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Govt launched multiple probes on rail privatisation ahead of contract

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The Marshall Government commissioned multiple investigations into the leaking of “confidential information” about its $2.14 billion rail operations privatisation, prompting one unsuccessful bidder to demand the procurement process be halted – just days before it was awarded to a rival firm.

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Transport and Infrastructure Minister Corey Wingard this month confirmed Keolis Downer had been awarded the lucrative eight-year contract to operate and maintain Adelaide’s six train lines and 92-railcar fleet.

But the process has been shrouded in controversy, with The Advertiser last week reporting that Bombardier Transportation President Australia Wendy McMillan – part of the unsuccessful Adelaide Next consortium bid – had flagged probity concerns after revelations “the State had entered into early discussions with Keolis Downer”.

McMillan sought a “full and independent probity investigation” into the bid process by the project’s probity officer, Ken Patterson, a senior manager with advisory firm BDO Australia.

In a reply co-signed by Patterson and BDO partner Kyffin Thompson, McMillan was told: “Your observations of the importance of ongoing confidentiality of [Adelaide Rail Transformation Program] matters are duly noted, and as you would appreciate this is one of the key probity principles that BDO takes very seriously and requires strict adherence by all parties.”

The exchange followed a series of leaks about the project, with the Government forced to confirm unsuccessful bidders had been promised a $1 million payout.

The response to McMillan notes that “up until the recent media commentary, BDO is satisfied all parties have been diligent in this matter and that the process has been conducted in accordance with probity principles”.

However, they noted a recent communication from the program’s management advising “that this matter is the subject of review of the circumstances that may have led to the media having access to certain ARTP confidential information”.

“The review will focus on the matters raised in the media and any others that impact upon the integrity of the process,” they said.

“The communication also advises that the Department of Infrastructure and Transport is taking this matter and its obligations extremely seriously and that it is highly likely that one or more other investigations will be conducted.”

These are further detailed in an August 21 email to an unknown recipient by ARTP boss Fergus Gammie, who notes “recent media inquiries and reports relating to aspects of the Adelaide Rail Transformation Program”.

“Since becoming aware of these the independent probity adviser has been conducting a review of the circumstances that may have led to the media having access to certain ARTP confidential information,” he writes in the email contained among correspondence provided to media by the Opposition.

“I also advise that a key part if the probity adviser’s role is to review all aspects of the procurement process and report on any areas where there are matters raised in relation to the integrity of the process.

“Any probity-related issues that may have arisen during the process will be addressed as part of the probity adviser’s review and report.”

Gammie’s email advises “that the Department of Infrastructure and Transport is also taking this matter and its obligations in relation to the matter extremely seriously”, and “it is highly likely that one or more other investigations will be conducted in addition to that of the probity adviser”.

Thompson told InDaily BDO “did do an investigation” but that the Department was “going to do something more, because we can only do so much”.

He said the inquiry focussed on how “confidential information seemed to have been released publicly”, but “any conclusion to those type of things is a matter for our client”, the Transport Department.

He said once procurement matters were raised publicly “we were engaged within a day or so to find out what we could find out”.

But in a subsequent email to BDO, dated September 4, McMillan demanded: “Given the seriousness of the matters raised, Bombardier assumes that no further steps will be taken in respect of the procurement process until those investigations have been completed and the findings are made available for consideration by each of the consortia involved in the procurement process.”

“Please confirm as a matter of urgency that this is BDO’s and the Department’s intention,” she added.

The BDO correspondents replied five days later that they were “not in a position to comment” on the Government’s intentions.

McMillan replied again on September 15, arguing it was “not clear how the next steps to be taken by [the Department] in the ARTP tender process can be decoupled from conclusion of all probity investigations and implementation of necessary steps to address any probity issues which are identified”.

However, just three days later the Government announced Keolis Downer as the successful bidder.

Bombardier declined to comment today, but has previously confirmed it was aware of “reports in relation to communications to the Probity Officer for the Adelaide Rail Transformation Program”.

The company said last week: “Probity, ethics and compliance are of the utmost importance to us and how we function [and] Bombardier will continue to comply with all probity and confidentiality obligations.”

InDaily asked the department to confirm whether it was undertaking an investigation into the leaking of documents about the rail transformation program, how many inquiries had been undertaken and how many were still underway.

A spokesperson replied: “Internal department investigations remain strictly confidential, as are any reports to integrity authorities if they are made.”

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