STATE AQUATIC CENTRE

Mr HAMILTON-SMITH (Waite—Leader of the Opposition) (14:37): My question is to the Premier. What probity matters have been discussed with the Crown Solicitor with regard to the government's handling of the Marion aquatic centre project? In June 2008 the Premier announced that the Aqua43 consortium would build the new aquatic centre as a PPP. Yesterday Mr Jim Hallion, CEO of the Department for Transport, Energy and Infrastructure, told the Budget and Finance Committee that he and Mr Rod Hook had met with the Crown Solicitor, Mr Stretton, regarding probity issues relating to the project.

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (14:37): I will get a fuller answer for the leader on that question, as it is understandably an appropriate question. Many members will recall when a previous government—in fact, I think it may have been the member for Davenport—listed the Marion pool as a potential PPP. Is that correct?

Members interjecting:

The Hon. K.O. FOLEY: No, I am not having a crack. I am just asking a question.

Members interjecting:

The Hon. K.O. FOLEY: No, I am actually being constructive. I am just giving the history.

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: When we came into office we had tried to—is that Kevin Naughton smirking there?

The Hon. P.F. Conlon: He must have got his indemnity.

The Hon. K.O. FOLEY: Yes. When we came into government we put out the project for a PPP, and there was a finance gap. From memory, the commonwealth government had put more money into it, and I recall a number of instances where we looked for probity advice. Initially, from memory—and I will get a more detailed answer—it was to do with changing the various levels of government support for the project, because a medical health centre was involved, the scope of the project changed and, to get the numbers to work, from memory, we had to increase government involvement in the project. We obviously would check (and I insisted on this) to make sure that, given that we were dealing with the private sector, from a probity perspective that was all above board.

My guess is that the specific issue that was raised yesterday (and I have not seen the question or answer) would have related to the fact that, in the end, the advice from Treasury and Finance was that the final deal we attempted to do with the preferred tenderer, where one of the consortium members (from memory it was Macquarie Leisure that was to be the operator of the pool) pulled out of the consortium, really did make our ability to make this a PPP very difficult. In the end, the advice from Treasury was that there was not value for money in trying to make a PPP work: it would be better for the budget if we treat it simply as a government build project and that we bring it onto balance sheet and construct it as a project.

At that point, the building company (from memory, Candetti) was part of the successful consortia that won the right to negotiate through to see whether or not they could conclude a PPP. There was an option there. We could have awarded a contract to Candetti to build, but the cabinet took the view (and the Minister for Infrastructure had referred this project to me for my management and consideration) that we would have to re-compete this project and we looked at some options, including whether or not we paid a consideration to Candetti for his intellectual property and then have other tenderers tender against that (a lot of work had been put into it) or whether we just simply went out in a selected tender process where Candetti could compete against the other builders.

From memory, we received some probity advice on whether or not we could go straight to Candetti and do a deal; sign a contract. I think we would have obtained probity advice as to whether or not we could offer to purchase his IP. I think that would be the mix of the probity advice that we sought. From memory (I stand to be corrected), the probity advice from Simon Stretton is that we could have negotiated directly with the builder, Candetti. However, the government (as it has always done) believes in competition and ensuring that the market has an opportunity to play and to give us the best price. Candetti won it—and, I must say, Mr Candetti has gone through hoops for many months, if not years, on this project.

To cut a long story short, we have landed the project, it will be constructed, and probity advice is sought, as it always is. I do it, as does, I know, the Minister for Infrastructure and other ministers. Whenever we are concerned that there may or may not be issues that could amount to potential problems involving the private sector, we always obtain probity advice from our Crown Solicitor.