manager of unleased Territory land nor the owner of Territory land. The CMA did not receive any directions under the Bushfire Operational Plan;

> Section N Justice and Community Safety, including all subsections N.2-N.4 - see the 2015-16 Annual Report of the Justice and Community Safety Directorate;

> Section O Public Sector Standards and Workforce Profile, including all subsections O.1-O.3 - see the 2015-16 Annual Report of the Commissioner for Public Administration; and

> Section P Territory Records - see the 2015-16 Annual Report of the Chief Minister, Treasury and Economic Development Directorate.

ACTPS Directorate Annual Reports are found at the following web address: http://www.cmd.act.gov.au/open_government/report/annual_reports.

http://www.cmd.act.gov.au/open_government/report/annual_reports

http://www.cmd.act.gov.au/open_government/report/annual_reports

SECTION B: ORGANISATIONAL OVERVIEW

AND PERFORMANCE


B.1 ORGANISATIONAL OVERVIEWOUR VISIONThe CMA’s vision was to build a modern, vibrant and sustainable city. The CMA captured this purpose with the following phrase:

‘Capital Metro: New Century, New Connections’

OUR MISSIONThe CMA’s mission was to manage all aspects of the ongoing planning, design and delivery of the Capital Metro project (the Project), being Stage 1 of Canberra’s Light Rail Network (from Gungahlin to the City).

OUR VALUESIn addition to the ACTPS values of respect, integrity, collaboration, and innovation the following values were unique to the CMA and were developed by the CMA team:

> Finds a way - I will find a way to conduct my work in a safe and professional manner.

> Open and transparent - I will work collaboratively with my team and be open in providing necessary and supporting information to team members.

> Advocacy - I will work with commitment, conviction and passion, because I care about Canberra, and will leave a positive legacy. I will advocate for the needs of our customers during design, construction and operation.

> Professionalism - I will work with professionalism and have a commitment to quality and excellence.

> Courage - I will have courage to take calculated risks, make decisions and deliver frank and fearless advice.

OUR ROLE Transport is critical to the Government’s vision of a sustainable city. The foundation for transport planning over the next 20 years is set out in the Transport for Canberra Policy 2012. This policy aims to create a transport system that puts people first and links new development to investment in public transport. The Project is an important part of this policy, which maps ways to deliver faster, more convenient and more sustainable transport options for Canberra over the coming years.

The Project is an important part of the ACT Government’s vision to deliver a truly sustainable and creative city as set out in The Canberra Plan 2004. The CMA delivered the Project in a manner which ensured comprehensive coordination and integration of transport, land use and development, social, and environmental outcomes.

OUR FUNCTIONS AND SERVICES The CMA was an agency within the ACT Government, responsible to the Minister for Capital Metro, Simon Corbell MLA. The CMA worked collaboratively with other ACT Government directorates to bring together the planning, design and procurement of the Project.

At the commencement of the 2015-16 reporting period, the CMA was midway through the Project’s Procurement Phase with shortlisted respondents preparing their final bids. The Project progressed through to bid evaluation and then Contract and Financial close in the reporting period with the CMA transitioning into the Delivery Phase, which includes light rail construction and operations, in the latter part of 2015-16.

In August 2015, the CMA commenced the transition process from the Project’s Procurement Phase to the Delivery Phase. This involved:

> developing and implementing people, capability and organisation structures;

> developing and implementing governance, control systems and reporting mechanisms;

> developing and implementing contract management tools and procedures; and

> knowledge transfer and team training.

During the Procurement Phase, the CMA was divided into five divisions with a number of smaller functional groups that delivered, supported and enabled procurement activities for the Project. These divisions were the:

> Office of the Project Director/Director-General;

> Procurement and Delivery Division:

• Procurement and Delivery Branch; and

• Planning and Design Branch.

> Customer Experience and Operations Division;

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> Commercial Division:

• Commercial Branch;

• Project Controls Branch;

• Finance Branch; and

• Legal Services Branch.

> Governance and Business Solutions Division:

• Governance and Business Solutions Branch; and

• Communications and Stakeholder Engagement.

Following the CMA’s transition into the Delivery Phase (in May 2016), the organisation’s structure was adjusted to support the activities of contract management, construction and light rail operations. At 30 June 2016, the CMA’s organisational structure consisted of three divisions, being the:

> Office of the Director-General;

> Office of the Chief Operating Officer:

• Governance and Business Solutions Branch;

• Communications Branch;

• Legal Branch; and

• Finance Branch.

> Office of the Project Director:

• Contract Management Office Branch;

• Construction Branch;

• Operations Branch; and

• Engineering Branch.

Throughout the 2015-16 reporting period, the CMA, the Minister for Capital Metro and the Capital Metro Sub-Committee of Cabinet were supported by the Capital Metro Project Board (the Project Board). The Project Board, which will be maintained through the Delivery Phase of the Project, focused on high level strategic decision making. For more information on the Project Board, please refer to Internal Accountability p16.

OUR CLIENTS AND STAKEHOLDERS Establishing and maintaining relationships with a wide range of stakeholders is essential to delivering light rail for Canberra. The CMA Stakeholder Engagement Strategy defined the breadth of engaged stakeholders interested in the design, construction and operation of light rail.

Our stakeholders included:

> Ministerial offices;

> ACTPS decision making bodies;

> ACT residents, community groups, advocacy bodies, businesses and institutions; and

> ACT and Commonwealth Government agencies.

Our primary client was the ACT community. The CMA engaged with the community to actively seek out, consider and act on their views to develop light rail and to deliver appropriate, complementary and usable urban design outcomes.

The CMA team developed and implemented a number of education awareness campaigns that target the needs of our clients and key stakeholders.

The team also actively participated in numerous community engagement events including presenting at forums and conferences, and attending stakeholder briefings. Independent market research activities were also conducted by the team, who were heavily engaged online and with social media.

These activities assisted in building an improved understanding of the Project’s objectives and encouraging meaningful engagement with the ACT community about the Project.

PLANNING FRAMEWORK During the reporting period, the Executive Team, in consultation with CMA employees, consultants and advisors, finalised the CMA’s Strategic Plan.

The Strategic Plan supported the Project’s Procurement Phase and the CMA’s transition into the Project’s Delivery Phase. The Plan also supported the building of a working relationship between the CMA, the Canberra Metro consortium (the preferred respondent for the delivery of the Project) and the Independent Certifier for the Project.

A key strategy for the CMA was to build upon its existing diverse workforce of both ACTPS employees and private sector consultants and contractors. In addition to the existing legal, commercial, probity, operational and technical advisors, the reporting period saw the engagement of specialist staff for design, construction and engineering.

The CMA continued to adopt and promote better practice project management and probity principles in its dealings, having implemented a Probity Policy to support the engagement of independent probity advisors, Sparke Helmore Lawyers, for the Project’s procurement and evaluation.


AGENCY PERFORMANCEThe following table provides a brief description of the CMA’s performance against the 2015-16 priorities as listed in the 2015-16 Budget Papers. For further information on the CMA’s performance against strategic indicators and output classes, see sub-section B.2 - Performance Analysis p21.

Priority Achievement at a glance

Conduct the tender process with shortlisted respondents participating in the Project’s Request for Proposal (RFP) phase.

The CMA conducted a robust procurement process during the Procurement Phase of the Project covering 1 November 2014 to 24 May 2016.

The EOI received four respondents, and the RFP was released on 16 April 2016 to the two shortlisted respondents.

Receive proposals from shortlisted respondents for both the City to Gungahlin component of the Project and the Russell Extension option.

The CMA received proposals from both shortlisted respondents for: > Stage 1 (Gungahlin to the City) on 4 September 2015; and

> Russell Extension option (Gungahlin to Russell) on 2 October 2015.

Manage the Project’s RFP evaluation team’s evaluation of proposals received from shortlisted respondents.

The CMA successfully managed the Project’s RFP proposal evaluation, providing a dedicated (and restricted) workspace for evaluation team members to conduct their evaluation. The team was well resourced (including expert advisors on RFP evaluation) and supported by several administrative staff.

Manage the Project’s RFP evaluation panel’s provision of recommendations to Government in respect of the preferred respondent for the Project, including provision of recommendations in respect of a potential extension of the route to Russell.

The CMA managed the provision of the RFP evaluation panel’s recommendations to Government for both Stage 1 and the Russell Extension option.

Negotiate a contract with the preferred respondent and achievement of ‘contract close’ for the Project.

The Canberra Metro consortium was selected as the preferred respondent on 1 February 2016, at which time contract negotiations commenced.

Contract close was achieved on 17 May 2016 with the signing of the Capital Metro Project Agreement (the Project Agreement).

Fulfil conditions precedent under the Project contract between the Territory and it’s Project delivery partner, with commencement of the contract’s term and the Project’s delivery period.

The CMA and the Canberra Metro consortium were able to fulfil conditions precedent under the Project Agreement with Financial close being achieved on 24 May 2016.

Procure and appoint an Independent Certifier for the Project.

On 9 May 2016 APP were appointed under an Early Independent Certifier Services Agreement. On 16 May 2016, the formal Independent Certifier Deed of Appointment was signed by the CMA, Canberra Metro and APP. This came into effect as of Financial close.

Conduct active community engagement and communications regarding the status of the Project.

The CMA continued to conduct active community engagement regarding the status of the Project.

During the reporting period the CMA actively sought feedback on the Project, including Development Application Approvals and Works Approvals. For further information please refer to Section M of the Chief Minister, Treasury and Economic Development Directorate’s 2015-16 Annual Report.

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Priority Achievement at a glance

Continue engagement across Government in connection with light rail master planning activities and in developing strategies for integration of light rail with other transport modes within the Territory.

Through the Project Board and other cross-Government working groups the CMA continued to actively promote and champion discussion and planning for the light rail network and its integration with other transport modes within the Territory.

Continue provision of support to Government in connection with its urban renewal activities.

The CMA continued to proactively support the Government’s urban revitalisation program.

Identify, monitor and manage risks associated with the complex delivery of the light rail network.

Although the CMA was only responsible for the management of Stage 1, the CMA did facilitate the identification, monitoring and management of risks associated with the complex delivery of the light rail network.

The CMA continued to regularly assess these risks and support risk management by other directorates with inter-related projects.

AGENCY OUTLOOKFrom 1 July 2016 the CMA and the Territory and Municipal Services Directorate (TAMS) will merge to become the Transport Canberra and City Services Directorate (TCCS). With a maintained focus on delivering core municipal services to Canberra, TCCS will also bring together ACTION buses and light rail as a part of the Public Transport Improvement Plan 2015.

The Transport Canberra division will integrate light rail with other modes of transport to ensure a single ticketing system, with a central point of contact for information, and coordinated timetabling. This means that customers of light rail will be able to use the same card and transfer between light rail and bus under the same rules that apply to the existing ACTION bus network.

2016-17 will be a significant year for the construction of light rail in Canberra. The turning of the first sod for Stage 1 is expected to occur in mid July 2016 at the light rail depot site in Mitchell. The light rail depot will incorporate a stabling yard for light rail vehicles, a maintenance facility and the operations centre for light rail - the heart of the light rail network.

Following the completion of survey works which commenced in June 2016, enabling works such as potholing, utility surveys and geotechnical investigations are expected to commence in mid July 2016 with main works (visible construction activity) commencing in August/September 2016.

In addition to the depot site, construction for light rail will be broken into six distinct zones with various construction activities occurring across each site at the same time to meet construction scheduling and to minimise disruption to the general public. These six zones are:

> Zone 1 - Gungahlin Terminus to Hibberson Street;

> Zone 2 - Flemington Road North;

> Zone 3 - Flemington Road South;

> Zone 4 - Federal Highway;

> Zone 5 - Northbourne Avenue; and

> Zone 6 - Civic Terminus.

The future Transport Canberra Light Rail Project Team within TCCS will continue its commitment to communicate and engage with the community and key stakeholders. TCCS and Canberra Metro will also continue to work with local businesses through the Canberra Business Chamber Light Rail Business Link Program and the local industry participation policy.

An approximate two and a half year construction timetable is expected with the completion of Canberra’s light rail network Stage 1 scheduled for late 2018.


INTERNAL ACCOUNTABILITYThe CMA was created by the Administrative Arrangements 2013 (No 1) with effect from 1 July 2013. On 8 April 2016, new administrative arrangements announced that from 1 July 2016 the CMA and TAMS would cease as entities with the establishment of a new directorate, the Transport Canberra and City Services Directorate (TCCS).

TCCS will bring together the CMA, ACTION buses and the existing municipal services functions of TAMS, including libraries, waste and recycling, infrastructure maintenance and management of Territory assets including recreational facilities.

As part of the transition to the new directorate, an interim structure for TAMS was established. In recognition of the significant scope of the new Directorate, the interim structure included four senior executive roles, reporting to the Acting Director-General TAMS:

> Deputy Director-General, Transport Canberra;

> Deputy Director-General City Services;

> Executive Director, Strategy Innovation and Customer Experience; and

> Chief Operating Officer.

This interim structure also impacted on the reporting lines of the CMA as described below.

The Deputy-Director General, Transport Canberra leads the Light Rail Project delivery and manages the provision of a transport system for Canberra that is integrated, convenient, reliable and efficient. The position is tasked with leading modal shift in transport usage to address low public transport patronage.

Duncan Edghill was appointed as the Acting Deputy Director-General, Transport Canberra in May 2016. He was also performing his duties as Executive Director, Commercial with the CMA during the transition period.

The Chief Operating Officer provides leadership in the strategic planning, governance and business support services for TCCS. The position also facilitates engagement with the Minister, the public and stakeholders on behalf of the Directorate. The position provides oversight of all corporate functions for TCCS such as financial management, procurement, legal services, work health and safety and participation in whole of Government activities.

Cherie Hughes was appointed to the role in May 2016. She was also performing her duties as Chief Operating Officer with the CMA during the transition period.

For the majority of the reporting period, up until May 2016, the CMA was structured as follows:

Capital Metro Sub-Committee of Cabinet

Light Rail Project Board

Minister for Capital MetroSimon Corbell MLA

Executive Director, Commercial

Duncan Edghill

Director, Project ControlsBrendan McAvoy

Chief Financial Officer

Andrew Fleming

Director, Governance and Business Solutions

Nikki Pulford

Director, Communications and Stakeholder Engagement

Melanie Taylor

Chief Operating Officer

Cherie Hughes

Executive Director, Procurement and Delivery

Scott Lyall

Director-General and Project DirectorEmma Thomas

Director, ConstructionSteve Anderson

Director, EngineeringSteven Sancbergs

Director, OperationsJim Kilfeather

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REMUNERATION FOR SENIOR EXECUTIVESIn accordance with the Remuneration Tribunal Act 1995, the Remuneration Tribunal establishes and renews the remuneration of senior executive officer positions and part-time statutory authority positions.

SENIOR EXECUTIVEAs at 1 May 2016, the CMA had the following Executive positions:

Director-General, Project Director

Reporting to the Minister for Capital Metro, Director-General was responsible for:

> the strategic direction and effective administration of the CMA;

> contributing, through the oversight of the Project, to realise the Government’s vision for a sustainable transport system as outlined in the Transport for Canberra Policy 2012; and

> mobilising and managing a multi-disciplinary project team with the experience, skills and motivation required to plan and deliver a major project of this scale.

The CMA Director-General was a member of the ACTPS Strategic Board which provides whole of Government leadership and direction to the ACTPS. Emma Thomas joined the CMA to take up this role in October 2013.

Executive Director, Commercial

Reporting to the CMA Director-General, the Executive Director led the Commercial Division and was responsible for:

> providing economic advice and direction on complex Project related commercial and financial matters;

> developing options for the commercial and financial arrangement by which the Project could be procured and delivered, including the appropriate engagement with private sector partners;

> oversight of risk management and control processes within the CMA;

> contributing to the development of procurement documentation and processes for the Project; and

> contributing to the development of whole of Government capacity in the analysis and implementation of Public Private Partnerships in delivering major infrastructure in the Territory.

Duncan Edghill joined the CMA in April 2014 to fulfil this role. He was appointed as the acting Deputy Director-General Transport Canberra in May 2016 combining these responsibilities.

Chief Operating Officer

Reporting to the CMA Director-General, the Chief Operating Officer was responsible for:

> strategic planning;

> corporate governance;

> overseeing community and stakeholder engagement;

> managing project systems and processes;

> overseeing the management of work health and safety within the CMA;

> establishing business solutions, including business systems, processes and capabilities for the CMA;

> overseeing the financial, legal and procurement activities of the CMA; and

> facilitating the CMA’s participation in whole of Government activities.

Cherie Hughes joined the CMA in February 2016 to fulfil this role. In May 2016 Cherie Hughes was appointed the Chief Operating Officer for TCCS.

Director, Communications and Stakeholder Engagement

Reporting to the Chief Operating Officer, the Director led the Communications and Stakeholder Engagement Branch and was responsible for:

> the CMA communications and engagement strategy for the Project;

> leading the day-to-day marketing, communications and media engagement activity, in close consultation with the Minister’s Office, the Director-General and the Project Team;

> planning for and delivering positive local industry participation outcomes;

> providing communications support to the Project Board;

> planning and delivery of meaningful engagement activities, including management of sensitive issues and conversations; and

> contributing to the successful transition from project planning to construction through positive and proactive community and stakeholder engagement.

Melanie Taylor joined the CMA in March 2015 to fulfil this role.


Director, Governance and Business Solutions

Reporting to the Chief Operating Officer, the Director led the Governance and Business Solutions Branch and provided executive leadership on governance and stewardship for the CMA. The Director was responsible for:

> providing effective liaison between the CMA, the Project Board, the Minister and Cabinet;

> providing strategic and secretarial support for the Project Board;

> leading the production of detailed issues and events briefs, reports, plans, speaking notes, responses to ministerial correspondence and the CMA’s preparation and attendance at public hearings as frequently required for government and Ministerial business;

> managing corporate reporting for the CMA as well as statutory reporting at a whole of Government level;

> managing the governance transition to a Public Private Partnership arrangement;

> providing strategic policy advice and review;

> managing Cabinet and Legislative Assembly business requirements on behalf of the CMA; and

> preparation and publication of Annual Report and other agency documents.

