Information about Bioelektra Australia project made public
Published on 27 May 2024
Council has proactively released information about its dealings with Bioelektra Australia Pty Ltd to address the level of community interest in the project.
Correspondence between Council and the NSW Office of Local Government (OLG) about the management of a construction contract to build the resource recovery facility prior to Bioelektra Australia going into administration in May 2023, has been published on Council’s website.
“I understand that the circumstances surrounding this project have been the subject of much public interest, sparking discussion about public-private partnerships and governance controls,” said CEO Robyn Stevens.
“The decision to make information about this matter publicly available is a step towards addressing public concern and providing transparency about Council’s internal review and its findings,” Ms Stevens said.
The correspondence details the extensive due diligence undertaken by Council in the procurement phase of the project and outlines that the risk allocation model adopted by Council limited its risk in the project by transferring the risk of the design, construction and operation of the facility to the contractor, Bioelektra Australia.
It further provides an overview of Council’s internal review process which found that a $2 million bank guarantee had not been provided by Bioelektra Australia as required under the terms of the contract, and milestone payments were paid prior to the specific conditions, such as the absence of an assessment of an independent certifier or particular works being completed.
An independent valuation of the site concluded that the value of the project works to date were in the order of between $2.2 million and $2.8 million.
Council has implemented changes to its contract management procedures and systems including the establishment of a project management office to conduct and maintain oversight of the whole project process, from pre-procurement through to delivery.
A review of Council’s financial, asset management and risk management policies will be conducted to ensure its procurement processes and funding decisions are robust.
The OLG advised that based on the work that had been done by Council that it did not intend to conduct its own investigation and asked to be kept updated of any future developments associated with the project.
The correspondence between Council and the NSW OLG between May and September 2023 are available on Council’s website. In consultation with the OLG and other third parties, some of the information has been redacted or withheld due to public interest considerations including, but not limited to, confidentiality, legal professional privilege and privacy.