The McGowan government sat on a $121 million cost blowout of its Metronet radio communications project for nearly six months before it told the public.
In a budget estimates hearing on Tuesday, Transport Minister Rita Saffioti’s representative Sue Ellery revealed a new deal worth $327 million with Finnish telecommunications giant Nokia was signed on December 22 last year.
Huawei were paid $6.6 million for the axing of its Metronet contract.Credit: Bloomberg
The new project is a cost jump of more than 50 per cent on the $206 million contract the state signed with Chinese-owned Huawei and Australian engineering company UGL in 2018.
That contract was axed in 2020 because of trade restrictions on Huawei imposed by the United States and the state sought a new contractor later that year.
Saffioti only revealed the Nokia deal, and a $6.6 million termination payment made to Huawei and UGL, in parliament last week — the same day Premier Mark McGowan travelled to Collie to announce the closure of the state-owned coal power stations there.
Opposition Metronet spokesman Tjorn Sibma said the long wait was another demonstration of poor transparency by the McGowan government.
“In December, the government agreed to a $6.6 million termination settlement and signed a new contract worth $327 million, yet the minister waited six months to update parliament,” he said.
“This is not the gold standard transparency Western Australians were promised.
“The minister must explain why she waited six-months to tell the WA taxpayer the cost of her incompetence.”
Ellery told the estimates committee the announcement was held off to give the public a fuller picture of the deal.
“Advice at the time suggested that we’d be able to do both update the public on the delivery of the project and finalisation of the termination of the Huawei arrangements at the same time, giving a complete picture of the progress of the project delivered,” she said.
Sibma said the government should adopt recommendations by auditor general Caroline Spencer to provide regular updates on the cost, time and status of major projects.
On Tuesday, Saffioti defended the cost blowout and said it was due to limited suppliers of radio technology once Huawei was removed from the market.
“As a result there’s limited competition…you’ve got limited competition and [cost] escalation that’s occurred across all parts of industry and construction,” she said.
“I look back and I don’t think we could have done anything differently. The reality is the Trump-China disputes blew up and as a result, a number of new sanctions and embargoes were put in place which were not foreseen at the time.”
Huawei technology was also subject to scrutiny after allegations emerged it could covertly access mobile networks around the world through backdoors designed for use by law enforcement agencies.
The company’s links to the Chinese Communist Party led to it being banned from Australia’s 5G network over security concerns.
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