My satisfaction with the information generated was such that I had been toying with thoughts of having Brian Clements assess whether they had any commercial potential. But for now it enabled me to monitor the project’s financial performance and compare outgoings and commitments with the budget amounts provided. As each contract variation was approved I would input the additional amount and revise the project forecast.
After my evening meal I returned to my office. I wanted to review the site webcam videos for the day as was my frequent practice. One of my first decisions on the project site had been the installation of a ten metre high mast on Lookout Hill. It was a steel tube with a metre square steel plate platform capping. On top of the cap was a solar panel that recharged a group of batteries in a steel box at ground level. Immediately below the capping were four webcams that provided three hundred and sixty degree coverage. All activity on the mine site could be monitored twenty four hours a day. The only limitation was that if no light was detected by a camera it would stop recording and go into hibernation mode.
In some ways I had created a rod for my own back as I was not the only person with access to the webcam feed. The Gibson Construction teams in Townsville and Brisbane could login and observe site activity live. As could the mine owner’s people based in Melbourne. I would often receive a phone call from someone in either Townsville or Brisbane with a query about something taking place on site. If anyone in Melbourne had a query they would call the Project Manager in Brisbane who would then call me.
The installation of the webcams had achieved another objective. It reduced the need for the Project Manager to visit the site, a situation that suited us both. I think that he was happy to be able to avoid the dust and noise of a busy construction site, and I was happy to avoid seeing him. When I had provided the means for him to witness the activity on site without leaving the air conditioned comfort of head office, I had given him an excuse to stay away and he had accepted it willingly.
However, I had provided for access by offsite personnel to just three of the four cameras. The three accessible cameras each had one hundred and twenty degree coverage. In theory I could have covered the complete site with only three cameras but I had overlapped the field of view for each camera by forty five degrees leaving the fourth camera to cover the remaining ninety degrees, plus fifteen degrees on each side. The fourth camera looked back up the ridge from Lookout Hill and covered the concrete aggregate quarry, aka the stormwater cutting. Jack Gilmore was the only person, apart from me, that had internet access to the feed from the fourth camera.
The setting up of the webcams had been a major breakthrough in monitoring the construction work. I could check on activities directly when I was either offsite or in my office. Since the webcam feeds were stored in the cloud they could be readily retrieved and used to settle disputes. I had already made use of the visual record of events on several occasions to defuse complaints before they could gather momentum.
As events unfolded later the webcams would help resolve a different sort of problem. A problem that I had no preconception of when the webcams were installed.
***
Monday October 19
Red Rock Project Site
As requested in a note that I left on her desk Leonie Wran, the project accountant, arrived in my office at nine o’clock on Monday morning to discuss the project costs. She was a bustling, energetic woman of uncertain age who took her job seriously. She was not a nine-to-five clock watcher. Learning that there was a possibility that there was a gremlin lurking in the project cost reports did not start her week off well. She was intent on resolving the matter but not concerned that it might rebound on her.
It was not the first time that we had met in order to reconcile my personal project calculations with the official accounting records. Previously I had been able to accept that the differences were within the possible range of timing differences. That is the time between expenditure being committed to and when payments are actually made and entered into the accounting records.
When Leonie Wran arrived in my office she had her laptop computer as I had requested and was bearing an armful of folders. I smiled when I saw that she was also carrying a cup of coffee. She had come prepared. The only warning that I had given her in my note requesting this meeting was that it might take some time. She had obviously taken my comment seriously.
I motioned her towards a seat opposite me at my desk. “Leonie, hi. I hope that you are refreshed and ready to help me unravel a mystery. I am hoping that we can quickly resolve it but I have spent the weekend on this and can’t see a simple explanation.”
Probably thinking back to the previous occasions when I had sought a reconciliation of project budget and actual costs she responded cheerfully. “Let me see what the problem is. I’m sure that we can work it out.”
Her expectations were the same as my hopes. That there was a simple explanation and that we would soon find it.
Her confidence in us quickly doing so was greater than mine. But, that wasn’t really surprising as I knew something that she didn’t.
***
I had spent most of Saturday reviewing my records of contract commitments and comparing those with payments approved and actually paid. Of the total $210 million project budget, Gibson construction was responsible for $156 million. Equipment procurement of about $50 million was controlled by the Project Manager based in Townsville. I was responsible for the remainder, almost $105 million.
The bulk of the $105 million, about $70 million, was tied up in contracts to install and commission the gold plant, crushers, mills and processing plant. The remainder was for power generation, water supply, accommodation and administration facilities, site roads and drainage, foundations and buildings. Plus construction management and commissioning costs that added up to several million dollars.
The major contracts were not a concern to me. So far there had been few payments made, albeit for hefty amounts. Keeping track of those contracts financially was easy as only a couple of relatively minor contract extras had been approved.
