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Questions over Premier's Gillman claims

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A significant Adelaide company made a play in March last year for the Gillman estate which was later sold to another developer without a tender, sources close the negotiation have claimed.

If true, the assertion would contradict claims from Premier Jay Weatherill that only a single company had made a serious proposal for redeveloping the land.

InDaily has been told the company, BARDAVCOL, started working with the State Government agency Renewal SA on a bid some three months before the consortium that eventually won the rights to develop the land made its approach.

This morning the Premier and Renewal SA both denied BARDAVCOL had contacted them about a proposal for the Gillman land.

BARDAVCOL declined to comment when contacted about the story by InDaily.

However, a source close to the negotiation insisted that the BARDAVCOL bid related to the land at the centre of the controversy.

The controversy emerged after the State Government agreed to a proposal from consortium Adelaide Capital Partners without going to tender – a move that has been criticised by the development industry and which resulted in resignations from the Renewal SA board.

InDaily has been told that Adelaide company BARDAVCOL approached Renewal SA about the Gillman estate in March, three months before eventual purchaser ACP put its proposal to the State Government.

Sources close to the negotiation said BARDAVCOL, an engineering company, approached Renewal SA in March with an offer to work with the Government to remediate and sell the Gillman land. The company then worked with Renewal SA  to develop the proposal.

InDaily understands Renewal SA told the company another discussion would be held once the masterplan for the site the agency was drawing up was complete, expected to be at the end of 2013.

Company management was shocked to discover the land had been sold, a source who was aware of the deal told InDaily.

Another company, E&A, claims it had made an unsolicited bid for the land in November.

InDaily understands one other firm also made an unsolicited bid, but has been unable to contact the firm said to be involved. The ABC has also revealed several smaller firms were planning to purchase allotments in the area once Renewal SA completed its masterplan.

Government ministers spent last week defending the decision to sell 400ha at Gillman for around $100 million to ACP without a tender.

Asked on Thursday whether other developers had expressed interest in the site, Premier Jay Weatherill claimed that “a few people have been advancing propositions in the last few minutes, but it has no substance to it”.

“Some people have been playing games with this. Some developers are keen to advance the idea that they wanted to be in on this arrangement.”

Minister for Transport and Infrastructure Tom Koutsantonis told ABC Radio it was “not true to say that beforehand we had been receiving detailed proposals for this land,” and called the line of questioning “hysterical”.

A spokesperson for Renewal SA this morning told InDaily BARDAVCOL had been involved in a separate project near Gillman, but had never made a play for the Gillman estate.

“At no stage has BARDAVCOL proposed to purchase the Gillman land or to develop the land to a point that it could be used for industry.  On this basis, Renewal SA did not inform Cabinet or the Premier,” the spokesperson said.

“Renewal SA is working with BARDAVCOL on its East Grand Trunkway Project, which is part of Renewal SA’s broader land holdings at Gillman, which are not included in the ACP proposal.”

But a source close to the negotiations insisted this morning that the land in question was the area agreed to be sold to ACP.

The source said BARDAVCOL proposed to Renewal SA they open a tender for companies to partner with to remediate the land, which needs extensive work before it’s ready for industries to set up on it.

After meeting with Renewal SA chief executive Fred Hansen in March BARDAVCOL offered their expertise to the agency free of charge in assessing how much remediation would need to be done on the site – with an expectation there would be a discussion about bidding for the remediation work, InDaily understands. BARDAVCOL’s free assessment was incorporated into the masterplan.

The Renewal SA spokesperson said BARDAVCOL was contacted by the consultant engaged to author the masterplan, and “there is no undertaking with BARDAVCOL for work”.

According to Renewal SA’s own figures contained in the Gillman masterplan that remediated land could be sold at $100 per sqm. ACP spent over $100 million to buy the unremediated land – which works out to around $25 per sqm.

Remediation experts have told InDaily they believed the 400ha could be remediated for between $100 and $160 million. The remediated land would have sold for $400 million, a profit of between $240 and $300 million for the Government.

If correct, it adds to criticism from State Opposition which has claimed the Government’s decision not to go out to tender meant it may not have got the best deal for the land.

Renewal SA had been working towards progressively redeveloping and selling lots at the Gillman site since at least 2011, according to the agency’s annual report.

The masterplanning process for the site was formally initiated in April 2013. The plan suggested the government invest in infrastructure and remediation on the site in stages and then bring them to market as they were finished.

 

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