Federal Government paid ten times value of land for future Western Sydney Airport expansion
‘Deficient’ advice from department officials has been blamed for a massive multimillion-dollar overspend on land for a Western Sydney Airport in an ‘incredible’ failing of due diligence.
NSW
Don't miss out on the headlines from NSW. Followed categories will be added to My News.
A massive multimillion-dollar overspend on land for a Western Sydney Airport expansion has been blamed on department officials by the minister in charge at the time of the deal.
Cabinet minister Paul Fletcher said the information given to him by the department when he held the Urban Infrastructure portfolio in 2018 was “deficient,” insisting the final sale was the fault of public servants.
Taxpayers forked out almost $30 million for about 12 hectares of land needed to build a second runway for the new airport in the next three decades, despite a later valuation saying it was only worth about $3m.
A scathing audit found the federal government paid $26.7 million more than the “fair value” of a 12.26 hectare triangle of land at Leppington in July 2018.
The Auditor General found serious “ethical” and “due diligence” issues in how the Federal Department of Infrastructure and Transport handled the process, and criticised staff for not fully briefing ministers.
Mr Fletcher said it was not his decision to buy the land at the agreed price.
“The decision was made by the deputy secretary of the department, not the minister of the day,” Mr Fletcher said on Wednesday.
“The information that went to the deputy secretary of the department from lower level officials in the department — the same information that was provided to the minister — was deficient, did not lay out properly the basis for the valuation and contained an expression of opinion by department officials that the price being paid was reasonable.
The federal government bought the land at Bringelly, in Sydney’s west, from the Leppington Pastoral Company, which is owned by billionaires Ron and Tony Perich.
The department only sought one valuation before the sale, using a person recommended by the Company selling the land who they deemed did not have a conflict of interest.
GOVERNMENT PAID TEN TIMES VALUE OF LAND
Less than a year after the Department of Infrastructure advised the government buy the land from the Leppington Pastoral Company at the high price, it was valued at just $3.06m.
In a report detailing a litany of failures, the Australian National Audit Office (ANAO) slammed federal department for not providing the relevant Minister with crucial facts, including the value of the land or the benefit of purchasing it decades before it was required.
MORE NEWS
Offer extended: Subscribe for just $1
“The approach taken by the department of omitting key information in the briefings to decision-makers and ministers was inappropriate and inconsistent with acting ethically,” the report said.
It was also revealed the department only sought a “single valuation” of the land using a supplier suggested by Leppington Pastoral Company.
“No valuation of the other types of compensation that may be payable under a compulsory acquisition was obtained,” the report said.
When asked about the valuation approach auditors said the department “did not provide the ANAO with accurate answers … which was not ethical behaviour”.
The price paid by the federal government was 22 times higher per hectare than what the NSW Government had spent on adjacent land for the same future runway project.
Asked how the state was able to arrive at such a lower agreed sale price, a NSW Transport spokesman told The Daily Telegraph the valuation was determined on the basis of “individual characteristics” of the land.
“This valuation was considered appropriate and supported by valuation advice of the prevailing market conditions at the date of assessment,” he said.
Australian Electoral Commission donation records show the Leppington Pastoral Company gave $58,000 to the Liberal Party of Australia in 2018/19.
Between 2003 and 2007 the Company also donated $28,000 to the Australian Labor Party.
Labor’s infrastructure spokeswoman Catherine King said she was concerned a Liberal Party donor was the “beneficiary” of the airport land overspend.
“The … Minister Population, Cities and Urban Infrastructure (Alan Tudge) must immediately address these incredible findings and explain how his government so comprehensively wasted Australian taxpayer’s money,” she said.
A spokesman for Mr Tudge said the department had agreed to all recommendations in the report.
“It is also investigating matters of staff conduct identified by the ANAO,” he said.
“There is no question of Ministerial involvement. It goes to the administrative actions of the Department, more than two years ago.”
Originally published as Federal Government paid ten times value of land for future Western Sydney Airport expansion