Nikki Pulford joined the CMA in June 2013 as the Senior Manager, Governance and Operations and was appointed as the Director of Governance and Business Solutions in November 2015. In May 2016, Nikki Pulford was appointed as the Director Governance and Business Solutions for TCCS.

Chief Financial Officer

Working to the Chief Operating Officer, the Chief Financial Officer led and managed the provision of accounting and financial management services within the CMA. The Chief Financial Officer was responsible for:

> providing monthly financial reports and management of financial performance including preparation of forecasts and variance analyses;

> preparing the annual budget and supporting internal budgets for CMA management;

> developing and maintaining financial controls, policies and processes;

> preparing annual financial statements and management, discussion and analysis as well as management of the external annual audit;

> managing the duties and performance of the CMA finance team;

> managing the delivery of financial information to CMTEDD and developing and maintaining the relationship with CMTEDD;

> providing accounting advice in relation to the activities of the CMA;

> managing taxation matters; and

> proving independent financial advice to the Director-General.

The services of the Chief Financial Officer were provided by a consultant, Andrew Fleming, during the reporting period.

Executive Director, Procurement and Delivery

Reporting to the CMA Director-General, the Executive Director led the Procurement and Delivery Division and was responsible for:

> providing advice and direction on complex project related procurement, design, planning and contract management matters;

> working closely with Shared Services Procurement, and the ACT Government Solicitor’s Office, developing options for establishing and overseeing the financial and related contract arrangements by which the Project was procured and delivered, including the appropriate engagement with private sector partners;

> contributing to the development of a whole of Government capacity in the analysis and implementation of complex procurement arrangements, including private sector partnerships, in delivering major infrastructure in the Territory;

> stewardship of the various project elements through the requisite planning and related approvals processes; and

> technical advice and support to private sector partners.

Scott Lyall is a contractor and joined the CMA in November 2015 to fulfil this role. Scott Lyall was appointed as the Light Rail Project Director in June 2016.

Director, Construction

Reporting to the Executive Director Procurement and Delivery, the Director led the Construction Branch and liaised closely with the Independent Certifier (IC), CMA Executives and other ACTPS Executives to provide leadership on the management and implementation of the delivery of the Project. Key responsibilities for the Director included:

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> managing and monitoring day-to-day construction operations;

> assisting in the resolution of site issues;

> developing contingency and mitigation strategies to minimise construction risks;

> providing advice on technical issues associated with construction, and contract claims and modifications; and

> upholding safety requirements and legislation across all construction areas.

Steve Anderson joined the CMA in February 2015 to fulfil this role.

Director, Contract Management Office

Reporting to the Executive Director Commercial, the Director was responsible for:

> providing assurance to the CMA’s Executive, Project Director and Project Board that risk, change and program matters were being effectively managed;

> managing the Project’s risk profile and the Project’s risk and change registers;

> overseeing the preparation of risk mitigation plans, including reporting against these plans for continuous improvement;

> overseeing Project control activities, including project planning, programming and scheduling;

> overseeing the management of the contract for the IC; and

> overseeing the management of the Project Agreement with Canberra Metro.

Brendan McAvoy joined the CMA in March 2015 to fulfil this role.

Director Engineering

Reporting to the Executive Director Procurement and Delivery, the Director was responsible for:

> managing, on behalf of the Territory, the satisfaction of Territory requirements under the Project Agreement in relation to planning, design and technical review;

> facilitating open review processes in association with the IC and other stakeholders such as the Technical Regulator;

> overseeing technical workshops and technical assurance processes;

> assistance in the negotiation of the design and engineering aspects of the Project Agreement;

> providing advice and direction on complex project related design, planning and approvals matters;

> working closely with the relevant consenting authorities, developing options for establishing and overseeing the planning and related approvals process, and providing assistance to facilitate timely approval; and

> working closely with Canberra Metro to ensure planning submissions are complete, an of acceptable quality, and submitted in the required time frame.

Steven Sancbergs joined the CMA in October 2015 to fulfil this role.

Director, Operations

Reporting to the Executive Director Procurement and Delivery, the Director was responsible for:

> ensuring customer needs were central to the design, planning, procurement and delivery processes of the Project;

> providing operational advice and direction on all significant Project design, planning, procurement and delivery aspects;

> ensuring the development of a concept of operations including key performance indicators for both standard and non-standard operations;

> leading and ensuring effective integration with the cycling, pedestrian, and road transport network;

> leading and ensuring effective integration with the public transport network including ticketing, service levels and timetabling, passenger information systems and marketing;

> ensuring an appropriate regulatory, safety and accreditation regime was in place for light rail operations in the ACT; and

> ensuring effective governance and management arrangements were in place to oversee the operation of the new light rail system.

Jim Kilfeather fulfils this role and is a contractor for the Project.


Capital Metro Project BoardThe Project Board met once a month with secretariat services provided by the CMA Governance and Business Solutions Branch. The Secretariat acted as the liaison point for requests for assistance from Project Board members.

The Project Board was an advisory board governed by the Light Rail Project Board Charter. It focused on high-level strategic decisions, with Project Board membership composed of decision makers only.

The following table identifies current Project Board members as at 30 June 2016:

Individual

ChairJohn Fitzgerald, Independent Chair

Deputy ChairUnder Treasurer

Independent memberMichael Kerry, Independent member

MemberDirector-General, Economic Development

MemberDirector-General, Justice and Community Safety

MemberDirector-General, Territory and Municipal Services

MemberDirector-General, Environment and Planning

Sparke Helmore was engaged in September 2014 as the probity advisor for the Project. During the reporting period, a representative from Sparke Helmore was in attendance at each Project Board meeting during the Procurement Phase to provide strategic probity advice.

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Significant CMA Committees 2015-16

Name of Committee Role of Committee

Capital Metro Sub-Committee of Cabinet

To make investment decisions about the Project, including on the Project’s Final Full Business Case.

The Capital Metro Sub-Committee of Cabinet: > settled major policy and service issues associated with the Project;

> approved the Project Plan for the timing and sequencing of work and receives regular progress updates;

> approved and received regular updates on the assurance arrangements for the Project, including:

• risk management and mitigation;

• evaluation;

• auditing;

• quality control; and

• value for money.

> approved major procurement and contractual arrangements; and

> approved the financial structure and fiscal strategy for the delivery of the Project.

Audit Committee To oversee the CMA’s governance framework (risk, compliance, external accountability and the internal control environment).

The key responsibilities of the CMA Audit Committee were to: > provide oversight of the internal audit function;

> oversee the risk management framework and processes including the CMA Fraud and Corruption Prevention Plan;

> oversee the legislative, regulatory and ethical compliance management framework;

> evaluate the processes in place for assessing and continuously improving compliance and internal controls, particularly those related to areas of significant risk; and

> review, with management, the annual financial statements presented to the governing body including the acceptability of, and correct accounting treatment for, disclosure of significant accounting transactions which are not part of the Agency’s normal course of business (external auditing responsibilities).

Corporate Governance Committee

To support the CMA Director-General’s ability to implement, maintain and report on corporate governance for the CMA.

The CMA established one committee to consolidate activities relating to the Directorate Consultative Committee, Work Health and Safety Committee, and a Corporate Governance and Resources Committee.

Risk Management and Change Control Committee

To ensure a common understanding of Project risks was maintained by all Agency personnel and all relevant stakeholders at all times, through adherence to the Agency’s Risk Management Procedures.

The Committee: > actively monitored a Risk Register of the CMA and the Project;

> reviewed and monitored progress on key project risks via analysis of Top Risk Management Plans;

> endorsed the issue of a revised Risk Register, including:

• pending emerging risks identified via Risk Notification Forms;

• non-approved risks identified via Risk Notification Forms;

• changes to existing risks affecting the overall risk profile as held in the working Risk Register;

• reporting to the CMA Audit Committee as it deems appropriate on the work of the Committee providing suggestions on areas of risk that may benefit from internal audit, or examination by the CMA Audit Committee;

• providing regular reports to the Project Director and Executive on actions undertaken by the Committee; and

• making recommendations to the Executive on risk matters as it determines in its sole discretion.

Further information may be obtained from the Governance and Business Solutions Branch by contacting (02) 6205 8479.


CMA HIGHLIGHTS DURING THE REPORTING PERIOD

July 2015

On 7 July 2015, the Minister for Capital Metro, Simon Corbell MLA called for nominations for people interested in becoming members of the community or business reference groups for the Project. Establishment of these reference groups provided a great opportunity for community and business leaders along the light rail corridor to get involved with the Project team and provide feedback about the best way to deliver the Project.

On 17 July 2015, public consultation on the draft Environmental Impact Statement closed; having opened on 20 June 2015. Following four weeks of consultation, the CMA received 59 responses to the draft Environmental Impact Statement from individuals, local businesses and community organisations. This feedback informed the ongoing planning for Stage 1 and supported the preparation of the final Environmental Impact Statement to be a comprehensive document that thoroughly considered potential issues and mitigation measures for the Project.

August 2015

Speaking at a public seminar hosted by the Heart Foundation on 26 August 2015, the Minister for Capital Metro (and Health Minister), Simon Corbell MLA spoke about the benefits of public transport and physical activity in the fight against obesity. The Minister highlighted that one of the many health benefits associated with light rail is that it will provide better connectivity and accessibility to the city, promoting active transport and decreasing time people spend in cars.

Across July and August 2015, the CMA facilitated a number of interactive workshops between the CMA Project team and representatives from both shortlisted respondents. These meetings, attended by the CMA’s probity advisors, created open communication streams between shortlisted respondents and Government officials to allow in-depth understanding of the Government’s Project requirements. This process involved in excess of 100 meetings, ultimately resulting in a reduction in costs through the benefit of better risk management and information sharing.

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September 2015

On 4 September 2015, the ACT Government received bids from both shortlisted respondents for Stage 1. Interactive respondent workshops were held by the CMA and shortlisted respondents between 29 April 2015 until late August 2015 to support the shortlisted respondents preparation of their bids for the Project. Proposals were mindful of:

> the Territory’s affordability bounds;

> the Territory’s desire to obtain a world-class, smart, seamless and modern light rail system that prioritises safety, the customer experience, personal security, reliability, frequency, simplicity and convenience;

> the need to display excellence in urban design that recognises Canberra’s unique, planned history and creates a beautiful and vibrant entrance to Australia’s capital city; and

> our community aspirations for the Project, including the Territory’s desire for meaningful dialogue to be maintained with Canberrans, effective engagement of local industry, to minimise disruption in the Project’s delivery, and ongoing focus on sustainability.

October 2015

On 2 October 2015, both shortlisted respondents for the Project submitted proposals to the ACT Government for the Russell Extension option.

On 16 October 2015, the final Environmental Impact Statement for Stage 1 was lodged with the Environment and Planning Directorate (EPD). This Statement helped the Government explore and mitigate potential environmental impacts before construction of light rail began. The Environmental Impact Statement also identified benefits and opportunities that will be delivered as a result of the Project.

On 23 October 2015, Development Applications for Stage 1 and the Russell Extension option were lodged with EPD. The plans were developed by the CMA with engineering and design firms Arup and Hassell. They detailed everything from construction management, demolition and earthworks plans, landscape management, light rail vehicles, utilities, roads and traffic arrangements, detailed site plans and much more.

November 2015

On 19 November 2015, Minister for Capital Metro, Simon Corbell MLA announced a partnership between the Canberra Business Chamber (CBC) and the ACT Government to help Canberra maximise the business

opportunities created by light rail which will increase economic benefits for the Canberra region. The Light Rail Business Link Program is a great example of industry and Government working together to benefit development, job creation, and the economy in the ACT. The program supports the CBC serving as a central consultation and engagement point between the ACT Government and the business community on the Project.

On 24 November 2015, the ACT Government released its study into Greenhouse Gas Emission Reductions from the Project. Prepared by Professor Will Steffan and David Flannery from the Canberra Urban Regional Futures (University of Canberra), the study estimates that by 2020, when Stage 1 is operational, about 2,900 to 4,700 tonnes of greenhouse gas emissions per year will be eliminated from the transport sector. This translates to an 18 to 30 percent emission reduction on the City to Gungahlin corridor in 2020 compared to a business-as-usual approach.

December 2015

On 21 December 2015, the first Development Application for Stage 1 was approved by EPD. Based on the CMA’s Reference Design, this Development Application was for certain parts of the route including Flemington Road and Hibberson Street, the light rail depot, substations and construction compounds at Gungahlin and opposite EPIC.

January 2016

January was a particularly busy month for the CMA as the evaluation of bids to select the preferred respondent was completed and submitted to the Project Board and Cabinet for consideration.

February 2016

On 1 February 2016, the Canberra Metro consortium was announced as the ‘preferred respondent’ to deliver Stage 1. The Canberra Metro consortium is world class and will build Stage 1 sooner and with a capital cost lower than earlier estimated by the ACT Government. Canberra Metro comprises of Pacific Partnerships, CPB Contractors, John Holland, Mitsubishi Corporation, Aberdeen Infrastructure Investments, Deutsche Bahn International and CAF - all with a proven track record of transport construction and operations both within Australia and overseas.

On 15 February 2016, the ACT Government and the CBC launched the first forum of the Light Rail Business Link Program.


Also on 15 February 2016, planning approvals were lodged for Stage 1, supporting the ACT Government’s vision of an improved urban design with a safe and accessible customer experience along the corridor. Applications were submitted to the National Capital Authority (NCA) and EPD for works to be carried out from the City to Gungahlin.

On 19 February 2016, the Minister for Capital Metro, Simon Corbell MLA announced that construction of Stage 1 would commence in mid-2016 following the completion of negotiations and contract finalisation with Canberra Metro.

On 23 February 2016, CMA Director-General, Emma Thomas was announced as the future Director-General of the new Transport Canberra Agency.

March 2016

March saw the Project team undertake the critical RFP evaluation for the Independent Certifier in addition to ongoing contract negotiations with Canberra Metro. The CMA was working with other government agencies on the establishment of the new Transport Canberra Agency.

April 2016

On 7 April 2016, the ACT Government announced that Transport Canberra would be merging with TAMS on 1 July 2016 to become the Transport Canberra and City Services Directorate.

In late April 2016 the CMA obtained planning approvals from both the NCA and EPD - allowing for the construction of Stage 1. These planning approvals took into consideration feedback from the community and businesses to support the construction of light rail in a manner that would have minimal impact on the community.

May 2016

In May 2016, the Project achieved both Contract close (17 May 2016) and Financial close (24 May 2016).

On 17 May 2016, the ACT Government announced the Civic Plaza concept, dynamic lighting and an upgraded Alinga Street stop would be included in the Project Agreement for Stage 1.

June 2016

On 9 June 2016, the Contract Summary and Project Agreement for Stage 1 were publicly released on the CMA website and the Procurement and Capital Works Procurement Register.


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B.2 - PERFORMANCE ANALYSISIn the reporting period, the CMA worked towards delivering the key strategic objectives identified in the 2015-16 Budget Papers relating to the ongoing planning, design and delivery of the first stage of a light rail network in the Territory. This was done in a manner that ensured comprehensive coordination and integration of transport, land use and development, social, economic and environmental outcomes.

The strategic priorities for 2015-16 included:

STRATEGIC OBJECTIVE 1

Procurement of the Capital Metro ProjectThe principle objective of the CMA was to manage all aspects of the ongoing planning, design and delivery of the Project. To achieve this strategic objective and consistent with the delivery of the Project’s Full Business Case, the CMA procured the Project as a Public Private Partnership.

Strategic Indicator 1: Identification of a Preferred Respondent to deliver the Capital Metro Project

The Project’s procurement process included an expressions of interest phase, an RFP phase, and then a contract negotiation and completion phase. The CMA shortlisted two respondents to participate in the Project’s RFP phase. Canberra Metro was identified as the preferred respondent on 1 February 2015.

STRATEGIC OBJECTIVE 2

Consideration of the Potential Extension of the Capital Metro Route to RussellThe Government included a Russell Extension option in the Project’s procurement process. Shortlisted respondents were requested to submit to the Territory a proposal for extending the light rail route from the City to Russell as part of the Project. At the time, the CMA supported the Government’s ability to exercise (or not exercise) the option to extend the Project’s route.

Strategic Indicator 2: Provision of Advice to Government in Response to the Russell Extension Proposals

Following the submission of proposals by shortlisted respondents and their evaluation by the Project’s RFP evaluation team, the CMA presented advice about the Russell Extension option proposals to Government. On 21 March 2016, the Government announced that it

would consider an extension of the Light Rail Network to Russell, alongside other options, as part of light rail Stage 2.

OUTPUT CLASS 1: CAPITAL METRO PROJECT AND GOVERNANCEThe CMA’s role was to deliver key Government policy and project initiatives, while also providing strategic advice to the Minister for Capital Metro. In particular, the planning, procurement and delivery of a light rail service between the City and Gungahlin and the possibility of an extension to Russell.

During the reporting period, the CMA:

> received two proposals from shortlisted respondents in respect of the City to Gungahlin component of the Project;

> received two proposals from shortlisted respondents in respect to the Russell Extension option;

> presented a Russell Extension option paper to Government for consideration;

> identified the Canberra Metro consortium as the preferred respondent in respect of the Project; and

> achieved Contract close (being the signing of the Project Agreement) on the Project on 17 May 2016 and Financial close on 24 May 2016.



