GALLOWAY, Mr Philip, Managing Director, Syncline Energy Pty Ltd [14:15] CHAIR: Welcome. Do you have an opening statement for us? Mr Galloway : I do. CHAIR: Great. And you've been sitting here listening all day, I noted. That's very good. Mr Galloway : Thank you. Syncline originates, develops and builds clean energy infrastructure. We're an Australian private company that was formed in 2005. Syncline has a 20-year track record that includes powering Melbourne's trams from Bannerton Solar Park and originating and developing the Melbourne Renewable Energy Hub, which is one of Australia's largest batteries. We've also built microgrids in remote Northern Territory and geothermal systems in western Victoria, and we are developing Syncline Community Cable, which is a fully underground HVDC transmission link that will connect from Melbourne to north-west Victoria and back into New South Wales. That project runs 100 kilometres up the median strip of the Calder, fully underground, and then travels underground through flat sheep-and-wheat country. In every Syncline project, we have worked with and listened to communities, we've met and exceeded our ecology and cultural heritage requirements, and we've delivered on our local-jobs-first and social procurement objectives. Syncline is building the Victorian AI hub on the same basis. It is big. It's a 4 x 600 megawatt third-generation campus. That means that we must develop the deep transmission network to supply power to a two-gigawatt facility. We need to accelerate renewable energy and firming to support the project's energy supply. We need to build long-term community relationships and also demonstrate clearly that the benefits to the community outweigh any costs. We need to do that work not just for our Victorian AI hub data centre but also for our connecting transmission cable and for the renewable energy and other firming energy that we pull through. It needs to have social licence. We've been planning for more than two years to use wastewater—recycled water—for the Victorian AI hub, and we think that's essential. It reduces our power demand on a hot day by about 200 megawatts, and it reduces noise by five decibels. We've been preparing the planning and regulatory packages that we'll submit over the next nine to 12 months, and they will be fully available to the public. There'll be full scrutiny. We're looking for a transparent planning process in the work that we're doing. We see AI and data centres as critical infrastructure. As, I think, every speaker has acknowledged, they support more efficient banking, transport, energy and public services. These are the buildings that allow us to work from home, to tap on and off the train, to keep planes in the air, to watch Netflix and to engage in political debate. And, yes, we want to run AI models. We want to build Australian AI capability. We want to host the models that we're increasingly using each day. In terms of our engineering modelling work, we have a very detailed Monte Carlo simulation of both data centres. DC Holden would be an inference based model, and DC Melton would be a training based model. Those models look at everything from the water supply locally to Melbourne's climate, to the energy cost, to the grid stability parameters that we need to meet. We're not just modelling a building here; we're modelling the whole ecosystem in which it sits, across Australia's water, energy and community infrastructure. We think this site has enormous competitive advantage. When I meet people in the US, they call this site a unicorn. That's because it delivers sustainable compute. We have very low latency, so, when you ask your computer a question, you don't have that annoying five-second lag. We sit in the AZ3 cluster, which is one of Australia's major data centre customers, and it means that, when you tap on your phone to buy a coffee, you don't have that annoying delay when you're not sure whether or not the transaction has gone through. The Australian domicile is also important—the Five Eyes, the data security and the sovereignty. We obviously sit as part of a massive compute infrastructure that includes global fibre connections, AI inference models, training models, GPU supply, the whole chip acquisition strategy and the opportunity to export compute and AI overseas rather than just be consumers of it. But that's all built around local capability, and, ultimately, I think this precinct is being designed as—and our instruction to our architects is to design—something that is a hundred-year digital economy infrastructure. We will see 15 generations of chips, and we will need to build the waste systems around recycling those chips and recovering the valuable resources within them, and that waste-recovery circular economy loop only comes with scale; it doesn't come if we're building lots of tiny facilities. Hopefully, one day we'll host quantum computing and Australian training capability. But the constant through all that infrastructure and all that story is Melbourne's 1.2 million skilled, young, tech-savvy workforce who work in the outer suburbs of the west of Melbourne. This cohort wants to lead the digital economy. They don't want to just consume it. Our site has the green energy, grid strength and water to compete globally on cost