Public Works Committee: Yatala Labour Prison Redevelopment

Mr CREGAN (Kavel) (11:26): I move:

That the 23^rd report of the committee, entitled Yatala Labour Prison Redevelopment, be noted.

On 4 July 2019, the Public Works Committee held a public hearing into the proposed Yatala Labour Prison redevelopment. The committee examined written and oral evidence in relation to this project and received assurances by Department for Correctional Services officials that the appropriate consultation in relation to this project had been undertaken. On this basis, together with the verbal evidence presented to the hearing, on 4 July the committee resolved to recommend the project.

The committee has since become aware of investigations into alleged irregular conduct by a number of DCS officers involved in aspects of the project. The committee understands that an investigation is being undertaken by a government agency, and I do not find it appropriate for the moment to comment further so as to preserve the integrity of that investigation.

The committee has received correspondence from the Chief Executive of the Department for Correctional Services. The correspondence is dated 16 September 2019. I read that correspondence to the house:

Dear Mr Cregan

RE: Final Report into the Yatala Labour Prison Redevelopment

I refer to the Final Report into the Yatala Labour Prison Redevelopment tabled in the House of Assembly and ordered to be published on 4 July 2019.

The Final Report provides that DCS should notify the Committee of any substantial changes—

Mr ODENWALDER: Point of order, Mr Speaker: if the member is reading directly from a document, I ask that he table that document.

The SPEAKER: Is the member reading a document or speech notes?

Mr CREGAN: I am reading from a letter, which I am happy to table.

The SPEAKER: Member for Kavel, if it is a document, I ask you to table it.

Mr CREGAN: I seek to table correspondence addressed to me, dated 16 September 2019, from the Chief Executive of the Department for Correctional Services. However, perhaps the document might remain with me for a moment so I can continue to read it into Hansard.

The SPEAKER: I am happy with that.

Mr CREGAN: The letter continues:

The Final Report provides that DCS should notify the Committee of any substantial changes to the nature of the project or the evidence provided to the Committee.

On Monday 15 July 2019, the Independent Commissioner Against Corruption issued the attached public statement.

In light of the ICAC's public statement and following subsequent considerations DPTI suspended the tender process for the Managing Contractor. A subsequent review of the procurement strategy to deliver on the project has been completed and DPTI has determined that a revised procurement methodology is preferred. As a result the original procurement process for the Managing Contractor was formally abandoned on Monday 16 September 2019—

I note that is the date of the letter that I am reading from—

and the revised procurement methodology activated. The development of the design has been unaffected by the ICAC's public statement and has progressed during this period.

The Crown Solicitor's Office has provided advice with respect to the conclusion of the original process and the revised procurement methodology. Consultation has occurred with ICAC where appropriate to do so. Set out below is a description of recent changes to the Project.

Procurement Methodology.

The Projection construction works will now be delivered under two separate contracts. This will comprise:

1) A fixed price contract for the 'Early Works'. The Early Works will include civil works, construction of a car park, construction of a business and administration centre and construction of a staff wellness centre and training hub.

2) A Managing Contractor contract for the remainder of the Project.

Project timing.

The table below sets out the revised indicative timing for the Project—

There follows a table with headings: event; target start date; early works, general building contractor: request for tender, September 2019; contract award, November 2019; construction commencement, early works, January 2020; main works, managing contractor: registration of interest, November 2019; evaluation and approval to proceed to request for tender, December 2019; request for tender, January 2020; contract award, April 2020; construction commencement, main works, July 2020—

Method of construction.

The Committee was informed that DCS and DPTI were considering using a modular construction process for the Project. DPTI and DCS have determined that a modular construction process will not be used for the Project.

If you require any further information in regard to this matter please contact—

There follows the contact details of a senior public servant—

Yours sincerely

David Brown

Chief Executive

Mr Speaker, I mentioned that a document was enclosed. That document is a public statement from the ICAC, which states:

Public Statement. Two arrested in alleged procurement corruption. Published on 15 July 2019. Statement by the Hon. Bruce Lander QC, Independent Commissioner Against Corruption.

As part of an extensive and long running investigation my investigators executed nine search warrants this morning and two people were arrested.

A 40 year old man from Seaton, who is a public officer employed as a senior executive in the Department for Correctional Services, has been charged with two counts of abuse of public office and one count of bribery or corruption of a public officer.

A 47 year old man from the Mt Gambier area has also been charged with two counts of abuse of public office and one count of bribery or corruption of a public officer.

It will be alleged that between 1 June 2018 and 15 July 2019 the men colluded to corrupt the tender and procurement processes associated with the $150 million redevelopment of the Yatala Labour Prison in order to financially benefit themselves.

Both men have been bailed to appear in the Adelaide Magistrates Court on 21 August 2019.

The investigation is ongoing and further arrests and charges may result.

I believe there are people in the business sector who were involved in the recent tender process for the Yatala Labour Prison Redevelopment management contract, and other persons who were involved in a recent expression of interest process for the modular design of prison cells, who are aware of the public officer's alleged activities. I expect that those members of the business sector will co-operate with the ongoing investigation.

