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Legislative Council - Fifty-First Parliament, Third Session (51-3)
2009-02-17 Daily Xml
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STATE AQUATIC CENTRE

The Hon. R.I. LUCAS (16:38): I seek leave to make an explanation before asking the minister representing the Minister for Transport and Minister for Infrastructure a question about the state aquatic centre fiasco.

Leave granted.

The Hon. R.I. LUCAS: On 26 June last year, the Premier announced that Aqua43, a consortium comprising Candetti Constructions and Macquarie, were the successful tenderers for the state aquatic centre at Marion. Soon after that, industry concerns were raised with the opposition that Aqua43 had won the tender on the basis of a minimal level of state government contribution and that, after winning the tender, had negotiated significantly increased financial benefits or incentives from the state government as part of the final negotiated deal.

These concerns and probity concerns were raised with Treasury representatives four days later, on 30 June, in the Budget and Finance Committee. Soon after that, I lodged a freedom of information request with Treasury for all documents that listed concerns about the proposed aquatic centre deal the government had announced.

In October, Treasury identified that 35 documents that expressed caution or concern about the government deal with Aqua43 existed within Treasury and, unsurprisingly, Treasury found 35 reasons for not releasing any documents to the opposition.

During the months of August and September the Crown Solicitor (Simon Stretton), a senior crown law officer (Mr Chris Gray) and a number of other crown law officers met with senior representatives of the transport department—the Chief Executive (Jim Hallion), Mr Rod Hook and the Under Treasurer (Mr Jim Wright)—where concerns about the probity aspects of this deal were raised by the Crown Solicitor. Subsequent to that, on 8 September 2008, a letter was sent from Mr Jim Hallion to Candetti Constructions summarising the government's position as a result of the probity concerns having been raised by the Crown Solicitor.

Of course, subsequent to that we found out that Macquarie Leisure firstly withdrew from the aquatic centre consortia and then the whole PPP collapsed over the Christmas/new year period. My questions to the government are as follows:

1. Is it correct that, in September, almost three months after the Premier had announced Aqua43 as the successful tenderer, the Crown Solicitor (Mr Simon Stretton) and other officers from the Crown Solicitor's Office expressed concern about the deal and in particular highlighted the 'significant risk' to taxpayers and the government if the deal went ahead as negotiated at that time?

2. Did the government negotiators during that period prior to the announcement of the deal at the end of June give to Aqua43 an additional $5 million worth of state land as a sweetener, that land comprising rail reserve land and Warradale Triangle land in the Marion precinct? Also, did the negotiators further sweeten the deal for Aqua43 by giving further undertakings which led to prospective financial benefits for Aqua43 and which led to the successful negotiation of the deal and the announcement by the Premier on 26 June 2008?

3. Is it correct that representatives of Aqua43 expressed concern to the government after receiving the letter from Mr Jim Hallion dated 8 September that the government had changed its position as negotiator with Aqua43 as announced by the Premier on 28 June?

4. Were those concerns from the consortium raised with the minister and, if so, what action did the minister take in relation to those concerns?

5. Is it now the case that, as a result of the PPP having collapsed and the state government taking over the deal, the taxpayers now have to accept the demand risk in relation to the project; that is, if there are insufficient users of the facility or the facility is poorly managed, the taxpayers will face potentially large and ongoing losses?

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (16:43): There are a number of quite specific details which the honourable member asked about, and I will refer those to the Minister for Infrastructure. However, I do not think I should just leave the answer at that. Quite clearly, if we are going to build an international swimming pool, which this state badly needs and which I would have thought everybody in South Australia badly needs, we know it will not be exactly a great money spinner. Of course, this government would have preferred to be able to reach an agreement where the private sector was able to run the swimming pool. The experience all around the world, particularly with an Olympic standard pool—and we are talking about a competitive swimming pool so that our swimmers in this state can compete in national championships and we can hold them here with a FINA standard pool—is that, clearly, that is something you would always prefer the private sector to run.

Of course, if the government sector runs it there will be risks; we know that, because all around the world swimming pools—particularly those that meet FINA standards, which are quite exacting and expensive—are difficult to fund. It is a bit like having a velodrome for cycling or having a soccer field, such as we have at Hindmarsh, which the previous government bought for soccer. Sporting fields, unfortunately, do not tend to be particularly lucrative financial arrangements. I find it rather incredible that the opposition is supporting the construction of a major stadium that will cost $1.5 billion, while the Liberal government in Western Australia has scrapped the Subiaco proposal, which was of that order.

If the honourable member is seriously suggesting that we can build a major sports stadium for something less than that amount, he has not looked at what is happening elsewhere around the world. I find it extraordinary that an opposition that hopes to be in government is proposing to build major sporting facilities, which we all know do not add up financially, but is criticising this government for trying to get out of a situation where we are the only major capital city in this country without a FINA-quality swimming pool.

This is something we need to do. My colleague the Minister for Infrastructure has done his best to get a solution and to get the private sector to fund it, but that has not been possible, so as a result the government will take up the construction of it so that swimmers in South Australia have a swimming pool this state can be proud of. Those points need to be put on the record. If we are talking about Treasury concerns and the like, everyone is concerned that swimming pools and other major facilities struggle to be profitable. This government has done what it can to reduce that risk—

The Hon. R.I. Lucas interjecting:

The Hon. P. HOLLOWAY: The last question the honourable member asked was about risk. This government will continue now to support the construction of a world-class swimming centre in this state so that our competitive swimmers are not disadvantaged relative to those in every other major city in this country.

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