against China, India and the US. Our hope is that less green, less well sited, first-generation and second-generation data centres will be retired and the compute moved to our greener pastures. So, after three years of engineering design, our connection process is well underway with VicGrid and AEMO, and we've been out to tender for the cooling and power equipment, which obviously drives the planning envelope of these long-lead equipment items. Whilst the engineering work is well advanced, our planning cycle is just starting. We want it to be a transparent process that includes consumer consultation and inputs into the design. We've not yet put in our planning submission; that's very deliberate. We don't want the community to be a last line of review but a first line of input in how we work with them. Our gigawatt scale is really important in terms of pulling through transmission of renewables, as just discussed, and also creating the economies of scale which mean we can compete globally on compute. But it also means that we can provide that meaningful community support, cheaper power, cheaper internet and, potentially, AI tokens to everyone that lives in postcode 3037 and the neighbouring surrounds. Much has been made of our very large footprint. We've got more than 350 hectares. But that's all about offsets and creating green space between the buildings and being able to store some water in dams on the site. For our neighbours, there are the correct offsets and buffers, where there are no noise or urban heat island impacts on our community. Our modelling puts that certainly at around 180 metres, but we're exceeding that and going for a 400-metre clearance to create green buffers and really mobilise the land around our buildings and make it accessible to the community. Peak workforce is around 3,700 people, with around 1,200 ongoing jobs. Again, the good thing about doing it as a campus and a precinct located where people live is that you're creating that continuity of work, which means you can have training and you can develop apprentices. And we want our people to live locally. We want them to get home in time to coach the cricket. We don't want them stuck in traffic on the Calder Freeway, commuting. We welcome the committee's questions and really appreciate the committee's work. Thank you. CHAIR: Thank you. Just to be clear, this new precinct, as you're describing it—ultimately, you're saying, you want it to have a 2.4-gigawatt capacity. What type of timeframe are you talking about? Mr Galloway : It would be delivered in stages. Just to explain why we've chosen that location, on that site, there are two 500-kV substations. One is called Sydenham and the other one is called Plumpton Renewable Terminal Station, which was built for our MREH battery. The really important part of this is, if you're at such a strong location on the grid, you don't need diesel backup. If you try to build these things in the inner city or even in remote parts of the country, you need that diesel backup. But, in our case, all our modelling shows that we have the reliability to get 99.49 or 99.69 by plugging into this really strong node in the grid. Once you connect at 500 kV, your logical increment of connection is 600 megawatts, and we have four bays at 600 megawatts. Each bay then supports a building. CHAIR: Just to be clear, we understand that the location itself. Where is this? Is it in Plumpton? Mr Galloway : It's in a corner of the world that is behind Bob Jane's Thunderdome, which is on the Calder Freeway and bound on the east by the high-capacity metro train stabling yards. We're bound on the west by the outer metropolitan ring road transport corridor, and the area is all under Melbourne Airport overlay, so it can't be used for housing. CHAIR: There has been community opposition to this project. Mr Galloway : Yes. CHAIR: We had a number of reps before us this morning in relation to this and other data factories in the region. What is your response to the concerns that the community has raised? Mr Galloway : They're entirely valid. I've attended some of the meetings around our project and, if what was being delivered looked like what was being described, then, frankly, I'd join the protest and I'd stop it. We've done a bad job, and we've been slow in explaining what it is and how we're going about it. When I say we've done a bad job, we've been really careful with our direct neighbours to make sure we engage with them first. There are about 100 direct neighbours, and we have been in discussions. We go to them first, and then we move out from there. But the model that we'd like to follow—this is before we put in a planning permit, so, again, it's a completely different story to what we're hearing from other places where the facility is either built or already in planning. To really get that consultation input, we need to have sessions with the locals about the architecture. There's no reason why these buildings need to be ugly; frankly, they can be built into the side of the hill, they can have green roofs, there are a lot of approaches that can make them better. We need to have sessions about what AI is and what data centres are doing. What's the compute that's being involved? We need to have some really significant sessions about energy