No further statement will be made at this time.

I earlier remarked that, to my mind, it would not be appropriate for further comment to be made, to protect the integrity of the process, the details of which I have provided to the house by reading a public statement and correspondence received by the chief executive.

Mr ODENWALDER (Elizabeth) (11:35): Thank you, Mr Speaker, for the opportunity to speak to the final report on the Yatala Labour Prison redevelopment, the 23^rd report of the fine Public Works Committee, which I had the pleasure of both being a member of and chairing over the course of several years.

We will get to some of the other issues later, but I will state from the outset that the opposition, through its membership of this committee, supported this project. The genesis of the project, of course, stretches back into the last government under the stewardship of David Brown, the chief executive. It is a $150 million project, and the reasons for it are outlined in the report: there is a projected increase in high-risk male prisoners over the next 10 years or 20 years and continuing into the future.

Importantly, the project supports the stated objective of the previous government, certainly, and an objective which the current government pays some lip service to—that is, rehabilitation and reoffending, the 10by20 strategy. One of the double-edged pleasures of being the shadow minister for corrections is that that everywhere I go stakeholders tell me how wonderful Peter Malinauskas is for really leading the charge in terms of this re-emphasis—

Members interjecting:

Mr ODENWALDER: These aren't my words, believe me. It is a double-edged sword, believe me. Every time I visit a stakeholder, I am told about Peter Malinauskas, his work and the work of his office in bringing the emphasis fully around to rehabilitation and the reduction of reoffending through the 10by20 project.

It is disappointing for us that over the course of the last two budgets some of that emphasis appears to have dropped, particularly the New Foundations program. I have heard the minister in several different ways describe why the New Foundations project was first reduced to a sort of trial and then abandoned entirely. It would have been a very important project in terms of providing housing and therefore rehabilitation to various prisoners in the system. Having said all that, I understand the rationale for this project.

The opposition was supportive of this project. The members for West Torrens and Light were on the committee that approved this report. I understand that it was all business as usual in terms of approving the report and that everyone was happy with the way it was conducted. Then, on 15 July, as the member for Kavel pointed out, we learnt that the ICAC commissioner has been investigating at least one officer of DCS in relation to this procurement process.

What the member for Kavel has not mentioned, of course, are subsequent news reports that name the officer of DCS, and I see nothing untoward in my naming that person here. It was a person by the name of Paul Andrew Robinson, who, incidentally, was present at the hearings during which evidence was given as to the need for and the scope of this project.

All of that notwithstanding, the project is a good one. It appears to have blown out. I appreciate the member for Kavel's fulsome contribution to the debate today. I note that it was postponed on the last sitting day, presumably waiting for planning advice from the department about where to now. I am glad that the member for Kavel has tabled that correspondence from the chief executive, and I look forward to examining it once again.

Mr Cregan interjecting:

Mr ODENWALDER: That's fine. I am glad you tabled it here so that we can all avail ourselves of it today. There are still some questions to be answered, though. I notice that the chief executive and others appeared at the Budget and Finance Committee meeting and that there has been a certain amount of to-ing and fro-ing between the department of corrections and the Department of Planning, Transport and Infrastructure about who is ultimately responsible for the probity process.

I understand that in the time between the last government and the current government nothing has changed in terms of the overall way in which these matters are conducted, but the question still remains as to what probity measures have been put in place by the department so that this does not happen again. I understand what they have done in relation to this particular project, and again the member for Kavel was quite fulsome in his explanation of it being split into two, between the early works and the later works.

According to my reckoning on the back of an envelope here, the start of the main works has now been pushed forward by at least three months, but I guess three months is neither here nor there. It is the probity measures we need to be assured of. We need the minister to make a definitive statement so that, following the investigation that the member for Kavel mentioned, we can be assured that this cannot happen again and that probity measures are in place so that a very senior officer of a department cannot influence a process in such a way again, if that indeed proves to be the case in court.

We still do not know how much it has cost the businesses that tendered in the first place. I understand that in these things it is a buyer beware situation, where those tenderers have to wear any losses when something untoward happens or is alleged to have happened. But we still do not know how much it has cost those businesses. It would be interesting to see, at the end of this investigation, at the end of this court case, how much this situation has cost them.

Another question that has not been answered is whether any other officers of the department of corrections, or indeed of any other department, are being investigated. Of course, there are measures in the ICAC Act that prevent anyone from saying publicly, outside this place, whether that is the case, but I imagine that it would certainly be of interest to people who would enter tender and procurement processes both for this project and for future projects with the department.

Having said that, I appreciate the member for Kavel's contribution today, and he did answer a few of my questions. I sincerely hope that at the end of this investigation the process is better. These projects are important, and we need good prisons and prisons that encourage rehabilitation as well as punishment for high-risk offenders. With those few words, I commend the report to the house.

Mr CREGAN (Kavel) (11:42): I certainly appreciate the Public Works Committee members' contribution to the taking of evidence and the preparation of this report. I also appreciate the shadow police minister's contribution. I thank members.

Motion carried.