The South Australian ombudsman says Coober Pedy councillors involved in a $200 million energy deal should consider their positions after finding they committed “one of the most serious examples of maladministration” he had seen.
The ombudsman investigated the District Council of Coober Pedy over a $198.6 million power purchase agreement with private supplier Energy Generation Pty Ltd that it entered into in 2016, without a competitive tender process.
The agreement was for the company to generate and sell electricity to the council for a 20-year period.
The ombudsman’s report stated council members had publicly acknowledged that at the time it executed the agreement, the council had a consultant’s report demonstrating “savings of approximately $85 million were available to the council on the open market”.
“This remains one of the most serious examples of maladministration in public administration I have observed since the relevant provisions of the ICAC [Independent Commissioner Against Corruption] Act were enacted,” ombudsman Wayne Lines said in his report.
“In my view, each of the elected members remaining on the council who participated in that decision should now consider their position.”
The ombudsman also said he remained “concerned that the elected body appears unwilling to accept ownership and responsibility for the decision to execute the agreement”.
Among his recommendations, he invited the Local Government Minister to consider recommending to the Governor that the District Council of Coober Pedy be declared a defaulting council.
Former minister Tom Koutsantonis cleared of misconduct
The ombudsman also investigated the Department of State Development and former energy minister Tom Koutsantonis in relation to the deal and subsidies provided, but found they did not commit maladministration.
However, he commented that Mr Koutsantonis should have requested more information about the agreement.
The ombudsman said former energy minister Tom Koutsantonis should have requested more information. (ABC News: Nick Harmsen)
“I consider that it would have been prudent for Mr Koutsantonis to have requested further information from the department as to how it was satisfied that the costs of the agreement were fair and reasonable when considered against comparable alternatives,” the ombudsman said.
“Although maladministration in public administration may arise from a public officer’s failure to act, I am not satisfied that Mr Koutsantonis’ omission to request further information from the department resulted in the substantial mismanagement of public resources in this instance.”
The ombudsman found the department didn’t act improperly.
“It is nevertheless concerning that the department and the council, in reaching their respective decisions as to whether to support the project, each appear to have proceeded on the understanding that the other bore ultimate responsibility for assessing whether the costs of the project were fair and reasonable,” the ombudsman said.
“Some criticisms notwithstanding, I am ultimately satisfied that the department undertook reasonable endeavours to satisfy itself that subsidising the project presented value for money to the state.”