supply and why the mix of energy supply that we've chosen makes sense for this facility. We need to ensure that we can build with City of Melton the infrastructure support and community benefit package that will really make a difference to those communities. Obviously, that steps well beyond buying the jumpers for the under-12s; it goes into, for example, making sure that power prices are lower for our direct community or that we can make available access to the AI and the type of compute and infrastructure to the locals as well. CHAIR: Well, 2.4 gigawatts is significant. It's almost Australia's entire capacity of data centres at the moment; we are at somewhere between two and 2½ gigawatts. So that's a huge project. What is the timeframe you are aiming at here? Mr Galloway : The discussion earlier about aligning construction—it needs to be aligned, obviously, with the build-out of our two-gigawatt underground transmission project. The timeline looks like 2027 for planning submissions and public consultation in 2028, and the start of construction, which then gets into the first stage, would be delivered by 2030. That aligns with the wind projects and the critical path supply chains around getting into operations by mid 2030 or early 2031. CHAIR: Are there other data centre proposals or factories already in this area? Mr Galloway : There's nothing close. There's certainly nothing connecting to Sydenham or Plumpton renewable terminal stations. We're in the same compute mix as the data centres that are being rolled out close to Tullamarine Airport. So we have what data centre operators call activity zones. We're in the same activity zone, which means there's very little latency between us and them. But, yes, there is nothing in our precinct. Again, it's that cumulative impact which is really important, which is why we want to get the precinct approved as a single package. It may not be approved, but take it through planning— CHAIR: Rather than doing stage 1, stage 2— Mr Galloway : And then pop up and say, 'Hey, guys, we've got another gigawatt to go.' CHAIR: Okay, so you're trying to be up front about it. It sounds big because it is big, but you're trying to be upfront about the fact that it is this big. This is where you want to go. Mr Galloway : Yes. It needs to be big to underwrite the infrastructure that we need for data centres. If there were 2.4-gigawatt facilities spread all over the place, you wouldn't get that underwriting. It also needs to be big to compete globally. This scale is what's being built in in India, China, the US, Philippines and Indonesia. Scale will become a key factor. CHAIR: Who will your customers be? Mr Galloway : There are different commercialisation models. Syncline has a track record in bringing in infrastructure funds and also non-recourse debt into projects as part of the way we finance energy and transmission projects. There are really three different models, and we're exploring those models with different partners. One would be that we'd partner with one of the big international companies. It'd be a self-built project, and it would be owned and operated by one of those big international hyperscalers— CHAIR: Like Microsoft or OpenAI? Mr Galloway : Exactly. They're looking for that sort of compute in the APAC region. The second model is one that is being pursued by, I guess, groups in Nvidia's sphere—Nvidia is a $5 trillion company—where it's more like a merchant creation of AI tokens that are then sold through various platforms, either on a long-term basis or a short-term basis for a whole lot of different— CHAIR: It's kind of multipurpose? Mr Galloway : Yes. So the University of New South Wales discussion yesterday was around how every researcher today needs a GPU to be able to do their research. They could, for example, go to that platform and buy that GPU capacity. CHAIR: And it could be located on Australian soil. Mr Galloway : Then the middle one is something between those two where you basically lease capacity for 15 years to, again, a hyperscale major company. CHAIR: But at this point, in terms of financing, you're still doing the scoping? You don't actually have that locked down yet. Mr Galloway : We are in discussions with a number of players and are getting that locked in. CHAIR: I could be wrong, but I thought one of the comments made by the local community in this area today was that there had already been some land clearing happening. Mr Galloway : I think Maurice might have mentioned that. It's incorrect. I think the project that was being mentioned was Melbourne Water building a potable water facility right on an adjacent site. We won't use potable water. That is all about supplying drinking water to Plumpton and Koroit. CHAIR: What is your view on the need for strong guardrails and national standards and whether they should be in place before approvals for your facility? Let's just cut to the chase. We're not talking hypotheticals here. We're talking about the reality for your 2.4 gigawatt facility or hub. Do you think those rules should be in place first before you get approval? Mr Galloway : Yes, I do. They are being rolled out in a few areas that this committee hasn't dealt with. One key concern is about the grid stability in the face of AI. Either the data centre drops off because