2013 
2014 Kew Cottages Development loss
soars past $45 million..
Lang Walker, Kew
Development Corporation &
Denis Napthine, Premier of Victoria
It
is Australia Day January 2014.
Major
Projects in Victoria are in a
mess, and the mess looks like
it is getting bigger, much
bigger.
Chronology
In 2006 the Victorian Government
promised intellectually disabled
Victorians that its Main Drive
Kew PPP (public-private
partnership) with Walker Corporation
would be "a nice little earner" for
the disabled..
It projected a $60 million return to
Government from building a new
upmarket $400 million housing estate
on their Kew Cottages Public Land.
The Government promised to pump all
of that $60 million profit into
services for intellectually disabled
Victorians by 2014.
It has not happened.
It appears now that there is still
no profit for the Government, and
there never was any profit for the
Government.
Instead, according to Major
Projects Victoria annual reports, accumulated Government losses from the Kew Cottages PPP now
exceeds $45 million...
The Challenges...
1. Maladministration
of Major Projects in
Victoria.
In simple dollar terms
the $400 million Kew Cottages
Walker Development fiasco
now appears relatively small
besides some of the State's
other contentious 'big
ticket' items.
For
example major projects
and proposals such as
the:
- $1.5 billion
myki smartcard ticketing
system,
- $5.7 billion Victorian
Desalination Plant
(Capital cost
only),
- $8 billion Melbourne East West
Link (Stage 1 only), and
- the
current push by
powerful
interests for
Victoria's "$18
billion stock of
public housing to
be put under
private
management.."
(Read
more >> in
The Melbourne Age,
by Senior Columnist,
Kenneth Davidson this
week.)
However,
despite differences in
scale, many of the
State's major projects
appear to have some of
the same
significant
ingredients of failure
built into them by the
Government - failures
now documented by the
Victorian Auditor
General's Office (VAGO).
For
example, many
State
projects,
like
the Kew Cottages
Development, are
managed by the
'Major Projects
Victoria' (MPV)
Business Unit of
the Department
of Business and
Innovation (DBI).
The Auditor
General has been
highly critical
of MPV's
practices and has gone
so far as to say
'MPV's
maladministration'
means that there is
likely to be an
increased risk of
fraud.
MPV’s
management of its
internal contracts
is seriously
deficient. There are
multiple
weaknesses
with most of the
contracts that have
occurred through
MPV’s
maladministration.
The absence of
appropriate checks
and balances means
that there
is likely to
be an increased risk
of fraud. While DBI
has a fraud risk
register that
includes
generic fraud risks
for MPV, this is not
based on the
findings in this
audit
around the
weak controls and
needs to be revised.
(
VAGO
MPV 2012, p.18)
For example
that when VAGO asked
MPV to provide
copies of the 15 MPV
contracts in place at
the time of the
2012 audit, MPV could
only 'locate' 10 of
the 15 contracts.
MPV simply had
no record of the other
5 contracts !
2.
Systemic secrecy
surrounding Major
Projects in Victoria.
And now the cancer has
started to spread...
In its November
2013 Annual Report
to Parliament the
Auditor General, John
Doyle, noted that
the Baillieu/Napthine
government has decided
to stop disclosing
budgets for all major
projects at the time of
the project
announcement.
"In December 2012,
the government signalled
its intention to cease
disclosing budgets for
major projects at the time
of project announcement,
citing commercial
sensitivities and the
potential to inflate
tender prices. However,
the government has not
informed Parliament and
the public as to when
project costs will be
announced."
The Auditor General
was not impressed and
concluded that:
John Doyle Auditor General
Recent
changes to the
information
provided by
government to
Parliament and
the public
regarding
major projects
has reduced
transparency.
A move away
from publicly
disclosing
project
budgets and
costs
decreases
government
accountability
over a
significant
area of public
spending.
At the stroke of a pen
accountability for all
major government
projects in Victoria is
now out, and government
secrecy is back in.
After ten years in
opposition calling for
more accountability and
transparency in the
management of major
projects in Victoria,
the Government has had a
change of heart.
The
Baillieu/Napthine
Governmen apparently not
only approves of the Kew
Cottages Development PPP
secrecy model after all,
but is now committed to
promoting the model and
extending it more widely
to all major projects
throughout Victoria.
The
Developer's Contract
Major Projects Victoria Contract
- 3669
Kew Residential Services
Development Agreement
Documents
1.
Part
1 Deed of Variation signed
28 August 2009 .pdf
(5210 KB, PDF)
2.
Part
2 Deed of Variation signed
28 August 2009.pdf
(4074 KB, PDF)
3.
Part
3 Deed of Variation signed
28 August
2009.pdf
(5483 KB, PDF)
4.
Part
4 Deed of Variation signed
28 August 2009.pdf
(4329 KB, PDF)
5.
Section
1.pdf
(4500 KB, PDF)
6.
Section
2.pdf
(4895 KB, PDF)
7.
Section
3.pdf
(6109 KB, PDF)
8.
Section
4.pdf
(5235 KB, PDF)
9.
Section
5.pdf
(3709 KB, PDF)
10.
Section
6.pdf
(1809 KB, PDF)
Baillieu/Napthine
Government Variations
11.
Development Agreement - 2nd
Deed of Variation - 13 June 2012
12.
Development
Agreement
3rd Deed of Variation 8 April 2013.pdf
Public Land Development
Committee Recommendations
2008
Victorian Ombudsman's Recommendations
2010
Video Interviews
Baillieu's
Ministers:
- Andrew McIntosh,
Minister responsible for the
establishment of an anti-corruption commission. Recorded July 2011
- David Davis,
- Minister for Health, & Former
Chairman, Select Committee on Public Land
Development. Recorded
June 2009
For further information
just follow the links...
(Note: Your PDF software
may require you to manually enter some of the PDF Page
Reference Numbers provided. )
The Challenge for Change. << 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 NOW! >>
