The Australian National Audit Office (ANAO) has criticised the Department of Infrastructure’s purchase of a 12.26 hectare triangle of land for the future development of Western Sydney Airport.
The ‘Leppington Triangle’ land was purchased for $29.8 million in July 2018 for use in about 30 years should a second runway be constructed in a future stage of the airport’s development.
According to the ANAO, the Department valued the land at $3,065,000 11 months later.
In its audit of the purchase, the ANAO found the Department did not exercise appropriate due diligence in its acquisition of the land
“Aspects of the operations of the Department fell short of ethical standards and an appropriate acquisition strategy was not developed,” the audit found.
“The valuation approach inflated the value of the land, which in turn led to the Australian Government paying more than was proper in the circumstances.”
The audit said nine valuations of the Leppington Triangle land were in the Department’s records, however the land valuation used by the Department of Infrastructure to arrive at the purchase price was four times higher than the next highest valuation.
It said the Department paid a price per hectare 22 times higher than that paid by the NSW Government for its portion of the Leppington Triangle.
The audit report said decision-makers were not appropriately advised on the land acquisition with formal briefings omitting relevant information such as the purchase price, and that the price exceeded all known market valuations of the land.
Auditor-General, Grant Hehir made three recommendations addressing the analysis that informs spending decisions, managing probity risks and the approach to obtaining land valuations.
The Department agreed to all the recommendations.
The full ANAO report can be accessed online at this PS News link and an 84-page printed version at this link.
The audit team was Tracey Bremner, Chérie Simpson, Tiffany Tang, Bradley Medina and Brian Boyd.