there's grid instability or just the ramp up of load as everyone turns up on Monday morning to work and you ramp up the load which can cause grid instability. There's a huge body of work being done by AEMO at the moment to change what's called chapter 5 of the National Electricity Rules and put obligations on data centres to make sure we don't cause instability and that we can ride through instability in the grid. That comes out in October. That's one of the things that's held back our planning application, because we need to design our equipment and facilities in the substation to be able to meet that requirement. There are also EPA requirements. In Victoria, there are 14 requirements. You can't make noise, you can't pollute, you can't cause harm there. They're things that keep me awake, meeting those EPA requirements, where a strong regulator will then follow up and monitor. You may want to get into the procurement of renewable energy separately, but we're building a whole portfolio of energy supply around what we're doing. We can't get funding or even hyperscaler partners without that bit locked in. We have an advantage in those negotiations with generators because we bring transmission to the table as well. We're not just hoping that transmission gets built down the path. We actually have a plan for that. CHAIR: You talked about dealing with some of the community concerns. Obviously, consultation is an important part. We've heard several times in the last couple of days that communities feel as though consultation is simply a word, not an action. They're being told something is happening instead of actually being consulted, and also they're being invited to consultation but then none of their feedback is being taken on. We heard that very loudly. A number of the projects in Sydney, in fact, had proponents who said: 'We haven't really changed it. We don't need to change it.' It's just a tick and flick process. How are you going to manage that? The anger out here in the community is red hot, and it would be foolish to think that you could just ride it out, I think. Mr Galloway : We've got no intention to ride it out. We're already making changes based on the feedback. In an ideal engineering world, I would love to have a gas turbine that's clutched to a synchronous condenser. The synchronous condenser would provide inertia into the system 24/7, and we would engage the clutch on those wind drought days that were mentioned before. I don't think we've got social licence for that. So we've got a gas pipeline on site, and we've got a really good business case for doing that. We've taken that off the table after the discussions we've had. CHAIR: The community doesn't want it to— Mr Galloway : The community doesn't want it. There are concerns around particulates. We're not using diesel, so that should be considered high merit. To then say, 'Yeah, but we're using gas,' I think is not going to win us any friends. We still need to solve the wind drought case. We've got a very detailed energy supply portfolio. It works in the P90, the median and the P10. The one that we're all struggling with is those eight days a year, particularly in Victoria, where it's still and may not be that sunny. We need a back up for that case. In fact, we don't. We could just pay over the odds for the power. We could hedge it out. But to go to the point that's been made by senators earlier, the responsible thing here to do is actually bring a solution to the wind drought case. We think we can combine that with adding inertia into the system, which is, again, from an engineering perspective, really important. CHAIR: What about how all of this is seen through—you said 'social licence', and it's quite clear that there isn't a social licence for carte blanche proposals at the moment. Can you see the need for an overarching plan for data centres so that the community isn't playing whack-a-mole and the elected representatives aren't playing whack-a-mole, trying to work out what this project means versus what this project means versus not even understanding the cumulative impact of it all? And what about, I guess, something almost like an inventory of what's there? There's nothing like that; it doesn't actually exist. Groups are doing bits and pieces, but there's nothing formal. Mr Galloway : Can I answer in two parts: one's the technical planning structure, but the other one's the community response. Listening today and also—I think Maurice put it really well this morning. They don't know what they need to be worried about, so they're sitting up in the middle of the night or they're getting Facebook feeds about a whole lot of stuff that, gosh, has—wow. I think we can help with providing that information. We'll certainly do it through our community groups and our discussions. That doesn't solve the bigger-picture issue that you raise. I think the bigger picture is you've got councils—who spoke earlier—who are great at understanding that the Plumpton Road roundabout with Diggers Rest needs upgrading, and the Victorian AI hub should solve that problem. They're really good at, because of the local ward system, actually knowing what communities are thinking and what they're doing and what's important to them. State governments are great, then, if you're looking at