Auditor-general to probe SkyCity deal

01:42, Jun 13 2012

The Government's controversial deal with SkyCity casinos for a $350m national convention centre will be investigated by the auditor-general's office.

The announcement comes as yet another blow to the Government, which in the last five days has backtracked on its plans for teachers and started a clean out of the under-fire senior management of ACC.

The Green Party, which asked Auditor-General Lyn Provost to launch the investigation, said the deal must at least now go on hold until the probe was complete.

Deputy Auditor-General Phillippa Smith said the inquiry would consider the process for seeking and assessing proposals for the convention centre, the adequacy of the assessment of the likely costs and benefits of each and any other matters deemed of interest.

The Government announced in June last year that it would negotiate with SkyCity to build a $350m national convention centre in Auckland.

More pokie machines and gaming tables and an extension of SkyCity's gambling licence were among the legislative changes offered by the Government in return.

Green Party co-leader Metiria Turei, who requested the investigation, said the Government could ''not possibly proceed with the SkyCity deal'' while the inquiry was going ahead, because its terms of reference ''cut to the heart of the decision to award the contract to SkyCity in the first place''.

"I raised concerns about the fairness and adequacy of the process, especially given SkyCity was offered a law change that gave it more pokies in exchange for building the centre, and the deal didn't appear to consider the huge social and financial costs of increased gambling."

Questions were raised about the deal's fairness after it emerged Prime Minister John Key discussed the idea with SkyCity bosses in a private dinner meeting in November 2009, before the field was opened to expressions of interest from other possible bidders in March 2010.

The late Infratil founder Lloyd Morrison personally wrote to Key urging a proposal for a Public Private Partnership for the centre - similar to one his company had set up in Melbourne - but was ignored.

Economic Development Minister Steven Joyce today said the investigation had no impact on the Government's negotiations with SkyCity.

"We are confident the [tender] process was transparent and each application was assessed on its merit," Joyce said.

"This is just another example of the Greens and Labour wanting to halt and delay projects that create jobs and economic growth in New Zealand while at the same time moaning that there are not enough jobs."

SkyCity shares had dipped 2.27 per cent on the news this afternoon, but SkyCity General Counsel Peter Treacy welcomed the inquiry.

"From SkyCity's perspective, we were involved in a competitive selection process, responding to the Government's request for Expressions of Interest to develop a National Convention Centre for New Zealand," Treacy said.

"While the Auditor-Generals inquiry is more a matter for the Government and the Ministry of Economic Development, we will of course cooperate fully with the Auditor-General as and if required over the course of her inquiry."

Labour leader David Shearer said the "shonky deal" was "on the ropes".

"It was stitched up in a way that essentially cut all other bidders out of the running," Shearer said.

"That's not the way we do business in New Zealand. We have a strong reputation internationally for open and transparent government and that must be protected."

In her letter requesting the investigation, Turei alleged that SkyCity had "an unfair advantage" over other bidders for the convention centre.

Today, she said it was appropriate that the Government's ''wheelings and dealings'' were being looked into.
"There were options on the table from other groups who wanted to build a centre which didn't involve trading in the wellbeing of vulnerable people to build it,'' Turei said.
"We don't think the process has been fair to those other groups, to Aucklanders who don't want more gambling in their city, and to the families of problem gamblers who are likely to suffer from any increase in gambling.''

Smith said the inquiry was being carried out under the Public Audit Act 2001 and the auditor-general's office would not comment while the inquiry was under way, but would publish a report when it was completed.

Smith made the announcement because Provost had a small shareholding in SkyCity and would not be involved in matters relating to the inquiry.