The ACT government may not be able to terminate its contract to sell a block of land in Dickson to the Tradies Club, even if a proposed Coles development and second carpark is not built by December.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Changes to the original request for tender were detailed in a scathing report last week from the ACT's Auditor-General, which revealed the government had negotiated away up to $2.6 million in potential revenue for taxpayers.
A Legislative Assembly committee inquiry is now likely to be launched into the land swap deal, and it could be one of the first issues referred to the territory's proposed anti-corruption commission when it is set up late this year.
The audit found one of the significant changes to the original request for tenders to buy the block outside the Dickson club was the removal of a termination clause from the RFT for the Tradies.
The clause had previously ensured the government, or the club, could terminate it if a second carpark for Dickson residents, proposed on Block 21 Section 30 Dickson, was not completed within four years of signing the contract.
But the removal of the clause means the territory government "can no longer terminate the agreement if the adjacent carpark remains unfinished after four years," the audit report reads.
Had the original clause been retained, the government could have terminated the contract in December this year, four years after the contract was signed, an opportunity that could have allowed for a new tender to be issued, in line with advice from the government solicitor's office revealed in the audit.
The government has repeatedly said the contract, signed in December 2014, still requires the second carpark to be developed before the Tradies can re-develop Block 30.
It is unclear why the clause was removed, one of several issues Opposition leader Alistair Coe says bears further investigation.
Mr Coe said he was also concerned about other concessions given to the club as part of the deal, including the amount of time that had elapsed since the block was valued at $3.18 million in November 2012.
He said the actual value of the land would likely be much higher five years' on, or whenever the club actually pays out the money beyond a $159,000, five per cent deposit paid at signing.
That deposit, the audit shows, was also varied from the original contract, which had set a 10 per cent deposit for any potential tenderers.
An answer from Chief Minister Andrew Barr to a Question on Notice Mr Coe posed last year also said the settlement was still tied to the completion of the other public carpark, but that there was "no provision for a price adjustment under the terms of the contract".
Questions put to planning minister Mick Gentleman about the audit and its findings were referred to planning directorate director-general, Ben Ponton.
Mr Ponton said the government took seriously the "observations, findings and recommendations" in the audit report and the opportunity it created "to further refine and build on governance frameworks put in place to support the operations of the new land entities established on 1 July 2017".
He said the directorate was working to "give robust consideration to the findings of this report" and advise Mr Gentleman to "inform the government response".
"Until such time the government is not in a position to provide in-depth information on the findings of this report," he said.
Mr Ponton also said the five per cent deposit the government received "aligns with the industry standard" for such transactions where settlement is required more than six months after exchange".
