Acting Premier John Rau announces deal to end High Court action over Gillman land deal which will cost taxpayers up to $2.2 million
TAXPAYERS will be hit with a bill of up to $2.2 million to shut down a High Court action against the State Government launched by companies frozen out of the Gillman land deal.
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TAXPAYERS will be hit with a bill of up to $2.2 million to shut down a High Court action against the State Government launched by companies frozen out of the Gillman land deal.
Acting Premier John Rau today confirmed the deal had been struck, which comes after The Advertiser revealed a week ago that parties were locked in negotiations.
The agreement is between Adelaide Capital Partners, who gained rights to the land in an exclusive deal, as well as the Government and spurned firm, Integrated Waste Services.
In a statement today, the Government said the deal meant:
IWS will end its High Court claim;
ACP has agreed to settle on 150ha of the land by November 1; and
TAXPAYERS will meet legal costs incurred by ACP and IWS associated with the legal proceedings.
While the state’s contribution to the combined legal costs of the parties is yet to be finally determined, the Government says “it will, in no circumstances, exceed $2.2 million”.
On March 26, The Advertiser revealed negotiations were underway and close to resolution.
The Gillman land deal was announced immediately prior to the 2014 election, with hype that it could create thousands of jobs with the establishment of an oil and gas hub development.
However, it subsequently became the subject of controversy and multiple investigations, including an Independent Commission Against Corruption probe that found maladministration within the department responsible for the deal.
The Government has also been savaged by industry for offloading the land without open tender, with claims it was sold under value.
In November, the High Court agreed to hear a case from companies prevented from tendering after their case was rejected in a split decision of the Supreme Court.
Counsel for Aquista, a joint venture between IWS and another firm named Veolia, top Sydney barrister Bret Walker SC, told the court that there were so “many strands” arguable it would be “scandalous” for it not to be given permission to seek an appeal.
Opposition Deputy Leader Vickie Chapman said the process had been mishandled from the start.
“The Government still haven’t given any answers on how much they’ve spent for all of the inquiries,” she said.
“We still are way behind financially over this deal.
“We’ve got no jobs, no money and a massive bill.
“It’s just a complete fiasco.”
The December 2013 sale gave Adelaide Capital Partners exclusive rights over 400ha of land, which, as long as it meets conditions set by the Government, will be sold for $122 million — $45 million for the first parcel of 150ha, with options to buy the remaining 257ha.
Since then, industry sources have said that the land could be worth up to $400 million and that details of at least four other proposals have now emerged.
Four members of the boards of the Government land development agency, Renewal SA, resigned over the deal, after advising the Government that it should reject it.
Solicitor-General Martin Hinton, QC, told the High Court last year that the majority decision by the full Supreme Court to reject Aquista’s appeal was reasonable.
In a statement, ACP managing director Andrew Gerlach said the decision to settle Veoila’s litigation would enable its redevelopment at Gillman to proceed.
“With Veolia’s litigation now settled, ACP can move to finalise planning approvals for the first stage of its master-planned development of the Gillman site and complete financing agreements with investors,” it said.
“It paves the way for a practical start on a major piece of industrial infrastructure that has the potential to deliver substantial economic benefit to the South Australian economy for decades to come.”
Mr Gerlach said ACP “at all times” had conducted its dealings with the government during the Gillman deal “both properly and with integrity”.
“This view was confirmed by the Supreme Court,” he said.
“That view has now also been vindicated in the settlement reached.
“ACP will now move as quickly as possible to finalise development approvals for the first 150ha stage of what will be known as the Lipson Estate.
“We can now also complete our agreement with third party investors. These matters have necessarily been on hold pending resolution of the litigation.”
Mr Gerlach said that, as part of the settlement, ACP would sell Veoila a 20ha parcel of land at Gillman, which it would be responsible for rehabilitating.
ABOUT THE GILLMAN SITE
What is the Gillman site?
It’s a 407ha parcel of prime industrial land near Port Adelaide.
In 1987, it was the site of a proposed joint venture, between the Federal Government and Japanese investors, called the Multi-Function Polis, to develop futuristic villages containing housing, teaching facilities, business premises and recreational areas for about 100,000 people.
Why is it now controversial?
