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Councillors' bid to seize control of e-scooter investigation

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In an extraordinary move, Adelaide City councillors are moving to derail an inquiry into the allegedly tainted tender process for CBD e-scooter permits ordered by council CEO Mark Goldstone – and replace it with an investigation completely independent of council staff.

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Three councillors have signed an order, citing powers vested in them by the Local Government Act, compelling Goldstone to call a special meeting this week that would consider the appointment of an independent investigator with no previous association to the council’s administration, to assess the e-scooter tender process.

Earlier this month, InDaily revealed:

In a letter to Goldstone, sent last Friday and obtained by InDaily, fellow unsuccessful e-scooter company Lime raised a series of further complaints about the process, including that Deputy Lord Mayor Alex Hyde had made comments on FIVEaa radio that “seem to presuppose the outcome of the review”.

Lime quotes Hyde as saying “I don’t expect there to be any issues with it (the tender) … everything that goes through that team is essentially watertight.”

Now, councillors Phil Martin, Anne Moran and Rob Simms have petitioned Goldstone, citing powers vested in them by the Local Government Act, to order a special meeting this Thursday, with the appointment of an investigator reporting directly to elected members and separated entirely from the council’s administration on the agenda.

In an email to fellow councillors sent today, Martin writes that there were allegations “by participants in the most recent tender process for e-scooters in the City of Adelaide that the process was flawed, incompetent or unfair and that the outcome of an investigation initiated by the City of Adelaide, they later alleged, has been predetermined or prejudiced”.

“These are serious allegations that have the potential to damage the reputation of the City of Adelaide.

“… our view is that it is unlikely any investigation into the administration or the administration’s tender process appointed and directed by the administration will be acceptable to the complainants, or possibly to members of the broader business community.”

The email acknowledges that Goldstone had initially ordered an internal review of the process by governance experts on council staff, and later referred the investigation to an external party.

It also expresses Martin’s view that Goldstone had sought to ensure an objective and fair process.

However, it also raises concerns about Goldstone’s communications with elected members regarding the administration’s review.

“On January 7th, the CEO (Goldstone) told elected members in an email that ‘I am confident our processes are sound’ and on January 15th, following criticism the Acting Lord Mayor’s (Hyde’s) media comments were capable of being judge as prejudicial, those remarks ‘had not given a perception of procedural unfairness’,” Martin’s email reads.

“Also on that very day, January 15th, the Acting Lord Mayor told elected members in an email that he did not expect the investigation ‘to come back with anything wrong’.”

North ward councillor Phil Martin. Photo: Tony Lewis / InDaily

In a statement to InDaily today, Goldstone said it was within the rights of councillors to call special meetings and that a report into the review of the tender process would be handed to councillors next week.

“The review of Beam’s complaint regarding the results of the Escooter EOI has been progressed (and) a detailed report will be tabled at the regular meeting of council on Tuesday 28th January,” the statement says.

“It is within the rights of councillors to call a council meeting at any time under Section 82 of the Local Government Act.”

Martin’s email also notes that “Lime and Beam have pointed to media comments made on the ABC by the Lord Mayor (Sandy Verschoor) and the Deputy Lord Mayor, (…which) they allege were supportive of the administration tender process and, therefore, have prejudiced the outcome or suggested the possibility of a ‘pre-supposed outcome’”.

Martin argues that the only way to deliver what will be seen as a fair and transparent process is for elected members to appoint their own independent investigator, reporting directly to councillors, on the basis of publicly disclosed terms of reference.

“We believe we have an obligation to ensure there is not only the objective, fair process that I have no doubt the CEO (Goldstone) has sought, but also one which is seen by any other observer to be transparent and fair,” the email reads.

Deputy Lord Mayor Hyde told InDaily his radio comments concerning the review of the tender process were informed by his understanding that the tender process and the review were both conducted with a high degree of probity.

He added that his comments had no influence over the review, whatsoever.

He said his radio comments constituted “my personal reflection on the competency of the team handling the review, who are arguably the most senior in-house legal counsel in the local government sector in South Australia”.

“I had no contact with anyone conducting the review.

“Afterwards I found out that the legal and governance team took it upon themselves to have their own work reviewed by a third party.”

He further described his radio comments as “my personal reflection on the original EOI (tender process), knowing how thoroughly it was conducted and the high degree of probity exercised by those handling it”.

Hyde said this week’s special meeting would be “a waste of time and rate payer money” and he believed it represented “a continuation of the disruptive adversarial tactics of some councillors from last year”.

“There is no need for another review into the e-Scooter EOI (tender), which would cost ratepayers tens of thousands of dollars.”

Councillor Simms told InDaily he signed the order to call the special meeting in order to facilitate discussion, and that he had not formed any strong view about whether an independent investigation was necessary.

“I have no fixed view on whether or not an independent investigation is required into the e-scooter process however it is clear to me that a face to face discussion with elected members is needed,” he said.

“It is not unusual for council to have special meetings to discuss key issues and I worry that next week’s agenda is already jam packed.

“A dedicated meeting will provide more opportunity for discussion.”

InDaily contacted Verschoor for comment.

Goldstone defended tender, review

In a letter to Beam CEO Alan Jiang last Friday, obtained by InDaily this morning, Goldstone defended both the tender process and the administration’s review of it.

“I can assure you that the review has been conducted objectively and fairly and that there is no basis for you to assert that the outcome of the review had been pre-empted or prejudiced,” Goldstone wrote.

“(The City of Adelaide) CoA is satisfied with the REOI (tender) process that was undertaken in relation to the E-Scooter permit. It is satisfied that the process was conducted in accordance with the REOI documentation and that it was transparent and fair.

“CoA does not intend to set aside the decisions that have been made or issue a new REOI.”

Regarding Beam’s allegations of a lack of due diligence on the council’s part and alleged failures to consider mandatory criteria as part of the process, Goldstone wrote: “I do not propose to address these matters raised in your correspondence in detail.”

“I disagree with Beam’s assertions in this regard.”

Goldstone added that the conditions of the tender process state that the council “has an absolute discretion in the exercise or non-exercise of its rights … and that it is not obliged to give reasons for a decision”.

“In participating in the REOI, Beam accepted those terms.

“In addition, it is stated in (the tender conditions, the) CoA may perform due diligence checks on any aspect of an EOI. Clearly, it follows from this statement that there is no obligation on CoA to perform such checks.

“The fact CoA may choose to perform such checks means also that it may choose not to do so.”

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