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Auditor-General issues damning report on LDA deals

By Charlotte Harper 30 September 2016 51

LDA

The Land Development Agency’s processes lacked “transparency, accountability and rigour” in relation to the acquisition of land adjacent to Glebe Park and Mr Spokes Bike Hire and Dobel Boat Hire at Acton, the ACT Auditor-General has found, adding that she is considering undertaking a broader audit of the organisation.

Dr Maxine Cooper has today presented a performance audit report entitled Certain Land Development Agency Acquisitions to the Speaker for tabling in the ACT Legislative Assembly, and its findings are damning.

Dr Cooper says ‘Transparency, accountability and rigour have been lacking in the processes used by the Land Development Agency for the acquisition of three properties and two businesses considered in the audit. Without these the integrity and probity of the acquisition process cannot be demonstrated.’

The acquisitions in question were of:

• Block 24, Section 65, City (land adjacent to Glebe Park) – for $3.8 million
• Block 13, Section 33, Acton (Mr Spokes Bike Hire) – for $1.1 million (and $1.00 for the associated business and $52,338 for owners’ costs associated for the preparation of the deed of surrender)
• Block 16, Section 33, Acton (Dobel Boat Hire) – for $1.0 million and Lake Burley Griffin Boat Hire (a business which operated under a sub-lease from Dobel Boat Hire) – for $575,000 (and $10,000 as a contribution for legal and accounting fees and $16,387 to settle unpaid rent payable to Dobel Boat Hire)

Dr Cooper said the report had found administrative issues related to sourcing professional advice, procurement for contractors and the approval process for making acquisitions.

“While the number of acquisitions considered were few, given the significance of the findings I am considering undertaking a broader audit on the Land Development Agency,” she said.

LDA CEO David Dawes said he would not be resigning over the report’s findings.

“I’m looking forward to carrying on and implementing the new processes that are highlighted in the Auditor-General’s report and working with the new government in the future,” he said.

“I’m standing here firm.”

Asked about the manipulation of a freedom of information response cited in the report*, he said he knew nothing about it at the time it occurred.

“When we were going through the processes we discovered that something had been altered,” he said.

“That is just unacceptable. We immediately raised it with our investigation officer, an investigation was conducted, and that particular officer has been counselled, and that sort of behaviour won’t happen again.”

Mr Dawes said decisions related to the payments in question were made by him or by other LDA officers and had not been taken to the Minister responsible or to cabinet.

He acknowledged the report highlighted the need for improvement in the LDA’s processes to ensure the highest level of accountability and transparency, and said that since the audited land acquisitions occurred in early to mid-2015, the LDA had made significant structural, staffing and process changes that address and in some cases go beyond, the Auditor General’s findings and recommendations.

The changes included restructure of the City to the Lake project team and its composition and establishment of robust governance arrangements; centralisation of processes for obtaining valuations to ensure high standards and consistency; re-establishment of ‘in-house’ Corporate and Governance services to support the effective operation of the LDA; and increased procurement training for all staff.

In addition the former Australian Auditor-General, Mr Ian McPhee, had been engaged to undertake a Governance Framework Review for the LDA and the broader Economic Development.

“The Auditor General has recognised the difficulties of making commercial purchases in an open market transaction and has highlighted a number of process improvements that need to be made to ensure accountability during these complex transactions,” Mr Dawes said.

“The purchase of the properties involved was essential for the implementation of the City to the Lake project. I am satisfied the prices paid for these acquisitions were reasonable, appropriate and necessary to allow this key government priority to progress.”

The Canberra Liberals have announced they would conduct a full review of the LDA if elected. Labor this week committed to splitting urban renewal, which would include responsibility for the City to the Lake project, off from the LDA to be overseen by a new body.

The full report, Certain Land Development Agency Acquisitions: Report No. 7/2016, is available online here.

* From the report on the FOI matter:
The Land Development Agency received a Freedom of Information request on 5 November 2015 in relation to the acquisition of Block 24, Section 65, City (land adjacent to Glebe Park). A Land Development Agency senior manager (now executive) provided a document to Land Development Agency officers responding to this request which had only been created after the Freedom of Information request was received. The title of the Colliers International Block 24, Section 65, Division of City ‘Glebe Park Land’ May 2015 Discussion Paper was amended by the Principal of Colliers International from ‘Discussion Paper’ to ‘Valuation Advice’ on 12 November 2015 and accepted by the Land Development Agency senior manager (now executive). This document was provided in response to the Freedom of Information request received by the Land Development Agency on 5 November 2015. Submitting manipulated information in response to a Freedom of information request is unacceptable.

