Premier Jay Weatherill has become embroiled in the controversy over the Gillman land sale, with the developer involved telling InDaily he dealt directly with the Premier instead of Renewal SA in his bid to secure rights to purchase the site.

Half of Renewal SA’s board resigned almost immediately after the government agreed to sell 400 hectares in Gillman to Adelaide Capital Partners (ACP) without going out to tender. InDaily understands some board members had significant concerns about the sale, but the Premier insists that Renewal SA supported the merit of the proposal.

This morning, Weatherill confirmed he had met with the ACP but defended the decision to not go out to tender.

Former Santos chairman Stephen Gerlach, who heads the ACP consortium, told InDaily he approached the Economic Development Board in June last year with an unsolicited proposal for the site – which was then taken to Weatherill.

“The process we went through is that we made an unsolicited bid to the Economic Development Board chairman, and the Economic Development Board deemed that this project was worthy of putting it in front of the Minister for State Development,” Gerlach said.

“We went to the Minister, which happens to be the Premier, and he also liked our vision and plans for the site.

“In terms of Renewal SA’s board, we have never spoken with Renewal SA’s board. I see that there’ve been some links, and that’s really a matter for Renewal SA – I haven’t dealt with them. I know some of the members but I haven’t dealt with them in this venture.”

Development industry peak bodies – the Property Council and the Urban Development Institute of Australia – have both questioned why the land was sold without going to tender. InDaily understands several other parties were interested in developing the land.

In a statement the Premier told InDaily he had agreed to meet ACP after a discussion with Economic Development Board members about the Gillman proposal.

“Following that meeting the proposal was referred to Renewal SA for further investigation,” Weatherill said.

“The advice received from Renewal SA confirmed the merit of the proposal and that the price offered represented good value.

“The Cabinet then made the decision to give ACP exclusive rights over a portion of land at Gillman to develop Lipson Estate.

“The Government is entitled to deal directly with proponents to capitalise on opportunities that are in the State’s interest.”

In late November Renewal SA released a draft masterplan for the long-vacant Gillman estate and conducted a three-week survey to get feedback.

ACP has finalised a 12-month exclusive deal with the Government to purchase approximately 400ha at Gillman for more than $100 million. The purchase will be made in stages.

InDaily has been told ACP has the rights to purchase additional blocks at the site in the future at today’s prices. Gerlach declined to confirm this, saying the information was commercial in confidence.

ACP plans to turn its purchase into a large industrial estate which will become a “global logistics hub for South Australia’s resources and oil and gas sectors” creating thousands of new jobs, according to a company press release.

To do that, the site will require rezoning from its current use – an issue Gerlach has already spoken to the Government about.

The site is severely limited by its low-lying nature. ACP will be required to significant raise the site – by up to three metres in some places according to Gerlach.

Much of that fill will come from recycling company ResourceCo – which is a member of the consortium, and already owns large supplies of unused fill.

“ResourceCo have access to a couple of major sandpits in the southern suburbs, which is really good quality fill,” Gerlach said. “And there are other marketplace sources for clean fill where people are doing major excavations.”

Port Adelaide Mayor Gary Johanson has raised concerns with the entire Gillman project, saying he fears it may become a large dump which will spread all the way down to the banks of the Barket Inlet.

Renewal SA’s masterplan allocates space on the east of the Gillman estate for an expansion of the landfill and recycling activities already on the site. That expansion is marked to flow right down to the edge of the Barker Inlet.

“That’s my major concern,” Johanson said. “I don’t see in a developed world … that it is smart to expand any dump so close to the city, particularly when any expansion runs alongside mangroves to the edge of our waterway.”

Gerlach said all the fill required would be clean fill which the company would buy, and no waste or recycling would be used.

Johanson told InDaily he was also concerned about the lack of utility infrastructure in the area, including power, water and sewage links.