B.3 - SCRUTINYImplementation status on existing reports

Report on Annual and Financial Reports 2013-14

Recommendation Action Status

The Committee recommends that the ACT Government inform the ACT Legislative Assembly as to measures it has taken to engage with Icon Water and ActewAGL regarding respective utility services to which each are responsible - to determine the full impact the Capital Metro project will have on the supply and security of these services during construction

Agreed. The Capital Metro Utilities Project Team has been established with representatives from all relevant utility providers including ActewAGL and Icon Water.

One of the roles of the Capital Metro Utilities Project Team is to provide an interface between the Utility Company/Stakeholders and the Capital Metro project, obtain initial approval on the type of utility treatment (i.e. relocate/protect/abandon), and develop an understanding of the utilities risk and the best way to transfer or manage that risk.

Completed.

The responsibility for engaging with utility providers is now owned by Canberra Metro.

Reports reviewed and responded to during 2015-16

During the reporting period, the CMA reviewed and responded to reports as summarised below.

Appropriation Bill 2015-2016 and Appropriation (Office of the Legislative Assembly) Bill 2015-2016


The Committee recommends that the ACT Government include appropriate standard termination/withdrawal clauses in all contracts for the provision of Capital Metro.

Noted.

The ACT Government intends to include appropriate standard termination provisions in the Capital Metro Project Agreement.

Completed.

The Committee recommends that the ACT Government reconsider the decision to use Eucalyptus mannifera as the replacement tree on Northbourne Avenue.

Not Agreed.

Detailed studies were carried out, by both Territory and independent arborists, into suitable tree species to be grown on Northbourne Avenue as a replacement upon the removal of the existing trees. The National Capital Authority advised of a preference for native trees to be utilised; this was further confirmed by the community feedback received through the consultation exercises carried out by the CMA.

Soil samples were taken and analysed to ensure that the most appropriate species of native tree was recommended to shortlisted bidders.

The above activities resulted in the recommendation of the Eucalyptus mannifera to be grown on Northbourne Avenue as a replacement of the existing trees.

Completed.

Based on specialist advice, the CMA has chosen Eucalyptus mannifera as the preferred species for the Northbourne Avenue corridor.

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The Committee recommends that the ACT Government undertake a staged approach to tree replacement on Northbourne Avenue.

Noted. The ACT Government, through the auspices of the CMA Request for Proposals process, has asked that the two shortlisted bidders identify costs for an optional approach to undertake a staged removal and replacement of the trees on Northbourne Avenue.

As part of the evaluation of the two proposals, the CMA will assess both the cost and program impact of a staged approach to tree removal and replacement.

Completed.

Canberra Metro will be undertaking a staged approach to the removal and replacement of trees on Northbourne Avenue.

On 16 June 2016, the Auditor-General tabled the Auditor-General’s Performance Audit Report No. 5 of 2016: Initiation of the Light Rail Project which examined the CMA’s ability to manage the Project through its:

> project management framework;

> project planning and scoping processes;

> controls on spending; and

> advice to decision makers.

A Government response was prepared during the reporting period. However, due to the 2016 ACT election, the response will not be tabled in the Legislative Assembly until the second sitting day of the Ninth Assembly to allow the new Government to consider the response.



B.4 - RISK MANAGEMENTGENERALThere was a broad range of risk management procedures used by the CMA guiding various management practices. This included Government-wide processes, such as those relating to financial reporting, as well as CMA-specific processes.

The CMA’s approach to risk management needed to address the management of risks at both Project-level and Corporate-level.

The CMA identified and managed risk at all levels of the organisation through the robust application of the CMA Risk Management Framework. This Framework was based on the Australian and New Zealand Risk Management Standard (AS/NZS ISO 31000:2009 Risk Management - Principles and Guidelines (the Risk Management Standard).

CMA RISK MANAGEMENT 2015-16During the reporting period, the Project Controls Group/Contract Management Office continued to have oversight of Project-level risks, change, issues and schedule management. The Governance and Business Solutions Branch maintained overall responsibility for Corporate-level risks such as fraud and corruption, financial, work health and safety and more.

The CMA’s Risk and Change Control Committee, consisting of CMA Executives and members from other ACT Government directorates, continued to play a pivotal role in the review of all risks prior to their inclusion in a single risk register. This committee also provided insight and guidance on the effectiveness of current risk mitigation strategies.

As with all other directorates, responsibility for risk management within the CMA ultimately rested with the Director-General. The Director-General was supported in this responsibility through:

CMA’s Executive and staffing team: All CMA staff, to varying degrees, fulfilled risk management tasks. During the reporting period, risk management controls were overseen by the Director, Project Controls/Contract Management Officer;

CMA’s advisors: During the reporting period, the CMA received risk management advice from risk management advisors and other advisors;

CMA’s governance structure: The governance structure included a Project Board with an Independent Chair that oversaw the Project and

advised Cabinet. The Project Board undertook a substantial role in overseeing risk management responsibilities. The CMA’s governance structure also included the CMA Audit Committee which reported directly to the CMA Director-General and was responsible for endorsing the CMA Risk Management Framework;

CMA’s Risk Management Framework: The Risk Management Framework and associated procedures, in line with the Risk Management Standard, provided the basis for establishing an individual risk rating, based on the likelihood and consequence of each risk. The risk consequence was assessed against various criteria including safety, cost, time, performance, reputation and environmental impacts to ensure that appropriate mitigations could be implemented; and

Other risk management resources applied through ACT Government: For example, under the ACT Government’s Risk Management Policy Statement, the ACT Insurance Authority (ACTIA) assisted the CMA on insurance implementation matters.

CMA Risk Identification 2015-16CMA Corporate-level risks consisted of Project risks and other risks associated with the operations of the Agency. As the principle objective of the CMA was to manage all aspects of the Project, Project-level risks comprised a large portion of the CMA’s overall risk profile.

With respect to risks for the Project, project risks were either ‘retained’ by the CMA or ‘transferred’ to a third party, via the means of a contract.

> Retained risks were risks managed by the CMA.

> Transferred risks were risks which were not managed by the CMA and were transferred via a contract for a contractor or partner to manage.

> Shared risks were risks which were managed, and the impact is borne by the CMA and a third party. As such, a shared risk might typically be apportioned via a contract between the CMA and a third party.


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B.5 - INTERNAL AUDITThe CMA Audit Committee reported to the Director-General on the Agency’s Governance Framework including risk, compliance, external accountability and the internal control environment. During the reporting period the CMA Audit Committee met three times and covered topics such as fraud and corruption prevention, risk management, procurement and governance.

During the reporting period, the CMA:

> completed an internal audit into financial management;

> completed an internal audit into procurement;

> commenced an internal audit into information management; and

> was subject to one performance audit by the Auditor-General: Initiation of the Light Rail Project.

As at 30 June 2016, the CMA Audit Committee had four members, consisting of an Independent Chair, two Independent Members and the CMA Chief Operating Officer.

CMA Audit Committee Membership and Attendance 2015-16

Name of Member Position Meetings Attended

Will Laurie Independent Chair 3

Glenys Roper Independent Member 3

Ken Moore Independent Member 3

Cherie Hughes Internal - Chief Operating Officer 1

Chris Webb Internal - Acting Executive Director, Governance and Business Solutions

1

Nikki Pulford Internal - Director, Governance and Business Solutions

1



B.6 - FRAUD PREVENTIONThe ACTPS Integrity Policy sets the whole of Government direction on the promotion of integrity in the ACTPS. The Public Sector Management Standards 2006 details the formal responsibilities of agencies to promote integrity and to control fraud and corruption. The CMA’s management of fraud and corruption prevention complied with these documents and aimed to enhance integrity, reduce the risk of fraud and corruption, and assist staff to make decisions in the reporting of fraud, corruption and other criminal offences affecting the organisation.

The CMA had a Fraud and Corruption Prevention Policy, a Fraud Risk Register, and had in place a Fraud and Corruption Prevention Plan. In the event of fraud or corruption occurring, the Fraud and Corruption Prevention Plan could be used as a guidance tool and outlined the appropriate response for an incident.

Fraud prevention in the CMA was managed by the Senior Executive Responsible for Business Integrity Risk (SERBIR), being the CMA’s Chief Operating Officer. The SERBIR reported directly to the CMA Director-General on matters of fraud and integrity and championed integrity in the workplace.

The CMA’s Corporate Governance Committee and the CMA Audit Committee had responsibility to review the CMA’s Fraud and Corruption Risk Register. The CMA also had a process to ensure all allegations and incidences of fraud were captured and recorded in accordance with the ACTPS Integrity Policy. At each meeting, the SERBIR was required to table a report to disclose any fraud and corrupt practices with the actions that had been taken to eliminate those risks.

The CMA’s fraud prevention activities were supported by the CMA’s Probity Policy. The Probity Policy outlined a number of practices and expectations for operating in a manner that supported probity and was underpinned by the principles of:

> fairness and impartiality;

> consistency and transparency of process;

> encouraging competition;

> identifying and managing conflicts of interest;

> security and confidentiality;

> compliance with legislative obligations; and

> establishing and maintaining a clear audit trail.

Probity provides a level of assurance to delegates, suppliers and the ACT Government that a procurement process was conducted in a manner that is fair, equitable and defensible.

There were no cases of potential fraud reported in the reporting period.


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B.7 - WORK HEALTH AND SAFETYThe CMA was committed to a culture where people are safe, engaged, passionate and valued for their skills. Safety was an important aspect of the overarching organisational culture. Work health and safety provided the foundation for all CMA activities, and was managed in accordance with the statutory provisions of the Work Health and Safety Act 2011 (the WHS Act) and supported by the ACTPS Workplace Health and Safety Policy Statement.

During the reporting period, the CMA was not issued (under Part 10 of the WHS Act) with any improvement, prohibition, or non-disturbance notices, nor did the CMA fail to comply with any enforceable undertakings under Part 11 or Part 2 (Divisions 2.2, 2.3 and 2.4) of the WHS Act.

During the Project’s Procurement and Delivery Phases, the CMA implemented a Safety Management System Framework. This Framework described the processes that were in place in order to demonstrate effective safety management. The systems and processes within this Framework assisted the CMA in demonstrating compliance with the requirements of the relevant rail safety and work health and safety legislation, even though the CMA was not an accredited rail transport operator.

It also identified CMA documentation and procedures which supported safety management for the Project and applied to all CMA staff, including consultants, advisors and embedded ACTPS from other Government agencies.

The CMA Safety Policy confirmed the Agency’s commitment to safety and to embedding safety into the CMA’s core values, processes and decision making, so that it could provide light rail that operates safely for customers, the workforce and the public.

WORKER CONSULTATION ARRANGEMENTSThe CMA continued the work of the Corporate Governance Committee which managed Agency consultation under the relevant Enterprise Agreement and general work health and safety matters, including:

> facilitating cooperation within the CMA to encourage priority for workers’ health and safety and a sustainable workplace environment;

> assisting in developing standards, rules and procedures relating to health and safety that were to be followed or complied with at the workplace; and

> provision of advice regarding initiatives set by the ACT Work Safety Commissioner.

During the reporting period, the CMA appointed a Work Health and Safety Representative (WHSR) and ensured this individual was provided adequate tools and training to perform the responsibilities of the role. The WHSR attended all work health and safety meetings and developed a Work Health and Safety Initiative Program to be implemented and reported against for a 12 month period.

ACCIDENT AND INCIDENT REPORTINGThe RiskMan system, implemented across all ACT Government workplaces in late 2014, continued to be an essential tool for accident and incident reporting for the CMA. The RiskMan system enabled timely reporting, thereby prompting swift action to identify and manage risks and, as a consequence, support workers more effectively.

During the reporting period, one Accident/Incident Report form was received with one incident logged through the RiskMan system. This incident did not require to be reported to the regulator in accordance with Part 3 Section 38 of the WHS Act.

INJURY PREVENTION, HEALTH AND WELLBEINGThe CMA continued to promote a safety culture which encompassed health and wellbeing. Safety culture was included as a part of the CMA induction process and documented in the CMA Staff Induction Manual. Furthermore, upon commencement with the CMA, employees completed a safety induction checklist to ensure they were aware of their, as well as the CMA’s, safety obligations under the WHS Act.

Safety communications were encouraged weekly by CMA Safety Talks, which were held throughout the reporting period. These designated all-staff meetings were generally chaired by team members on a rotational basis whereby they covered a topic of their choice relating to any type of safety, health or wellbeing issue.


In addition, the CMA implemented a range of injury prevention, health and wellbeing initiatives, including:

> ‘Health and Wellbeing’ reimbursement initiative (not exceeding $100 per annum) to provide financial support and encouragement to employees to participate in health and wellbeing activities;

> ongoing provision of workstation assessments;

> participation in events such as R U OK? Day; and

> influenza vaccinations offered to staff.


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> ongoing provision of workstation assessments;

> participation in events such as R U OK? Day; and

> influenza vaccinations offered to staff.


B.8 - HUMAN RESOURCE MANAGEMENTThe Governance and Business Solutions Branch of the CMA provided operational advice and Human Resources (HR) support to Executives, managers and staff of the Directorate. The team performed a number of HR functions for the CMA and coordinated the provision of transactional support from the Shared Services division of CMTEDD. The team also facilitated the provision of strategic HR advice and support from the HR team within TAMS.

Attracting and retaining high performing employees was critical to ensuring that the CMA’s work objectives were met. The workforce profile of the CMA consisted of a highly integrated Project team, with local, national and international expertise in the delivery of light rail.

During the Procurement Phase of the Project, the workforce profile focused on the needs of managing a complex procurement and tender evaluation process. With the commencement of the Delivery Phase in late May 2016 the workforce profile began to transition - focussing on Contract Management expertise.

A Transition Plan (the Plan) was developed setting out the organisational requirements to progress from the procurement phase to delivery phase of the Capital Metro Project, and supporting and informing the Transition Program of work.

The Plan identified and scheduled transition activities to ensure that the Territory was mobilised to manage:

> the roles, responsibilities and obligations of the Territory under the Territory Project Documents;

> Territory retained risks; and

> business as usual activities.

The objectives of the Plan were to:

1. Establish a project team, accommodation and supporting systems to manage delivery phase activities when they commence.

2. Prepare the Territory for its role in pre-Financial Close ‘early’ delivery phase activities.

3. Prepare the Territory for its role in the delivery phase post Financial Close.

Agency representatives actively participated and engaged in various cross-Government forums including the People and Performance Council, Policy Council, HR Directors Forum, and the Respect Equity and Diversity Review Working Group.

ATTRACTION AND RETENTION INITIATIVESDuring the reporting period, the CMA did not enter into any Attraction and Retention Initiatives (ARins), nor where there any ARins provided for privately plated vehicles.


STAFFING PROFILE

FTE and headcount by Division/Branch

Division/Branch FTE Headcount

Office of the Director-General

3.0 3

Office of the Project Director

8.9 9

Office of the Chief Operating Officer

17.0 17

Total 28.9 29

FTE and headcount by gender

Female Male Total

Full Time Equivalent by Gender

19.92 9 28.9

Headcount by Gender 20 9 29

Percentage of workforce (based on headcount)

69.0% 31.0% 100.0%

Headcount by classification and gender

Classification groups Female Male Total

Administration Officers 8 1 9

Senior Officers 7 5 12

Executive Officers 5 3 8

TOTAL 20 9 29

Headcount by employment category and gender

Employment category Female Male Total

Casual 0 0 0

Permanent Full-time 14 6 20

Permanent Part-time 0 0 0

Temporary Full-time 5 3 8

Temporary Part-time 1 0 1

TOTAL 20 9 29

Headcount by diversity group

Headcount Percentage of directorate workforce

Aboriginal and Torres Strait Islander

0 0.0%

Culturally and Linguistically Diverse

3 10.3%

People with disability 0 0.0%

Headcount by age group and gender

Classification groups Female Male Total

Under 25 0 1 1

25-34 7 1 8

35-44 6 7 13

45-54 7 0 7

55 and over 0 0 0

TOTAL 20 9 29

Average length of service by gender (headcount)

Female Male Total

Average years of service 4.5 3.2 4.1


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B.9 - ECOLOGICALLY SUSTAINABLE DEVELOPMENTAN ENVIRONMENTALLY FRIENDLY CMAThe ACT Government has the most ambitious greenhouse gas emissions reduction targets of all Australian jurisdictions. The Climate Change and Greenhouse Gas Reduction Act 2010 formalised the ACT targets of zero net emissions (carbon neutrality) by 2060 and a 40 percent reduction in greenhouse gas emissions from 1990 levels by 2020. In April 2013, the Minister for the Environment and Sustainable Development released the Government’s Carbon Neutral Framework. This Framework coordinates a whole of Government approach to achieving carbon neutrality in a cost effective manner.

In the 2015-16 financial year, the CMA was predominantly in the Procurement Phase of the Project, only commencing the Delivery Phase of the Project in late May 2016. During this time, the CMA was primarily office-based, with some minor activities occurring off site. Office-based activities were focussed on conducting the procurement of the Public Private Partnership for Stage 1 of Canberra’s Light Rail Network. This included conducting an expressions of interest, RFP and a tender evaluation process which involved the establishment of an on-site temporary evaluation office which was restricted to the evaluation team members only.

In all of its operations, the CMA endeavoured to consider the impact of its activities on the environment. CMA staff and consultants were actively encouraged to travel using active travel or public transport, as well as the conduct of meetings via teleconferences as opposed to meetings involving travel.

RESOURCE MANAGEMENT PLANThe CMA Resource Management Plan (RMP) provided a framework to consistently monitor and improve the environmental performance of the Agency. The RMP was prepared as a part of implementing the Framework.

The RMP also provided a guide to assist with staff education to increase awareness of the environmental impact of their everyday work activities. The RMP provided guidance for:

> resource efficiency targets and actions to be established;

> identifying methods of measuring environmental performance; and

> outlining reporting on sustainability achievements.

It should be noted that the RMP was under review when the CMA’s merge into TCCS was announced. As a result, updating the RMP was postponed until the TCCS merge on 1 July 2016.