The grey area was the $30 million or so of site works that I controlled directly from the site. Wherever possible I had bundled up the work into contract packages and negotiated fixed prices with subcontractors. However, in many cases I had to accept cost plus contracts due to the need to expedite the work and complete the foundations, roading and drainage work before the end of October. This appeared to be where a problem lay. About sixty percent of the budgeted $20 million of cost plus contracts had been completed. I had expected that the cost to date for that work would have been around $11 million. But it was almost $500,000 higher. Still below budget, but from my point of view around $500,000 too high.
In order to monitor and control these cost plus contracts I had engaged an additional two inspectors and a quantity surveyor. I could now be sure to have at least two inspectors and one quantity surveyor onsite at all times. All cost plus contracts were based on estimates of man-hours, materials and services. Each contractor had to submit weekly statements of work done and report actual, or potential, variations from the estimates.
The system was simple and should have eliminated the chance of any surprises. Each of the weekly statements for the cost plus contracts had to be checked and approved by either one of the junior engineers or one of the inspectors. All physical quantities had to be verified by a quantity surveyor. After that the weekly statements were accumulated for each contract and used as the basis for approving payments to a contractor.
I was provided with a summary for each cost plus contract as a new weekly statement was received and input that information into my project monitoring program.
During the past weekend, I had spent much of Saturday checking my program for errors. I found none.
By late Saturday afternoon I had reached the conclusion that there was a disconnect between the total value of contracted work reported in the weekly statements and the cost plus contract payments made.
>
Somehow payments had been made to cost plus contractors that exceeded our records of the agreed value of the work done. This was not a matter of timing. There was a problem. A potentially serious problem.
***
It was eight p.m. on Saturday when I returned to my quarters at the end of my working day having just completed my evening meal. It was time for the News update so I turned on the television and sank back in my easy chair.
My main interest had been the weather forecast but there was nothing to immediately worry about. Some areas of low pressure had formed in the Coral Sea but were not expected to reach the Queensland coast. Not this time anyway, but the meteorologist proclaimed that the low pressure areas were developing earlier and more intensely this year. In another month or so these low pressure cells could be expected to develop into cyclones and threaten to come ashore. Even if cyclones did not develop, these areas of low atmospheric pressure will almost certainly bring heavy rainfall to the coastal region and extend inland to the Atherton Tableland. I automatically translated that to include Red Rock.
I was sceptical of the meteorologist’s claim that mankind was responsible for global warming but I accepted that if global warming was taking place it would inevitably lead to greater extremes of weather. That being so I was thankful that I had opted to complete the stormwater cutting. My only concern being that I would like to have had it completed already. If the meteorologist was right then the seasonal storms might be earlier, and more intense, than usual.
The next News item was about the Queensland Government’s Opposition Leader claiming that extortion allegations against unions should be investigated by the Queensland Crime and Corruption Commission.
His diatribe could probably be written off as meaningless political posturing. One did not have to be a cynic to wonder why the Opposition Leader had not done something about it when he was Premier just a few months ago. On the other hand it was a topic that I should not ignore as it could well impact on construction contracts such as the Red Rock Mine.
The Opposition Leader was either a very good actor or he had a sincere belief that something needed to be done. He vehemently claimed that there was a long history of intimidation and unlawful strikes by the Construction Workers Union during a number of capital works projects that had cost taxpayers millions of dollars. He cited the case of the Children’s Hospital in South Brisbane which had cost an unnecessary $8 million extra due to illegal Union stoppages.
Most of his allegations I had heard before. I had already known that the Federal Government’s Royal Commission into Union Governance and Corruption had found conduct which constituted blackmail and extortion by officers of the Construction Workers Union. They had also concluded that the behaviour of Construction Workers Union’s officials in Queensland and other states contravened the boycott, cartel and other provisions of the Competition and Consumer Act.
The Opposition Leader had concluded by stating that at least a dozen unionists in Queensland had already been found guilty in the Federal Court of causing unlawful stoppages on multi-million dollar Government projects.
When the News item concluded I sat back thinking about how complicated real life could get when compared with what one expects when young and inexperienced. Nothing at university had fully prepared me for the range of issues and events that I had already encountered as a construction engineer.
Saturday night’s News was a case in point. The two leading items were the potential for storms and the unlawful behaviour by Unions. Both could be highly relevant to the Red Rock Project and I needed to have a strategy to deal with each of them if, or when, they became an issue at Red Rock.
I was already concerned that I had a problem of fraud by a Gibson employee either alone or in collaboration with an outside contractor.
Those were three issues that we never considered at university. There it had been mostly about engineering mathematics and other physical sciences. Sure we had covered contract law, report writing and some other non-science topics but it was all hypothetical. There when we had a problem to solve we had the question spelled out for us. We just had to decide on the answer.
