Contract for Festival Plaza work contained conflict of interest, audit finds


October 18, 2017 17:39:38

Major probity flaws and a conflict of interest have been uncovered in the awarding of a government contract for almost $3 million of work on the controversial redevelopment of Adelaide’s Festival Plaza.

In 2015, engineering and development consultancy Mott MacDonald was engaged by the Department of Planning, Transport and Infrastructure (DPTI) to provide project management services for the taxpayer-funded component of the plaza upgrade.

The work did not go to a competitive tender process, and written contracts were not executed until long after work had begun.

A review by SA auditor-general Andrew Richardson has found significant deficiencies in the procurement process used to engage Mott MacDonald, poor record keeping and shortcomings in the department’s contract management.

Mr Richardson said DPTI did not adequately explain why it did not use a competitive tender process to engage the firm.

The auditor-general found the department had conducted a “comparative benchmark price range” for parts of the project to assess the Mott MacDonald deal.

But that price range was revised after the department received an offer from Mott MacDonald that was above the range.

“We found the offer exceeded the initial benchmark price range established to evaluate the single offer, however the reason for revising the benchmark was not disclosed to approval authorities,” the auditor-general said.

Conflict ‘not identified, documented, considered or managed’

The audit found the department did not adequately consider that Mott MacDonald had also been engaged by developer Walker Corporation, which had won exclusive rights to redevelop the Festival Plaza and build a 27-storey office tower between the plaza and Parliament House.

The auditor-general found the dual roles for the firm represented a conflict of interest.

“We found that this conflict was not identified, documented, considered or managed by DPTI before engaging Mott MacDonald,” Mr Richardson said.

Further scrutiny of the controversial $500 million Festival Plaza is expected soon.

Mr Richardson told Parliament’s Economic and Finance Committee a separate audit on the plaza deal was his “next priority” and would be released “in the next few weeks”.

Earlier this year the auditor-general revealed that negotiations over a potential crossover between his office and the Independent Commissioner Against Corruption had stalled that investigation.








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