INFRASTRUCTURE SUSTAINABILITYThe Project was registered for an Infrastructure Sustainability (IS) Rating through the Infrastructure Sustainability Council of Australia (ISCA). The IS Rating scores projects across:

> management and governance;

> using resources;

> emissions, pollution and waste;

> ecology;

> people and place; and

> innovation.

The CMA used the IS Rating tool as a framework to guide the Project’s approach to sustainability and identified Project requirements across all these areas to ensure that the Project design can deliver environmental benefits to the Territory.

Canberra Metro will need to achieve a certified IS Rating for the Project to quantify and benchmark the sustainability achievements of the Project. Canberra Metro has recognised this challenge and has been able to demonstrate the importance of implementing positive environmental and sustainable outcomes through all the areas of their work. Canberra Metro’s designs have already received a rating of ‘excellent’ from ISCA.

Through careful and considered design and construction, light rail will be constructed of sustainable, resilient and low maintenance material. Design features will minimise noise and light pollution, and support the collection of renewable resources such as energy and rain water.

In addition to design features, a number of strategies will be implemented throughout construction and operations to support sustainability and other environmental considerations, such as:

> driver training will be designed to ensure energy management;

> strategies for waste management and recycling; and

> a coordinated future-proofed utilities plan.


RENEWABLE ENERGYThe ACT Government has determined that light rail will operate on 100 percent renewable energy. Canberra Metro will source part of the light rail system’s electricity usage from renewable energy sources such as solar and wind. This is in addition to the ACT Government’s own commitment to achieving 100 percent renewable energy by 2020. Light rail in Canberra will be 100 percent green powered - the first of any Australian jurisdiction.

STATE OF THE ENVIRONMENT REPORTThe CMA was not requested to contribute to the State of the Environment Report published in February 2016.

Sustainable Development Performance - Current and Previous Financial Year

Indicator as at 30 June Unit Current FY Previous FY Percentage change

Agency staff and area

Agency staff FTE 28.92 24.81 +16.6%

Workplace floor area Area (m²) 853.94 853.94 0.0%

Stationary energy usage

Electricity use Kilowatt hours

103,214 53,775 +91.9%

Renewable electricity use Kilowatt hours

N/A N/A N/A

Natural gas use Megajoules N/A N/A N/A

Transport fuel usage - Nil Nil N/A

Water usage

Water use Kilolitres Data not available

Data not available

N/A

Resource efficiency and waste

Reams of paper purchased Reams 866 693 +25.0%

Recycled content of paper used Percentage (%)

100 95 +5.3%

Waste to landfill Litres 42,116 18,880 +123.1%

Co-mingled recycled Litres 19,718 11,610 +69.8%

Paper and Cardboard recycled (incl. Secure paper) Litres 15,840 7,200 +120.0%

Organic material recycled Litres 55 Nil N/A

Greenhouse gas emissions

Emissions from stationary energy use Tonnes CO2-e

79.8 43.1 +85.2%

Emissions from transport Tonnes CO2-e

Nil Nil N/A

Total emissions Tonnes CO2-e

79.8 43.1 +85.2%

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SUSTAINABLE DEVELOPMENT PERFORMANCE - COMMENTARYThe change in resource efficiency and waste performance for this reporting period was reflective, in part, to a larger floor area being occupied. This included the temporary use of Level 7 Telstra House, Dickson for the Capital Metro Project RFP Evaluation Team between 1 September 2015 and 31 May 2016. The following information is provided for clarity.

> Electricity use:

• Electricity use for Level 2 was proportioned based on the CMA’s occupancy of 5.8 percent of the workplace floor area.

• Due to the unavailability of meter data from the building owner, electricity use was estimated for Level 1 and Level 7 using monthly electricity intensity values (kWh/m²) of Level 2. For consistency, this method was also applied to the reporting for 2014-15 which has resulted in a variation from data published in 2014-15.

• The increase in electricity for 2015-16 is due to additional floor space being utilised for part of the year.

> Renewable electricity use:

• The ACT Property Group purchases 7,700 (megawatt hours) of Green Power on behalf of the ACT Government, representing an indicative five percent of the ACT Government’s electricity consumption for 2015-16.

> Resource efficiency and waste:

• Waste to landfill was unable to be disaggregated and was therefore calculated on the CMA’s proportion to the whole of building based data on the Net Lettable Area (NLA) for both 2014-15 (12 percent) and 2015-16 (27 percent).

• Data for co-mingled recycling was not readily available and has been based on the estimate of bin capacity and the regularity of collections across Level 1 and Level 7. Data for Level 2 was provided to the CMA based on the proportioned NLA for Level 2.

> Greenhouse gas emissions:

• Greenhouse gas emissions for electricity consumption have been calculated using emissions factors based on the latest ACT Electricity Emissions Factor Report (April 2016).


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SECTION C: FINANCIAL MANAGEMENT


C.1 - FINANCIAL MANAGEMENT ANALYSISGENERAL OVERVIEW

ObjectivesThe principal objective of the CMA, which was established on 1 July 2013, was to manage all aspects of the ongoing planning, design and delivery of the Project, being the first stage of a light rail network in the Australian Capital Territory.

CMA was to achieve its principal objective in a manner which ensured comprehensive coordination and integration of transport, land use and development, social, economic and environmental outcomes.

Risk ManagementBroadly, CMA risks consist of Project risks and other risks associated with the operations of the Directorate. As the principle objective of CMA was to manage all aspects of the Project, Project-specific risks comprise a large portion of the Directorate’s overall risk profile.

As with other ACT Government directorates, responsibility for risk management within CMA ultimately rests with CMA’s Director-General.

Guiding risk management practices within CMA were a range of risk management procedures. These include ACT Government-wide processes, such as those relating to financial reporting, and CMA specific processes. CMA’s risk management processes were developed over time and continued to be developed in order to ensure appropriate practices were in place. CMA’s evolving risk management procedures and risk register had regard to both directorate-level and Capital Metro project-level risks.

The following key policies and procedures have been implemented to enhance governance and risk management:

> Risk Management Framework;

> Director General Financial Instructions and Delegations;

> Fraud and Corruption Prevention Plan;

> Gifts, Benefits and Hospitality Policy and Register; and

> Whole of Government Alcohol and other drugs policy.

Key near-term risks identified by CMA during the 2015-16 financial year were associated with the:

> provision of timely responses to facilitate design and construction activities by the Public Private Partnership Consortium;

> management of project planning approval applications to relevant Territory and Commonwealth authorities;

> management of utility company interactions in order to facilitate an efficient and timely project construction activities; and

> conduct of procurement activities including the selection of a preferred bidder in a manner which meets all ethical and procedural requirements and delivers value for money outcomes.

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Financial PerformanceThe following financial information is based on audited financial statements of CMA for the 2015-16 financial year.

The analysis provided below outlines the main trends and factors affecting the CMA’s financial performance and position for the year ended 30 June 2016 and financial position at 30 June 2016.

Table 1 Financial Results

Indicator as at 30 June Actual2014-15

$m

Budget2015-16

$m

Actual2015-16

$m

Total Revenue 24.060 7.859 7.581

Total Expenses 23.696 7.955 7.540

Operating Surplus/(Deficit) 0.364 (0.096) 0.041

The CMA has started capitalising costs in 2015-16 that were directly attributable to the light rail project as it was probable that future economic benefits associated with these items would flow to the entity.

TOTAL REVENUE

Components of RevenueFigure 1 shows a breakdown of the revenue components in the 2015-16 financial year. Government Payment for Outputs (GPO) accounts for 99 percent of CMA’s total revenue.

Figure 1 Components of Revenue for 2015-16

Total 2015-16 Revenue Compared to the Original Budget The GPO of $7.5 million was $0.3 million below budget in line with lower than budgeted operating expenditure.

Total revenue for the year of $7.6 million consists of GPO of $7.5 million.

Comparison to 2014-15 Actual RevenueTotal revenue of $7.6 million was $16.5 million, or 68.5 percent lower than 2014-15 revenue due to the capitalisation of costs directly attributable to the Project from 1 July 2015.


TOTAL EXPENSES

Components of ExpensesFigure 2 shows a breakdown of the expense components in the 2015-16 financial year. Of CMA’s total expenses, supplies and services account for 57 percent, employee costs 39 percent and superannuation four percent.

Supplies and services payments of $4.3 million primarily includes payments for professional services (contractors and consultancies) of $2.3 million, legal costs of $0.2 million, community engagement costs of $0.4 million, office accommodation $0.4 million and IT services and telecommunications of $0.4 million. The level of professional services required is a result of the need to draw on external advisory expertise not readily available to CMA within existing ACT Government resources.

Figure 2 Components of Expenses for 2015-16

Total 2015-16 Expenses Compared to the Original Budget The total expenses of $7.5 million were $0.4 million, or 5.2 percent below budget mainly due to lower than expected:

> employee expenses of $0.2 million due to lower than budgeted FTEs as a number of the roles expected to be filled were more prudently discharged by individual contractors and consultancies; and

> Supplies and Services of $0.2 million mainly due to the capitalisation of legal and advisory costs as mentioned above. These were budgeted as operating expenses but a significant portion were capitalised as project costs.

Comparison to 2014-15 Actual ExpensesTotal expenses of $7.5 million were $16.2 million, or 68.2 percent lower than the 2014-15 expenses due to the capitalisation of costs directly attributable to the Project from 1 July 2015.

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DIRECTORATE FINANCIAL POSITION

TOTAL ASSETS

Components of Total AssetsTotal assets are $15.5 million. Figure 3 indicates that the major categories of the CMA’s total assets are capital works in progress (83 percent), cash (15 percent) and receivables (two percent).

Figure 3 Total Assets at 30 June 2016

Comparison to the Original BudgetThe total asset position at 30 June 2016 was $3.1 million below budget. Capital Works in Progress accounts for the majority of the variance and was below budget by $3.2 million due to a compressed construction time frame (later start, early finish) being followed by Canberra Metro Consortium for the light rail project. The budget assumed a longer construction period and as a result costs moved forward on the time line without impacting the completion date of the project.

Comparison to 2014-15 ActualTotal assets of $15.5 million compare with $3.1 million at 30 June 2015 resulting from the capitalisation of costs directly attributable to the Project from 1 July 2015.

TOTAL LIABILITIES

Components of Total LiabilitiesTotal liabilities are $2.0 million. Figure 4 indicates that the major categories of the CMA’s liabilities are employee benefits (53 percent) and payables (46 percent).

Figure 4 Total Liabilities at 30 June 2016

Comparison to the Original BudgetThe CMA’s liabilities at 30 June 2016 of $2.0 million were $0.6 million lower than the 2015-16 original budgeted amounts primarily due to lower than expected current payables. The budget assumed higher accrued expenses at the end of June.

Comparison to 2014-15 ActualTotal liabilities of $2.0 million compared with $2.8 million at 30 June 2015 mainly due to a decrease of $0.9 million in payables which were impacted by the timing of the payment of invoices.

Future TrendsCMA ceased as a separate reporting entity on 1 July 2016 and its functions amalgamated with TAMS to become the Transport Canberra and City Services Directorate effective 1 July 2016.


INDEPENDENT AUDIT REPORT

CAPITAL METRO AGENCY

To the Members of the ACT Legislative Assembly

Report on the financial statements

The financial statements of the Capital Metro Agency for the year ended 30 June 2016 have been audited. These comprise the operating statement, balance sheet, statement of changes in equity, cash flow statement, statement of appropriation and accompanying notes.

Responsibility for the financial statements

The Director‐General of the Transport Canberra and City Services Directorate is responsible for the preparation and fair presentation of the financial statements in accordance with the Financial Management Act 1996. This includes responsibility for maintaining adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and the accounting policies and estimates used in the preparation of the financial statements.

The auditor’s responsibility

Under the Financial Management Act 1996, I am responsible for expressing an independent audit opinion on the financial statements of the Capital Metro Agency.

The audit was conducted in accordance with Australian Auditing Standards to provide reasonable assurance that the financial statements are free of material misstatement.

I formed the audit opinion following the use of audit procedures to obtain evidence about the amounts and disclosures in the financial statements. As these procedures are influenced by the use of professional judgement, selective testing of evidence supporting the amounts and other disclosures in the financial statements, inherent limitations of internal control and the availability of persuasive rather than conclusive evidence, an audit cannot guarantee that all material misstatements have been detected.

Although the effectiveness of internal controls is considered when determining the nature and extent of audit procedures, the audit was not designed to provide assurance on internal controls.

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The audit is not designed to provide assurance on the appropriateness of budget information included in the financial statements or to evaluate the prudence of decisions made by the Agency.

Electronic presentation of the audited financial statements Those viewing an electronic presentation of the financial statements should note that the audit does not provide assurance on the integrity of information presented electronically, and does not provide an opinion on any other information which may have been hyperlinked to or from this report. If users of the report are concerned with the inherent risks arising from the electronic presentation of information, then they are advised to refer to the printed copy of the audited financial statements to confirm the accuracy of this electronically presented information.

Independence

Applicable independence requirements of Australian professional ethical pronouncements were followed in conducting the audit.

Audit opinion

In my opinion, the financial statements of the Capital Metro Agency for the year ended 30 June 2016:

(i) are presented in accordance with the Financial Management Act 1996, Australian Accounting Standards and other mandatory financial reporting requirements in Australia; and

(ii) present fairly the financial position of the Capital Metro Agency at 30 June 2016 and the results of its operations and cash flows for the year then ended.

This audit opinion should be read in conjunction with other information disclosed in this report.

Dr Maxine Cooper Auditor‐General 16 September 2016


C.2 - FINANCIAL STATEMENTSThese are hidden on purpose


FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2016

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Capital Metro Agency Operating Statement

For the Year Ended 30 June 2016 Hidden word

Original Actual Budget Actual Note 2016 2016 2015 No. $’000 $’000 $’000Income Revenue Government Payment for Outputs 3 7,525 7,859 23,535Resources Received Free of Charge 4 56 ‐ 525

Total Revenue 7,581 7,859 24,060 Total Income 7,581 7,859 24,060 Expenses Employee Expenses 5 2,959 3,175 3,599Superannuation Expenses 6 327 327 378Supplies and Services 7 4,254 4,453 19,719

Total Expenses 7,540 7,955 23,696 Operating Surplus/(Deficit) 41 (96) 364 Total Comprehensive Income/(Deficit) 41 (96) 364 The above Operating Statement should be read in conjunction with the accompanying notes.

Capital Metro Agency (CMA) has one output class and as such the above Operating Statement is also CMA’s Operating Statement for the Capital Metro Project and Governance Output Class. The Capital Metro Project and Governance Output Class includes planning, procurement and delivery of a light rail service between the City and Gungahlin.


Capital Metro Agency Balance Sheet At 30 June 2016 Hidden words

Original Actual Budget Actual Note 2016 2016 2015 No. $’000 $’000 $’000Current Assets Cash and Cash Equivalents 9 2,298 2,152 2,921Receivables 10 274 220 198Other Assets 11 18 34 11

Total Current Assets 2,590 2,406 3,130 Non‐Current Assets Capital Works in Progress 12 12,899 16,137 ‐

Total Non‐Current Assets 12,899 16,137 ‐ Total Assets 15,489 18,543 3,130 Current Liabilities Payables 13 891 1,522 1,809Employee Benefits 14 912 856 813Other Liabilities 15 12 12 12

Total Current Liabilities 1,815 2,390 2,634 Non‐Current Liabilities Employee Benefits 14 124 121 137Other Liabilities 15 15 40 28

Total Non‐Current Liabilities 139 161 165 Total Liabilities 1,954 2,551 2,799 Net Assets 13,535 15,992 331 Equity Accumulated Funds ##N 13,535 15,992 331

Total Equity 13,535 15,992 331 The above Balance Sheet should be read in conjunction with the accompanying notes.

Capital Metro Agency (CMA) has one output class and as such the above Balance Sheet is also CMA’s Balance Sheet for the Capital Metro Project and Governance Output Class.

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Capital Metro Agency Statement of Changes in Equity For the Year Ended 30 June 2016

Hidden words

Accumulated Total Funds Equity Original Actual Actual Budget Note 2016 2016 2016 No. $’000 $’000 $’000 Balance at 1 July 2015 331 331 (49) Comprehensive Income Operating Surplus/(Deficit) 41 41 (96)Total Comprehensive Income/(Deficit) 41 41 (96) Transactions Involving Owners Affecting Accumulated Funds Capital Injections 13,163 13,163 16,137

Total Transactions Involving Owners Affecting Accumulated Funds

13,163 13,163 16,137 Balance at 30 June 2016 13,535 13,535 15,992

Accumulated Total Funds Equity Actual Actual Note 2015 2015 No. $’000 $’000 Balance at 1 July 2014 (129) (129) Comprehensive Income Operating Surplus 364 364Total Comprehensive Income 364 364 Transactions Involving Owners Affecting Accumulated Funds Capital Injections 96 96

Total Transactions Involving Owners Affecting Accumulated Funds

96 96 Balance at 30 June 2015 331 331 The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.


Capital Metro Agency Cash Flow Statement

For the Year Ended 30 June 2016 Hidden words

Original Actual Budget Actual Note 2016 2016 2015 No. $’000 $’000 $’000

Cash Flows from Operating Activities Receipts Government Payment for Outputs 7,525 7,859 23,535Goods and Services Tax Input Tax Credits from the Australian Taxation Office 7,509 ‐ 1,857Total Receipts from Operating Activities 15,034 7,859 25,392 Payments Employee 2,861 3,175 3,267Superannuation 340 327 373Supplies and Services 5,738 4,453 19,201Goods and Services Tax Paid to Suppliers 7,583 ‐ 1,878

Total Payments from Operating Activities 16,522 7,955 24,719 Net Cash (Outflows)/Inflows from Operating Activities 18 (1,488) (96) 673 Cash Flows from Investing Activities Payments Payments for Capital Works 12,298 16,137 ‐Total Payment from Investing Activities 12,298 16,137 ‐ Net Cash (Outflows) from Investing Activities (12,298) (16,137) ‐ Cash Flows from Financing Activities Receipts Capital Injections 13,163 16,137 96

Total Receipts from Financing Activities 13,163 16,137 96 Net Cash Inflows from Financing Activities 13,163 16,137 96 Net (Decrease)/Increase in Cash and Cash Equivalents (623) (96) 769Cash and Cash Equivalents at the Beginning of the Reporting Period 2,921 2,248 2,152

Cash and Cash Equivalents at the End of the Reporting 18 2,298 2,152 2,921 Period The above Cash Flow Statement should be read in conjunction with the accompanying notes.

