"Sydney Airport caught in cover-up claim"

Thursday, March 3, 2005

Airport caught in cover-up claim
By Paddy Manning
The Australian


THE federal Government has been accused of covering-up documents relating to
the 2001 privatisation of Sydney Airport Corporation (SACL).

Property developer STX Developments, a company connected with the
Melbourne-based Strang Group, is suing the Federal Minister for Justice and
Customs, Senator Chris Ellison, over the conduct of a 2002 tender for
provision of a new Sydney headquarters for the Australian Customs Service. 

Mediation broke down last year and the case is set for trial in the Federal
Court on April 4. 

SACL won the tender with a proposal to house the Customs headquarters
on-site at the airport, over eight other bidders including STX, which owned
a site near the airport at 183-189 O'Riordan St, Mascot, and had obtained
approval to build a 27,000sqm twin-tower office development there. 

In a Federal Court action launched in 2002, STX is seeking damages plus
interest totalling $850,000, claiming the Commonwealth failed to disclose
that one of the tender criteria was that the new Customs headquarters be
located on-site at the airport. 

STX alleges that the Commonwealth used the rental income stream from the
Customs tenancy to increase the value of SACL, which was at the time being
sold to the Macquarie Bank-led Southern Cross consortium. 

SACL, headed by Max Moore-Wilton, former head of the Prime Minister's
Department, is now 55.5percent-owned by Macquarie Airports. 

STX's lawyers have sought a range of documents relating to the sale of SACL
to Southern Cross, including any with a bearing on the $5.6 billion purchase
price of the airport. 

In preliminary hearings last November, Justice Graham Hill told lawyers for
the Commonwealth to provide, by this month, documents relating to SACL
becoming the preferred tenderer for the Customs headquarters, and ultimately
winning it. 

But Stewart Levitt of Levitt Robinson, for STX, told The Australian that the
Commonwealth had withheld documents concerning the terms of its sale of
SACL, claiming privilege. 

Mr Levitt claimed the under-bidders in the Commonwealth-run tender process
believed they were "never really in contention". 

"The Commonwealth is accused of having failed to disclose that the Customs
accommodation opportunity was part of the bait it was using to gain a higher
price for the sale of SACL," he said. 

"Failed bidders have complained that being on-site at the airport had never
been notified to them as a pre-condition for winning the tender, either when
expressions of interest were called for, or in the Commonwealth's invitation
to tender." 

STX claims the bidders spent millions of dollars on drawing plans, obtaining
approvals and tendering. 

A spokesman for SACL said the corporation was not involved in the litigation
and the allegations were a matter for the federal Government. 

Neither Senator Ellison nor the Australian Customs Service would comment on
any aspect of the case yesterday.


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