Risks ignored in $30m land deal for Western Sydney Airport

Officials focused on a ‘positive relationship’ with pastoralists and disregarded the risks of buying land for 10 times more than its value, a report says.

The Western Sydney Airport site. Picture: Nearmap

Federal infrastructure officials were too focused on maintaining a “positive relationship” with wealthy pastoralists and disregarded the risks of buying the Leppington Triangle for 10 times more than its value, an independent report has found.

A scathing report from the Auditor-General last year found the federal government paid almost $30 million for a parcel of land next to the proposed Western Sydney Airport, which was valued at only $3 million.

The land was bought from the Leppington Pastoral Corporation with the aim of eventually using it as part of the airport’s second runway in 2050.

A separate independent investigation by Sententia Consulting – tabled in senate estimates on Monday – supports many of the conclusions of the Australian National Aufit Office regarding poor process.

“(The Department of Infrastructure) was heavily focused on maintaining a positive relationship with LPC, and was less clear on how broader risks to the success of the acquisition … would be managed,” the report states.

“In undertaking the acquisition, relevant officers made, or failed to make, a number of decisions which exposed the acquisition to unnecessary risk.”

The land was owned by wealthy businessmen Tony and Ron Perich through their LPC dairy farm and their company has had financial links to the Liberal Party. The LPC donated nearly $58,800 to the Liberal Party in 2018-19 and $62,700 to the Liberal and National parties in 2015-16. It made smaller donations to the Labor Party in the mid-2000s.

There was no suggestion ministers or MPs were involved in the Leppington purchase.

The Sententia report found “no evidence” of “poor integrity, criminal activity or personal benefit for officers involved in the transaction”.

“There is no question that determining a “suitable” or “just” price for the Leppington Triangle was always going to be difficult, given the unique nature of the property and the transaction,” the report states. “It is possible that the Commonwealth could have sought to negotiate a lower price for the Leppington Triangle, but there is no guarantee that LPC would have accepted it.

“All evidence obtained by this review indicates that actions and decisions taken by the team executing the transaction were motivated by achieving the best long-term outcome for the government and the economy.”

The Department of Infrastructure has accepted the report’s recommendations.

Sententia advised the government to strengthen its capability to manage land acquisitions, boost governance arrangements and add new thresholds when determining whether a purchase was value for money. Infrastructure officials will also improve record keeping and the department will be pushed to “reinforce values and behaviours in connection with probity, quality, teamwork and risk management”.