The Forde joint venture land development is caught up in GST dispute with the Tax Office, which could see the joint venture, half owned by ACT taxpayers, forced to repay $14.3 million in GST.
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The Tax Office has made an initial ruling that the agency was not entitled to claim refunds for GST paid on Forde land sales.
The Land Development Agency has refused to explain the dispute or its impact on the joint venture. Asked for details, it released a statement under the name of deputy chief executive Dan Stewart, saying, "The Land Development Agency is currently in negotiations with the Australian Tax Office and no further comment will be made."
After further requests for clarification he said a statement would be issued once the issue had been resolved.
The Forde joint venture to develop and sell more than 1250 blocks in the new suburb which borders Mulligans Flat nature reserve in Gungahlin, is nearing an end, with land sales complete.
It is half owned by the ACT Government's Land Development Agency and one quarter each by Lend Lease and CIC.
It reported a $5 million loss in the year to July, largely attributable to the GST issue. It has accounted for the repayment of $5.8 million in GST in 2013-14, and has also recorded more than $550,000 in legal fees for GST advice over the past two years.
The financial statements say the Tax Office's investigation is still underway, but the initial assessment was that the agency was "not entitled to claim the refunds for overpaid GST for Forde land sales and these refunds will therefore be disallowed".
It points to a total of $14.3 million transferred from the Land Development Agency to the joint venture for GST refunds since 2010, payments that are now in doubt. If the joint venture was also required to repay that amount, it would need to go cap in hand to the joint venture partners.
CIC chief executive Col Alexander was more forthcoming on the GST issue, saying he doubted any refunds would be required. The legal advice he had seen suggested the Land Development Agency was on very strong ground, he said.
"I believe the issue is they require more information, and once they've got the information, the matter will go away. There's nobody in CIC or Lend Lease losing any sleep over this whatsoever," he said.
He said it had been a very successful joint venture and a loss in the most recent financial year should be seen in the context of a highly successful development over some years.
The blocks had sold for about $300,000 each. A very high quality suburb had resulted, he said, pointing to much lower property values across the road in Bonner.
The notes in the financial statements were "an enormously conservative attitude by us to provision that on the basis that it is still a dispute between ATO and the LDA, but all the advice is that the thing will be resolved in due course".