the broader electricity supply network or you're looking at the cumulative effects of a number of data centres in a particular area that might cross a number of councils or you're looking at water. And then the role of Commonwealth government—again, it came up yesterday. I think you're never going to legislate fast enough to have an impact, because the industry moves so fast that, by the time legislation goes through—you can do some things with regulations, and, certainly, in energy supply mix, that's the right place to do it. But, ultimately, you probably need to have a framework that puts the responsibility back on me, as we do with cybersecurity, as we do with safety—that, as a director, if something goes wrong, that's on me. It covers a much broader range of responsibilities than trying to legislate each line of something that may be of concern. CHAIR: Senator Henderson, have you got some specifics? Senator HENDERSON: Mr Galloway, thank you so much for your evidence to date and your interest in our inquiry. You mentioned that you've changed your plans by reason of the community feedback. Can you detail that a bit more specifically. Mr Galloway : We've changed them in a number of ways. The initial concept was to have a much larger number of smaller buildings that would have put us closer to housing. Instead, we've concentrated them into four big buildings that, generally, are 1½ kilometres away. We've moved the noisier portions of what we're doing—instead of putting them on the roof, we've put them on the ground and put them behind screening. A great thing about using recycled water is that it's a lot quieter than having refrigeration compressors running 24/7. So we've really adopted our layout. We've increased our offsets. That work's ongoing, and, until we can start providing our architects' drawings, we won't have that fully resolved—exactly how we manage the offsets and what we plant between them, how we activate those zones for the community in terms of cycling and bike paths. We want community feedback on those things as well. We've also looked at the energy mix. As I said, it would be, from an engineering perspective, handy to have a combined-cycle gas turbine sitting alongside this facility to manage the wind-drought case and manage a number of rare grid events. That was always to be clutched with a synchronous condenser so the gas would only be turned on when you absolutely needed it; you would be creating inertia the rest of the time. I don't think we have the social licence to put in those combined-cycle gas— Senator HENDERSON: Yes, you mentioned that in your— Mr Galloway : At that location. There are potentially better locations for it. The great thing about inertia: it's a system-wide issue; you don't have to inject it at the data centre. Senator HENDERSON: So what is going to be the power mix for— Mr Galloway : We're in discussions at the moment with a number of existing, operating, wind projects and also potential new projects. We'll have PPA—power purchase agreement—coverage with new projects. Again, as to whether it's a megawatt basis or an energy basis, I'll work with the energy basis—sorry, I'll work with the capacity basis first: so 3½ gigawatts of new renewables. We also mobilised renewables by putting a battery up in north-west Victoria and running the transmission at a much higher capacity factor, so we're doing—and also, by providing inertia, you can do a number of things, without building transmission, that actually mobilise renewable energy. You then bring our underground transmission line to the table, and we're significantly increasing the amount of interconnected flows from New South Wales. Then that mix means that, on an energy basis, we're about 75 per cent new renewables and 25 per cent grid purchases, and 'grid' as a mix of whatever the policy decides the grid should be, whether that's a mix of coal and gas or a mix of whatever the future generation systems are. Senator HENDERSON: And, given your engagement with local community—and you've responded to some of that—how close are you to local houses? What's the buffer? Mr Galloway : Our closest house is 400 metres away, but that's to the passive edge of a two-storey building, which will be set behind a hill. That 400-metre buffer is green space that we'll activate for the community. We would like to connect up Plumpton to the Kororoit PSP with cycling paths and jogging paths. It's heavily degraded farmland at the moment. We've done a lot of ecology and cultural heritage work, already, on the site. We're still doing a portion of the site that we haven't done. But we want to return that to native vegetation and replant some of the species that have been lost through that area. Senator HENDERSON: Just to understand a bit of the lie of the land, how are you financing this development? Have you got customer contracts in place already? How does the financing— Mr Galloway : We're working on the three models that I mentioned: where you partner with one of the large international compute companies and self-build, where you build something and lease it to one of those guys or where you develop it as a token platform that's making tokens. We're working on commercialising the buildings using each of those approaches. Senator HENDERSON: So you haven't