PERTH may have missed the chance to have its convention and exhibition centre paid for by the private sector.
PERTH may have missed the chance to have its convention and exhibition centre paid for by the private sector.
Preferred bidder Multiplex is to lease government-owned land around the busport site for 35 years for a peppercorn rent. After this time, the land will revert to the government.
However, Multiplex will take $110 million in State Government funding to build the Perth Convention and Exhibition Centre and soccer stadium.
Unsuccessful bidder Leighton Contractors proposed redirecting roads around the site to link the site with the Swan River and free 6.7 hectares of land for redevelopment.
The road redirection would also have created 400 per cent more public open space.
Sale of the 6.7 hectares would have paid for the convention centre in its seventh year of operation.
Leighton approached LandCorp to handle the sale of the land but negotiations ceased because it was not one of the final bidders.
LandCorp chairman Ross Hughes said Leighton had approached his organisation to see if it was interested in rationalising the land.
“We would have been happy to help them,” Mr Hughes said.
“In some respects it was quite smart of Leighton to seek our advice.
“However, our involvement would have been subject to them winning their bid.”
Leighton’s bid was unsuccessful because the Government considered the land sale proposal to be too risky.
However, the Government has taken a very similar approach to land redevelopments in both Subiaco and East Perth.
It is also understood Leighton is refusing to sign off on the probity issues surrounding the bidding process and is calling for an investigation.
Leighton seems to have concerns over the WA Government’s changing of the mandatory requirements of the bid during the negotiation stage.
Initially, the Government asked for a series of mandatory requirements including a 20,000 square metre exhibition space and a separate performing arts area.
Neither finalist bidder could keep their bids financially viable if they met all of the mandatory requirements.
In the negotiation stage, the Govern-ment allowed the Nexus and Multiplex consortia to alter their bids.
Multiplex opted for a 17,000sqm exhibition space that could be converted to accommodate a performing arts area. The Nexus proposal included a 14,000sqm exhibition space.
It is believed the Leighton bid, which was kept in reserve, would have had its financial rating boosted considerably if it had been allowed the same leeway.
Reducing exhibition space and the need for a separate performing arts space is believed to have reduced the total cost of the project by $50 million.
This would have brought forward the breakeven point on the Government investment under the Leighton proposal.
A spokesman for Tourism Minister Norman Moore said Leighton had not been allowed into the negotiation stage because it had come third in the initial bidding process.