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Capital Metro Agency Statement of Appropriation For the Year Ended 30 June 2016

Hidden words

Original Total Appropriation Appropriation Budget Appropriated Drawn Drawn 2016 2016 2016 2015 $’000 $’000 $’000 $’000 Government Payment for Outputs 7,859 7,859 7,525 23,535 Capital Injections 16,137 16,137 13,163 96

Total Appropriation 23,996 23,996 20,688 23,631 The above Statement of Appropriation should be read in conjunction with the accompanying notes.

Column Heading Explanations

The Original Budget column shows the amounts that appear in the Cash Flow Statement in the 2015‐16 Budget Papers. This amount also appears in the Cash Flow Statement. The Total Appropriated column is inclusive of all appropriation variations occurring after the Original Budget. The Appropriation Drawn is the total amount of appropriation received by the Capital Metro Agency (CMA) during the year. This amount also appears in the Cash Flow Statement. Government Payments Capital for Outputs Injections 2016 2016 $’000 $’000 Original Budget 7,859 16,137Total Appropriated 7,859 16,137Undrawn Funds a (334) (2,974)Appropriation Drawn 7,525 13,163

a) Undrawn Government Payment for Outputs funds are due to lower cash needs from lower than expected operating expenditure. Undrawn Capital Injections are due to less cash than expected required for payments of Capital Works. This is in line with lower than budget Capital Works in Progress due to a compressed construction time frame (later start, early finish) being followed by Canberra Metro Consortium for the light rail project. The budget assumed a longer construction period and as a result costs have moved forward on the time line without impacting the completion date of the project.


Capital Metro Agency Note Index of the Financial Statements


Note 1 Objectives of the Capital Metro AgencyNote 2 Significant Accounting Policies Income Notes Note 3 Government Payment for OutputsNote 4 Resources Received Free of Charge Expense Notes Note 5 Employee Expenses Note 6 Superannuation Expenses Note 7 Supplies and Services Note 8 Auditor's Remuneration Asset Notes Note 9 Cash and Cash Equivalents Note 10 ReceivablesNote 11 Other AssetsNote 12 Capital Works in Progress Liability Notes Note 13 Payables Note 14 Employee Benefits Note 15 Other Liabilities Other Notes Note 16 Financial Instruments Note 17 Commitments Note 18 Cash Flow Reconciliation Note 19 Events Occurring after Balance Date

Note 20 Budgetary Reporting ‐ Explanation of Major Variances Between Actual Amounts and Original Budget Amounts

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Capital Metro Agency Notes to and Forming Part of the Financial Statements


NOTE 1. OBJECTIVES OF THE CAPITAL METRO AGENCY

The principal objective of the Capital Metro Agency (CMA), which was established on 1 July 2013, is to manage all aspects of the ongoing planning, design and delivery of the Capital Metro project, being the first stage of a light rail network in the Australian Capital Territory. CMA is to achieve its principal objective in a manner which ensures comprehensive coordination and integration of transport, land use and development, social, economic and environmental outcomes.

As a result of Administrative Arrangements 2016 (No. 3) notifiable instrument NI2016‐178 announced on 8 April 2016, CMA ceases as a separate reporting entity from 1 July 2016. CMA’s functions amalgamated with the Territory and Municipal Services Directorate to become the Transport Canberra and City Services Directorate

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation

CMA is prescribed as a Directorate under the Financial Management Act 1996 (FMA).

The FMA requires the preparation of annual financial statements for ACT Government agencies.

The FMA, and the Financial Management Guidelines issued under the Act, requires CMA’s financial statements to include:

(i) an Operating Statement for the reporting period;

(ii) a Balance Sheet as at the end of the reporting period;

(iii) a Statement of Changes in Equity for the reporting period;

(iv) a Cash Flow Statement for the reporting period;

(v) a Statement of Appropriation for the reporting period;

(vi) the significant accounting policies adopted for the reporting period; and

(vii) such other statements as are necessary to fairly reflect the financial operations of the Capital Metro Agency during the reporting period and its financial position at the end of the reporting period.

These general‐purpose financial statements have been prepared to comply with ‘Generally Accepted Accounting Principles’ (GAAP) as required by the FMA. The financial statements have been prepared in accordance with:

(i) Australian Accounting Standards; and

(ii) ACT Accounting and Disclosure Policies.

CMA’s cash needs are funded through appropriation by the ACT Government on a cash‐needs basis. This is consistent with the whole‐of‐Government cash management regime, which requires excess cash balances to be held centrally rather than within individual agency bank accounts.

The financial statements have been prepared using the accrual basis of accounting, which recognises the effects of transactions and events when they occur. The financial statements have also been prepared according to the historical cost convention.




NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

These financial statements are presented in Australian dollars, which is CMA’s functional currency.

CMA is an individual financial reporting entity.

(b) The Reporting Period

These financial statements state the financial performance, changes in equity and cash flows of CMA for the year ending 30 June 2016 and the financial position of CMA at 30 June 2016.

(c) Comparative Figures

Budget Figures

To facilitate a comparison with Budget Papers, as required by the FMA, budget information for 2015‐16 has been presented in the financial statements. Budget numbers in the financial statements are the original budget numbers that appear in the Budget Papers.

Prior Year Comparatives

Comparative information has been disclosed in respect of the previous period for amounts reported in the financial statements, except where an Australian Accounting Standard does not require comparative information to be disclosed.

Where the presentation or classification of items in the financial statements is amended, the comparative amounts have been reclassified where practical. Where a reclassification has occurred, the nature, amount and reason for the reclassification is provided.

(d) Rounding

All amounts in the financial statements have been rounded to the nearest thousand dollars ($’000). Use of “‐”represents zero amounts or amounts rounded up or down to zero.

(e) Public Private Partnership

Public Private Partnerships (PPPs) are long term contracts entered into between a government agency (the grantor) and a private sector consortium (the operator) to design, finance, construct and operate/maintain assets over a concession term.

The operator, Canberra Metro, receives service payments from the grantor, CMA, over the life of the contract which are intended to cover the costs incurred by the consortium in constructing, delivering and maintaining and operating the infrastructure assets over the term of the contract.

For a Public Private Partnership where:

a) the Territory is compensating the operator for construction of the infrastructure assets through service payments over the period of the arrangement; and

b) the arrangements are for a finite period, with the Territory retaining a significant residual interest in the assets at the end of the operating phase;

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NOTE 2. SIGNIFICANT ACCOUNTING POLICIES – CONTINUED

(e) Public Private Partnership ‐ Continued

then such a Public Private Partnership is accounted for under UK FRS 5 Reporting the Substance of Transactions: Application Note F Private Finance Initiative and Similar Contracts, in accordance with ACT Accounting Policy – Public Private Partnerships Financed by the Operator the Assets being Territory Assets at the end of the Arrangement.

FRS 5 applies a risks and rewards approach to the recognition of assets in a Public Private Partnership arrangement. Application of the requirements of FRS 5 results in such arrangements being accounted for by the Territory as leases in accordance with AASB 117 Leases.

At the date of commitment to the principal provisions of the arrangement, the estimated service payments are allocated between the component related to the design and construction or upgrading of the asset and components related to the ongoing operation and maintenance of the asset.

The components relating to the design and construction or upgrading of the asset are accounted for as a finance lease in accordance with the lease policy (see Note 2(n) Leases).

The remaining components are accounted for as commitments for operating costs which are expensed in the comprehensive operating statement as they are incurred (see Note 2(p) Commitments for Expenditure).

Canberra Light Rail Project

On 25 May 2016, the Territory entered into a 20 year public private partnership arrangement with private sector consortium (Canberra Metro) for the design, construction, operation, maintenance and financing of a 12km light rail route from Canberra’s City/central business district (Civic) to the Gungahlin town centre. The project is scheduled for completion by August 2018. The Territory retains the significant residual interest in the assets at the end of the 20 year term.

Under the arrangement, the Territory will be making monthly service payments to the Canberra Metro. The portion of the total payments to Canberra Metro that relates to the Territory’s right to use the service concession assets (the Light Rail Asset) are accounted for as finance lease assets and liabilities from the date of commencement of the lease term which is deemed to be the date the light rail assets are commissioned and ready for use. In addition, from the date of commissioning until the end of this Public Private Partnerships arrangement, the Territory will pay Canberra Metro for the ongoing operation and maintenance of the light rail system. Such payments will be recorded as operating expenses.

The light rail project is a service payment based Public Private Partnership which uses a ‘securitised licence structure’ for payment of the project. Under this arrangement, the Territory does not pay for construction activities over the delivery phase, but it does pay for the GST on these activities as they are considered to be for services provided. As a consequence of using this structure, no cash passes between the Territory and Canberra Metro in this phase (other than in relation to GST amounts ‐ which the Territory claims back from the Australian Taxation Office).

The commitments for the Public Private Partnerships project are disclosed in Note 17 Commitments.





(e) Public Private Partnership ‐ Continued

The Project Agreement can be terminated under a number of scenarios. Where it is terminated before expiry of the 20 year operating phase, Canberra Metro may be entitled to a termination payment (depending on the reason for termination). The three types of termination scenarios set out in the Project Agreement are summarised below: Termination for convenience ‐ The Territory may terminate the Project Agreement at any time by giving

no less than 60 business days notice in writing to Canberra Metro. If the Project Agreement is terminated for convenience, the Territory will pay Canberra Metro a termination for convenience payment. This amount is generally calculated as Canberra Metro’s outstanding Project debt, plus the fair market value of Canberra Metro’s equity, plus any other reasonable costs incurred by Canberra Metro as a result of the termination.

Force Majeure Termination Event ‐ Where the Project Agreement is terminated for force majeure (e.g. earthquake, bushfire, landslide), or the Capital Metro Project is wholly or substantially damaged or destroyed upon the occurrence of an uninsurable risk, the Territory will pay Canberra Metro the general termination event payment. This amount is generally calculated as Canberra Metro’s outstanding project debt plus any other reasonable costs incurred by Canberra Metro as a result of the termination, less any insurance proceeds.

Termination for Canberra Metro default ‐ Where the Project Agreement is terminated for Canberra Metro’s default, the Territory will pay Canberra Metro the fair market value of the Project determined by an independent expert or as a result of a re‐tender of the contract to the market.

A default by Canberra Metro under the Project Agreement will entitle the Territory to various remedies. Where a default has occurred, the Territory will in most circumstances be required to give Canberra Metro an opportunity to remedy the default. If the default is not remedied by Canberra Metro within the required period, then it will escalate to a Major Default. The Project Agreement also states that a number of events are automatically classified as a Major Default (e.g. when there are persistent breaches or frequent service failures).

In respect of Major defaults, Canberra Metro will be given the opportunity to develop a plan to remedy the default (if the default is capable of remedying) or a prevention plan to prevent the default from recurring (in circumstances where the default is not capable of remedy). Where Canberra Metro fails to remedy the Major Default within the required period or fails to comply with an agreed remedy or prevention plan (as applicable), this will generally give rise to the Territory’s right to terminate the Project Agreement.

Certain events of default are so severe that they are not subject to a remedy regime. They give rise to a Territory termination right immediately upon their occurrence (e.g. insolvency of Canberra Metro). These events are called Default Termination Events.

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(f) Revenue Recognition

Revenue is recognised at the fair value of the consideration received or receivable in the Operating Statement. In addition, the following specific recognition criteria must also be met before revenue is recognised:

Government Payment for Outputs

Government Payment for Outputs are recognised as revenues when CMA gains control over the funding. Control over appropriated funds is obtained upon the receipt of cash.

(g) Resources Received and Provided Free of Charge

Resources received free of charge are recorded as a revenue and expense in the Operating Statement at fair value. The revenue is separately disclosed under resources received free of charge, with the expense being recorded in the line item to which it relates. Goods and services received free of charge from ACT Government agencies are recorded as resources received free of charge, whereas goods and services received free of charge from entities external to the ACT Government are recorded as donations.

Services that are received free of charge are only recorded in the Operating Statement if they can be reliably measured and would have been purchased if not provided to CMA free of charge.

(h) Current and Non‐Current Items

Assets and liabilities are classified as current or non‐current in the Balance Sheet and in the relevant notes. Assets are classified as current where they are expected to be realised within 12 months after the reporting date. Liabilities are classified as current when they are due to be settled within 12 months after the reporting date or CMA does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

Assets or liabilities which do not fall within the current classification are classified as non‐current.

(i) Impairment of Assets

The CMA assesses, at each reporting date, whether there is any indication that an asset may be impaired. Assets are also reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Any resulting impairment losses for land, buildings, leasehold improvements, infrastructure, heritage and community assets and plant and equipment are recognised as a decrease in the available Asset Revaluation Surplus relating to these classes of assets. Where the impairment loss is greater than the balance in the Asset Revaluation Surplus for the relevant class of asset, the difference is expensed in the Operating Statement. Impairment losses for intangible assets are recognised in the Operating Statement, as these assets are carried at cost. The carrying amount of the impaired asset is also reduced to its recoverable amount. Non‐financial assets that have previously been impaired are reviewed for possible reversal of impairment at each reporting date.





(j) Cash and Cash Equivalents

Cash includes cash at bank and cash on hand. Cash equivalents are short‐term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(k) Receivables

Accounts receivable (including other trade receivables) are initially recognised at fair value and are subsequently measured at amortised cost, with any adjustments to the carrying amount being recorded in the Operating Statement.

The allowance for impairment losses represents the amount of other trade receivables CMA estimates will not be repaid. The allowance for impairment losses is based on objective evidence and a review of overdue balances. CMA considers the following is objective evidence of impairment:

a) becoming aware of financial difficulties of debtors;

b) default payments; or

c) debts more than 90 days overdue.

The amount of the allowance is recognised in the Operating Statement.

(l) Capital Works in Progress

Capital Works in Progress comprise costs incurred by CMA which are directly attributable to the Capital Metro project in accordance with Australian Accounting Standard AASB 116 Property, Plant and Equipment. From 1 July 2015 CMA management determined that it was probable that future benefits will flow from the project and accordingly all directly attributable costs from 1 July 2015 have been capitalised as Capital Works in Progress. Capitalised costs in 2015‐16 included the costs of management, staff, and advisers working directly on the project tender process together with other related costs.

CMA also conducted work on a ‘Russell extension option’ during the reporting period which ultimately did not proceed and all related to this part of the project were therefore expensed.

Capital Works in Progress are not depreciated as the Directorate is not currently deriving any economic benefit from them.

(m) Payables

Payables are initially recognised at fair value based on the transaction cost and subsequent to initial recognition at amortised cost, with any adjustments to the carrying amount being recorded in the Operating Statement. All amounts are normally settled within 30 days after the invoice date.

Payables include Trade Payables and Accrued Expenses.

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(n) Leases

A lease is a right to use an asset for an agreed period of time in exchange for payment. Leases are classified at their inception as either operating or finance leases based on the economic substance of the agreement so as to reflect the risks and rewards incidental to ownership.

CMA has also entered into operating leases which do not effectively transfer to CMA substantially all the risks and rewards incidental to ownership of the asset under an operating lease. Operating lease payments are recorded as an expense in the Operating Statement on a straight‐line basis over the term of the lease.

The lease incentives represent a rent‐free period which CMA recognised as a liability at the time of signing the lease. The lease incentive liability is amortised over the life of the lease.

(o) Employee Benefits

Employee benefits include:

a. short‐term employee benefits such as the following; wages and salaries, annual leave loading and applicable on‐costs, if expected to be settled wholly before twelve months after the end of the annual reporting period in which the employees render the related services;

b. other long‐term benefits such as long service leave and annual leave; and

c. termination benefits.

On‐costs also include annual leave, long service leave, superannuation and other costs that are incurred when employees take annual and long service leave.

Wages and Salaries

Accrued wages and salaries are measured at the amount that remains unpaid to employees at the end of the reporting period.

Annual and Long Service Leave Annual and long service leave including applicable on‐costs that are not expected to be wholly settled before twelve months after the end of the reporting period when the employees render the related service are measured at the present value of estimated future payments to be made in respect of services provided by employees up to the end of the reporting period. Consideration is given to the future wage and salary levels, experience of employee departures and periods of service. At the end of each reporting period end, the present value of future annual leave and long service leave payments is estimated using market yields on Commonwealth Government bonds with terms to maturity that match, as closely as possible, the estimated future cash flows.

Annual leave liabilities have been estimated on the assumption they will be wholly settled within three years. At 30 June 2016 the rate used to estimate the present value of future annual leave payments is 101.4% (101.0% at 30 June 2015).





(o) Employee Benefits ‐ Continued

At 30 June 2016, the rate used to estimate the present value of future payment for long service leave is 114.7% (104.2% at 30 June 2015).

The long service leave liability is estimated with reference to the minimum period of qualifying service. For employees with less than the required minimum period of 7 years qualifying service, the probability that employees will reach the required minimum period has been taken into account in estimating the provision for long service leave and applicable on‐costs.

The provision for annual leave and long service leave includes estimated on‐costs. As these on‐costs only become payable if the employee takes annual and long service leave while in‐service, the probability that employees will take annual and long service leave while in‐service has been taken into account in estimating the liability for on‐costs.

