The infrastructure department has pointed the finger at the New South Wales government for a decision to move the location of a road related to the Leppington Triangle land purchase, contradicting evidence to the auditor general.
At Senate estimates on Tuesday, Labor probed who was responsible for the decision to move the proposed northern road alignment, which senator Penny Wong said increased the amount of land purchased by the commonwealth and the potential for “untoward” or “corrupt” expenditure.
In September, the auditor general released a scathing report finding the department paid $30m, 10 times the fair value, for a parcel of land to build a second runway at Western Sydney airport after 2050.
The purchase process commenced in 2016, a year after NSW’s Roads and Maritime Services realigned the northern road at the Leppington Pastoral Company in preparation for construction of the Western Sydney airport.
“The route was adjusted so as to run on mostly Australian government land along the airport boundary rather than through the farm of the landowner,” the audit report said.
“Due diligence and value for money was not demonstrated in the department’s advice supporting the route adjustment.”
The department cited capitalising on the “goodwill” from the road alignment as its justification for proceeding with a speedy voluntary sale rather than compulsorily acquiring the Leppington Triangle. The auditor general found that the inflated valuation was “inconsistent” with that explanation.
On Tuesday, Wong asked infrastructure department officials who was responsible for the decision in November 2015 to change the route of the proposed road realignment.
The department’s deputy secretary, David Hallinan, said that RMS had consulted Leppington Pastoral Company and advised there were “significant challenges” with the proposed route.
The department provided advice on alternate alignments because moving the road away from the airport construction zone was “important” to ensure it was built on time.
The assistant secretary, Greg Whalen, said the request to move the route came from the NSW government, not the commonwealth.
Wong noted that was “not what the audit office said”, and noted the report contains correspondence from RMS attributing the decision to the department.
In a March 2016 letter, RMS asked the department to “reconfirm the current alignment” and said it “is of the understanding” the department is “directing the alignment” despite risks identified by aviation consultants.
Whalen replied: “RMS’s advice back to us was [Leppington Pastoral Company] was not going to accept the alignment as proposed through their land, so we could expect significant delays.
“To be fair to the auditors – they’ve relied on a letter where it says the department advised RMS [to change the alignment]. I can advise that is not the case.”
Wong said the movement of the road had “enabled greater untoward, possibly corrupt, expenditure” because it increased the amount of land purchased by the commonwealth.
Officials agreed to provide documentation on notice showing RMS was responsible for the decision.
The infrastructure department secretary, Simon Atkinson, revealed the road alignment would be included in an independent audit of the purchase.
Earlier, Atkinson said there was a “question around culture” in the Western Sydney unit that “should be looked at”.
Atkinson said the evidence was there had been a “substantial problem” with the Leppington Triangle sale, but until an independent audit and two code of conduct investigations were complete he couldn’t say if it was a “one-off” activity.
“Any organisation that has something like this happen should look if there is a cultural element to it.”
He noted the unit was a “different construct” to the rest of the department, because governance activities were embedded within it and conducted internally.
Atkinson was forced to correct evidence to an estimates session in October that he thought he first learned about problems with the Leppington Triangle purchase when the audit office sent through its proposed report in August 2020.
In fact, the department received “preparation papers” from the auditor general on 23 June that identified the problems with the purchase.
When Wong queried what the department had done in the “weeks and months” before it started code of conduct investigations into two public servants on 21 August, Hallinan said it had ensured the two staff members played no further no role in responding to audit office requests.
The human resources department also began to look into the issue as a “precursor” to the later code of conduct investigations, he said.