decided which way you'll go? Mr Galloway : No, but we're in discussions at the moment. Senator HENDERSON: You've heard, today, a lot of community angst about how some data centres are being rolled out. What do you think are appropriate safeguards to protect local communities? Mr Galloway : I think there are a bunch of safeguards that haven't been discussed, particularly around the EPA. As a director of a company—I've been a director of companies for more than 25 years, and I've got a 40-year career—what keeps directors awake at night are things like the EPA having real teeth— CHAIR: Let's get some of those! Mr Galloway : Well, that's right. If some of those things are happening around noise or diesel pollution, your first call should be to the EPA because the directors of the companies that were mentioned have real obligations. And that's what's been built. What is still to be built? We won't build this unless we can get the community on board—we won't get everyone on board—and get an acceptance that the cost of what we're doing is going to be outweighed by the benefit. CHAIR: That was a very strong sentiment today. Mr Galloway : Yes. And there were questions about housing price. I gave my employment schedule and profile for the operating phase—not even the construction phase—to one of our electrical contractors who employs about 1,200 people. I had a senior electrical job at about $160,000 per year. He said, 'You must be joking.' For those jobs now for a seven- or eight-year-out sparky, with site allowances, you're talking about $220,000 to $240,000 a year. Those people want to live locally. Hillside is a great community. It's got footy ovals, it's got great sporting clubs and it's got primary schools. Those people want to live there. They want to live in the PSP. They'll bring a lot to those communities. I just don't see it as something that is going to negatively impact housing prices, having that sort of facility next door. Senator HENDERSON: Thanks very much. CHAIR: Senator Hodgins-May. Senator HODGINS-MAY: Thank you for joining us. One of the issues that was raised by the community this morning was the lack of a power balance between the corporations looking to move in and the community groups, which are volunteer run, with people basically taking on full-time jobs in their spare time trying to ascertain information and get some transparency around the decisions. Have you had regular meetings with ministers and decision-makers at a state level around this project? Mr Galloway : I haven't, no. Senator HODGINS-MAY: No? Okay. Do you contract third-party lobbyists— Mr Galloway : No. Senator HODGINS-MAY: or have government relations teams? Mr Galloway : No. Senator HODGINS-MAY: No? Okay. You said that you've consulted with some of the houses. Have you done any other sorts of public consultation with the wider community, like town halls or information sharing? Mr Galloway : We've done letterboxes and we have an open line for people to ring and make contact about any concerns. That's really actively used. It's surprising how many people say, 'We think this is a good idea,' and then there's a 'but'. I think there are some pretty patronising comments about our western suburbs in Melbourne. We have really smart young people who are working in AI, data centres and compute who are really engaged in what we're doing, the types of chips we might be using and the approach. So there is engagement on that level. We will start to hold town halls. but we'll do them on topic-specific items and we'll probably have them independently mediated. It won't be me just saying what we're doing and what's good. It'll be an ecologist talking about the grasslands and how they can be best restored. And we're seeking feedback. At the moment, one of the paddocks is used as an illegal dirt bike track. My instinct is to shut that thing down. The community that we're talking to are saying: 'No. The kids love it. Don't shut it down.' So we need to have those discussions. That will play out. We won't put in a planning document for nine to 12 months until we've played all those things out. Senator HODGINS-MAY: So you anticipate that consultation commencing pretty imminently? Mr Galloway : Yes. We're meeting with a lot of people. There are a lot of groups. This is not meant to be patronising, but pick your creek or grasslands and there are a lot of friends. There are cricket clubs. There are footy clubs. We are having those discussions and talking with people. We will start to structure those broader sessions. The first one is probably going to be around some architectural plans. What we want to show is not these great big monolithic buildings but actually something with a green roof set back into the hill and actually architecturally beautiful. We want to start those discussions from that place. We've got a big task to do. We want to talk about energy. We want to start those discussions with the right people in the room and have facilitated conversations. We're already coming up to Melbourne Cup Day and Christmas. Senator HODGINS-MAY: Yes. I highly recommend not doing it over the summer. Mr Galloway : Yes. Senator HODGINS-MAY: That's even more cynical than not doing it sometimes! Mr Galloway : I know, yes! Senator HODGINS-MAY: Just to be clear, the Melbourne