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House of Assembly - Fifty-First Parliament, Third Session (51-3)
2009-06-03 Daily Xml
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ROYAL ADELAIDE HOSPITAL

Mr HAMILTON-SMITH (Waite—Leader of the Opposition) (14:22): My question is to the Treasurer. In order to guarantee a competitive tender process for the rail yards hospital, does the government intend to compensate any of the consortia for costs of bids and, if so, what will be the costs?

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (14:22): No, we have no intention of compensating; I do not know why we would. Infrastructure Partnerships Australia, which I think is one of the umbrella groups for companies participating in PPPs, came to me with this notion: would I be prepared to put a blanket guarantee out there that an incoming government would guarantee costs should a new government come in (a Liberal government) and scrap the project? I said, 'No; that is a risk you who will have to assume and assess whether or not you think there will be a change of government. If you think there will be a change of government, you have to bid accordingly.'

I have no intention of compensating bidders or putting upfront taxpayers' money to compensate in the outset. There are times when arguments might need to be made for compensation as a result of government actions, but there should be no issue with compensation in advance of any potential government action. This government is committed to that hospital. We have no problem with the number of people who will tender. The bid costs are not the issue. As I outlined to the house yesterday, how these projects are funded is an issue because the cost of capital for the private sector right now is at a premium, as both the availability is scarce and what is available comes at a reasonably high price.

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