An audit of a Government-run project to develop a new freight transfer depot in Sydney has found management unable to demonstrate it had achieved value for money in its appointment of advisors and consultants or that it managed the risks associated with conflicts of interest involving gifts and hospitality.
In his report, Procurement Processes and Management of Probity by the Moorebank Intermodal Company, Auditor-General, Grant Hehir said the company, MIC, was unable to show value for money had been achieved or that its probity had been well managed.
“Open and effective competition has not been a feature of MIC’s procurement practices,” Mr Hehir said.
He said MIC was established in December 2012 under the Corporations Act 2001 and was responsible for the delivery of the Moorebank Intermodal Terminal project in south western Sydney.
Intermodal terminals are inland ports which allow shipping containers to be transferred between rail and road. This enables freight to make part of its journey by rail instead of road.
Mr Hehir said MIC had engaged a range of advisers and consultants to assist it to deliver on its purpose.
He said its approach to competition for procurement had “contributed to the company being unable to demonstrate that value for money has been achieved through its procurement activities (and) probity risks (including conflicts of interest) have not been well managed.”
“MIC has not effectively managed the risks associated with accepting and providing hospitality, gifts or benefits. Initially this was due.”
Mr Hehir said that subsequent to the development of policies and guidance, poor compliance and ineffective governance arrangements resulted in the acceptance of offers that should have been declined.
His sole recommendation was that the company implement recommendation arising from internal reviews and one of his own performance audits in December 2017.
The company agreed.
The Auditor-General’s 75-page report can be accessed at this PS News link and the audit team was Amy Willmott, Tessa Osborne, Joe Keshina, Meg Byrne, Danielle Page and Brian Boyd.
