SA WATER

In reply to Mr WILLIAMS (MacKillop—Deputy Leader of the Opposition) (9 November 2011) (First Session).

The Hon. P. CAICA (Colton—Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Aboriginal Affairs and Reconciliation): I am advised:

1. SA Water's procurement policies permit the waiver of competitive tender in certain instances. These waivers are required to be supported by a business case describing the reasons why the tender should be waived. Approval of the waiver is required from SA Water's Group Procurement Manager, who is separate from projects, to ensure appropriate segregation of duties. SA Water advises that in all instances, the waiver of tenders on the North South Interconnection System Project was supported by a business case which satisfied the Group Procurement Manager that waiver of tender was appropriate in the circumstances.

SA Water acknowledges that there were instances where waiver of tenders were approved on the day that the contractor was advised of award, but in all instances, this was done prior to the contractor being advised of award.

2. The value of the initial contract in question was for an amount of $121,025. The contractor was then awarded a second contract in the amount of $350,000, where approval in accordance with the process to permit the waiver of a competitive tender was provided. This contract was then varied by an amount of $800,000 due to additional work being included in the scope of the contract. The total amount paid to the contractor for the two contracts was in the order of $1,271,025.

It should be noted that, notwithstanding the increases in the contract values, payment was made in respect of additional work performed, work that had been budgeted for in the initial project development funding budget of approximately $30 million. There was no additional impact to the project budget.

3. A range of options were investigated during the options development phase, before arriving at the preferred project option with a budget of approximately $403 million. This is the amount that been consistently referred to and used in SA Water's forward estimates and the Full Financial Approvals for the project. This was also the amount included in the Public Works Committee submission.