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Glenelg jetty upgrade plan sinks to bottom

The State Government says it will save $20 million by scrapping a Liberal commitment to redevelop Glenelg Jetty that “failed to stack up” – but Liberals say the project had already been shelved years ago.

May 31, 2022, updated May 31, 2022
A design concept released by Woods Bagot and Mott MacDonald in 2016 of the proposed redevelopment.

A design concept released by Woods Bagot and Mott MacDonald in 2016 of the proposed redevelopment.

The Steven Marshall-led Liberals committed $20 million to the project while still in Opposition back in 2016.

It was contingent on a positive cost-benefit analysis for the project, a joint design by Mott MacDonald and Woods Bagot that would have seen construction of a new hotel and aquarium as part of a jetty extension and revamp that documents reveal could have cost as much as $280 million.

In government, the Liberals established a Project Reference Group including senior bureaucrats, representatives from Holdfast council and local residents, as well as former mayor-turned-Liberal MP Stephen Patterson MP, who later resigned after his promotion to the frontbench.

But little more has been heard of the project, with Infrastructure Minister Tom Koutsantonis declaring today the money was now off the table.

He said the former Liberal Government was told in 2020 by a never-released independent feasibility review that the project would “not create economic value in excess of its costs”.

A briefing note on the PricewaterhouseCoopers review, seen by InDaily, said its finding was “consistent with previous analysis on the project where sensitivity testing identified that movements in assumptions could reduce the value of benefits below the estimate of costs”.

“Although the project as then defined demonstrated a range of community, visitor and business benefits, the project did not create economic value in excess of its costs,” the briefing stated.

“Based on a 30-year project term, with the application of a 7 percent discount rate, PwC estimated that the project would have a Net Present Value of negative $30.8 million and [Benefit-Cost Ratio] of 0.88.”

It did note that “further work would need to be done to understand the true impact” of scaling down the project, including “removing the Aquarium or other components from the project scope”.

The briefing said that “following consideration of the report no substantive further action was taken by the Department or to the best of our knowledge by the previous government”.

Koutsantonis told InDaily today: “The Malinauskas Labor Government will not proceed with this project.”

“Instead the $20 million will be put towards the Government’s planned investment in health,” he said.

But it’s unclear whether the $20 million remained in the budget in any case.

The last apparent mention of the project was in the budget measures statement from 2018-19 – the former Marshall Government’s first economic statement.

In that document, it was described as “$20.0 million in grant funding to the City of Holdfast Bay for the redevelopment of the Glenelg Jetty [which] will bring new tourism and retail opportunities to the area”.

“The government will work with the City of Holdfast Bay to secure their contribution to the project, in addition to contributions from the Commonwealth Government and private developers,” it said.

“The government grant will be provided once the project approvals and project finances have been finalised.

“This initiative delivers on the government’s election commitment.”

But the project is not directly mentioned again in subsequent budgets.

A Liberal source told InDaily “there was an investigation [and] it never went anywhere”.

“It required private sector investment [and] there was never a significant enough commitment from the private sector,” they said.

“At one stage there was a discussion that SARDI [South Australian Research and Development Institute] might get moved there… it was looked at in the early days but never went anywhere and the money was taken out of the budget.”

Steven Marshall just told @abcadelaide & @DavidBevanSA that the Glenelg Jetty redevelopment was a council project.

Really? This is his policy document from the 2018 State Election.

Sounds like this promise is going the way of Globelink, and Tram right-hand turn. pic.twitter.com/af4l165FwM

— SA Labor (@alpsa) April 6, 2021

But Holdfast mayor Amanda Wilson says council was never officially informed that the project would not proceed.

“They promised $20 million, but it seems to me they were never supportive of the idea,” she told InDaily.

“Despite our constantly seeking meetings with the minister, Corey Wingard, it was never progressed by them at all [but] they hadn’t ever rung me up and ruled it out.

“It was more that there was no-one within the Government, apart from Stephen Patterson, who was an active supporter of it.”

Patterson told InDaily the former government did due diligence but the plan as presented “didn’t stack up”.

“Some of the assumptions of the previous modelling didn’t stack up… we asked the council to go back and rework the proposal,” he said.

He noted the project had “needed federal buy-in as well which, to be honest, proved problematic”.

“There hasn’t been great buy-in from a federal perspective, and significant private investment was needed as well,” he said, adding that the former government’s commitment had always been contingent on the business case.

Wilson said the council had already begun talks with the Malinauskas Government about a “scaled-back” alternative.

“We’ve been really happy with the way the new Government have reached out to us about it… we’ve already started talks on redeveloping down there,” she said.

“We would see it as a new asset for the whole of SA… we’re probably going to start from the beginning on what we need down there and how we see the jetty working for all South Australians – whether that be a launch facility for sailing boats with a food and beverage offering at the end [or something else].”

She said the council’s lease expires in 2028-29, with a condition assessment confirming “it needs repair”.

“So decisions have got to be made about what’s happening to it,” she said.

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