Fiona Stanley scandal: Barnett must explain $330million loss of taxpayers’ money and Serco contract bungle

Friday 14 Feb 2014

Fast Facts:

  • Colin Barnett, Troy Buswell and Kim Hames must fully explain their failure in the Serco-Fiona Stanley Hospital affair
  • The commissioning costs of the hospital have blown out by $330million and WA taxpayers, not Serco, will be forced to pay
  • Treasury reviewed the $4.3billion contract, the biggest awarded by a  WA State Government in history, only two weeks before it went to Cabinet

Premier Colin Barnett, Treasurer Troy Buswell and Health Minister Kim Hames must fully explain their failure to prevent the scandalous waste of hundreds of millions of dollars in the Serco-Fiona Stanley Hospital affair.

WA Labor Leader Mark McGowan said a Parliamentary Committee was told yesterday that commissioning costs for the hospital have now blown out by $330million and that WA taxpayers, not Serco, will be forced to foot the bill.

The Committee was also told that Treasury reviewed the $4.3billion contract, the biggest awarded by a WA State Government in history, only two weeks before it went to Cabinet. Treasury would normally take 6-12 months to review contracts of this nature.

Mr Hames’ weak defence on radio this morning cannot be believed.

His claim that Under Treasurer Tim Marney ‘hasn’t said there’s anything wrong with the contract’ and that Treasury ‘could have taken longer if they had wanted’ flies in the face of all the evidence presented to the Committee.

Mr Hames claimed that the hospital would cost $850million a year to run. Yet Mr Marney claimed the running cost was still unknown.

Further, it was revealed that Treasury received advice in 2012 that the opening of Fiona Stanley Hospital would be delayed, yet Serco were not informed until June 2013. In the meantime, tens of millions of dollars were spent on employing staff to work at the hospital – a blowout that will now be paid by taxpayers.

Mr Barnett and Mr Buswell must explain why they failed to act on Treasury’s concerns that the project faced delays and why they both told the people of WA at the March election that the hospital would open on time in April 2014.

“This is a financial scandal of the highest order that has created a massive loss of taxpayers’ money,” Mr McGowan said.

“Why was the Barnett Government in such a rush to award this $4.3billion contract to Serco before it had given it appropriate scrutiny? It’s been proven time and time again that the Barnett Government is far too close to Serco.

“Colin Barnett, Troy Buswell and Kim Hames are to blame for this disaster. They did not apply due diligence to this contract and now taxpayers will be forced to pay hundreds of millions of dollars to clean up the mess.

“This is the latest in a series of financial blunders caused by Colin Barnett’s chaotic and dysfunctional management of important projects. It’s no wonder Mr Barnett has lost WA’s AAA credit rating and blown out State debt by 700 per cent.

“Mr Barnett, Mr Buswell, and Mr Hames must offer a full explanation into this scandal.”


MARK MCGOWAN MLA – WA LABOR LEADER

SHADOW MINISTER FOR REGIONAL DEVELOPMENT; ECONOMIC REFORM; PUBLIC SECTOR MANAGEMENT

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