Annual leave and long service leave liabilities are classified as current liabilities in the Balance Sheet where there are no unconditional rights to defer the settlement of the liability for at least 12 months. Conditional long service leave liabilities are classified as non‐current because CMA has an unconditional right to defer the settlement of the liability until the employee has completed the requisite years of service.

(p) Superannuation

CMA receives funding for superannuation payments as part of the Government Payment for Outputs. CMA then makes payments on a fortnightly basis to the Territory Banking Account to cover CMA’s superannuation liability for the Commonwealth Superannuation Scheme (CSS) and the Public Sector Superannuation Scheme

(PSS). This payment covers the CSS/PSS employer contribution, but does not include the productivity component. The productivity component is paid directly to the Commonwealth Superannuation Corporation

(CSC) by CMA. The CSS and PSS are defined benefit superannuation plans meaning that the defined benefits received by employees are based on the employee’s years of service and average final salary.

Superannuation payments have also been made directly to superannuation funds for those members of the Public Sector who are part of superannuation accumulation schemes, which are solely schemes of employee choice.

The total Territory superannuation liability for the CSS and PSS is recognised in the Chief Minister, Treasury and Economic Development Directorate’s Superannuation Provision Account and the CSC and the external schemes recognise the superannuation liability for the schemes of employee choice. This superannuation liability is not recognised at individual agency level.

The ACT Government is liable for the reimbursement of the emerging costs of benefits paid each year to members of the CSS and PSS in respect of the ACT Government service provided after 1 July 1989. These reimbursement payments are made from the Superannuation Provision Account

(q) Commitments for Expenditure

Commitments for future expenditure include operating (relating to operating, maintenance and financing expenses) and capital (relating to design and construction of the asset) commitments arising from contracts. These commitments are disclosed in Note 17 Commitments. The total Public Private Partnership Commitments disclosed in Note 17 of $1,649,352 (excluding GST) does not include an amount for additional costs that may be incurred if Territory‐retained risks were to occur. These include, for example, decisions that result in significant variations to the light rail system, legislative changes that affect the project and other project risks such as certain utilities and planning risks. As these risks are retained by the Territory, additional costs associated with such risks are borne by the Territory.

59




(r) Equity Contributed by the ACT Government

Contributions made by the ACT Government in its role as owner of CMA are treated as contributions of equity.

(s) Insurance

Major risks of the Capital Metro Agency are insured through the ACT Insurance Authority. The excess payable, under this arrangement, varies depending on each class of insurance held.

(t) Budgetary Reporting – Explanations of Major Variances between Actual Amounts and Original Budget Amounts

Explanations of major variances between the 2015‐16 original budget and the 2015‐16 actual results are discussed in Note 20 Budgetary Reporting ‐ Explanation of Major Variances between Actual Amounts and Original Budget Amounts.

The definition of ‘major variances’ is provided in Note 2(u) Significant Accounting Judgements and Estimates – Budgetary Reporting – Explanation of Major Variances between Actual Amounts and Original Budget Amounts.

(u) Significant Accounting Judgements and Estimates

In the process of applying the accounting policies listed in this note, CMA has made the following judgements and estimates that have the most significant impact on the amounts recorded in the financial statements:

a) Employee Benefits: Significant judgements have been applied in estimating the liability for employee benefits. The estimated liability for annual and long service leave requires a consideration of the future wages and salary levels, experience of employee departures, probability that leave will be taken in service and periods of service. The estimate also includes an assessment of the probability that employees will meet the minimum service period required to qualify for long service leave and that on‐costs will become payable.

The significant judgements and assumptions included in the estimation of annual and long service leave liabilities include an assessment by an actuary. The Australian Government Actuary performed this assessment in May 2014. The assessment by an actuary is performed every 5 years. However it may be performed more frequently if there is a significant contextual change in the parameters underlying the 2014 report. The next actuarial review is expected to be undertaken by May 2019.

b) Capital Works in Progress: Significant judgements have been applied in determining that from 1 July 2015 it was probable that future economic benefits will flow from the Capital Metro project and accordingly all directly attributable costs from 1 July 2015 have been capitalised as Capital Works in Progress.

c) Budgetary Reporting – Explanation of Major Variances between Actual Amounts and Original Budget Amounts: Significant judgements have been applied in determining what variances are considered as ‘major variances’ requiring explanations in Note 20 Budgetary Reporting. Variances are considered to be major variances if both of the following criteria are met:





(u) Significant Accounting Judgements and Estimates ‐ Continued

The line item is a significant line item: the line item actual amount accounts for more than 10% of the relevant associated category (Income, Expenses and Equity totals) or sub‐element (e.g. Current Liabilities and Receipts from Operating Activities totals) of the financial statements; and

The variances (original budget to actual) are greater than plus (+) or minus (‐) 10% of the budget for the financial statement line item.

Further information on this is provided in Note 2(t) Budgetary Reporting.

d) Canberra Light Rail Project: As disclosed in Note 2, the Territory has entered into a Public Private Partnership Agreement with the Canberra Metro Consortium. The accounting for this PPP has been done in accordance with the ACT Accounting Policy – Public Private Partnerships Financed by the Operator the Assets being Territory Assets at the end of the Arrangement. In applying this policy, the Agency has adopted the requirements of United Kingdom Accounting Standard FRS 5 and formed a view under FRS 5(a) that Australian Accounting Standard AASB 117: Leases is to be used to account for the arrangement.

e) Fair Value of PPP Commitments: Finance Lease Commitments disclosed in Note 17: Commitments are based on estimated future payments for the design and construction of the Capital Metro light rail system. Under AASB 117, management has assessed the cumulative value of these future payments to represent the fair value of the leased asset and equivalent liability that will be recorded in the Agency’s financial statements as at the commencement of the lease in August 2018.

(v) Accounting Standards Adopted Early for the 2015‐16 Reporting Period

AASB 2015‐2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 101 has been early adopted for the 2015‐16 reporting period, even though the standards are not required to be applied until annual reporting periods beginning on or after 1 July 2016.

AASB 2015‐2 amends AASB 101 Presentation of Financial Statements including clarifying that agencies should not be disclosing immaterial information and that the presentation of information in notes can and should be tailored to provide users with the clearest view of the Directorate’s financial performance and financial position.

(w) Impact of Accounting Standards Issued but yet to be Applied

The following new and revised accounting standards and interpretations have been issued by the Australian Accounting Standards Board but do not apply to the current reporting period. These standards and interpretations are applicable to future reporting periods. The CMA does not intend to adopt these standards and interpretations early. Where applicable, these Australian Accounting Standards will be adopted from their application date. The CMA only discloses those standards and amending standards that are expected to have a material impact or where the impact has not yet been assessed. .

AASB 9 Financial Instruments (December 2014) (application date 1 January 2018);

61




(w) Impact of Accounting Standards Issued but yet to be Applied – Continued

o This standard supersedes AASB 139 Financial Instruments: Recognition and Measurement. The main impact of AASB 9 is that it will change the classification, measurement and disclosures of the Directorates financial assets. No material financial impact on the Agency is expected.

AASB 15 Revenue from Contracts with Customers (application date 1 January 2018);

o AASB 15 is the new standard for revenue recognition. It establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It replaces AASB 111 Construction Contracts and AASB 118 Revenue. The CMA is currently assessing the impact of this standard and has identified there could be a potential impact on the timing of the recognition of revenue. At this stage the CMA is not able to estimate the impact of this new standard on its financial statements. The CMA will make a more detailed assessment of the impact over the next 12 months.

AASB 16 Leases (application date 1 January 2019);

o AASB 16 is the new standard for leases. It introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset value is low. At this stage the CMA is not able to estimate the impact of this new standard on its financial statements. The Directorate will make a more detailed assessment of the impact over the next 12 months.

AASB 2010‐7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 120, 121, 127, 128, 131, 132, 136, 137, 139, 1023 & 1038 and Interpretations 2, 5, 10, 12, 19 & 127] (application date 1 January 2018);

o This standard makes consequential amendments to a number of standards and interpretations as a result of the issuing of AASB 9 in December 2010. No material financial impact on the Directorate is expected.

AASB 2014‐1 Amendments to Australian Accounting Standards – Part E Financial Instruments [AASB 1, 3, 4, 5,7,9 (December 2009), 9 (December 2010), 101, 102, 108, 112, 118, 120, 121, 132, 136, 137,139, Interpretation 2, 5,10, 12, 16, 19, and 107] (application date 1 January 2018);

o Part E of this standard defers the application of AASB 9 to 1 January 2018. No material financial impact on the CMA is expected.

AASB 2014‐5 Amendments to Australian Accounting Standards arising from AASB 15 [AASB 1, 3, 4, 9 (December 2009) (December 2010), 101, 102, 112, 116, 132, 134, 137, 138, 139, 140, 1023, 1038, 1039, 1049, 1053, 1056, Interpretation 12, 127, 132, 1031, 1038 & 1052] (application date 1 January 2018);

This standard makes consequential amendments to a number of standards and interpretations as a result of the issuing of AASB 15. The CMA is assessing the potential impact of AASB 15.





(w) Impact of Accounting Standards Issued but yet to be Applied – Continued

AASB 2014‐7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2014) [AASB 1, 2, 3, 4, 5, 7, 13, 101, 102, 108, 110, 112, 120, 121, 123, 128, 132, 133, 136, 137, 139, 1023, 1038, 1049, Interpretation 2, 5, 10, 12, 16, 19 and 127] (application date 1 January 2018);

o This standard makes consequential amendments to a number of standards and interpretations as a result the issuing of AASB 9 (December 2014). No material financial impact on the CMA is expected.

AASB 2015‐6 Amendments to Australian Accounting Standards – Extending Related Party Disclosures to Not‐for‐Profit Public Sector Entities [AASB 10, 124 and 1049](application date 1 July 2016);

o This standard extends the scope of AASB 124 Related Party Transactions to the not‐for‐profit sector and updates AASB 124 to include implementation guidance (including illustrative examples) to assist not‐for‐profit entities to apply the new requirements. While there is no

o material financial impact in implementing this standard there will be increased disclosure required by the CMA.

AASB 2015‐8 Amendments to Australian Accounting Standards – Effective date of AASB 15 (application date 1 January 2017);

o This standard defers the application date of AASB 15 Revenue from Contracts with Customers to 1 January 2018. At this stage the CMA is not able to estimate the impact of AASB 15 on its financial statements. The CMA will make a more detailed assessment of the impact over the next 12 months.

AASB 2015‐10 Amendments to Australian Accounting Standards – Effective Date of Amendments to AASB 10 and AASB 128 (application date 1 January 2016);

o This standard defers the application date of amendments to AASB 10 and AASB 128 that were made in AASB 2014‐10, Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture, from 1 Jan 2016 to 1 January 2018.

o There is no material financial impact on the Directorate.

AASB 2016‐2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 107 (application date 1 January 2017);

This standard amends AASB 107 Statement of Cash Flows to require agencies preparing financial statements in accordance with Tier 1 reporting requirements to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non‐cash changes.

This standard relates to disclosure only and there is no material financial impact on the CMA.

AASB 2016‐4 Amendments to Australian Accounting Standards – Recoverable Amount of Non‐Cash‐Generating Specialised Assets of Not‐for‐Profit Entities [AASB 36] (application date 1 January 2017).

The CMA has not yet assessed the impact of this standard.

63



NOTE 3. GOVERNMENT PAYMENT FOR OUTPUTS

Government Payment for Outputs appropriation is revenue received from the ACT Government to fund the costs of delivering outputs. The ACT Government pays this appropriation on a fortnightly basis.

2016 2015 $’000 $’000Revenue from the ACT Government Government Payment for Outputs a 7,525 23,535Total Government Payment for Outputs 7,525 23,535 a) The decrease in GPO in 2015‐16 was due to a budgeted reduction in operating expenditure.

NOTE 4. RESOURCES RECEIVED FREE OF CHARGE

Revenue from ACT Government Entities

Financial Management Support Services provided by the Territory and Municipal Services Directorate 3 10Services provided by the Chief Minister, Treasury and Economic Development Directorate (CMTEDD) ‐ 151Legal Services provided by the Justice and Community Safety Directorate a 53 364

Total Resources Received Free of Charge 56 525

a) The 2014‐15 legal costs reflected additional legal services required in the procurement phase of the project.




NOTE 5. EMPLOYEE EXPENSES 2016 2015 $’000 $’000Wages and Salaries a 2,527 3,109Annual Leave Expense 214 249Long Service Leave Expense 113 162Workers' Compensation Insurance Premium 32 36Other Employee Benefits and On‐Costs 73 43

Total Employee Expenses 2,959 3,599 Total Employee Costs 4,379 3,599 less Amounts Capitalised as Capital Work in Progress (1,420) 0

Total Employee Expenses 2,959 3,599

a) The decrease is due to the capitalisation of the portion of wages and salaries directly attributable to the Capital Metro project from 1 July 2015.

b) The number of Full‐time equivalent (FTE) staff increased from 25 at 30 June 2015 to 29 at 30 June 2016.

c) The total Employment Expenses relating to staff that was directly attributable to the Light Rail Project and recorded as Capital Work in Progress was $1.420 million, bringing the total Employee Expenses of the CMA to $4.379 million.

NOTE 6. SUPERANNUATION EXPENSES

Superannuation Contributions to the Territory Banking Account 129 149Productivity Benefit 17 18Superannuation to External Providers 181 211

Total Superannuation Expenses 327 378

65



NOTE 7. SUPPLIES AND SERVICES 2016 2015 $’000 $’000 Contractors and Consultants a 2,316 15,529Legal Costs b 240 2,545Community Engagement Costs c 379 375Staff Development and Recruitment 113 146Rent and Utility Charges 401 322IT Services and Telecommunications 434 439Other Supplies and Services 371 363

Total Supplies and Services 4,254 19,719 a) Contractors and Consultants include the costs of advisors providing technical, commercial, project management and risk management services relating to the design, procurement and delivery of light rail infrastructure. The decrease in these expenses in 2015‐16 was due to the capitalisation of contractor and consultant costs of $9.051 million as Capital Work in Progress as they were directly attributable to the Capital Metro project.

b) The decrease this year was due to the capitalisation of legal costs of $1.927 million during 2015‐16 as they were directly attributable to the Capital Metro project.

c) Community Engagement Costs comprise market research; design and creation of display tools; digital imagery; community stakeholder workshops and events; and general advertising. NOTE 8. AUDITOR’S REMUNERATION

Auditor's remuneration consists of financial audit services provided to CMA by the ACT Audit Office. No other services were provided by the ACT Audit Office.

Audit Services Audit Fees Paid or Payable to the ACT Audit Office 82 45

Total Audit Fees 82 45




NOTE 9. CASH AND CASH EQUIVALENTS

CMA holds one bank account with the Westpac Banking Corporation as part of the whole‐of‐government banking arrangements. As part of these banking arrangements CMA does not receive any interest on this account.

2016 2015 $’000 $’000 Cash at Bank 2,297 2,918Cash on Hand 1 3

Total Cash and Cash Equivalents 2,298 2,921 Cash Balances were higher in 2014‐15 reflecting cash held for the payment of invoices in July 2015.

Credit Facilities

Apart from the CMA’s use of credit cards, there are no formal credit facilities in place for the CMA with the Territory’s appointed transactional bank. If the CMA’s account goes into overdraft throughout the year, the CMA is not charged interest, however, the overdraft position is required to be rectified as soon as possible. The CMA did not go into overdraft during 2015‐16.

NOTE 10. RECEIVABLES Current Receivables Other Trade Receivables 3 1Net Goods and Services Tax Receivable 271 197

Total Current Receivables 274 198

Total Receivables 274 198

67



NOTE 10. RECEIVABLES - CONTINUED

Ageing of Receivables Not Overdue Overdue Total Less than 30 to Greater 30 Days 60 Days 60 Days $'000 $'000 $'000 $'000 $'000 2016

Not Impaired a Receivables 271 ‐ 1 2 274

2015

Not Impaired a Receivables 198 ‐ ‐ ‐ 198

a) 'Not Impaired' refers to Net Receivables (that is Gross Receivables less Impaired Receivables).

2016 2015 $’000 $’000Classification of ACT Government/Non‐ACT Government Receivables Receivables from Non‐ACT Government Entities Other Trade Receivables 3 1Net Goods and Services Tax Receivable 271 197

Total Receivables from Non‐ACT Government Entities 274 198 Total Receivables 274 198




NOTE 11. OTHER ASSETS 2016 2015 $’000 $’000Current Other Assets Prepayments 18 11

Total Other Assets 18 11

NOTE 12. CAPITAL WORKS IN PROGRESS Capital Works in Progress comprise costs which are directly attributable to the Capital Metro project. No costs were capitalised in 2014‐15 as it was only determined that economic benefits would flow from the project at the commencement of 2015‐16. For further details please see Note 2(k) Capital Work in Progress.

Capital Works in Progress are not depreciated as the Directorate is not currently deriving any economic benefit from them.

Capital Works in Progress 12,899 ‐

Total Capital Works in Progress 12,899 ‐

a) Capital Works in Progress is broken down into the following categories:

Employment Costs – All staff that have been directly involved in the procurement process from Evaluation to Contract/Financial close are recorded as Capital Work in Progress.

Legal Costs – These costs include costs of the CMA’s legal and probity advisors that were involved at all stages of the procurement process and also during negotiation and Contract Close.

Consultants – Includes all Technical (Planning and Design), Commercial (including Cost Estimation Advisory), Customer Experience and Operations Input (including Ticketing, Traffic Modelling and Transport Integration) and Transaction Management advisors required during the procurement process and also during negotiation and Contract Close.

Other Costs – Costs for the Evaluation Room including Contractors, The Design Advisory Panel and Development Application Fees.