Renewable Energy Hub that you were involved with, you're not going to be relying on that for your renewable energy; it's going to be new projects? Mr Galloway : Yes, exactly. But it does help. Syncline originated that project. It's one of Australia's biggest batteries. It's now bidding into the energy market. Victoria's power prices are about a third of what they were before it started operations. It mops up if there's an excess of rooftop solar. Some of the discussions today probably weren't informed about the real dynamics in the energy market at the moment. It's brought down wholesale energy prices massively. I'd taken that to the government. You asked about government conversations. The last ones were around that project. I took it to the government and said, 'This probably should sit in state hands,' and the SEC was then formed around owning that—partly because a private operator would arbitrage the hell out of a bushfire or whatever, whereas the state can bid it with real integrity. Senator HODGINS-MAY: My understanding is that energy's already got households that are depending on it—that renewable energy. The energy that you're putting into this project— Mr Galloway : Yes, it's in addition. We would like to build a similar facility up in the north-west of the state, which would mean that we could run the transmission lines at a much higher capacity factor. At the moment, they're maybe running at 60 per cent capacity factor; we can use storage to make sure they're running 24/7 full, and that is around meeting our data centre demand. Senator HODGINS-MAY: Apologies if you've covered this, but have you got a bit of an idea of how much of the value generated from this AI data centre will stay in Melbourne's west and Victoria? Mr Galloway : Yes. I can't give you precise answers, but I can scope it for you. During construction, obviously, that workforce is local. They're highly paid jobs; they're highly skilled jobs. During operations, there are about 1,000 people. So, if they're paid $200,000 a year, that is a massive injection into— Senator HODGINS-MAY: How many workers do you expect? Mr Galloway : A thousand. Again, it comes with precinct scale. I heard some of the discussion about, basically, 'no-one's home'. With something of the scale we're talking about, you are changing over chips on a five-to-six-year basis. You've got a lot of electrical contractor work. You've got a lot of IT work that's ongoing. So that workforce piece is really important. It then pulls through manufacturing jobs. There are portions—and, again, we're trying to optimise this—of what we're building which would be local jobs first and manufactured locally. When we went out to tender for the cooling equipment, a big plus was if they had that local manufacturing capability. The construction piece is massive, and— Senator HODGINS-MAY: And then post construction? Beyond the construction phase, what does that benefit look like? Mr Galloway : Well, the workforce is those thousand people at really high salaries, and ongoing. The construction phase is around 6,000 people, with a five-to-six-year project that they're working on, as opposed to them just coming in and moving on, which gives us that skills— Senator HODGINS-MAY: So roughly 1,000 workers annually over six— Mr Galloway : No, during operations it's 1,000 workers, and during construction it's 6,000. Senator HODGINS-MAY: Okay. Something we haven't talked about as much today, but I did hear it at the Port Melbourne data centre meeting, was around the fire risks. If a fire were to occur on this site, are there any sorts of commitments that you think your company should have to undertake— Mr Galloway : Yes, of course. Senator HODGINS-MAY: to contain that and to pay for that—beyond taxpayers having to foot the bills, not to mention the health impacts of potential fires. Mr Galloway : When we model fire, we obviously have experts who do this work, and we liaise with FRV and CFA because we're on that urban fringe, so both authorities are important. We're concerned about bushfire impact on our facility because it is grasslands, and, obviously, we will have buffers and firefighting equipment to ensure that there's no impact. That is just fundamental to design. Within the facility itself, across those buildings, we'll have about $40 billion worth of chips, and I can guarantee we will have the world's best fire-detection and fire-suppression system ever designed. Our insurers will require it of us. That involves nitrogen suppression and continuous monitoring. As I've said before, we don't have diesel stored on site. We don't have diesel backup, so that takes that off the table. Senator HODGINS-MAY: Thanks. CHAIR: Senator Pocock. Senator DAVID POCOCK: Thank you for your time this afternoon. I'm interested to know what proportion of the tenancy of the data centre that you're building will be reserved for Australian companies? Mr Galloway : We would love to solve the problem that came up in yesterday's discussions around every researcher needing access to a GPU, and we're trying to work out how to create that. With each of those models, the amount of export versus onshore compute will depend on who our partners are, and they all have slightly different approaches to that export capacity from Australia versus supplying