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House of Assembly - Fifty-First Parliament, Second Session (51-2)
2007-11-22 Daily Xml
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Question Time

LAND MANAGEMENT CORPORATION

Mr HAMILTON-SMITH (Waite—Leader of the Opposition) (14:21): My question is to the Minister for Infrastructure. Why has he failed to ensure that the Land Management Corporation, which reports to him, has in place proper risk management processes? In his special report to parliament yesterday, the Auditor-General warned that the corporation was not following appropriate risk management policies. The Auditor-General identified instances where:

a risk assessment was performed after the joint venture agreement was executed;

the risk management assessment for a project had not been qualified and, as a consequence, monitoring of high to medium residual risks could not be performed;

a risk assessment for the appointment of a contractor for engineering services could not be located; and

the risk assessment for the multimillion dollar Port Adelaide waterfront redevelopment project, in which the LMC is a joint partner, had not been performed.

The Hon. P.F. CONLON (Elder—Minister for Transport, Minister for Infrastructure, Minister for Energy) (14:22): Once again, the Leader of the Opposition, in making comment in his question, misleads the house—perhaps unintentionally. He says that I failed to do anything about that.

Mr Hamilton-Smith interjecting:

The Hon. P.F. CONLON: They are tedious. They really are.

Mr HAMILTON-SMITH: I have a point of order, Mr Speaker. Yesterday, without prompting, you called me to order in regard to a matter of misleading. The Minister for Infrastructure has just said I was misleading. I ask you to get him to withdraw, as you did yesterday.

The SPEAKER: Order! I was distracted and discussing something with the Opposition Whip. I did not hear the comment. If the Minister for Infrastructure did accuse a member of being misleading, he must withdraw. The Minister for Infrastructure.

The Hon. P.F. CONLON: What I did say was perhaps he was doing it unintentionally, which of course is not an allegation that attracts the same opprobrium. The truth is—

Mr HAMILTON-SMITH: Mr Speaker, you asked him to withdraw. He must withdraw.

Members interjecting:

The SPEAKER: Order! From what I understand, the Minister for Infrastructure has clarified what he said. I did not hear the comment myself but the Minister for Infrastructure has made it clear that he was not accusing the opposition of deliberately misleading the house, and that is certainly sufficient. The Deputy Premier.

The Hon. K.O. FOLEY: I rise on a further point of order, sir. I believe upholding the good office of the Speaker to be paramount in the chamber. The leader said, quite audibly to many on this side, that there is one set of rules for this side of the house and another set of rules for that side of the house. That is a direct reflection on you as Speaker, and I ask him to withdraw.

The SPEAKER: Order! I did not hear the remark of the Leader of the Opposition. I do warn all members that any criticisms of the chair have to be made by substantive motion; and I so direct them. If the Leader of the Opposition is aggrieved, I invite him either to do so or approach the chair.

The Hon. P.F. CONLON: I come back to the point. The Leader of the Opposition said that I failed to do anything about the matters contained in the Auditor-General's Report. Of course, the reason the Leader of the Opposition is mistaken is that a number of matters were drawn to my attention regarding the LMC. It is not the bombshell he would suggest. A number of matters were drawn to my attention, and I remember writing to the LMC on 30 June about some matters in regard to abiding by proper process; that does not mean the LMC has done anything at all wrong. What the Auditor-General has said is that some processes should be improved. I spoke to the chair of the LMC, which is a body corporate with a very good board. He told me about the excellent efforts of a person—I cannot remember the name of the individual, nor would I recognise him—who has been working on improving the processes.

I remind the Leader of the Opposition, before he gets off on another extravagant witch-hunt, that the LMC has been a tremendous asset to both this government and previous governments over many years. It has returned a great deal. This is the Leader of the Opposition who was claiming that I had media out of here yesterday so there would not be any scrutiny of this matter. Of course, that would be using my Jedi mind powers, wouldn't it: 'Nothing to see folks, go to another chamber; nothing to see here.' What I needed to do, also, was to use my Jedi mind powers on the Hon. Ann Bressington yesterday: 'I have a speech for you which will get their attention.' That is plainly ridiculous.

I hope that the Leader of the Opposition will ask another question today about the matter he asked about yesterday, because I would love to answer it in front of the media. There is absolutely no doubt that his attempt to lambaste me failed—that is right, Mr Speaker, I was blasted by a lamb. I ask the member—please—to ask a question about this contract that he alleges should not have been signed that way. The legal advice is very strong, and I will tell—

Mr Hamilton-Smith interjecting:

The SPEAKER: Order!

The Hon. P.F. CONLON: Okay, the government's brief. I remind the Leader of the Opposition that the first advice was sought by the LMC of a private commercial firm—and a very serious commercial firm. I invite him to go out of this place and suggest that they dodgied the advice. The first advice was supported entirely by the Crown Solicitor. Let me explain what happened with that, since the Leader of the Opposition wants to talk about it.

What happened is that in 2001 the then Liberal government sought an expression of interest for the development of Newport Quays. The matters that later became contained in that PDA (which are the subject of this legal advice) were raised by the eventual successful tenderer at the time and were always part of its bid. Before we get any complaints about that original obligation: it was always part of the bid and, subsequently, it became part of the development agreement.

The development agreement imposed major risks on the developer in terms of remediation—quite wise, we think. We are not complaining about it because remediation is a major risk of the project. They sought throughout, and eventually got, an ability to be able to control that risk.

What happened was that about two years ago the LMC tendered for the project management on remediation. It is about a $151,000 contract. I remind you it is a $15 billion development. My understanding of the reason they tendered was because they did not believe Newport Quays would be in the least bit interested in a $151,000 contract—because I do remind the Leader of the Opposition that, under our very successful management of this project, the cheapest apartment on sale there is now, I think, $400,000, and there are more than 40 million-dollar apartments in the current release. So, obviously the reason Newport Quays was seeking this was because they wanted to be able to control, to the extent possible, the management of the risk of remediation.

When they insisted upon it, not me but the corporation sought legal advice, and the legal advice was that they should, in fact, be awarded the contract, that they did have, if you like, the right of first refusal. The LMC then made sure that its cost was at least as good as the best one of the three tenderers in the truncated tender process. They sent a minute to me saying, 'This is what we should do on legal advice.' And I have to tell the Leader of the Opposition: every time the corporation sends something to me saying, 'This is what we should do, on legal advice' I am going to—

Mr Hamilton-Smith: The A-G says that that advice was flawed.

The Hon. P.F. CONLON: The A-G says the advice was flawed—which was why the LMC then sought further advice from the Crown Solicitor, who emphatically supports the original advice.

Members interjecting:

The SPEAKER: Order!

Members interjecting:

The SPEAKER: Order! Members will not speak over me. The member for West Torrens will take his seat. The Leader of the Opposition has 40 minutes to ask all the questions he wants. It is not necessary for him to speak over the Minister for Infrastructure while he is answering his question. The Minister for Infrastructure.

The Hon. P.F. CONLON: Especially, sir, as I am in fragile health; listen to that voice. He's such a cad! What the suggestion is of the Leader of the Opposition—and I am not going to name the firm—is that the LMC should have ignored the advice of a major commercial firm and ignored the advice of the Crown Solicitor. I have got to tell you that you would probably have a story then, wouldn't you, if I said, 'No, I'm not doing that.' Basically, what crown law advice suggests is that, if I had not taken the advice of the LMC, there is a very strong likelihood that the government would now be locked in legal conflict with the developer. That is what you suggest we should have done. So, I am quite happy to talk about this with the media here because there is nothing in it. There is absolutely nothing in it, and your attempts to lambaste me have failed once again.

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