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Gillman: Questions about Weatherill and Rau involvement

Feb 11, 2015
Deputy Premier John Rau (left) with Premier Jay Weatherill.

Deputy Premier John Rau (left) with Premier Jay Weatherill.

A massive dump of Gillman documents reveals new details about the involvement of Premier Jay Weatherill and Deputy Premier John Rau in Renewal SA’s troubled decision-making on the controversial deal.

According to emails buried in more than 1000 pages of unindexed documents tabled by the Government in Parliament, Weatherill, Rau and minister Tom Koutsantonis called in acting Renewal SA Michael Buchan as he faced a revolt by board members over the deal.

Buchan then reported back to the board that the Government wanted Renewal SA to provide its advice on the Adelaide Capital Partners (ACP) proposal for the Gillman land in time for the following Monday’s Cabinet meeting.

Emails show that several board members were deeply concerned about the speed in which they were being required to make a decision on the deal.

The documents are part of evidence presented to a Supreme Court case on the Government’s deal to give exclusive rights to more than 400 hectares of land at Gillman to one proponent without going to tender.

The documents also raise questions about the Government’s central rationale for approving the deal – the promise of an “oil and gas hub” that would create thousands of jobs.

The Deed of Agreement published by the Government yesterday is vague on the requirement for such a hub to be built.

Emails also show that one Renewal SA board member – Mike Terlet – questioned the wisdom of locating an oil and gas hub in Gillman, near Port Adelaide (he later absented himself from decision-making due to a conflict of interest).

On Wednesday 13 November, 2013 – just over a month before the Government announced the deal – board member Amanda Rischbieth wrote to Renewal SA executive Warren Smith to raise her concerns about the proposed deal, particularly “probity and process challenge risks to the board directors and Renewal SA”.

She quoted a document which said there were “three risks which cannot be managed through the negotiations if the ACP offer is approved” including that “the ACP offer, both in scale and value is at odds with the position taken by Renewal SA’s valuer in relation to a single purchaser with access to significant capital in the context of assessing compensation owing to Adelaide City Council arising from the compulsory acquisition”.

[The Government had compulsorily acquired part of the Gillman land – the Dean Rifle Range – from the Adelaide City Council. That acquisition is now the subject of legal action against the Government brought by the council.]

Terlet then emailed the entire board and senior Renewal SA managers to say: “I share Amanda’s concerns particularly given the relationship on an ACP proponent to a supplier of fill material. I am also concerned that they believe Gillman is a better location than Whyalla for an Oil and Gas support precinct.”

Buchan responded to the concerns in his own email to board members, including pointing out that an external probity adviser had been appointed.

He went on to write that “it is noted that Renewal SA is responding to the compressed timelines set out in ACP’s offer”.

“Following discussions with the Premier, Deputy Premier and Minister (Koutsantonis) yesterday, it is likely the Government will require Renewal SA’s advise (sic) on the negotiated ACP proposal for consideration by Cabinet on Monday,” the email said.

The following day, board members were asked by Buchan to approve an out of session paper by noon the next day – Friday, 15 November.

Another board member, Craig Holden, wrote an email to Buchan that day saying he could not support the proposal and needed more time.

“The board needs time to carefully consider the many probity and contractual issues this decision involves, it would be unwise in my opinion to do otherwise,” he wrote.

Rischbieth also pleaded for more time, saying her concerns were “unchanged”.

“The board needs to receive additional legal advice and to have more time to carefully consider the many probity and contractual issues this decision would raise”.

Another board member, Theo Maras, simply sent back the paper with an X in the “not approved” box.

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On Sunday, 17 November, Buchan emailed board members saying that he provided a draft “cab sub” to the minister on Friday night. He said he had discussions with Weatherill’s chief of staff Simon Blewett and Koutsantonis’s chief of staff Rob Malinauskas “informing them of the Board’s significant reservations”.

A new paper was sent out to board members on 20 November, which, according to the document dump, was carried. That paper recommended the Government reject the deal with ACP due to probity concerns and lack of market testing.

On 28 November, yet another paper was sent out to board members from the Renewal SA executive.

This paper, first revealed by InDaily in early 2014, recommended that the offer from ACP was good value and that the land was appropriate for industrial/commercial development.

It’s not clear which board members approved the paper from the document dump (apart from Helen Fulcher, whose approval is noted in an email).

Rischbieth, Maras, Holden and Terlet all subsequently resigned from the board.

A partially redacted Cabinet paper containing the final recommendations was included in the document dump. It doesn’t appear to record any of Renewal SA’s earlier concerns about the deal.

InDaily asked Weatherill and Rau why there were involved in the process and why they required a quick decision from Renewal SA despite board members requesting more time.

Only Rau responded saying: “My involvement in the matter was as a member of cabinet”.

He also said there was “specific mention of the development of an oil and gas hub at Gillman in the deed documentation”.

“The Government made this decision in the interests of the state, taking into account the potential for employment in addition to the price offered for the land,” he said.

Opposition deputy leader Vickie Chapman questioned why Weatherill and Rau were involved in the Renewal SA process.

“Premier Weatherill and Mr Rau have repeatedly refused to answer questions in the Parliament about the assessment of the ACP proposal,” she said.

“The assertion that Mr Weatherill and his senior ministers were pressuring Renewal SA to provide advice to Cabinet in a compressed timeframe is extremely concerning.

“Given this was supposedly an unsolicited bid, senior members of Cabinet should not have been involving themselves in the assessment of the proposal.

“There does not appear to be any legitimate reason for Mr Weatherill or Mr Rau to have been discussing this matter with Renewal SA officers before it went to Cabinet.”

Last week, InDaily reported that the chair of the state’s Economic Development Board, Raymond Spencer, had received complaints from ACP about the time it was taking to consider the proposal.

Spencer said he didn’t take the complaints to the Government because he didn’t see that as his role.

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