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Govt decides when to use post-Gillman process: Treasury CEO

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Treasury has conceded the $42 million Adelaide Oval hotel loan could have gone through the rigorous process set up to prevent another Gillman debacle, but it didn’t need to – because the Government has discretion over which unsolicited bids go through the process and which don’t.

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Department of Treasury and Finance CEO David Reynolds told parliament’s select committee into the oval hotel that the unsolicited proposals committee could conceivably have assessed the $42 million taxpayer-funded loan to the Stadium Management Authority to develop the hotel.

The unsolicited proposals process was set up following controversy over the Weatherill Government’s decision to sell Crown land at Gillman to a private consortium, behind closed doors, without going to tender.

As InDaily revealed earlier this month, the SMA’s request for the loan to fund the hotel development appears to clearly fall within the Government’s own criteria for an unsolicited bid, published on Treasury’s website.

Executive director of the South Australian Centre for Economic Studies at the University of Adelaide, associate professor Michael O’Neil, told InDaily at the time that the hotel loan deal resembled the Gillman land deal.

But Reynolds said this morning that governments “always have the power to directly consider any matters it considers appropriate” – as in, outside of the unsolicited bids process – and listed a series of other, earlier requests for funding for which taxpayer’s money was handed over without going though it.

“The original request for this loan was an interest-free loan, which would have had corresponding adverse impacts on the state budget,” Reynolds explained in his opening remarks to the committee.

“The final terms of the loan to the SMA (were) on a more commercial basis, without a negative impact on the budget across the life of the loan … I acknowledge that the unsolicited proposals guidelines can be interpreted fairly broadly in that context.

“If this matter had come to the unsolicited proposals committee, it would have (been) assessed in accordance with its guidelines.”

He conceded that, “if read broadly, it could be considered that many projects could go through the unsolicited proposals process”.

“Governments always have the power to directly consider any matters it considers appropriate – (and) in a range of other examples (proposals) didn’t go through the unsolicited proposals committee.

“It includes things like commercial arrangements for the Murray Bridge racing club zone, (a) Flinders University land request … SAHMRI 2 funding, the grant to the Adelaide City Council for the Le Cornu site and grants for the Adelaide Football Federation state sports club.”

He argued moreover “the unsolicited proposals process is not designed to consider funding requests as such”.

“The guidelines make that clear and I quote – ‘all requests for financial support should be raised directly with the relevant government agency’.”

However, the guidelines also state that an unsolicited proposal is defined as “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”.

Importantly, 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.

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