Mike Elliott: Holdfast Shores

Extract from Hansard

Legislative Council
23 October 2001

Mike Elliott
Leader Australian Democrats
Member of the Legislative Council

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The Hon. M.J. ELLIOTT: The questions I wish to ask relate to the Glenelg Holdfast Shores development. A number of concerns have been raised about that development in the past. One related to the impact on sand movement, which the government is now telling us is costing us $1.7 million a year. Is the Minister for Transport going to handle this question?

The Hon. M.J. ELLIOTT: I think it can happily be answered by the Treasurer: I am sure he will be happy to answer it. As I said, one issue related to sand movement, and that is now costing the state $1.7 million. Looking at the Auditor- General's Report today, he has touched on matters that were the other concern; that is, whether or not the state is getting the best deal out of the Holdfast Shores development, without arguing about its actual form in terms of building on the beach, etc.

According to the Auditor-General's Report, the project master budget initially saw the government having a return of $9.66 million. I understand now that the expectation is that the amount is $3.7 million. In looking at this diminution the Auditor-General has raised a couple of issues, the first being around the major project variation. The Auditor-General appears to suggest that, as a consequence of the major project variation, should any land sale occur it can only happen to the developers who have been involved so far. The clear inference in what the Auditor-General is saying is that there could have been, and perhaps should have been, rather than being involved in the development as a co-developer, if you like, exploration of the idea that a simple land sale might give a better return.

Indeed, even the values of the land currently being ascribed have not been put before independent valuers for some years. Further, in relation to this development, the Auditor-General looked at questions of monitoring of costs. I note that in his concluding comments he said:

In my opinion it is imperative that enhanced contract management arrangements be implemented to monitor the ongoing project fees and expenses to minimise any further diminution in return to the government.

1. Can the minister explain how it is that the return to the government has diminished from $9.66 million to $3. 7 million, despite the fact that the land values in that area significantly exceed that amount?

2. What has the government done in relation to contract management arrangements to ensure that the state does not suffer further loss?

The Hon. R.I. LUCAS (Treasurer): I will take that question on notice, refer it to the minister and bring back a reply.