Dockers deal to ‘break’ Cockburn

KEEP Freo in Freo campaigners say Cockburn council will “break its piggy bank” luring the Dockers south, with the project to cost a whopping $150 million to operate over 30 years.

The Dockers are set to relocate to a yet-to-be-financed $113 million facility at Cockburn Central after signing a heads of agreement with the council in December.

The Herald understands due diligence consultant KPMG presented figures to Cockburn councillors last week over dinner. The council was expected to vote on the business plan at a special behind-closed-doors meeting Thursday night, after the Herald went to press.

Keep Freo in Freo convenor Chris Lewis says the council will have to pay $5 million a year just to maintain the ground.

“It is understood the consultants formed some different views to council management on the project,” he says. “A key one being the consultants see social value in the you-beaut sport-recreation project but not investment value. Social value is usually PR speak to cloud every imaginable shortcoming.

“The real risks to the city and all participants are being flicked aside in the haste to build a Taj Mahal. So are they setting out to bet their entire piggy bank on one glitzy project?”

Mr Lewis says none of the project makes business sense.

“It assumes the city will finance the project via the cocktail of funds they have previously listed, including $15 million state grant, $15m fed grant, $4m from state departments, $60m from city reserves, any balance from developer contributions and other buckets.

“But the only firm source of funds on this list is their own reserves, which are in the bank. And what happens when it needs major maintenance at various times over the 30-year run?”

Cockburn deputy mayor Kevin Allen believes the cost is too much for the council to bear.

“It should be a state government project in terms of the cost,” he says.

“There are going to be annual losses and someone has to pay for them. And it will impact on our ability to provide other services.”


2 responses to “Dockers deal to ‘break’ Cockburn

  1. Looks like you guys botched this one… how did you get it so wrong?

    Misreported story: Cockburn City Herald, 6 April 2013
    The City of Cockburn is very disappointed that the journalist wrote an article based on hearsay and incorrect information, without reading the report provided by the external consultants’ Davis Langdon and KPMG. As a result, there are many inaccuracies and false information that is misleading the public.

    The City would like to clarify each section of the article that is incorrect so our residents and the wider community have access to the correct information.

    *Firstly, the article relates to the Regional Aquatic and Recreation Community Facility at Cockburn Central West. An external consultant was engaged by the City as part of the due diligence process, in regards to the Business Plan, outlining aspects such as costs and risk management. A Special Council Meeting was then held last night (4 April) to accept the report only, so that the Business Plan could be advertised for public comment. That means the public will now be able to have their say and provide a submission during the advertising period. The Council did not vote on or adopt the Business Plan as the article suggested.

    *In the opening paragraph it stated that the project operating cost was $150 million over a 30-year period. This is incorrect. The consultant’s report identified that the operating cost is estimated at $108 million over 30 years, for which the Business Plan has income to cover these operating costs.

    *The third paragraph states that “The Council was expected to vote on the Business Plan at a special behind-closed doors meeting Thursday night”. This is incorrect. The City did not vote on the Business Plan nor did it go behind closed doors. It was a public meeting.

    *Keep Freo in Freo Convenor Chris Lewis was reported as saying in the fifth paragraph that the City is “setting out to bet their entire piggy bank on one glitzy project.” His comment is incorrect. This project has been in the City’s 10-year Plan for the District and money has been allocated specifically for it. Other projects will continue and money will still be spent on parks, new roads and infrastructure.

    *Mr Lewis again then incorrectly states the wrong figures in relation to funding. The correct figures are: The City has applied for $2M from the State Government and $15M from the Federal Government. The balance of the cost of the facility will then be taken from the City’s municipal funds and developer contributions.

    The external consultant’s report is publicly available on the City’s website by clicking the “Minutes and Agenda” tab on the front page.

    For more information please contact the City on 9411 3444.

    • The Herald responds: After reviewing the story, the only thing we got wrong was that the meeting was not behind closed doors as suggested. A bad call from a sub-editor for which the Herald apologises to its readers.
      We stand by the rest of the story:
      • The recommendations before the council were: “1) advertise the Business Plan for the Regional Aquatic and Recreation Community Facility…. and 2) call for public submissions from interested parties on the Business Plan…” If the recommendations were watered down on the night the Herald can’t be expected to know that. Our deadline was some hours before the meeting, which is why we reported the council was “expected” to vote on the business plan—not an unreasonable assumption.
      • The council’s claim of $108 million operating expenditure is open to challenge. The report excludes costs the average punter would consider “operating”, such as interest payments on loans and some expenses in the first two years of the project. Councillor Bart Houwen confirmed to the Herald the consultants at first told councillors the facility’s operating costs would be $150 million, and only revised the figure at the insistence of officers who demanded some items be excluded.
      • The Herald quoted Mr Lewis accurately. It’s his opinion, as the article clearly states. The city was twice asked by the Herald to respond to his comments, with the media officer confirming that the questions had been forwarded to CEO Stephen Cain, but he chose not to respond.

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