SkyCity had direct line to PM - Shearer

KATE CHAPMAN AND HAMISH RUTHERFORD
Last updated 09:02 20/02/2013

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There were no brown envelopes passed under the table but SkyCity got preferential treatment over others during negotiations for a national convention centre, Labour leader David Shearer says.

Deputy Auditor-General Phillippa Smith's long-awaited report into the decision to negotiate directly with SkyCity for a new centre at its Auckland casino was issued yesterday.

Her investigation found no evidence that "inappropriate considerations" such as political connections played a part in the decision to choose to negotiate with SkyCity, and that shoddy process probably did not affect the outcome.

However, it criticised meetings between Beehive staff and SkyCity which took place when senior ministers had already agreed to seek expressions of interest from the market.

Prime Minister John Key said allegations by opposition parties that the Government had acted inappropriately in regards to SkyCity had been found to be "100 per cent incorrect".

He said the Auditor-General had no problem with Government talking to companies.

Rather the report found procedural issues with the way officials conducted the process, Key told TV3's Firstline.

"It's a non-standard procurement ... it's not the same as going to buy a box of paperclips," he said.

The Government would not re-tender the deal because that would be a "waste of time".

"Frankly, look we're ready to go on and carry on with those negotiations, we'll be doing that," Key said.

The Greens and Labour did not like the deal but there would be less pokie machines, in total, under National, he said.

Shearer said that while there were "no brown envelopes passed under the table", there was different treatment for SkyCity.

"What has actually happened here is SkyCity had an inside track to the Prime Minister's office, was negotiating directly with the Prime Minister and the Prime Minister's chief of staff," Shearer told Radio New Zealand.

Any reasonable person reading the report would be shocked to see the preferential treatment given to SkyCity, he said.

SkyCity's proposal was for it to pay the entire capital cost of the convention centre, in return for being allowed to install hundreds more poker machines and be granted an extension to its gambling licence.

The deputy auditor-general's report said SkyCity had more information than rivals, but admitted it may have made no difference.

"No other submitter appears to have been likely to be able to adapt their proposal to enable them to fund the full construction costs," the report said.

However, flawed process was a symptom of a "lack of attention to procedural risks and therefore to the fairness and credibility of the process", Smith said.

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SkyCity chief executive Nigel Morrison said the company was still willing to invest up to $350 million to own and operate the convention centre "provided acceptable returns can be delivered on the total project".

- Stuff

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