Claims made last weekend by the Premier – through a spokeswoman – about probity concerns with Labor Party fundraisers and bidders for major government contracts were WRONG.
“Last weekend, Mr Rann was under attack because he and his Ministers were involving themselves in major Labor Party fundraisers with bidders and advisers during the actual bidding process for major contracts, such as the $323 million ‘Super Schools’ and $1.7 billion Royal Adelaide Hospital PPP projects,” Shadow Minister for Finance Rob Lucas said today.
Mr Rann claimed through his spokeswoman that:
“The Ministers are quite removed from the process. They are not the ones qualified to make such decisions, that is just not how the process works. The decisions are taken by a team of experts who are there to assess the bids. There have not been any private meetings since the bidding process began.”
“Mr Rann’s claims about probity concerns with Labor Party fundraisers and bidders for major government contracts are WRONG,” Mr Lucas said.
“Ministers are not removed from the process; in fact, they make the final decision as to the successful companies.
“Furthermore, decisions are not taken by a team of experts, but rather a team of public servants and advisers provide advice to Ministers for their final approval.
“In fact, official Treasury guidelines for PPP projects [summary attached] make it absolutely clear that Cabinet makes the final decision as well as requiring Cabinet to give approval for all key decisions such as to proceed to initial market testing and then approval to proceed to tender.
“Similarly, Mr Rann’s own claim that there had not been any private meetings with bidders and advisers during the bidding process for the $323 million ‘Super Schools’ PPP is wrong. Documents released under Freedom of Information clearly demonstrate that bidders were involved in high-priced Labor fundraisers with Rann Government Ministers during the bidding process.
“Finally, my letter to the Auditor General this week asking him to investigate these issues also asks him to investigate why the Rann Government broke its own guidelines and commitments in awarding a $323 million contract to the private sector which was almost $10 million more expensive than if the public sector had managed the project in the traditional way.
The Rann Government’s own PPP guidelines make it absolutely clear that these contracts will only be given to the private sector if they are at a lower cost to the taxpayer than the Public Sector Comparator (PSC):
“The project must be able to demonstrate that, on a whole of life basis, the cost to the community of the project provided by the private sector is lower than for the equivalent project provided by the public sector.”
(“Partnerships SA” guidelines, DTF website)
In fact, on 3 June 2009 Mr Foley told Parliament:
“That is what makes PPPs attractive, but they must always be put up against a robust public sector comparator. Just about every time I have spoken on this matter you will see that, without any attempt to be other than upfront, open and transparent, I have always said that if these PPPs do not provide value for money to the state we will proceed with a different delivery model.”
(Kevin Foley, Hansard, 3-06-2009)
“There is a clear need for some public explanation as to why the Rann Government has made a decision contrary to its often stated policy position on whether or not it would award a PPP project to the private sector,” Mr Lucas said.
“It is clearly possible that some other companies might have been prepared to bid if they knew the Rann Government would change its own policy during the process and award a contract to consortia bidding almost $10 million above the PSC bid price.
“The Auditor General’s office is now the only independent authority which has the power to give some public assurance that the public interest has been protected and that there have been no probity problems with the PPP process.”