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Auditor-General issues damning report on LDA deals
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dungfungus 9:34 am 08 Oct 16

chewy14 said :

dungfungus said :

JC said :

dungfungus said :

JC said :

dungfungus said :

justin heywood said :

On a reading of the full report, the offence described (amending the title of a document under FOI) appears innocuous enough, although even an amateur like me knows that is verboten.

But the relationship between the LDA and Colliers is interesting.

Colliers, a major player in foreshore development, provides informal ‘advice’ and ‘mentoring’ on ‘supply and demand pricing’

to the LDA – all free of charge, (4.181-4.187).

If nothing else, could the LDA executives not see how this would look? Didn’t they care?
There must be a better way to do it.

The LDA, owned by the ACT Government is also selling the land it owns for the FOY plastic recycling plant at Couranga Crescent, Hume and the same government is approving its siting there.

Isn’t that a conflict of interest?

So how should it work, especially when the government owns all the land (except of course the land the feds own) and is the planning authority? I fail to see how it could work any other way.

And apart from it being over your back fence, what exactly is the issue, real or otherwise with this proposal that is leading to a conflict of interest or even the perception of a conflict of interest?

If you can’t see the conflict of interest then you are part of the problem.
Quite simply, the government should not be involved in any type of business that competes with the private sector.

How many more Rhodiums, Transacts and Better Places can the ratepayers afford The LDA only survives because it has total control of land supply and sale in the Territory and this is unhealthy along with the nepotism and unholy alliances that it creates.

Additionally, LDA pays nothing for the land and nothing for the holding costs. It’s purpose appears to be none other than keeping prices at almost unaffordable levels to maximise revenue for the current Labor government.

En globo land in the Territory should be sold to the private sector and the laws of supply and demand should determine the selling prices in a competitive environment.
And we don’t need a massive bureaucracy to do that.

Couple of issues, without a LDA or equivalent how does the government sell land to private developers? You need a government agency to manage the sales!

Second issue do you really think selling to private developers will result in cheaper prices? Seriously go look at the cost of land in Denman Prospect which is being developed by a private developer, vis the Snow family. Or indeed compare historic land sales in Casey. North of Yeend ave is the ‘Springbank’ rise development which was done by Lend Lease and south of that was the LDA. And parts were developed at the same time so should be able to give you some like for like comparisons.

Oh and unaffordable? Agree it is expensive, but the land is being sold, so someone must have the money to buy and hence afford it!

Anyway all really moot in the example that you were talking about which is the proposed plastic to fuel facility in Hume. I am yet to see any evidence of wrong doing in having the LDA selling land in an industrial suburb for industrial purposes being a conflict of interest. Which was your argument.

The conflict of interest is that the ACT Government owns the land, its directorate (LDA) is selling it, its EPA directorate will approve its environmental credentials and the ACT Government will then approve its construction and operation (with the CFMEU’s blessing, of course).

This project threatens to become Koppers Logs 2.0. Ironic how the recycling plant will be next door to where Koppers Logs was (the legacy is still there).

Read what Simon Corbell said about Koppers a couple of years ago: http://www.2cc.net.au/localnews/779-act-government-koppers-site-in-hume-poses-no-risk-to-canberrans-or-environment.html

Now read the full story here:http://www.canberratimes.com.au/act-news/revealed-timber-treatment-plants-toxic-legacy-20140324-35eiy.html

So your point is that it’s a conflict of interest that the government owns all of the land in the ACT as well as writing the planning legislation that defines how it’s used.

Note, that your assertion that the planning authority will simply “approve” the development is ridiculous, they simply apply the current legislation to proposed developments.

Exactly how do you think it’s possible for the government to remove this conflict of interest, whilst still remaining a government?

“…..apply the current legislation ……”

The government controls this function too.

rommeldog56 7:23 pm 07 Oct 16

JC said :

Nothing what so ever to do with the Westminster system of government. What I think is the government should do something about the LDA as it appears they are operating contrary to the directions given to them by the government. If the responsible government minister fails to act then yes that minister has something to answer for, however unless I am mistaken the responsible minister has acted as a result of the findings from the auditor general. Or are they maybe not acting quick enough for you by sacking people without going through proper process, or do you maybe want to make a point out of it for political gain. The later is what is wrong with this country, too much comes down to playing politics, point scoring and trying to get scalps. And yes both (all actually) sides do that.