local markets. But I think a facility like ours is exactly where we could reserve GPU capacity for universities or for government and for Australian use, which again is one of the topics that came up, because we have the economies of scale and therefore, hopefully, the lowest cost offering in that regard. Senator DAVID POCOCK: Following on from Senator Hodgins-May's questions about benefit, outside of jobs—we currently have a lot of skill shortages in this country—what is the long-term benefit? I assume that your multinational tenants will use GPUs but minimise their tax in Australia. How do we get a financial benefit over the long term? Mr Galloway : Over and above the local jobs and the income tax, there are a bunch of state taxes that are obviously triggered by something of this scale. There's, I guess, the sovereign compute capability. That's the framework at the moment, and, if there are other models, we'd obviously comply with those models. Senator DAVID POCOCK: So it's state taxes. Does Syncline pay corporate tax here in Australia? Could you give us an idea of what sort of corporate tax you pay? Mr Galloway : We're an Australian domiciled company, so we pay Australian corporate tax, and we have paid tax since 2005. Senator DAVID POCOCK: Do you know how much you paid last year? Mr Galloway : Thirty per cent. Senator DAVID POCOCK: The dollar figure? Mr Galloway : No, I don't have that. Senator DAVID POCOCK: You spoke earlier about local manufacturing. Can you give us a rough estimate of how much of your total site's kit will be locally made and how much will be imported? Mr Galloway : Of the locally made portion—each of those four buildings—it's around a $4 billion bill. Then the chips that come into those buildings will be closer to $10 billion to $15 billion. As I think we all acknowledge, we don't have a chip industry in Australia and they will come in from overseas. Senator DAVID POCOCK: Yes, but, of the non-chips, how much do you think will be Australian sourced? Mr Galloway : As much as possible. In the renewables sector, there is a whole framework around local jobs and local content, and we will start that work with the Victorian government authorities, who are great at this, to create as much local content as we possibly can and look for those opportunities. There's some self-interest in this. We don't necessarily want to rely on long overseas supply chains, so, having delivered renewables during various Suez Canal issues or Ukraine issues, you want as much local supply as you can get. Senator DAVID POCOCK: To push you on the non-chips component, you said as much as possible will be Australian sourced. Do you have a rough percentage? Do you have a target? Do you have any sort of thinking there? Mr Galloway : I don't. We're working through it work package by work package. We've been working through the cooler package, for example. We think that can have a really high portion—I won't give a percentage—of local manufacturing. It makes sense to do that because this is big equipment that you don't necessarily want to be shipping around. For our main grid connection, we use 500-kV transformers. Unfortunately, there's no manufacture of those in Australia, so they will come from overseas. We keep looking for opportunities. Again, the great thing about being at scale is that you can hopefully pull through real manufacturing capability as part of what you're doing, as opposed to just box dropping from overseas. Senator DAVID POCOCK: The committee has heard reports that, for every dollar of investment in data centres, roughly 80c goes offshore to purchase infrastructure. Does that sound about right—20 per cent locally sourced and manufactured? Mr Galloway : I'd separate out the chip component. Gosh, I wish we did have a chip industry, but we don't. That is the big-dollar item in what we're doing. But the building and the part that is open for local content is, in our case, for each of those buildings, still around $4 billion. There will be a lot of local content in that component. At the right time, we will work through and publish proper bills of material and what we can source locally. Again, the renewables sector has been doing this for 15 years—developing a bill of material and looking for local opportunities to get that supply. Senator DAVID POCOCK: I've also heard the renewables sector is importing steel that can be made here in Australia, so I think there's probably a need for the parliament to actually start mandating these sorts of procurements so we can build up this local manufacturing that you've talked about. Mr Galloway : There are good models for doing that, and we would support those models, particularly where the Commonwealth was similarly acquiring compute capability and insisting on local content, if it's both on the revenue side and insisting on local content. They're models that have worked well for a whole lot of other industries in the past, whether it's defence or renewables—use your purchasing power to pull through that local capability. Senator DAVID POCOCK: Thank you very much. CHAIR: Mr Galloway, thank you for your time and evidence today. We also appreciate you listening to the concerns that have been raised and considering that in your responses to us. That's very much appreciated. Thank you..