Camellia site purchase done without valuation: NSW Transport report

A land deal that earned a developer a $15.5m windfall was made without a valuation or negotiation, revealing a “stunning level of incompetence”.

An internal Transport NSW document reveals there were concerns about the rushed process.

NSW government officials made no attempt to independently verify the value – or to negotiate the price – of a piece of contaminated land in Camellia before paying a developer $53.5m for the site, according to an internal audit report.

The six-hectare site at Camellia, near Parramatta, is going to be used as a maintenance facility for the Parramatta light rail project.

The site, contaminated with asbestos, hexavalent chromium and other harmful chemicals, was bought by a property developer for $38 million in November 2015, just days before the multi-billion-dollar Parramatta light rail project was announced.

Seven months later, the government took over the land and the developer made a $15.5m million profit.

But an independent valuation, which put a price tag of only $15.5m on the site, wasn’t done until after the land was bought.

NSW Transport Minister Andrew Constance has referred his own department to the ICAC over the Camellia land deal. Picture: NCA NewsWire / Christian Gilles

An internal Transport NSW document, released to the state parliament, reveals there were concerns about the rushed process a full year before Transport Minister Andrew Constance referred the matter to a corruption watchdog following a media investigation.

“It’s a stunning level of incompetence that raises serious questions,” NSW opposition finance spokesman Daniel Mookhey said.

In the November 2019 report, the authors write Transport officials didn’t wait for the project to be fully approved before buying the land “due to the availability of the land on the open market”.

But the first government offer, based on an initial valuation, was rejected and a third party swooped in to buy the property instead.

Within half a year that developer came back to the government with an offer to sell at an inflated price.

That increased asking price was “based on vendor expectations of the development value of the property”, the report states.

Bulldozers working on the Parramatta light rail project in Camellia. Picture: AAP Image / Angelo Velardo

“The acquisition was then accelerated by (Transport for NSW); however, management did not obtain a formal independent valuation of the property at that time.”

“The audit did not see … evidence that efforts had been made to engage and negotiate an agreement with the vendor.”.

After the purchase, an independent valuation was sought.

“(Transport) management were unable to provide evidence of further work performed to gain additional assurance of the land valuation,” the report states.

The audit also found there weren’t regular checks for conflicts of interest done during the acquisition process, exposing the agency to “an increased risk of perceived or actual fraud/corruption in the commercial land acquisition process”.

The document is the result of an internal probe into processes around acquiring land for infrastructure projects and was done by the department’s audit and risk division.

The Transport Minister declined to comment because the matter has been referred to the Independent Commission Against Corruption and the NSW Auditor-General.

Artist's impression of the light rail at Camellia. The handling of a land deal in the area has been referred to ICAC.

“Given I have made referrals on this matter to other independent agencies, I can’t comment any further at this stage,” Mr Constance said in a statement.

A Transport NSW spokesman said the audit was undertaken “as part of normal practices” and recommendations had been “absorbed into our restructure program so that the appropriate systems and processes can be developed and implemented”.

“Transport for NSW welcomes the investigation by the Auditor General and the Independent Commission Against Corruption (ICAC) and will give its full assistance in any way it can support this process,” he said.

“Given the matter of the land purchase has been referred to ICAC, it would be inappropriate to comment further.”