Auditor-general Ppp Report A Whitewash, Says Expert

The Age

Friday November 23, 2007

Clay Lucas, City Reporter

ONE of the state's leading experts on public-private partnerships (PPPs) has slammed an Auditor-General's report into Southern Cross Station and the Melbourne Exhibition and Convention Centre, branding it "a whitewash".

Peter Fitzgerald is a Labor Party insider hired by the State Government in 2006 to review its program of private investment in infrastructure. He has delivered a broadside against the Auditor-General's assessment of the two projects, both public-private partnerships.

"These audits are a disappointment to anyone hoping that, when the Auditor-General undertakes a serious audit, he will address major concerns about the state's public finances," Mr Fitzgerald said.

The Southern Cross Station redevelopment is one of the largest PPPs ever undertaken in Victoria. Under the deal, the Civic Nexus consortium won a contract in 2002 to build and manage the station for 30 years.

Over that period the Government will pay the consortium $1.8 billion.

In return, Civic Nexus gets to develop surrounding public property for commercial use.

Critics of the deal believe, among other problems, that the cutting-edge station design was spoiled by the addition of a huge discount retail centre next door as part of the PPP.

Similarly, the $1 billion Convention Centre has been mired in controversy. Under a deal cut with the State Government, the Plenary-Multiplex consortium is building a downmarket suburban homewares centre on prime Southbank land at the rear of the six-star, environmentally friendly convention centre on the Yarra.

Mr Fitzgerald said public debate about PPPs included whether they cost too much and whether they overcompensated developers.

"The two audits review the projects for their consistency with policy frameworks and their approach to contract management. But not for value for money," he said.

"This report is a whitewash," said Mr Fitzgerald, who is a director of consultants Growth Solutions Group.

Auditor-General Des Pearson, who tabled the audits in the Victorian Parliament on Wednesday, found the Melbourne Convention Centre development had been effectively planned and was being well managed.

But Mr Pearson said there were serious concerns about the contract struck with the consortium that built and now managed Southern Cross Station.

The report found that the station's manager, Civic Nexus, could account for only 800 of 3000 assets at the train station.

"That means we don't even know what we own, let alone what state it's in," Greens MP Greg Barber said.

Opposition major projects spokesman David Davis said the report's analysis did not include further costs that the Government could incur from the project.

These included the $1.2 million retro-fitting of stormwater capture and rainwater tanks that should have been part of the original project.

© 2007 The Age

Back to News Index | Back to Home