The State Government has given SA a massive vote of no confidence by sending millions of dollars of work across the Victorian border.
The Independent Weekly has learnt that the government engaged lawyers Clayton Utz in Melbourne for SA’s biggest public-private project, the $2 billion Marjorie Jackson- Nelson hospital.
“It boggles the mind,” said the chief executive partner of Adelaide’s largest law firm, Minter Ellison’s much respected Nigel McBride. “Local firms weren’t even considered by the Crown Solicitor. The Attorney-General and the Law Society had an understanding that this sort of thing wouldn’t happen again. I’m very disappointed.”
Mr McBride, who also chairs SA Great, represents one of the many SA firms who weren’t given so much as a chance to bid for the work. Extensive Independent Weekly investigations show that Crown Solicitor Simon Stretton, acting with the knowledge of and possibly on instructions from senior Cabinet ministers, surreptitiously excluded SA companies. The investigations show that Mr Stretton’s office approached three law firms in Melbourne: Middletons, Clayton Utz, and Corrs Chambers Westgarth. He asked those companies, to the deliberate exclusion of SA-based firms, to submit tenders for work on the public-private partnership in the controversial Marjorie Jackson-Nelson project.
The decision will cost SA taxpayers hundreds of thousands of dollars in higher legal fees. “Legal work done by SA firms for government is capped at a maximum of $260 an hour. That cap does not apply to interstate firms. Clayton Utz and can charge two or three times that amount,” Mr McBride said. The decision will also cost local jobs and professional development in the industry, lost opportunity, and is equally seriously a devastating blow to the state’s national reputation.
Mr McBride said it sent a signal to the rest of Australia that the government didn’t believe in the competence of the profession in its home state. “This is the worst kind of cringe. I thought we’d gone beyond that,” he said. Mr McBride said that Minter Ellison was acting for other clients on the hospital project and would probably not have tendered for the Crown work, so there was “no question of sour grapes”. “It’s wrong, not transparent, not fair,” Mr McBride said of the process.
Faced with a number of questions from The Independent Weekly the government admitted to and then defended its secret deal. “This does not conflict with State Government policy to give preference to local legal firms wherever possible,” Attorney-General Michael Atkinson claimed in a written statement.
“In this case it was not possible to do that because no local firms have experience in working on a major hospital public-private partnership. There are very few firms in Australia that have this expertise.”
Half a dozen local firms say the government’s argument about the water contract and hospital project is arrant nonsense. “We could quite easily have done the work – we wrote the book on public-private partnerships in Victoria,” Mr McBride said. “I would put SA legal firms up against any one on the east coast, any day of the week.”
Loretta Reynolds, chair of partners at Adelaide firm Thomson Playford, was equally adamant. “We’ve got all the expertise in the state to work on this project,” Loretta Reynolds said. “We’re already doing work on the Marion public-private partnership.” Mr McBride said Johnson Winter
Slattery would also have been exemplary.
“I think it is extremely disappointing,” JWS managing partner Peter Slattery said. “I cannot understand what rationale in the world there would be for not taking the trouble of asking a small number of SA firms whether they have the experience for a project such as this.”
Mr Slattery, a director of SA companies (including Solstice Media, publisher of The Independent Weekly), said he was concerned that revenue would leave the state economy without a very clear justification.
“I think this sort of approach indicates a type of professional cringe that can only undermine confidence within and outside SA and SA-based enterprises,” he said. Law Society members are furious. President Grant Feary said the process was not open, not widely publicised, and showed the State Government believed all roads led to Melbourne.
“Local firms have the relevant experience but because they couldn’t tender were unable to demonstrate this,” he said. Minter Ellison employs 300 Adelaide staff, together with other local firms does millions of dollars of pro-bono work in the state, and invests in SA by hiring local graduates and keeping investment dollars here.
“Not one dollar will be coming into the state via Clayton Utz,” Mr McBride said. The Independent Weekly investigation shows that the hospital project is not the only one which will suck money from the state economy.
Clayton Utz has also been appointed for the SA Water Glenelg-Adelaide parklands pipeline and reuse plant project. “The Crown Solicitor’s Office is primarily managing the legal work for this project with the assistance of specialist advice from Clayton Utz,” Mr Atkinson responded.
One again, it was not an open tender process. “That firm was appointed after a selective tender process,” the Attorney acknowledged. “The necessary expertise for water alliance contracting was not available in SA because similar work has not been done here before.” The claim is disputed. The Independent Weekly further understands that the government will send money interstate for legal work on the billion-dollar desalination plant and new prison complex near Murray Bridge.
Staff at Crown Law and the Attorney-General’s Department itself are far from universally happy about the move. One long-serving public sector lawyer said he believed the Clayton Utz appointment had more to with the government’s “hatred” of the profession in SA than any issue of local expertise.
“I wouldn’t say it’s a state of war,” he said, “but it’s not all peace between (the legal profession) and the AG.”
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