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'This resembles Gillman': Govt sidesteps process on Adelaide Oval hotel

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EXCLUSIVE | The State Government insists it did not need to put the $42 million taxpayer-funded loan for the proposed Adelaide Oval hotel through the rigorous unsolicited bid process, despite criticism the deal resembles the Gillman debacle.

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Late last year, the Marshall Government announced it would award a $42 million loan to the Stadium Management Authority in order to develop a five-storey hotel outside the oval’s eastern grandstand.

Asked by InDaily whether the proposal was put through the formal process required for unsolicited bids following the Gillman debacle, a Government spokesperson said the request for financial assistance “was not an unsolicited bid”.

Yet the appeal for a loan appears to clearly fall within the Government’s own criteria for an unsolicited bid, prompting one of the state’s most senior economists to question the process.

Executive director of the South Australian Centre for Economic Studies at the University of Adelaide, associate professor Michael O’Neil, told InDaily this morning that the Marshall Government’s approach to the hotel loan “resembles the unsolicited, secret and discredited bid for land at Gillman which caused the previous Labor Government no end of trouble”.

O’Neil suggested that secrecy surrounding the application allowed the Government to by-pass the Adelaide City Council – which is the custodian of the parklands on which the hotel is to be built.

“The Adelaide City Council (ACC) was to be by-passed, the Adelaide Park Land Authority as well, with plans lodged with the State Commission Assessment Panel and approved some nine days later,” said O’Neil.

“This avoided all the potentially messy negotiations with the ACC as was the case when the proposal to build a grandstand in the east park lands for a once a year car race were defeated.”

The Government’s criteria says an unsolicited bid is “when a business or a not-for-profit organisation approaches the government with a proposal that hasn’t formally been requested and does not fit into existing procurement processes”.

This includes “requests for government support (financial, regulatory or other)”. You can find the full criteria and guidelines here.

The rigorous unsolicited bid process was set up after widespread outrage at the 2013 Weatherill Government decision to accept an unsolicited offer from one consortium to develop Crown land at Gillman, in Adelaide’s northwest, without going to tender. The circumstances of that deal prompted an ICAC investigation which resulted in a maladministration finding against two public servants.

Treasurer Rob Lucas told InDaily this afternoon it would have made “no sense” for the Government to go through the unsolicited proposals process.

“The unsolicited bids process tends to be used when an unsolicited bid from a single bidder is considered for a government building or property when a number of bidders might have been interested if there was an open process,” he said in a statement.

“It makes no sense for the project to have gone through the unsolicited proposals process given the Stadium Management Authority has the lease for Adelaide Oval and, therefore, no-one else would have been able to build the hotel.”

However, the “uniqueness” of a proposal – one that cannot be delivered by competitors – is among the key features for assessing an unsolicited bid, as set out in the Government’s  unsolicited proposals guidelines.

The SMA sought and was granted development approval to build the hotel – but this is distinct from the government’s decision not to use the unsolicited bids process to assess the SMA’s requestfor a loan.

Lucas added: “This particular loan arrangement, which went through a formal Cabinet process, is entirely consistent with the practices of former governments. In fact, this process was followed by the former Labor government when approving SAHMRI 2, the $10 million grant to the City of Adelaide to purchase the old Le Cornu site, a $19 million grant to the Football Federation of SA for the Home of Football at State Sports Park and a $5 million loan to Murray Bridge Racing.”

When the Weatherill Government sidestepped the process in relation to the $198 million Coober Pedy council power deal in 2017 then-Opposition Deputy Leader Vickie Chapman told InDaily it was an “utterly outrageous” example of a government ignoring its own rules.

“It isn’t a question of saying ‘we will be discretionary about what should be considered an unsolicited bid’ – they have to consider unsolicited bids (under the guidelines),” Chapman – now Deputy Premier – had told InDaily at the time.

“This is just a backdoor way of ignoring the rules.

“It’s utterly outrageous – the Government claimed they had learned the lesson from Gillman. They had a new regime in place and they have completely ignored it.”

It has, however, released a set of emails to The Advertiser, according to a story in the News Corp publication this morning, showing a series of events that are consistent with Treasury’s definition of an unsolicited bid.

According to the story, the SMA approached Premier Steven Marshall directly in May last year, seeking a meeting concerning a “major investment opportunity”, and later approached the Premier’s chief of staff for a further meeting on the matter.

Meanwhile, the SMA published its submission to Parliament’s select committee inquiry into the hotel deal overnight, including a timeline that is also consistent with the definition of an unsolicited bid.

According to the “Hotel Development Timeline”:

The unsolicited proposals guidelines published by Treasury list the objectives of the process, including:

The SMA is a joint venture between the SANFL and the South Australian Cricket Association.

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