Personal Explanation

Surpass Sun Electric

The Hon. F. PANGALLO (14:17): I seek leave to make a statement in response to questions asked of me by the Hon. Tammy Franks on 25 October and to clarify comments I made about Mr Colin Gillam from the solar company SSE, or Surpass Sun Electric.

Leave granted.

The Hon. F. PANGALLO: Thank you.

1. That Mr Gillam has disappeared from SSE is incorrect. Mr Gillam is still with SSE Australia, a subsidiary of SSE China, based in Melbourne as its general manager. I withdraw that comment and I unreservedly apologise to Mr Gillam for any inference that he had done 'a runner, a David Copperfield or a Lord Lucan'.

In the context of that language, perhaps I should have made myself clearer. I intended to point out that the project was 13 months behind schedule and only the first stage of the promised three stages had been completed, and that there was no sign of stages 2 and 3 commencing.

2. That the project was beset with problems until only recently. I will not be retracting those views because they are true, as I will outline in facts not disputed by Mr Gillam.

In January this year, Mr Gillam, in the company of the then premier Jay Weatherill, the member for Giles (Mr Eddie Hughes), Whyalla Mayor Lyn Breuer and others were on site at SSE's solar farm project for Mr Weatherill to cut the symbolic red ribbon. Various media outlets that attended on the day and a number of online posts trumpeted that the first stage was completed, commissioned and switched on.

What was not declared at the time was that the project was not even registered with AEMO or close to being connected to the grid by SA Power Networks. Far from it. The registration only took place a month later on 14 February. The facility only started feeding electricity into the grid in mid-July. It was not switched on seven months earlier as was implied during the state election campaign stunt.

The Hon. T.A. Franks: Not anything I asked about in my question either. I asked you: did you actually say that Colin Gillam and SSE didn't exist and were a mystery? This has nothing to do with the question you were asked.

The Hon. F. PANGALLO: I have not finished.

The PRESIDENT: Order, the Hon. Ms Franks! The Hon. Mr Pangallo, make sure you keep it to the issues in relation to which you wish to make a personal explanation.

The Hon. F. PANGALLO: Yes. In an email response to a series of questions I put to Mr Gillam, he conceded that it was not officially switched on in January, that he took the opportunity to gain media attention, and that it was convenient because the Premier happened to make himself available.

The Hon. T.A. Franks: And that SA Power Networks hasn't actually done—

The Hon. F. PANGALLO: I have not finished.

The PRESIDENT: The Hon. Ms Franks—

The Hon. T.A. Franks: Report that as well—

The Hon. F. PANGALLO: I am about to, if you listen.

The PRESIDENT: We are not debating the issue. The Hon. Mr Pangallo, please keep to the issues at hand.

The Hon. F. PANGALLO: It is, Mr President. To quote Mr Gillam in his response to me, 'This type of timing of announcements due to availability of significant parties happens all the time.' Putting the cart before the horse has even been led out of the stable and hitched up, is how I would describe it.

He went on to say that the delays were outside SSE's control, and laid the blame solely on SA Power Networks, that SAPN made connection mistakes, that SAPN was inexperienced in this type of project, and that SSE could sue SAPN to recover its losses if it wished. While it respectfully could not go into detail on the grounds of commercial confidentiality, SAPN did tell me that there were aspects of Mr Gillam's comments on which they would disagree, that key matters had to be resolved before the plant could begin exporting power to the grid, and that it was unfair to say that the delays were the responsibility of any single party.

In a discussion I had with Mr Gillam last weekend he revealed that there is now doubt about whether stages 2 and 3 can proceed—not good news for Whyalla. Again, he is blaming SA Power Networks for this, accusing it of making unreasonable financial demands of up to $1.3 million to connect those two stages to the grid.

3. That SSE (Australia and China) is a mystery Chinese company. I have never said that the company does not exist. It has constructed projects of varying degrees in Australia, from the large-scale Whyalla solar farm to other rooftop systems.

'By the end of 2018 we plan to complete another four similar projects', Mr Gillam said boldly at his January launch in Whyalla—quite ambitious, and certainly not for lack of trying. SSE currently has one project under construction at Yongala near Peterborough in our Mid North, while sites at Stirling North, Kadina and Moonta are at various stages of development approval and another at South Hummocks is being developed and seeking an investor. So he is unlikely to meet his own deadline expectations. Mr Gillam tells me his company has also identified multiple sites on Eyre Peninsula to be jointly developed with a local partner. I look forward to that being fulfilled.

On its website SSE boasts—and I am quoting directly from its website—it is 'the only solar company in Australia that can deliver both commercial and utility-scale solar equipment and infrastructure'. Speaking to industry leaders and experts, that SSE claim was incorrect when it was made three years ago, just as it is incorrect today. Mr Gillam stands by it, but concedes it may not apply today with more companies in the market. Yet the claim remains on the SSE website.

Mr Gillam also questions whether I have any idea what this claim means. It can be interpreted in many different ways; however, I am well aware of the difference between vertically-integrated companies that provide the technology and build the plant; engineering procurement and construction companies (EPCs) that build plant, accepting risk and liability for construction, including liquidated damages; and EPC management companies, which act as contractors not directly involved in the construction but responsible for administering construction contracts, and which do not accept the same risk and liability as EPCs and do not accept liquidated damages.

There are companies that are prepared to big-note themselves and claim a level of activity and performance in many different areas of expertise that is not true, or that is designed to mislead. I am not suggesting SSE is one of them. That said, SSE needs to be very careful how it represents itself in the market. However, I do contend that SSE is a mystery for reasons other than its list of projects in China. This includes the fact that, while its Australian directors and management are known, there is scant information about the owners of the parent company available on the company's website, which has not been updated for two years.

It does list several of its large projects in China, which I assume exist, and I will be writing to its CEO in Shanghai seeking more information. However, if we are to accept what Mr Gillam has said in an email correspondence to a former partner he fell out with, companies in Australia would be advised to be wary when doing business deals with Chinese companies. Here is what he said, and again I quote Mr Gillam:

Dealing with a Chinese company is not easy, trust me, I have been doing it for 4 years and I am also very tired and frustrated. To sum it up—the Chinese simply don't care. They will do what they want. And they don't see contracts as anything but a starting point for discussion, certainly not anything binding.

This is an extremely bizarre comment to make and it raises questions of trust. Basically, Mr Gillam is saying the Chinese—and I gather this includes his parent company—do not see a requirement to honour signed contracts.

The Hon. T.A. FRANKS: Point of order, Mr President.

The PRESIDENT: The Hon. Mr Pangallo, there is a point of order. Can I just hear the point of order?

The Hon. T.A. FRANKS: The member, in his answer, is presuming what another person meant by their words. The member has no ability to do that, clearly.

The PRESIDENT: I take your point of order. The Hon. Mr Pangallo, please restrain yourself.

The Hon. F. PANGALLO: Mr Gillam has actually admitted to writing these words.

The PRESIDENT: This is not a debate. You are making a personal explanation which relates to the specific issues at hand. Do you have much more to say?

The Hon. F. PANGALLO: No, nearly finished, Mr President. However—

The PRESIDENT: I will allow you some latitude, but the Hon. Tammy Franks makes a strong point. Please continue.

The Hon. F. PANGALLO: Okay. In closing, I do not wish my response to be viewed as an adverse reflection on Mr Gillam. He has a visible presence in the solar industry. I wish him and SSE the best in their endeavours in South Australia.