Motions

Gillman Land Sale

The Hon. J.A. DARLEY (17:05): I move:

1. That a select committee of the Legislative Council be established to inquire into and report on the sale of state government owned land at Gillman, with reference to—

(a) the state government’s holding of state government owned land at Gillman over time and the events that led to an agreement between the state government and Adelaide Capital Partners in relation to state government owned land at Gillman;

(b) the conduct, including public statements, of the state government in respect of the agreement, and the decision not to offer the land for sale by open tender;

(c) the interaction between the state government, including the Economic Development Board, Renewal SA and parties who identified an interest in land at Gillman;

(d) the involvement of lobbyists and other third parties in negotiations between the state government and Adelaide Capital Partners;

(e) the role of Renewal SA, including Renewal SA Board members, in the sale of land at Gillman;

(f) the role of Renewal SA and other parties in the development of the Gillman master plan;

(g) the state government valuation process regarding the subject land;

(h) infrastructure planning undertaken by the state government to support development at Gillman and surrounding areas;

(i) the sale of other state government owned land at Gillman over the past 12 years;

(j) state government policies and guidelines;

(k) principles of good public sector practice; and

(l) any other relevant matters.

2. That standing order 389 be so far suspended as to enable the chairperson of the committee to have a deliberative vote only.

3. That this council permits the select committee to authorise the disclosure or publication, as it sees fit, of any evidence or documents presented to the committee prior to such evidence being presented to the council.

4. That standing order 396 be suspended to enable strangers to be admitted when the select committee is examining witnesses unless the committee otherwise resolves, but they shall be excluded when the committee is deliberating.

This motion relates to the sale of government-owned land situated at Gillman and, more specifically, the circumstances surrounding the agreement struck between the state government and Adelaide Capital Partners, a joint venture between Gerlach Asset Development and ResourceCo led by former Santos chairman, Stephen Gerlach.

Members will recall that on 22 November last year, the government announced the release of the Gillman draft master plan. At the time of the announcement, the then minister for housing and urban development indicated that the draft master plan would enable suitable areas of land in Gillman and Dry Creek to be rezoned for employment use and identified about 240 hectares which, once filled and rezoned, could be immediately rezoned for industry. In a press release the minister stated:

The plan envisages a range of businesses establishing themselves in Gillman and Dry Creek, including distribution centres, warehousing, transport logistics, manufacturing industries, service industries and a variety of small to medium-sized businesses.

He also stated that Renewal SA was working with a consultant team, led by Jensen Planning and Design, to undertake the master planning for the area. This was said to follow:

…detailed investigations to determine the extent of land available for development, taking into account the need for stormwater management and environmental purposes, as well as other transport and infrastructure requirements.

Much to the surprise of many, just weeks later, in December of last year, news broke of an agreement reached between the government and Adelaide Capital Partners in relation to the same parcel of land situated at Gillman. According to InDaily media reports, Adelaide Capital Partners had finalised a 12-month exclusive deal with the government to purchase 400 hectares of land for more than $100 million, with the purchase to be made in stages.

Almost immediately after the agreement was reached, half of Renewal SA's board members tendered their resignations. As speculation over the deal grew, the government was forced to defend its decision to accept an unsolicited bid from ACP rather than go to open tender. The government's position was that no credible proposals had been put forward by any other company and that the deal was executed as a proper exercise of cabinet authority.

We now know that several companies had in fact expressed an interest in the land, and in the weeks following the announcement more and more details came to light concerning the offers put forward by those companies. The government's dismissive attitude towards these claims has not been well received and nor should it be. In fact, several companies and stakeholder groups have been scathing of the government, not only in relation to the comments made to the media by the Premier and the former minister about the lack of any credible economic proposals, but also the lack of transparency that ensued in the sale of the land—and rightly so.

Integrated Waste Service chief executive, Joe Borrelli, criticised the government after his company's unsolicited bid, made in April of last year, was rejected by the government. In a three-page letter to The Advertiser, Mr Borrelli rejected the claims of the Premier and the former minister, claiming his proposal 'specifically included details as to how the site could be developed as a profitable joint venture'.

E&A Limited chairman, Stephen Young, has stated that he wrote to the Minister for Infrastructure in November of last year urging the project to go to tender and expressing an interest in the land. Adelaide Resource Recovery's general manager, Matt Size, and Bardavcol—a civil and engineering and construction company—both confirmed making bids and submitting proposals for the site which were also rejected. The then minister for urban housing and development has also denied that the resignation of four Renewal SA board members was prompted by a difference of opinion over the agreement with ACP, arguing instead that they had left for completely different reasons.

As members would be aware, the government has now become embroiled in not one but two legal disputes over the Gillman land—the first, an ongoing dispute with the Adelaide City Council, which previously held an interest in Dean Rifle Range; and the second, a multimillion dollar lawsuit over the deal launched by Acquista Investments.

According to The Advertiser media reports, this second action was initiated by the public waste company on the eve of the election in the hope that it would lead to a sale of the site by public tender. The entire deal is nothing short of a complete shambles at taxpayers' expense.

I turn now to Premier and Cabinet Circular 114, which came into operation on 11 October 2010. Part 70 of that document deals with the process for the disposal of government-owned land and part 72 with the basis for pricing. It provides:

The basis for price in all government real property transactions will be the current market value of the property as defined by the Australian Property Institute. That is, the estimated amount for which the property should be exchanged on the date of valuation between a willing buyer and a willing seller in an arm's length transaction wherein the parties have each acted knowledgeably, prudently and without compulsion. Valuers may use other appropriate processes to value a property where market value is difficult to determine, as provided by the Australian Property Institute.

Part 73 of the document goes on to state:

Valuations of the facilities and land should be undertaken by the Valuer-General or with the prior approval of the Valuer-General, another qualified valuer who is a member of the Australian Property Institute. The Valuer-General may give prior approval to individual agencies to use other qualified valuers on such conditions as the Valuer-General thinks fit and subject to regular review by the Valuer-General. Where a valuer other than the Valuer-General is used, the Valuer-General will retain a right to audit valuations.

Whilst Renewal SA are specifically exempted from the provisions of Circular 114, it is questionable whether they are exempt from pursuing an appropriate process for the disposal of land to achieve its optimum sale price. Notwithstanding that, it would appear cabinet itself is not exempt from the provisions of the circular, and it remains unclear whether the government followed the basis for pricing process set out in its own circular.

There is no question that the Gillman deal has created enormous community concern, especially amongst other interested companies and stakeholder groups. As a former valuer-general and chief executive of the then lands department, there is no doubt in my mind that there are major questions to be answered over the disposal process and ultimately whether the taxpayers of South Australia got the best value for money. There is no question that the best test of the market would have been for the Gillman land to go to open tender, registration of interest or public auction. There is also no question that consideration ought to have been given to optimising the land's maximum value based on optimum use which would have had regard to rezoning, subdivision and the like.

I do not think anyone accepts that an open tender process would have jeopardised the potential for job creation as has been claimed by the government. For all we know, it could have resulted in more jobs. The point is that we do not know. As a parliament we should all be concerned about the manner in which the Gillman deal was struck. We need to forensically examine the details of how it came about, the conduct of the government and, in particular, the Premier and the former minister, and whether or not South Australian taxpayers got bang for their buck. I urge all honourable members to support the motion.

Debate adjourned on motion of Hon. M.C. Parnell.