BER: 50% of budget disappears

More waste from Rudd and Gillard’s $16.2 billion so-called Building the Education Revolution…

My BER mole states that stuff is being built for about $1.4 million, dropped down from $1.7 million + GST but the NSW government website has the same stuff budgeted at around $3 million to $3.2 million. That’s a heck of a difference even if one allows for the 6% “managing contractor’s” fee and the builder’s 11% profit margin. But $1.5 million??? Thus, the question on everyone’s lips is, “Where is all the money going?” The builders can’t say. Not even the managing contractors can say. Does Julia know? One thing is for sure, but. Julia’s $14 million so-called inquiry? Add that money to the amount that has been wasted on this BER scandal.


Seriously, I have no idea where 50% of the project cost has gone. Granted this makes my employer look bad as the builder, but what does that say about the Project Manager for the government when the cost of managing the project equals the project value?

And then we have employees of the Reed Group receiving massive cash bonuses of up to $1 million. The Reed Group is a major advertiser on 2GB, the radio station that hosts Alan Jones’ breakfast show and also Ray Hadley. Someone please tell me this isn’t why Jones changed his tune on all of this.


He [Reed Group’s Bob Leese] said the seven managing contractors he had appointed via a tender process had worked very well.


The BER is a farce not from the point of the guys building it, it is from the people who are supposed to be managing it.

With the ratio of project managers 10 times the standard industry ratio, and with over-worked project managers signing cheques left right and centre, this was always going to end, er, not so nicely.

This fetid BER mess stinks more by the minute. Heads must roll. Rudd’s and Gillard’s first.

(With thanks to my mole and Merylin Williams.)


Anne Connolly has some interesting articles on this, too.

An inquiry? Nothing short of a Royal Commission will get to the bottom of this, but there’s so much money involved – this is arguably Australia’s biggest scam ever – that I wouldn’t even trust that until another government is in power.


It is fairly typical of any government contract, amateurs trying to contract the inept to oversee the professionals.

Perhaps so. But this time we’re talking over $16 billion of taxpayer money being wasted on a program with massive systemic failures being executed on a national level. That’s about an $800 rip-off for every man woman and child in Australia.

And on one hand we have private schools receiving a huge wad of cash, but they are able to choose their architect, choose what they want built, and choose who builds it. And they are getting value for money. On the other hand, we have the public schools being dictated to as to what will be built, who’ll design it, and who’ll build it, and we are seeing massive cost blowouts.

This is a “plan” that was rushed out by complete incompetents, that has been managed like kids managing a candy store, and how dare Gillard and Rudd get away with it.


For sure, this is not directly and solely related to this BER, but Labor has taken a massive hit in the NSW by-elections. Unprecedented, in fact. More than 25% swings. Any other time that would be astonishing, but not now.

And there’s every chance (unfortunately) the stuff on this blog will never go mainstream. But it’s quite something that it may not even need to.

    • Carpe Jugulum
    • June 20th, 2010

    This program has to be scrapped and properly investigated. Having done building for the government previously they truly are armchair experts.

    Frustrated at the total waste i shall now bang my head on the keybord ’til i’m unconscious. :p

    • Merilyn Williams
    • June 20th, 2010

    No need to bang your head on the keyboard Carpe, you and bing are doing a marvelous job, it was thanks to you lads that I found out about it. Now read up on anything that comes to hand on it, and notice a lot of people are now writing about it in the blogs, [I gave you a plug bing on Piers Akerman, said that it was here that I first read about the BER’s].

    Alan Jones eh? Now that is interesting.

    • Cheers for the plug. Should check up on Piers more often.

      I’m not saying Jones is in on this, but when this is potentially such a big story that hasn’t played out yet, I know if I were the radio bigshot, I wouldn’t be accepting ad dollars from Reed at the moment no matter what assurances I was given.

      • Carpe Jugulum
      • June 20th, 2010

      Hi Merilyn, thanks to Bings mole, i’m lucky enough to be able to support the assertions made and finally people are starting to see the BER for the farce it is.

      Unfortunately the BER scheme varies between all states and is a fairly complex construction management scheme with 3 layers of management as opposed to 2 or a direct client/builder relationship.

  1. Many things Tony Abbott needs to do when he gets in. One is to request the Queen remove her GG for compromising the GG position politically, second is to clean out the AEC, third is to remove the union monopoly on forming unions, and a Royal Commission into the BER.
    I cannot believe the disaster this Federal government has been.

    • Richard Ryan
    • June 21st, 2010

    BUILDING THE EDUCATION REVOLUTION $16.2billion or as Sir Peter Ustinov once said: People at the top of the tree are those without qualifications to detain them at the bottom. Or as my father use to say: the country is overun by educated idiots.

      • Carpe Jugulum
      • June 21st, 2010

      At the risk of being contrary Richard, i think it should be we are being governed by educated idiots. 😉

      • Governed by persons educated far beyond their intellectual capapacity.

  2. ‘Capacity’. Damn, where’s the preview?

      • bingbing
      • June 22nd, 2010

      Firefox has an automatic spell-checker. Not perfect but better than nothing.

      • Carpe Jugulum
      • June 22nd, 2010

      I miss perview, it was my fiend. 😉

    • Merilyn Williams
    • June 23rd, 2010

    “BER contractor ordered to fix shoddy school buildings” [Anthony Klan, The Australian 23/6/2010].
    “The Reed Group building company has been found to have conducted shoddy work on 60 prefabricated school buildings in northern NSW.”
    “This has cast more doubt on the Rudd government’s repeated claim that instances of rorting under the school stimulus program is isolated.”
    Gosh and they were paid a “bonus”?

    • First thought that comes to mind is if they actually built it or sub contracted it out.

        • Carpe Jugulum
        • June 23rd, 2010

        Reed Group would act as the projet manager and then award the building contract (via tender)to a 2nd builder who does all the work (including subcontracting of trades). It’s a bit of a convoluted process.

        • Thought so. So then it isn’t actually Reed who should be blamed for the shoddy work, or at least primarily, right?

          Still, I’m guessing they have managers coming out the proverbial and being Tier 1, the buck stops with them. That about right?

        • But then there’s this from Merilyn’s article.

          “However, The Reed Group – which receives a fee of 20.96 per cent on top of all work it does – opted to deliver and fully install the buildings itself.”


  1. June 20th, 2010
  2. October 6th, 2010

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