Accountability and responsibility of Ministers are corner stones of the Westminster system. Barr, as Planning Minister (or what ever it is), should have known whats going on within the LDA for goodness sakes. It was a damming Auditor Generals report that certainly should not have out of the blue. The point is that the LDA is obviously over stepping the mark by paying mega bucks more than necessary to buy up blocks of land to facilitate as quickly as possible, Ministers (Barr’s) “vision” for things like the City to Lake project. This is the same LDA that is drip feeding the release of blocks of land for obvious reasons, including increasing Annual Rates revenues.

If you think that wanting accountability by Ministers on how their Departments/Agencies are run and demanding good decision making by Govt is “political point scoring”, and if that’s how the average ACT voter/ratepayers thinks, then we are all stuffed.

chewy14 1:02 pm 07 Oct 16

dungfungus said :

JC said :

dungfungus said :

JC said :

dungfungus said :

justin heywood said :

On a reading of the full report, the offence described (amending the title of a document under FOI) appears innocuous enough, although even an amateur like me knows that is verboten.

But the relationship between the LDA and Colliers is interesting.

Colliers, a major player in foreshore development, provides informal ‘advice’ and ‘mentoring’ on ‘supply and demand pricing’

to the LDA – all free of charge, (4.181-4.187).

If nothing else, could the LDA executives not see how this would look? Didn’t they care?
There must be a better way to do it.

The LDA, owned by the ACT Government is also selling the land it owns for the FOY plastic recycling plant at Couranga Crescent, Hume and the same government is approving its siting there.

Isn’t that a conflict of interest?

So how should it work, especially when the government owns all the land (except of course the land the feds own) and is the planning authority? I fail to see how it could work any other way.

And apart from it being over your back fence, what exactly is the issue, real or otherwise with this proposal that is leading to a conflict of interest or even the perception of a conflict of interest?

If you can’t see the conflict of interest then you are part of the problem.
Quite simply, the government should not be involved in any type of business that competes with the private sector.

How many more Rhodiums, Transacts and Better Places can the ratepayers afford The LDA only survives because it has total control of land supply and sale in the Territory and this is unhealthy along with the nepotism and unholy alliances that it creates.

Additionally, LDA pays nothing for the land and nothing for the holding costs. It’s purpose appears to be none other than keeping prices at almost unaffordable levels to maximise revenue for the current Labor government.

En globo land in the Territory should be sold to the private sector and the laws of supply and demand should determine the selling prices in a competitive environment.
And we don’t need a massive bureaucracy to do that.

Couple of issues, without a LDA or equivalent how does the government sell land to private developers? You need a government agency to manage the sales!

Second issue do you really think selling to private developers will result in cheaper prices? Seriously go look at the cost of land in Denman Prospect which is being developed by a private developer, vis the Snow family. Or indeed compare historic land sales in Casey. North of Yeend ave is the ‘Springbank’ rise development which was done by Lend Lease and south of that was the LDA. And parts were developed at the same time so should be able to give you some like for like comparisons.

Oh and unaffordable? Agree it is expensive, but the land is being sold, so someone must have the money to buy and hence afford it!

Anyway all really moot in the example that you were talking about which is the proposed plastic to fuel facility in Hume. I am yet to see any evidence of wrong doing in having the LDA selling land in an industrial suburb for industrial purposes being a conflict of interest. Which was your argument.

The conflict of interest is that the ACT Government owns the land, its directorate (LDA) is selling it, its EPA directorate will approve its environmental credentials and the ACT Government will then approve its construction and operation (with the CFMEU’s blessing, of course).

This project threatens to become Koppers Logs 2.0. Ironic how the recycling plant will be next door to where Koppers Logs was (the legacy is still there).

Read what Simon Corbell said about Koppers a couple of years ago: http://www.2cc.net.au/localnews/779-act-government-koppers-site-in-hume-poses-no-risk-to-canberrans-or-environment.html

Now read the full story here:http://www.canberratimes.com.au/act-news/revealed-timber-treatment-plants-toxic-legacy-20140324-35eiy.html

So your point is that it’s a conflict of interest that the government owns all of the land in the ACT as well as writing the planning legislation that defines how it’s used.

Note, that your assertion that the planning authority will simply “approve” the development is ridiculous, they simply apply the current legislation to proposed developments.

Exactly how do you think it’s possible for the government to remove this conflict of interest, whilst still remaining a government?

