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House of Assembly - Fifty-First Parliament, Third Session (51-3)
2009-02-04 Daily Xml
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SUPER SCHOOLS

Mr PISONI (Unley) (15:10): I would like to thank the Attorney-General for that indulgence of his in the parliament. My question is to the Treasurer. Have any of the consortia in the government's super schools PPP projects due to start opening next year opted out and, if so, what are the ramifications for the project? Yesterday, the Treasurer told the house—and he repeated it again in the house today in a similar form—the following:

European banks are under pressure from their own domestic constituents to stop lending money to overseas markets such as Australia and are repatriating those line facilities back to the United States and United Kingdom. That is putting enormous pressure on good enterprises here in Australia, particularly here in South Australia.

Europe-based Deutsche Bank and ABN AMRO are short-listed debt equity vehicles for the super schools PPPs. The other short-listed vehicle is Babcock & Brown.

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (15:11): I will not make any comment on the nature of the elements of consortia as we are currently going through the evaluation process to choose a successful consortia, and issues of availability of finance, price of finance, corporate balance sheets, price and delivery schedules are all matters to be assessed through a very carefully coordinated process, and a process with serious probity—

Ms Chapman interjecting:

The SPEAKER: If the deputy leader has another question, I am more than happy to give her the call.

The Hon. K.O. FOLEY: The one matter of which one has to be mindful during these processes is matters of probity. I do not intend to give an answer to a question that may or may not affect anything to do with a decision process because I do not want to be blamed for actions taken by subsequent consortia if information put into the public domain at this point in time was in any way to affect a consortia's ability to conclude a successful deal. However, I will say this. Clearly, we are in the midst of the most significant financial meltdown the world has ever seen and it is not unreasonable to assume that matters relating to capital are causing some anxious and stressful moments right across both the public sector and the private sector. Whether that will or will not affect the value-for-money test on these projects will be determined during this process.

As I said in answering the question from the leader concerning the Marjorie-Jackson Nelson Hospital, if the value-for-money test does not put the PPP for schools as a better option than a design and construct, then one would not proceed. What I can say further is that all the way through this process the availability of credit has not been an issue, but I am not prepared to say whether or not that is the case at this very moment because matters are changing at a rapid rate.

Now the issue of Babcock & Brown is one that I have raised in this place in earlier times. Babcock & Brown (depending on which entity) is seriously wounded in this financial meltdown the world is seeing, but my understanding of the placement of debt within consortia—and my understanding was that Babcock & Brown was a placer of debt in consortia in which they are operating—would be that that would be debt that would be replaced by other entities, but I cannot really say any more than that. The projects themselves are not at risk. Those schools will be delivered, they will be delivered on time and they will be a proud part of this state's educational infrastructure.

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