In December 2013, the Labor State Government signed a deal for the site with Australian Capital Partners, an Australian-based consortium, without putting the sale out to the open market. Premier Jay Weatherill said it was a premium price and that there were no other credible proposals for the land. He added that ACP would have walked away if the site was put out to tender. Since then, industry sources have said the land could be worth up to $400 million and details of at least four other proposals have emerged. Four members of the Government land development agency Renewal SA’s seven-member board resigned over the deal, after advising the Government to reject it.
What is the deal?
The deal gave ACP exclusive rights over 400ha of land, which, as long at it meets conditions set by the Government, will be sold for $122 million: $45 million for the first parcel of 150ha, with options to buy the remaining 257ha.
What is Adelaide Capital Partners?
It is a consortium led by former Santos chairman Stephen Gerlach. The consortium members are Gerlach Asset Development and ResourceCo — run by Simon Brown — which is a waste management company that has a site adjacent to the Gillman land.
What is maladministration?
“Maladministration in public administration is the unauthorised and/or mismanagement of public resources that might be described as improper, incompetent or negligent.” (ICAC website)
HOW IT UNFOLDED
December 23, 2013: The State Government announces in The Advertiser that it has struck a deal with consortium Adelaide Capital Partners to buy and develop the 400ha former Multi-Function Polis site at Gillman.
December 24, 2013: It is revealed that more than half of the board of State Government property developer Renewal SA resigned over the deal after rejecting it twice, believing it should have gone out to public tender.
January 22, 2014: Premier Jay Weatherill said ‘there have not been any offers for this land of any substance for the last 30 years”, adding that a competitive tender process would have driven away the developer’s interest.
January 25, 2014: The Government is accused of short-changing taxpayers for agreeing to sell the site for $100 million, one-quarter of its potential value, without going to tender.
January 30, 2014: Mr Weatherill said the Government had received a “couple” of other proposals for the site but dismissed them as not “credible”. When asked if the Renewal SA board had rejected the proposal, then-Infrastructure Minister Tom Koutsantonis said: “Not that I’m aware of. If you have evidence of that, please show it to me.”
February 6, 2014: Details emerge that civil engineering firm Bardavcol had approached the Government with a detailed proposal for the site in May.
February 7, 2014: It is revealed that waste management company Integrated Waste Services is considering legal action against the State Government after it submitted a detailed proposal for the site the previous year. It is also revealed that Adelaide Resource Recovery had made a proposal but ruled out legal action.
February 11, 2014: Details of Renewal SA board’s advice from November 20 emerge, recommending that Mr Koutsantonis “reject the ACP submission”. Mr Koutsantonis said ‘the Government did not accept the proposal the board was not happy with”.
He said the proposal that Cabinet approved was different.
February 12, 2014: Mr Weatherill admits Renewal SA was lobbied to overturn advice that the sale of the site be put to an open tender.
March 14, 2014: Acquista Investments, known as Integrated Waste Service, and Veolia Environmental Services initiate legal action against the State Government’s land developer Renewal SA over the sale of the site. The waste company hopes the legal row will lead to a sale of the site by public tender.
March 24, 2014: A parliamentary inquiry into the deal is set up. Mr Weatherill and Mr Koutsantonis refuse to appear.
October 2, 2014: The Government decides to overhaul the guidelines for companies making unsolicited bids to develop public land or build infrastructure in the wake of the Gillman land deal controversy, which Premier Jay Weatherill said has scared investors away from the state.
January 12, 2015: Supreme Court Justice Malcolm Blue hands down his final judgment on the deal in which he upholds the validity of the contract but finds serious concerns with the process, calling it “irrational” and “unlawful”.
January 16, 2015: The State’s Auditor General handed down his report into to deal which found that a Cabinet submission that showed the deal was a “good value offer” was misleading because it left out key advice.
January 22, 2015: Independent Commissioner Against Corruption Bruce Lander revealed he was investigating the deal to determine if there was any evidence of maladministration.
January 23, 2015: Mr Koutsantonis admitted the State Government does “make mistakes” and its poor handling of the Gillman land deal should not be repeated.
July 20, 2015: Acquista Investments’ appeal of Justice Blue’s decision to uphold the deal is dismissed. But Auxiliary Justice Bruce Debelle, who led the Royal Commission into the Government’s botched handling of the rape of a child at a western suburbs school, dissented. Mr Debelle said a “prudent” vendor would have investigated further the merits of a competitive sale process.
September 10, 2015: The Government gazetted a rezoning of the Gillman site to allow redevelopment in line with ACP’s proposal.
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