JC 12:53 pm 07 Oct 16

justin heywood said :

So let me understand your point. As a concerned citizen, you posted something the Libs did which ‘didn’t pass the sniff test’ for you.

It didn’t pass the sniff test of the NSW ICAC either.

JC 12:08 pm 07 Oct 16

rommeldog56 said :

JC said :

In this case the right seems to want to be blaming ministers and play politics over what is an administrative issue.

So you think that the Head of the LDA and Minister Barr are not responsible or accountable for the administration of the LDA. Got it. So much for the Westminster system of Government.

Nothing what so ever to do with the Westminster system of government. What I think is the government should do something about the LDA as it appears they are operating contrary to the directions given to them by the government. If the responsible government minister fails to act then yes that minister has something to answer for, however unless I am mistaken the responsible minister has acted as a result of the findings from the auditor general. Or are they maybe not acting quick enough for you by sacking people without going through proper process, or do you maybe want to make a point out of it for political gain.

The later is what is wrong with this country, too much comes down to playing politics, point scoring and trying to get scalps. And yes both (all actually) sides do that.

JC 12:03 pm 07 Oct 16

dungfungus said :

JC said :

justin heywood said :

Consider, JC, if your political opponents (the Libs) were in power. Would you still consider there to be no risk?

Consider if the Libs were in power, would you still be baying for blood?

And never mind of course the links that private land developers have with the Liberal party nationally and indeed in the ACT. Including NSW developers with no connection or developments in the ACT donating to the ACT branch, who are then generous and rich enough to donate money to their NSW brethren. Where of course donations from developers is banned.

Certainly doesn’t pass the sniff test does it? But bet you, Dungers and Co wont say a bad word about it…

http://www.abc.net.au/news/2016-07-14/sydney-property-developers-donating-to-act-liberal-party/7626854

While I don’t condone any of this it appears that no charges are ensuing.

The amounts involved are chicken-feed compared to past donations of hundreds of thousands of dollars generated from Labor Clubs and te one of $1.4 million made to the Greens by a businessman (not to mention the trade unions).

Oh some it comes down to the amount (or lets say the severity of the issue) not the fact that it appears money was laundered through the ACT branch to the NSW branch? Or that Mr Coe defends it saying the money was for the Federal election and not the ACT election and that it is a storm in a tea cup?

JC 11:58 am 07 Oct 16

dungfungus said :

The conflict of interest is that the ACT Government owns the land, its directorate (LDA) is selling it, its EPA directorate will approve its environmental credentials and the ACT Government will then approve its construction and operation (with the CFMEU’s blessing, of course).

This project threatens to become Koppers Logs 2.0. Ironic how the recycling plant will be next door to where Koppers Logs was (the legacy is still there).

Read what Simon Corbell said about Koppers a couple of years ago: http://www.2cc.net.au/localnews/779-act-government-koppers-site-in-hume-poses-no-risk-to-canberrans-or-environment.html

Now read the full story here:http://www.canberratimes.com.au/act-news/revealed-timber-treatment-plants-toxic-legacy-20140324-35eiy.html

So how can it work in any other way? We have ONE Government, they own the land, they sell the land, they approve developments. Who do you think is or should be doing that?

And as for this proposal I have no opinion either way, but conflict of interest nah. If the land isn’t used for this purpose it will be used for something else anyway. Unless of course you are accusing the government or individuals in the LDA of accepting underhand payments.

dungfungus 8:53 am 07 Oct 16

JC said :

justin heywood said :

Consider, JC, if your political opponents (the Libs) were in power. Would you still consider there to be no risk?

Consider if the Libs were in power, would you still be baying for blood?

And never mind of course the links that private land developers have with the Liberal party nationally and indeed in the ACT. Including NSW developers with no connection or developments in the ACT donating to the ACT branch, who are then generous and rich enough to donate money to their NSW brethren. Where of course donations from developers is banned.

Certainly doesn’t pass the sniff test does it? But bet you, Dungers and Co wont say a bad word about it…

http://www.abc.net.au/news/2016-07-14/sydney-property-developers-donating-to-act-liberal-party/7626854

While I don’t condone any of this it appears that no charges are ensuing.

The amounts involved are chicken-feed compared to past donations of hundreds of thousands of dollars generated from Labor Clubs and te one of $1.4 million made to the Greens by a businessman (not to mention the trade unions).

dungfungus 8:45 am 07 Oct 16

JC said :

dungfungus said :

JC said :

dungfungus said :

justin heywood said :

On a reading of the full report, the offence described (amending the title of a document under FOI) appears innocuous enough, although even an amateur like me knows that is verboten.