Reconciliation of Capital Works in Progress

The following shows the movement of Capital Works in Progress from the beginning to end of 2015‐16. Carrying Amount at the Beginning of the Reporting Period ‐ ‐

Additions 12,899 ‐

Carrying Amount at the End of the Reporting Period 12,899 ‐

69



NOTE 13. PAYABLES

2016 2015 $’000 $’000Current Payables Trade Payables 120 133Accrued Expenses 771 1,676

Total Current Payables 891 1,809 Total Payables 891 1,809

At 30 June 2016 significant amount of prior months invoices have been settled. This resulted in a reduced accrued expense balance.

Payables are aged as followed: Not Overdue 891 1,809Total Payables 891 1,809 Classification of ACT Government/Non‐ACT Government Payables Payables with ACT Government Entities Trade Payables 2 ‐Accrued Expenses 95 58

Total Payables with ACT Government Entities 97 58 Payables with Non‐ACT Government Entities Trade Payables 118 133Accrued Expenses 676 1,618

Total Payables with Non‐ACT Government Entities 794 1,751 Total Payables 891 1,809




NOTE 14. EMPLOYEE BENEFITS

2016 2015 $’000 $’000Current Employee Benefits Annual Leave 435 328Long Service Leave 451 325Accrued Salaries 24 145Other Benefits 2 15

Total Current Employee Benefits 912 813 Non‐Current Employee Benefits Long Service Leave 124 137

Total Non‐Current Employee Benefits 124 137 Total Employee Benefits a 1,036 950 Estimate of when Leave is Payable Estimated Amount Payable within 12 months Annual Leave 186 138Long Service Leave 6 ‐Accrued Salaries 24 145Other Benefits 2 15

Total Employee Benefits Payable within 12 months 218 298 Estimated Amount Payable after 12 months Annual Leave 249 190Long Service Leave a 569 462

Total Employee Benefits Payable after 12 months 818 652 Total Employee Benefits b 1,036 950 At 30 June 2016, CMA employed 29 full‐time equivalent (FTE) staff, compared to 25 FTE staff at 30 June 2015.

71



NOTE 15. OTHER LIABILITIES

CMA has entered into an operating lease for office accommodation in Dickson ACT. The lease is for 4.5 years commencing 24 March 2014 and the lease expires on 30 September 2018.

The lease incentives represent a rent‐free period which CMA recognised as a liability at the time of signing the lease.

The lease incentive liability is amortised over the life of the lease. Each month the lease rental payment is allocated to the rent expense and reduction of the lease incentive liability.

2016 2015 $’000 $’000Current Other Liabilities Lease Incentives 12 12

Total Current Other Liabilities 12 12 Non‐Current Other Liabilities Lease Incentives 15 28

Total Non‐Current Other Liabilities 15 28 Total Other Liabilities 27 40




NOTE 16. FINANCIAL INSTRUMENTS

Details of the significant policies and methods adopted, including the criteria for recognition, the basis of measurement, and the basis on which income and expenses are recognised, with respect to each class of financial asset and financial liability are disclosed in Note 2 'Summary of Significant Accounting Policies'.

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

CMA is considered to have no exposure to interest rate risk, as its financial assets( cash and cash equivalents) and Receivables) and financial liabilities (Payables) are non‐interest bearing.

Sensitivity Analysis

A sensitivity analysis has not been undertaken as CMA has no exposure to interest rate risk.

Credit Risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. CMA’s credit risk is limited to the amount of the financial assets it holds net of any allowance for impairment loss. CMA expects to collect all financial assets that are not past due or impaired.

Cash and cash equivalents are held with a high credit quality financial institution (Westpac Banking Corporation), in accordance with whole of ACT Government banking arrangements. Most receivables are represented by a net Goods and Services Tax receivable from the Australian Taxation Office.

Credit risk is therefore considered to be low.

Liquidity Risk

Liquidity risk is the risk that CMA will be unable to meet its financial obligations associated with financial liabilities that are settled by delivering cash or another financial asset. CMA’s main financial obligations relate to the purchase of supplies and services. Purchases of supplies and services are paid within 30 days of receiving the goods or services.

The only source of cash to pay these obligations is appropriation from the ACT Government which is paid on a fortnightly basis during the year. CMA manages its liquidity risk through forecasting appropriation drawdown requirements to enable payment of anticipated obligations. CMA has ability to drawdown additional appropriations from the ACT Government if required. This ensures that CMA has enough liquidity to meet its emerging financial liabilities. See the maturity analysis below for further details of when the financial assets and liabilities mature. CMA’s exposure to liquidity risk and the management of this risk has not changed since the previous reporting period.

73



NOTE 16. FINANCIAL INSTRUMENTS - CONTINUED

Price Risk Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether these changes are caused by factors specific to the individual financial instrument or its issuer; or by factors affecting all similar financial instruments traded in the market.

CMA does not have any financial instruments that are subject to price risk. Accordingly, a sensitivity analysis has not been undertaken.

Fair Value of Financial Assets and Liabilities

The carrying amounts and fair values of financial assets and liabilities at the end of the reporting period are: Carrying Fair Value Carrying Fair Value Note Amount Amount Amount Amount No. 2016 2016 2015 2015 $’000 $’000 $’000 $’000Financial Assets

Cash and Cash Equivalents 9 2,298 2,298 2,921 2,921Receivables 10 3 3 1 1

Total Financial Assets 2,301 2,301 2,922 2,922 Financial Liabilities

Payables 13 891 891 1,809 1,809

Total Financial Liabilities 891 891 1,809 1,809 Fair Value Hierarchy

CMA’s financial assets and liabilities are measured, subsequent to initial recognition and at amortised cost,.


Capital M

etro Agency

Not

es to

and

For

min

g Pa

rt o

f the

Fin

anci

al S

tate

men

ts

For the

Year E

nded

30 June

201

6 Hidd

en words

NO

TE 1

6. F

INA

NC

IAL

INST

RU

MEN

TS –

CO

NTI

NU

ED

The following tables set out th

e CM

A’s maturity

analysis

for financial assets and liabilities as well as the expo

sure to

interest ra

tes, includ

ing the weighted average interest

rates by

maturity

period as at 3

0 June

2016. A

ll fin

ancial assets and liabilities which are non

‐interest bearin

g will m

ature in 1 year o

r less. A

ll am

ounts appe

aring in th

e following maturity

analysis

are sh

own on

an un

discou

nted

cash flo

w basis.

Fixed Interest M

aturing In:

Weighted

Floa

ting

Over

More

Non

‐

Note

Average

Interest

1 Ye

ar

1 Ye

ar to

than

Interest

No.

Interest

Rate

or Less

5 Ye

ars

5 Ye

ars

Bearing

Total

Rate

$’000

$’000

$’000

$’000

$’000

$’000

Fina

ncial Instrum

ents

Fina

ncial A

ssets

Cash and

Cash Equivalents

9 ‐

‐‐

‐‐

2,298

2,298

Receivables

10

‐‐

‐‐

‐3

3

Total Finan

cial Assets

‐‐

‐‐

2,301

2,301

Fina

ncial Liabilities

Payables

13

‐‐

‐‐

‐891

891

Total Finan

cial Liabilities

‐

‐‐

‐891

891

Net Finan

cial Assets

‐‐

‐‐

1,410

1,410

75

Capital M

etro Agency

Not

es to

and

For

min

g Pa

rt o

f the

Fin

anci

al S

tate

men

ts

For the

Year E

nded

30 June

201

6 Hidd

en words

NO

TE 1

6. F

INA

NC

IAL

INST

RU

MEN

TS –

CO

NTI

NU

ED

The following table sets out th

e CM

A's maturity

analysis

for financial assets and liabilities as well as the expo

sure to

interest ra

tes, includ

ing the weighted average interest

rates b

y maturity

period as at 3

0 June

2015. A

ll fin

ancial assets a

nd liabilitie

s which have a flo

ating interest ra

te or a

re non

‐interest bearin

g will m

ature in one

year o

r less.

All amou

nts a

ppearin

g in th

e following maturity

analysis

are sh

own on

an un

discou

nted

cash flo

w basis.

Fixed Interest M

aturing In:

Weighted

Floa

ting

Over

More

Non

‐

Note

Average

Interest

1 Ye

ar

1 Ye

ar to

than

Interest

No.

Interest

Rate

or Less

5 Years

5 Ye

ars

Bearing

Total

Rate

$’000

$’000

$’000

$’000

$’000

$’000

Fina

ncial Instrum

ents

Fina

ncial A

ssets

Cash and

Cash Equivalents

9 ‐

‐‐

‐‐

2,921

2,921

Receivables

10

‐‐

‐‐

‐1

1

Total Finan

cial Assets

‐‐

‐‐

2,922

2,922

Fina

ncial Liabilities

Payables

13

‐‐

‐‐

‐1,809

1,809

Total Finan

cial Liabilities

‐

‐‐

‐1,809

1,809

Net Finan

cial Assets

‐‐

‐‐

1,113

1,113




NOTE 16. FINANCIAL INSTRUMENTS - CONTINUED

2016 2015 $’000 $’000Carrying Amount of Each Category of Financial Asset and Financial Liability Financial Assets Loans and Receivables Measured at Amortised Cost 3 1 Financial Liabilities Financial Liabilities Measured at Amortised Cost 891 1,809

CMA does not have any financial assets in the ‘Available for Sale’ category, the ‘Financial Assets at Fair Value through Profit and Loss’ category or the ‘Held to Maturity’ category and, as such, these categories are not included above. Also, CMA does not have any financial liabilities in the ‘Financial Liabilities at Fair Value through Profit and Loss’ category and as such this category is not included above.

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NOTE 17. COMMITMENTS

Capital Commitments Capital commitments contracted at reporting date that have not been recognised as liabilities, are payable as follows:

Public Private Partnership Finance Lease Commitments

Minimum lease payments

Finance Charge

Present Value of minimum lease

payments 2016 2016 2016 $’000 $’000 $’000

Public Private Partnership Finance lease Commitmentsa Public Private Partnership Commitments Within One Year ‐ ‐ ‐ Later than one year but not later than five years 446,939 53,098 393,841 Later than five years 490,141 180,030 310,111

Total Public Private Partnership Commitments 937,080 233,128 703,952

a) Public Private Partnership Finance Lease payments are GST Exclusive.

The above capital commitments relate to the Territory entering into a 20 year public private partnership on 25 May 2016 with the Canberra Metro Consortium. Refer to Accounting Policy Note 2 (e) Public Private Partnership, for more information.

2016 2016 $’000 $’000

(excludes GST) (includes GST)

Finance Lease Commitments (as shown above) Finance Lease Commitments 937,080

Public Private Partnership ‐ Operational Commitments Payable: Later than one year but not later than five years 73,109 80,420 Later than five years 639,163 703,079

Total Operational Commitments 712,272 783,499

Total Public Private Partnership Commitmentsb 1,649,352

b) See Note 2(q) for further information on Territory‐retained risks




NOTE 17. COMMITMENTS - CONTINUED

Operating Lease Commitments

CMA has one non‐cancellable operating lease for a building which is used for office accommodation. The operating lease agreement gives CMA the right to renew the lease. Renegotiations of the lease terms occur on renewal of the lease.

Contingent rental payments have not been included in the commitments below. Total non‐cancellable operating lease commitments that are also included relate to Shared Services ICT. 2014Non‐Cancellable Operating Lease Commitments are payable as follows: $’000 2016 2015 $’000 $’000 Within One Year 401 379Later than one year but not later than five years 527 827Later than five years 20 ‐Total Operating Lease Commitments 948 1,206 All amounts shown in the commitment note are inclusive of Goods and Services Tax.

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NOTE 18. CASH FLOW RECONCILIATION

(a) Reconciliation of Cash and Cash Equivalents at the End of the Reporting Period in the Cash Flow Statement to the Equivalent Items in the Balance Sheet

2016 2015 $’000 $’000 Total Cash and Cash Equivalents Recorded in the Balance Sheet 2,298 2,921

Cash and Cash Equivalents at the End of the Reporting Period as Recorded in the Cash Flow Statement 2,298 2,921

(b) Reconciliation of the Operating Surplus to Net Cash (Outflows) / Inflows from Operating Activities

Operating Surplus 41 364

Add/(Less) Non‐Cash Items

Cash Before Changes in Operating Assets and Liabilities 41 364 Changes in Operating Assets and Liabilities (Increase)/Decrease in Receivables (76) 22(Increase)/Decrease in Other Assets (7) 22(Decrease) in Payables (1,519) (61)Increase in Employee Benefits 86 338(Decrease) in Other Liabilities (13) (12)

Net Changes in Operating Assets and Liabilities (1,529) 309

Net Cash (Outflows)/ Inflows from Operating Activities (1,488) 673

NOTE 19. EVENTS OCCURING AFTER BALANCE DATE As a result of Administrative Arrangements 2016 (No. 3) notifiable instrument NI2016‐178 announced on 8 April 2016, CMA ceases to be a separate reporting entity from 1 July 2016. CMA’s functions amalgamated with the Territory and Municipal Services Directorate to become the Transport Canberra and City Services Directorate.




NOTE 20. BUDGETARY REPORTING – EXPLANATIONS OF MAJOR VARIANCES BETWEEN ACTUAL AMOUNTS AND ORIGINAL BUDGET AMOUNTS The following are brief explanations of major line item variances between budget estimates and actual outcomes. Variances are considered to be major variances if both of the following criteria are met:

(a) The line item is a significant line item: the line item actual amount accounts for more than 10% of the relevant associated category (Income, Expenses and Equity totals) or sub‐element (e.g. Current Liabilities and Receipts from Operating Activities totals) of the financial statements; and

(b) The variances (original budget to actual) are greater than plus (+) or minus (‐) 10% of the budget for the financial statement line item.

Balance Sheet Line Items Original Actual Budget1

2015‐16 2015‐16 Variance Variance Variance Explanation $’000 $’000 $’000 % Capital Works in Progress 12,899 16,137 (3,238) (20) The variance is due a

compressed construction time frame (later start, early finish) being followed by Canberra Metro Consortium for the light rail project. The budget assumed a longer construction period and as a result costs have moved forward on the time line without impacting the completion date of the project

Current Payables 891 1,522 (631) (41) At June 2016 most prior month

unbilled amounts were settled resulting in a lower accrued expense balance.

Statement of Changes in Equity These line items are covered in other financial statements

Cash Flow Statement Line Items Original Actual Budget1

2015‐16 2015‐16 Variance Variance Variance Explanation $’000 $’000 $’000 % Employee Expenses 2,861 3,175 (314) (10) Actual full‐time equivalent (FTE)

is lower than budget due to certain roles being more prudently discharged by contractors or consultancies.

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NOTE 20. BUDGETARY REPORTING – EXPLANATIONS OF MAJOR VARIANCES BETWEEN ACTUAL AMOUNTS AND ORIGINAL BUDGET AMOUNTS - Continued Supplies and Services 5,738 4,453 1,285 29 Actual results includes cash

payments for 2014‐15 accrued Supplies and Services. The budget assumed most 2014‐15 supplier accounts to be settled within the year.

Capital Injections 13,163 16,137 (2,974) (18) This variance is due to lower Capital Injections required during the year which is in line with lower Capital Work in Progress as explained above. .

1 Original Budget refers to the amounts presented to the Legislative Assembly in the original budgeted financial statements in respect of the reporting period (2015‐16 Budget Statements). These amounts have not been adjusted to reflect supplementary appropriation or appropriation instruments.


C.3 - CAPITAL WORKSThe CMA began to capitalise costs in 2015-16 that were directly attributed to the Project. No costs were capitalised in 2014-15 as it was determined that economic benefits would flow from the Project only at the commencement of 2015-16.

From 1 July 2015, CMA management ascertained that it was probable that future benefits would flow from the Project and accordingly all directly attributable costs from 1 July 2015 have been capitalised as Capital Works in Progress.

Capital Works in Progress have been broken down into the following categories:

> Employment Costs - All staff directly involved in the procurement process from Evaluation to Contract/Financial close are recorded as Capital Works in Progress.

> Legal Costs - These costs include costs of the CMA’s legal and probity advisors involved at all stages of the procurement process and also during negotiation and Contract close.

> Consultant Costs - Includes all technical, commercial, customer experience, operations, and transaction management advisors required during the procurement process and also during negotiation and Contract close.

> Other Costs - Costs for the evaluation room including contractors, the Design Advisory Panel and Development Application fees.


