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Councils were warned about "insider knowledge" risk in lighting tender


One of the councils involved in the controversial tender for a multi-million-dollar Adelaide streetlight replacement program warned more than nine months ago that a competing company may have had a possible “competitive advantage”, InDaily can reveal.

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Streetlight tender under fire

In May, InDaily revealed international lighting company Citelum had pulled out of the process, citing concerns about the role of an associate of a competing company in helping design the tender for a contract to replace thousands of streetlights for seven eastern Adelaide councils, estimated to be worth $50 million.

The Eastern Region Alliance (ERA) of councils agreed to halt the tender process and call in an independent consultant to review it last month, but the tender process looks likely to be restarted.

SA Ombudsman Wayne Lines has been “making inquiries” about the process, but is yet to decide whether to formally investigate it.

InDaily can now reveal that the CEO of the City of Norwood, Payneham and St Peters, Mario Barone, expressed concerns to other Eastern Region Alliance councils about the “inside knowledge” of contractor Complete Urban in the tender process as early as October last year.

The minutes of an ERA CEOs Group meeting on October 22, 2015 , obtained under Freedom of Information laws, shows that Barone “expressed concerns regarding the probity of the street lighting tender, with the work to date being undertaken by Complete Urban who will also be submitting a tender”.

“The firm’s inside knowledge may give them a competitive advantage in preparing their tender,” the document says.

Complete Urban did not submit a tender, but a related entity, ENE.HUB SA, did.

The ERA resolved to halt the tender process for an independent review early last month.

However, Burnside Mayor and chair of the ERA David Parkin told InDaily he had been briefed on the findings of the independent review, due to be circulated early next month, which he said “has found no fault with the tender, and it’s my understanding that the tender will be restarted”.

“We’ll just press the start button again.”

It remains unclear whether the tender is to be started again entirely, or if the paused process will simply recommence.

Parkin defended the engagement of engineer Scott Williams, who helped develop the technical specifications for the tender, and was the project director of the streetlight replacement program.

Williams is also a director of Complete Urban and lighting company ENE.HUB, the largest shareholder of ENE.HUB SA, which made a bid for the tender; he is not, however, a director of ENE.HUB.SA.

ENE.HUB.SA, ENE.HUB and contractor Complete Urban operate out of the same Sydney address.

Parkin said: “We needed professional assistance to write the [tender] documents.

“[When] we have a highly technical specification … you’re dealing with a very small number of people [who can write it].”

He said he did not remember any expression of concern about the probity of the tender process in October last year, but that “if there were concerns, they clearly weren’t valid”.

Minutes of a June 2016 meeting of the ERA CEOs says that probity adviser Phillip Zubrinich told the gathering that: “In years gone by, when a large project required a third party to provide technical advice in putting together a tender, that party would have been excluded from tendering.

“This is no longer the case: as long as the tender documents are non-biased and generic, they meet probity requirements.

“In his view, the ERA tender documents meet these requirements and provide a level playing field to all tendering organisations.”

The minutes say that “the CEOs are confident that legal and probity advice received to date indicate that the tender process has been clean”.

“However, given the matters being pursued by the media and the implication that there has been a conflict of interest, it has been agreed to put the tender process on hold.”

An ENE.HUB spokesperson told InDaily in May that “all potential conflicts were declared and managed appropriately”.

InDaily has contacted Barone for comment.

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