Grocon alleges Infrastructure NSW ‘acted in bad faith’ over Central Barangaroo

Grocon has accused a former senior NSW public servant of withholding approvals for its Central Barangaroo project before cutting a hefty consulting deal with Aqualand.

Grocon CEO Daniel Grollo has alleged INSW assisted Aqualand by withholding planning decisions over its Central Barangaroo until after the developer sold out of its stake in the harbourside development. Picture: Tim Hunter.

Grocon has accused a former senior NSW public servant of withholding approvals for its Central Barangaroo project before cutting a hefty consulting deal with Aqualand when the Chinese developer eventually took over the project.

Grocon chief executive Daniel Grollo claims former Infrastructure NSW executive director Timothy Robertson acted in bad faith by withholding approval for the Central Barangaroo project, resulting in his company copping massive losses on the project.

“INSW improperly preferred its own commercial interests, as well as the commercial interests of Aqualand, over Grocon’s commercial interests,” he wrote in a submission to a NSW parliamentary inquiry made public on Monday. “As a result of the above conduct, Grocon believes that the NSW public have been subjected to the loss of a mixed used precinct on the last remaining piece of public land on Sydney Harbour that was best in class for carbon neutral property development.

“On or about 30 November 2019, Mr Robertson ceased his employment with INSW and established a consultancy business Tim Robertson Advisory … Grocon understands that Robertson Advisory was then engaged (directly or indirectly) by Aqualand to provide consulting services … and that Aqualand paid Robertson Advisory a substantial sum for those services,” it reads.

In its submission, the Melbourne-based developer claims the Barangaroo Delivery Authority and Infrastructure NSW “demonstrated a sustained absence of good faith, transparency and fairness” over its $420m project.

Grocon is locked in a $270m court fight with Infrastructure NSW over allegations the agency sold the “sight lines” in Barangaroo twice: first to Crown-Lendlease and second to Grocon.

Grocon paid $420m for the rights to develop the Central Barangaroo project after its bid was selected by the NSW government.

Grocon is locked in a $270m court fight with Infrastructure NSW over allegations the agency sold the ‘sight lines’ in Barangaroo twice: first to Crown-Lendlease and second to Grocon. Picture: Richard Dobson

Former premier Mike Baird announced plans to build a transport hub in the Central Barangaroo precinct – a significant development on Sydney Harbour – with plans to recoup the cost by lifting the approved size of whatever building was above from 58,000sq m to 150,000sq m.

However, the government had already struck a deal with Crown and Lendlease over the $2bn Crown Resort tower built, with an agreement to include the two companies in negotiations over “optimising commercial development” at the site.

Grocon was never able to begin construction in Central Barangaroo, with Mr Grollo claiming his company “prepared dozens of schemes … each time at the BDA’s instruction”, costing more than $37m. He was, he alleges, blocked after Crown and Lendlease failed to agree to the proposals.

Crown and Lendlease took the NSW government to court over the sight lines, which resulted in the proposed development being limited to 120,000sq m.

Mr Grollo claims despite being assured by Infrastructure NSW that the agency would appeal the outcome, it instead struck a secret deal that handed Crown and Lendlease a cash settlement, as well as developable area worth “in excess of $300m in revenue”.

“Throughout this period, INSW repeatedly assured Grocon that the (sight lines resolution notice) would be issued,” Mr Grollo writes in his submission.

“For example, in May 2019, Mr Robertson repeatedly assured Mr Grollo in person and by telephone that the SLRN would be issued by August 2019. However, those assurances were completely false.”

In response to the delayed start of the project and looming financial difficulties, Grocon quit its stake in Central Barangaroo in September 2019, selling its stake in the site to Aqualand for $73m.

Grocon, which collapsed into administration in 2020, blamed its failure on the poor return it made on exiting its Barangaroo stake.

Infrastructure NSW has long argued Grocon was aware of the risks.

In court hearings last November, Grocon alleged managers at Infrastructure NSW colluded to delay disclosing details of sight line deals to Mr Grollo.