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C.4 - ASSETS MANAGED AND OFFICE ACCOMMODATIONPlease refer to Compliance Statement p4


C.5 - GOVERNMENT CONTRACTINGService Provider Contract Title Value (Incl.GST) Procurement Methodology Procurement Type Exemption Start Date Completion

Date

Ernst and Young Additional Advisory Services $29,700.00 Select (Panel) Consultant No 12/12/2015 28/02/2016

Ernst and Young Commercial Cost Breakdown and Project Appraisal $16,500.00 Select (Treasury Panel) Consultant No 05/02/2016 28/02/2016

Ernst and Young Capital Metro pre-selection negotiation and evaluation activities $55,000.00 Select (Treasury Panel) Consultant No 01/12/2015 30/06/2016

Ernst and Young Accounting services towards recommendation for capitalisation of the light rail project

$16,500.00 Services Agreement (Variation) Consultant N/A 04/09/2015 04/01/2017

Ernst and Young Infrastructure commercial advisory services in relation to the Russell Extension


Randall Barry Operations Advisor Extended under Panel $126,720.00 Specialist Advisors Panel - Works Order Consultant No 31/12/2015 30/06/2016


Geonosis Specialist Advisor for Interactive Tendering Process, evaluation and negotiation

$340,454.40 Specialist Advisors Panel - Works Order Consultant No 20/07/2015 27/05/2016

Geonosis Specialist advisory services to the CMA $69,154.80 Specialist advisory services to the CMA Consultant No 27/05/2016 02/10/2016

Atech Group Utilities PM $52,800.00 Services Agreement Consultant Yes 24/09/2015 13/05/2016

Atech Group Utilities PM $158,400.00 Services Agreement (Variation) Consultant N/A 24/09/2015 13/05/2016


Fleming and Partners Chief Financial Advisor $204,000.00 Services Agreement Consultant Yes 01/07/2015 30/06/2016

Arup Pty Ltd Technical advisory - Variations 38-51 $81,787.34 Services Agreement (Variation) Consultant N/A 22/03/2016 30/06/2016

Clayton Utz Secondment Agreement $174,462.20 Services Agreement (Variation) Consultant N/A 31/08/2015 31/05/2016

Clayton Utz Extension of Secondment $18,760.00 Services Agreement (Variation) Consultant N/A 31/05/2016 24/06/2016

Clayton Utz Services rendered in accordance with invoice 3912512 $8,434.80 Services Agreement (Variation) Consultant N/A 31/05/2016 24/06/2016

SNC Lavalin Rail & Transit IC Procurement Evaluation (Sheila) $55,000.00 Specialist Advisors Panel - Works Order Consultant No 27/08/2015 30/05/2016

SNC Lavalin Rail & Transit Specialist Advisor - Light Rail Operations $531,520.00 Specialist Advisors Panel - Works Order Consultant No 01/08/2015 30/06/2016

SNC Lavalin Rail & Transit Interfleet Support Services for RFP Evaluation $360,140.00 Specialist Advisors Panel - Works Order Consultant No 25/08/2015 31/12/2015

SNC Lavalin Rail & Transit Continuation of Services $68,020.31 Specialist Advisors Panel - Works Order Consultant No 31/12/2015 30/04/2016

SNC Lavalin Rail & Transit Director of Operations - Jim Kilfeather $1,148,400.00 Specialist Advisors Panel - Works Order Consultant No 01/04/2016 24/04/2018

Caroplan Pty Ltd Ticketing & Pricing Consultancy Services $7,425.00 Specialist Advisors Panel - Works Order Consultant No 01/07/2015 31/12/2015


Piazza Research Pty Ltd Market Research Services $63,554.00 Services Agreement Consultant Yes 01/07/2015 30/06/2016

Piazza Research Pty Ltd Additional Focus Group Services $1,485.00 Services Agreement (Variation) Consultant N/A 24/08/2015 30/06/2017

Turner and Townsend Constructability Advisor Extended - New Resource $250,800.00 Specialist Advisors Panel - Works Order Consultant No 13/07/2015 15/12/2015

Turner and Townsend PPP Tender Evaluation $155,452.00 Specialist Advisors Panel - Works Order Consultant No 30/09/2015 30/12/2015

Turner and Townsend Constructability Advisor Extended $274,560.00 Specialist Advisors Panel - Works Order Consultant No 15/12/2015 30/06/2016

Hiller Parry Local Industry Participation Services $25,000.00 Services Agreement Consultant Yes 30/09/2015 30/06/2016

Tracey Brunstrom & Hammond RFP Evaluation $129,851.70 Specialist Advisors Panel - Works Order Consultant No 07/09/2015 31/05/2016


Tracey Brunstrom & Hammond 2 x P6 Software license $3,069.00 Purchase Order Consultant Yes 04/09/2015 04/09/2015

85

Service Provider Contract Title Value (Incl.GST) Procurement Methodology Procurement Type Exemption Start Date Completion Date

Ernst and Young Additional Advisory Services $29,700.00 Select (Panel) Consultant No 12/12/2015 28/02/2016

Ernst and Young Commercial Cost Breakdown and Project Appraisal $16,500.00 Select (Treasury Panel) Consultant No 05/02/2016 28/02/2016

Ernst and Young Capital Metro pre-selection negotiation and evaluation activities $55,000.00 Select (Treasury Panel) Consultant No 01/12/2015 30/06/2016

Ernst and Young Accounting services towards recommendation for capitalisation of the light rail project


Ernst and Young Infrastructure commercial advisory services in relation to the Russell Extension




Geonosis Specialist Advisor for Interactive Tendering Process, evaluation and negotiation



Atech Group Utilities PM $52,800.00 Services Agreement Consultant Yes 24/09/2015 13/05/2016



Fleming and Partners Chief Financial Advisor $204,000.00 Services Agreement Consultant Yes 01/07/2015 30/06/2016

Arup Pty Ltd Technical advisory - Variations 38-51 $81,787.34 Services Agreement (Variation) Consultant N/A 22/03/2016 30/06/2016

Clayton Utz Secondment Agreement $174,462.20 Services Agreement (Variation) Consultant N/A 31/08/2015 31/05/2016

Clayton Utz Extension of Secondment $18,760.00 Services Agreement (Variation) Consultant N/A 31/05/2016 24/06/2016

Clayton Utz Services rendered in accordance with invoice 3912512 $8,434.80 Services Agreement (Variation) Consultant N/A 31/05/2016 24/06/2016

SNC Lavalin Rail & Transit IC Procurement Evaluation (Sheila) $55,000.00 Specialist Advisors Panel - Works Order Consultant No 27/08/2015 30/05/2016

SNC Lavalin Rail & Transit Specialist Advisor - Light Rail Operations $531,520.00 Specialist Advisors Panel - Works Order Consultant No 01/08/2015 30/06/2016

SNC Lavalin Rail & Transit Interfleet Support Services for RFP Evaluation $360,140.00 Specialist Advisors Panel - Works Order Consultant No 25/08/2015 31/12/2015

SNC Lavalin Rail & Transit Continuation of Services $68,020.31 Specialist Advisors Panel - Works Order Consultant No 31/12/2015 30/04/2016

SNC Lavalin Rail & Transit Director of Operations - Jim Kilfeather $1,148,400.00 Specialist Advisors Panel - Works Order Consultant No 01/04/2016 24/04/2018



Piazza Research Pty Ltd Market Research Services $63,554.00 Services Agreement Consultant Yes 01/07/2015 30/06/2016

Piazza Research Pty Ltd Additional Focus Group Services $1,485.00 Services Agreement (Variation) Consultant N/A 24/08/2015 30/06/2017

Turner and Townsend Constructability Advisor Extended - New Resource $250,800.00 Specialist Advisors Panel - Works Order Consultant No 13/07/2015 15/12/2015

Turner and Townsend PPP Tender Evaluation $155,452.00 Specialist Advisors Panel - Works Order Consultant No 30/09/2015 30/12/2015

Turner and Townsend Constructability Advisor Extended $274,560.00 Specialist Advisors Panel - Works Order Consultant No 15/12/2015 30/06/2016

Hiller Parry Local Industry Participation Services $25,000.00 Services Agreement Consultant Yes 30/09/2015 30/06/2016

Tracey Brunstrom & Hammond RFP Evaluation $129,851.70 Specialist Advisors Panel - Works Order Consultant No 07/09/2015 31/05/2016


Tracey Brunstrom & Hammond 2 x P6 Software license $3,069.00 Purchase Order Consultant Yes 04/09/2015 04/09/2015



Tracey Brunstrom & Hammond Variation to Work Order 5 $105,686.90 Specialist Advisors Panel - Works Order Consultant No 07/09/2015 31/05/2016

Tracey Brunstrom & Hammond Document Management System $11,299.20 Purchase Order Consultant Yes 11/11/2015 30/06/2016

Parsons Brinckerhoff Continuation of EIS services $241,379.00 Services Agreement (Variation) Consultant N/A 27/07/2015 31/05/2016


Parsons Brinckerhoff Provision of Additional Information to support the Russell Extension EPBC Referral


Lee Noble Continuity of - Safety accreditation and safety management assurance systems and policy development and management services for the Customer Experience & Operations


Bang The Table Online Community Engagement $5,500.00 Services Agreement Consultant Yes 09/07/2015 31/10/2015

Bang The Table Online Community Engagement $19,800.00 Services Agreement (Variation) Consultant N/A 08/07/2015 30/06/2016

ICON Audit of the Intra Government Comms. Network $550,000.00 Utilities Services No 08/07/2015 20/03/2016

Pelicancorp Dial before you dig $10,000.00 Utilities Services No 20/11/2015 20/11/2015

Ranbury Management Group Interface Agreement Development $79,200.00 Specialist Advisors Panel - Works Order Consultant No 01/07/2015 30/09/2015


Ranbury Management Group Continuity of Interface Agreement Development and transition planning


Ranbury Management Group Senior Design Manager - Procurement & Delivery $277,200.00 Specialist Advisors Panel - Works Order Consultant No 29/02/2016 30/11/2016

First International Management Independent Panel Member $50,600.00 Services Agreement Consultant Yes 15/09/2015 16/01/2016

JBA Urban Planning Consultants Independent Panel Member - Comms $11,000.00 Services Agreement Consultant Yes 10/09/2015 24/01/2016

JBA Urban Planning Consultants Independent Panel Member (additional scope) - Comms $3,300.00 Services Agreement (Variation) Consultant N/A 10/09/2015 24/01/2016

JBA Urban Planning Consultants Independent Panel Member (additional scope) - Comms $742.50 Services Agreement (Variation) Consultant N/A 10/09/2015 24/01/2016

Elton Consulting Planning Advisory Services $147,455.00 Services Agreement Consultant No 24/11/2015 24/05/2016

Elton Consulting Planning Advisory Services - Extended $69,696.00 Services Agreement (Variation) Consultant N/A 24/06/2016 16/12/2016

Deloitte Organisation Design Consultancy Services $14,000.00 Work Order Services No 28/10/2015 30/11/2015

JBS Consult Pty Ltd Executive Director - Procurement & Delivery $145,200.00 Services Agreement Consultant Yes 16/11/2015 30/02/2016

JBS Consult Pty Ltd Continuity of Services - ED, P&D $89,540.00 Services Agreement (Variation) Consultant N/A 28/02/2016 22/04/2016


TSA Management Commercial Manager $620,136.00 Specialist Advisors Panel - Works Order Consultant No 01/02/2016 01/02/2017

Tait Waddington Urban Design Officer $74,910.00 Specialist Advisors Panel - Works Order Consultant No 01/02/2016 30/10/2016

87


Tracey Brunstrom & Hammond Variation to Work Order 5 $105,686.90 Specialist Advisors Panel - Works Order Consultant No 07/09/2015 31/05/2016

Tracey Brunstrom & Hammond Document Management System $11,299.20 Purchase Order Consultant Yes 11/11/2015 30/06/2016



Parsons Brinckerhoff Provision of Additional Information to support the Russell Extension EPBC Referral


Lee Noble Continuity of - Safety accreditation and safety management assurance systems and policy development and management services for the Customer Experience & Operations


Bang The Table Online Community Engagement $5,500.00 Services Agreement Consultant Yes 09/07/2015 31/10/2015

Bang The Table Online Community Engagement $19,800.00 Services Agreement (Variation) Consultant N/A 08/07/2015 30/06/2016

ICON Audit of the Intra Government Comms. Network $550,000.00 Utilities Services No 08/07/2015 20/03/2016

Pelicancorp Dial before you dig $10,000.00 Utilities Services No 20/11/2015 20/11/2015



Ranbury Management Group Continuity of Interface Agreement Development and transition planning


Ranbury Management Group Senior Design Manager - Procurement & Delivery $277,200.00 Specialist Advisors Panel - Works Order Consultant No 29/02/2016 30/11/2016

First International Management Independent Panel Member $50,600.00 Services Agreement Consultant Yes 15/09/2015 16/01/2016

JBA Urban Planning Consultants Independent Panel Member - Comms $11,000.00 Services Agreement Consultant Yes 10/09/2015 24/01/2016

JBA Urban Planning Consultants Independent Panel Member (additional scope) - Comms $3,300.00 Services Agreement (Variation) Consultant N/A 10/09/2015 24/01/2016

JBA Urban Planning Consultants Independent Panel Member (additional scope) - Comms $742.50 Services Agreement (Variation) Consultant N/A 10/09/2015 24/01/2016

Elton Consulting Planning Advisory Services $147,455.00 Services Agreement Consultant No 24/11/2015 24/05/2016

Elton Consulting Planning Advisory Services - Extended $69,696.00 Services Agreement (Variation) Consultant N/A 24/06/2016 16/12/2016

Deloitte Organisation Design Consultancy Services $14,000.00 Work Order Services No 28/10/2015 30/11/2015


JBS Consult Pty Ltd Continuity of Services - ED, P&D $89,540.00 Services Agreement (Variation) Consultant N/A 28/02/2016 22/04/2016


TSA Management Commercial Manager $620,136.00 Specialist Advisors Panel - Works Order Consultant No 01/02/2016 01/02/2017

Tait Waddington Urban Design Officer $74,910.00 Specialist Advisors Panel - Works Order Consultant No 01/02/2016 30/10/2016


REPORT OF FACTUAL FINDINGS


To the Members of the ACT Legislative Assembly

Report on the statement of performance The statement of performance of the Capital Metro Agency for the year ended 30 June 2016 has been reviewed.

Responsibility for the statement of performance The Director‐General of the Transport Canberra and City Services Directorate is responsible for the preparation and fair presentation of the statement of performance in accordance with the Financial Management Act 1996. This includes responsibility for maintaining adequate records and internal controls that are designed to prevent and detect fraud and error, and the systems and procedures used to measure the results of accountability indicators reported in the statement of performance.

The auditor’s responsibility Under the Financial Management Act 1996 and Financial Management (Statement of Performance Scrutiny) Guidelines 2016, I am responsible for providing a report of factual findings on the statement of performance.

The review was conducted in accordance with Australian Auditing Standards applicable to review engagements, to provide assurance that the results of the accountability indicators reported in the statement of performance have been fairly presented in accordance with the Financial Management Act 1996.

A review is primarily limited to making inquiries with representatives of the Capital Metro Agency, performing analytical and other review procedures and examining other available evidence. These review procedures do not provide all of the evidence that would be required in an audit, therefore, the level of assurance provided is less than that given in an audit. An audit has not been performed and no audit opinion is being expressed on the statement of performance.

The review did not include an assessment of the relevance or appropriateness of the accountability indicators reported in the statement of performance or the related performance targets.

No opinion is expressed on the accuracy of explanations provided for variations between actual and targeted performance due to the often subjective nature of such explanations.

89

As disclosed in the statement of performance, in accordance with the Financial Management (Statement of Performance Scrutiny) Guidelines 2016, the Government Payment for Outputs and Total Cost information included in the statement of performance has not been reviewed.

Electronic presentation of the statement of performance Those viewing an electronic presentation of this statement of performance should note that the review does not provide assurance on the integrity of information presented electronically, and does not provide an opinion on any other information which may have been hyperlinked to or from the statement of performance. If users of the statement of performance are concerned with the inherent risks arising from the electronic presentation of information, then they are advised to refer to the printed copy of the reviewed statement of performance to confirm the accuracy of this electronically presented information.Independence Applicable independence requirements of Australian professional ethical pronouncements were followed in conducting the review.

Review opinion Based on the review procedures, no matters have come to my attention which indicate that the results of the accountability indicators, reported in the statement of performance of the Capital Metro Agency for the year ended 30 June 2016, are not fairly presented in accordance with the Financial Management Act 1996.

This review opinion should be read in conjunction with the other information disclosed in this report.

Dr Maxine Cooper Auditor‐General 14 September 2016


GLOSSARY

TERMS, ACRONYMS AND ABBREVIATIONSACT Australian Capital TerritoryACTIA ACT Insurance AgencyACTPS ACT Public ServiceAPP Private sector Independent Certifier for the ProjectARIn Attraction and Retention IncentiveCanberra Metro The Canberra Metro consortium, the preferred respondent and the Territories private

sector partner to deliver the Capital Metro ProjectCMA Capital Metro AgencyCMTEDD Chief Minister, Treasury and Economic Development DirectorateDA Development ApplicationDirections, the The Annual Reports (Government Agencies) Notice 2015 or the

2015 and 16 Annual Report DirectionsEAP Employee Assistance ProgramEOI Expression of InterestEPD Environment and Planning DirectorateFTE Full-time equivalentHR Human ResourcesISCA Infrastructure Sustainability Council of AustraliaIR Infrastructure Rating under the ISCA rating schemeJACS Justice and Community Safety DirectorateMLA Member of the Legislative AssemblyNCA National Capital AuthorityProject, the Capital Metro Project, Canberra’s light rail projectProject Agreement The Capital Metro Project Agreement between the Canberra Metro consortium

and the TerritoryProject Board Capital Metro Project BoardRED Respect Equity and DiversityRFP Request for ProposalsRMP Resource Management PlanRussell Extension option An option for the ACT Government to extend the Stage 1 of light rail to the Russell PrecinctSERBIR Senior Executive Responsible for Business Integrity RiskShortlisted Respondents Shortlisted consortiums (Canberra Metro and ACTivate)

participating in the Project’s RFP processStage 1 The first stage of Canberra’s Light Rail Network, from Gungahlin to the CityTAMS Territory and Municipal Services DirectorateTCCS Transport Canberra and City Services DirectorateWHSR Work Health and Safety Representative

93

DOCUMENT REFERENCES

Document Title Reference

ACT Electricity Emissions Factor Report www.environment.act.gov.au

ACTPS Integrity Policy www.cmd.act.gov.au

ACTPS Work Health and Safety Policy Statement www.cmd.act.gov.au

Carbon Neutral ACT Government Framework www.environment.act.gov.au

Climate Change and Greenhouse Gas Reduction Act 2010 www.environment.act.gov.au

Government Risk Management Policy www.treasury.act.gov.au

Public Sector Management Standards www.legislation.act.gov.au

The Canberra Plan www.cmd.act.gov.au

Transport for Canberra Policy www.transport.act.gov.au

Work Health and Safety Act 2011 www.legislation.act.gov.au

http://www.environment.act.gov.au

http://www.cmd.act.gov.au


http://www.treasury.act.gov.au

http://www.legislation.act.gov.au


http://www.transport.act.gov.au

http://www.legislation.act.gov.au