Renewal SA

In reply to Ms CHAPMAN (Bragg—Deputy Leader of the Opposition) (17 July 2014). (Estimates Committee A) (First Session)

The Hon. J.R. RAU (Enfield—Deputy Premier, Attorney-General, Minister for Justice Reform, Minister for Planning, Minister for Housing and Urban Development, Minister for Industrial Relations, Minister for Child Protection Reform): I have been provided the following advice:

Currently, Renewal SA has one property in the Industrial and Commercial Premises Scheme that is subject to an indemnity deed. The property is located at Dalgleish Street, West Thebarton and is occupied by Hospira Adelaide Pty Ltd (formerly Bresagen Pty Ltd).

The acquisition, development and sale of the site located at OG Road, Felixtow (the former J P Morgan facility) was governed by an Indemnity Deed between the Hon Rob Lucas MLC (then Minister for Industry and Trade) and the Industrial and Commercial Premises Corporation (ICPC).

The Indemnity Deed, dated 27 November 2001 provides within Clause 2.1 as follows:

'The Minister indemnifies ICPC against all claims suffered or incurred by, or brought, made or recovered by any person against, ICPC in connection with:

1. the sale of the Land, for a price less than the Actual Cost Price and costs incurred by ICPC in selling the Land (which includes break costs incurred by ICPC from SAFA as a consequence of the sale of the Land) provided that if at the time of sale, Completion of the Works has not occurred at a price determined in accordance with clause 3 of the Agreement to Lease as if at the date of sale Completion of the Works had occurred.'

As there was a shortfall between net sale proceeds and the loan against the property of approximately $2.8 million, Renewal SA (as the successor to the ICPC) sought reimbursement for this shortfall from the Minister for Manufacturing, Innovation and Trade in order to clear the loan balance against the property in accordance with Clause 2.1(l) of the Indemnity Deed outlined above.