Once again all information relating to GESAC is buried in the small print of the financial report in vague and obtuse language designed to reveal as little as possible. Attempting to piece together the various figures becomes an impossibility (deliberately so we believe) when no definitions of terms are provided, and no basic ledger of bottom line accounting on the project exists. Yet, there are still some startling announcements.

Below are some copied extracts. The last two are bolded because of their significance and we draw readers’ attention to the third extract in particular. Calling in bank guarantees is an astonishing move given that the court case is far from settled at this point in time. What happens if council loses? What does this say about the cash flow status if Council has to gamble in this manner for what is really a drop in the ocean of $1.8m in an overall budget? And what is the ‘unbudgeted variance’ of $99k for contractors? Surely not lawyers? Our guess at this stage is that the legal eagles’ costs would by now be triple this amount. Where is this figure in the accounts?

There are a number of issues concerning the building of the centre which are currently in dispute. They include the delay in completion of the centre (liquidated damages), variations, and back charges for use of Council utilities during construction and defects. The matters are the subject of civil proceedings brought by Council. A Directions Hearing on 23 August 2013 set dates for the parties to file documents. The parties are to confer and attempt to agree on a List of Issues. The parties are to hold formal mediation prior to 14 February  2014.

GESAC – Council has received income of $1.8M relating to the release of bank guarantees held by Council under the construction contract. This amount will be reflected in Council’s Income Statement on a progressive basis from August until 30 June 2014. The income recognised as at 31st August is $164K.

GESAC – there are unbudgeted costs associated with the defects and litigations issues relating to GESAC. These expenditure items will be treated as operational and will be offset (in part) by the income received from the release of the bank guarantees mentioned above. The unbudgeted variance in contractors relating to GESAC is $99K. 

Yes, council is in a legal stoush, but this does not mean that residents (and probably councillors) should be kept like mushrooms in the dark as to the financial side of things. The lack of transparency and accountability, throughout this entire project demands a full, independent investigation.

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