Ex-public servant flagged ‘probity issues’ with Ian Macdonald’s coal tender reopening
A former NSW government staffer says he flagged concerns with ex-resources minister Ian Macdonald about the reopening of an allegedly rigged mining tender for a property owned by then-Labor powerbroker Eddie Obeid.
NSW
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A former NSW government staffer says he flagged concerns with ex-resources minister Ian Macdonald about the reopening of an allegedly rigged mining tender for a property owned by then-Labor powerbroker Eddie Obeid.
Macdonald, Obeid and his 50-year-old son are fighting conspiracy to commit misconduct in public office charges at their NSW Supreme Court trial.
The Crown alleges the trio schemed for Macdonald to grant a lucrative exploration licence on coal-rich Obeid family land at Mount Penny in the Bylong Valley between 2007 and 2009.
On Monday a retired senior executive from the department of primary industries testified that in October 2008 Macdonald’s chief of staff told him the minister wanted to reopen the expression of interest process to more applicants after it had officially closed.
“I indicated that I didn’t think that was a good idea in fairly strong terms for a range of reasons,” former DPI deputy director general of mineral resources Alan Coutts said.
The court heard during multiple discussions with the then chief of staff Jamie Gibson, Mr Coutts voiced his opposition to the idea, “mainly because of potential probity issues.”
“But the minister’s office was insisting,” Mr Coutts said.
“I did press Jaimie in our penultimate conversation on the matter about what was driving this.”
The Crown alleges that a number of new companies that joined in when the tender was ultimately reopened in early 2009 “were connected.”
New bidder Cascade Coal eventually won the rights to mine, and the Obeids expected to make $60 million by selling a 25 per cent stake in the company, the Crown alleges.
The court heard an independent auditor had advised that despite some concerns, the government could reopen the tender process for the 11 coal release areas “under certain circumstances.”
“Trying to manage at least 11 areas to small companies was something that the department had never done before, it was potentially complex,” Mr Coutts said.
The veteran public servant said he feared mistakes might be made as Macdonald was “putting pressure on us for tight time frame.”
Macdonald is accused of instructing the department to reduce the Mount Penny allotment size so that it had an estimated coal yield of 100 million tonnes and included the Obeid property.
But he insists in order to find immediate budget savings the tender needed to target small and medium Australian companies to avoid land banking by corporate mining giants.
Mr Coutts didn’t support this, telling Macdonald they should target bigger miners with “deep pockets” that carried less risk of having to be bailed out, and he also flagged more community anti-mining opposition if 11 separate new areas were put to market.
“(But) the minister was quite adamant in his view that he wanted to do this so … we did what we were told,” he said.
Moses Obeid’s lawyer has said he and the two ex-state Labor MPs were charged following a “fruitless” and costly inquiry by the anti-corruption watchdog, which tainted the perception of harmless business deals.
The judge-alone trial before Justice Elizabeth Fullerton continues.
