Coober Pedy council guilty of power deal maladministration: SA ombudsan

The South Australian Ombudsman has found that the Coober Pedy District Council committed “one of the most serious examples of maladministration in public administration I have observed” in its decision to enter into a $198 million Power Purchase Agreement with a private supplier, Energy Generation Pty Ltd, in the absence of a competitive tender process.

In his report, the Ombudsman, Wayne Lines, said “In my view, each of the elected members remaining on the council who participated in that decision should now consider their position.”

The Ombudsman identified more than 25 significant errors committed by the council in connection with its negotiation and execution of the agreement, including:

• failure to consider and heed legal advice concerning the project

• failure to observe the terms of established prudential management and procurement policies

• failure to meaningfully consider advice received from a consultant

• failure of the council’s senior administration to ensure that the elected body considered and decided upon matters of strategic importance

• failure of the council’s governing body to exercise meaningful oversight over the activities of the council’s senior administration in respect of the project

• failure of the council’s governing body to give meaningful consideration to the terms and consequences of the agreement.

In his final report, the Ombudsman observed “In my view, the practices of the council resulted in the substantial mismanagement of public resources because they caused the council to commit to expend in excess of $100 million in circumstances where the council did not observe established procurement and prudential processes and did not satisfactorily demonstrate that the transaction presented value for money.”

“I remain concerned that the elected body appears unwilling to accept ownership and responsibility for the decision to execute the agreement. “

The council has indicated that it does not accept the Ombudsman’s views.

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