But in real life we may not even realise that there was a question to be answered. So, we had to first decide just what the question was. Then, we had to decide what the answer was. It had all been so easy at University. Here in the real world at Red Rock I had three potential issues; storms, corrupt Unions and fraud. I could just ignore them, treat them as being unlikely to occur, and focus on construction of the project. But to do so would be to ensure a catastrophe if any of the issues became an actual problem.
Whatever I did next was clearly going to be a judgment call. I did not want to waste time by jumping at shadows but I decided that I could not ignore the risks associated with storms, corrupt Unions and fraud.
Dealing with storms needed engineering solutions. At least I knew where to start with them and I was knowledgeable about what could be done.
But the issues of corrupt Unions and fraud were something else. I did not know where to start. Thinking back to the TV News item I decided to learn more about the Queensland Crime and Corruption Commission. And the best place to start was the internet.
It only took a few moments to locate the website for the Commission. It made interesting reading.
The Crime and Corruption Commission had evolved from the Criminal Justice Commission which had been formed in 1989 after the Fitzgerald Inquiry into police corruption. At the same time the Queensland witness protection service was created. The new Commission’s role was to investigate police and public sector misconduct and to work with the police to investigate organised and major crime.
In 2001 the Queensland Government decided to form a single body to fight crime and public sector misconduct. That led to the creation of the Crime and Corruption Commission which now has oversight of the police and the public sector as well as providing protection for witnesses.
As I read through the list of the Commission’s functions, it seemed that the Commission’s number one priority was investigation of organised crime. Next in its priorities was receiving and investigation of allegations of serious or systemic corrupt conduct, followed by witness protection.
The Commission has wide ranging powers but is subject to three distinct monitoring agencies and is far from a being a law unto itself.
First, the Commission has to report to an all-party Parliamentary Crime and Corruption Committee every two months by way of public and confidential reports and submissions. Second, it is also subordinate to the Supreme Court of Queensland which reviews some of its decisions and must give its approval before the Commission can exercise some of its powers. Third, the Public Interest Monitor ensures the Commission’s compliance with key legislation, including examining their applications for warrants to carry out covert searches and surveillance.
The Public Interest Monitor’s primary role is to represent the public interest where law enforcement agencies seek approval to use search powers and surveillance devices that have the capacity to infringe the rights and civil liberties of citizens. It monitors the Commission’s applications for, and the use of, surveillance device warrants, retrieval warrants and covert search warrants.
It had been an eye-opening experience to learn about the Commission. There was no doubt in my mind. If there was an issue of corrupt unions and fraud here at Red Rock then it would clearly fall within the Commission’s ambit. Noting down their contact details I decided that if, and when, appropriate I would get in touch with the Commission. It was reassuring to at least have a plan.
***
After my regular eight kilometre run early on Sunday morning I felt physically and mentally refreshed. I then realised that I had allowed myself to be sidetracked the previous evening and get too caught up in possible problems instead of first addressing the matter in hand. My post run euphoria had cleared my mind and enabled me to get my thinking back on track.
What I needed to do was
to focus on resolving the discrepancy between the accounting system data and my construction management program. And that is just what I would do later that day.
Immediately after breakfast I did a site walk around. Some work was still in hand and I was soon engaged in work-related discussions and getting explanations where I had a question regarding the work being done. One thing that I could count on was that within minutes of my arrival on site, all of the foremen and leading hands knew that I had arrived. They would then make themselves highly visible and try to ensure that I did not talk to members of their team without them being there to participate in any discussion.
These weekend walk-arounds enabled me to get to know the workers and identify issues that should be addressed before they escalated into problems. Sunday morning had been no exception and I had a number of items to discuss with the engineers and inspectors the following day. After I completed the site inspection, I shared a table in the dining room with a group of workers when I had lunch. There was a different mealtime protocol in place during the weekends. During the week the men usually ate their meals in workgroups. Foremen and leading hands would either eat with their own workgroup or else share a table with other foremen and leading hands. It did not seem to be appropriate for foremen or leading hands to eat with other workgroups. Why that was so I did not know, but during the weekends the mealtime groupings were less predictable. Perhaps it was because a greater percentage of those onsite were actually off duty.
During the week I usually ate at a table with my supervisory team including the foremen and leading hands. The only protocol in place as far as I was concerned was that I would not discuss specific work-related matters while I was eating. I would make arrangements to meet someone for a later discussion but, unless it was an emergency, I would not talk work. Before I had taken a firm stand about not talking work during meals I had been inundated with workers taking the chance to talk to the boss. On one occasion when I had unwisely responded to a worker who approached me with a work-related query a queue of other workers had almost immediately formed behind him.
Smoking Gun (Adam Cartwright Trilogy Book 1) Page 9