But the relationship between the LDA and Colliers is interesting.

Colliers, a major player in foreshore development, provides informal ‘advice’ and ‘mentoring’ on ‘supply and demand pricing’

to the LDA – all free of charge, (4.181-4.187).

If nothing else, could the LDA executives not see how this would look? Didn’t they care?
There must be a better way to do it.

The LDA, owned by the ACT Government is also selling the land it owns for the FOY plastic recycling plant at Couranga Crescent, Hume and the same government is approving its siting there.

Isn’t that a conflict of interest?

So how should it work, especially when the government owns all the land (except of course the land the feds own) and is the planning authority? I fail to see how it could work any other way.

And apart from it being over your back fence, what exactly is the issue, real or otherwise with this proposal that is leading to a conflict of interest or even the perception of a conflict of interest?

If you can’t see the conflict of interest then you are part of the problem.
Quite simply, the government should not be involved in any type of business that competes with the private sector.

How many more Rhodiums, Transacts and Better Places can the ratepayers afford The LDA only survives because it has total control of land supply and sale in the Territory and this is unhealthy along with the nepotism and unholy alliances that it creates.

Additionally, LDA pays nothing for the land and nothing for the holding costs. It’s purpose appears to be none other than keeping prices at almost unaffordable levels to maximise revenue for the current Labor government.

En globo land in the Territory should be sold to the private sector and the laws of supply and demand should determine the selling prices in a competitive environment.
And we don’t need a massive bureaucracy to do that.

Couple of issues, without a LDA or equivalent how does the government sell land to private developers? You need a government agency to manage the sales!

Second issue do you really think selling to private developers will result in cheaper prices? Seriously go look at the cost of land in Denman Prospect which is being developed by a private developer, vis the Snow family. Or indeed compare historic land sales in Casey. North of Yeend ave is the ‘Springbank’ rise development which was done by Lend Lease and south of that was the LDA. And parts were developed at the same time so should be able to give you some like for like comparisons.

Oh and unaffordable? Agree it is expensive, but the land is being sold, so someone must have the money to buy and hence afford it!

Anyway all really moot in the example that you were talking about which is the proposed plastic to fuel facility in Hume. I am yet to see any evidence of wrong doing in having the LDA selling land in an industrial suburb for industrial purposes being a conflict of interest. Which was your argument.

The conflict of interest is that the ACT Government owns the land, its directorate (LDA) is selling it, its EPA directorate will approve its environmental credentials and the ACT Government will then approve its construction and operation (with the CFMEU’s blessing, of course).

This project threatens to become Koppers Logs 2.0. Ironic how the recycling plant will be next door to where Koppers Logs was (the legacy is still there).

Read what Simon Corbell said about Koppers a couple of years ago: http://www.2cc.net.au/localnews/779-act-government-koppers-site-in-hume-poses-no-risk-to-canberrans-or-environment.html

Now read the full story here:http://www.canberratimes.com.au/act-news/revealed-timber-treatment-plants-toxic-legacy-20140324-35eiy.html

rommeldog56 8:27 am 07 Oct 16

JC said :

In this case the right seems to want to be blaming ministers and play politics over what is an administrative issue.

So you think that the Head of the LDA and Minister Barr are not responsible or accountable for the administration of the LDA. Got it. So much for the Westminster system of Government.

justin heywood 10:41 pm 06 Oct 16

JC said :

justin heywood said :

Consider, JC, if your political opponents (the Libs) were in power. Would you still consider there to be no risk?

Consider if the Libs were in power, would you still be baying for blood?

And never mind of course the links that private land developers have with the Liberal party nationally and indeed in the ACT. Including NSW developers with no connection or developments in the ACT donating to the ACT branch, who are then generous and rich enough to donate money to their NSW brethren. Where of course donations from developers is banned.

Certainly doesn’t pass the sniff test does it? But bet you, Dungers and Co wont say a bad word about it…

http://www.abc.net.au/news/2016-07-14/sydney-property-developers-donating-to-act-liberal-party/7626854

So let me understand your point. As a concerned citizen, you posted something the Libs did which ‘didn’t pass the sniff test’ for you. Nobody happened to comment on your post.

Someone else (the Auditor-General in fact) issues a ‘damning report’ against your team and you’re all “move along people, nothing to see here'”

Nobody is ‘baying for blood’ that I can see. But we punters are perfectly entitled to comment on the report, which incidentally raises questions beyond the FOI document issue.

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