The Sky City reports

February 19th, 2013 at 2:32 pm by David Farrar

The Deputy has reported:

The inquiry has considered both the adequacy of the process followed and whether anything substantively wrong has taken place. The main question underlying this inquiry was whether the Government’s decision to negotiate with SkyCity had been influenced by inappropriate considerations, such as connections between political and business leaders.

We have seen no evidence to suggest that the final decision to negotiate with SkyCity was influenced by any inappropriate considerations.

The Opposition will try and ignore this conclusion.

However, we found a range of deficiencies in the advice that the Ministry provided and the steps that officials and Ministers took leading up to that decision. The quality of support that was provided fell short of what we would have expected from the lead government agency on commercial and procurement matters.

And this appears to be very fair criticism. Note that there is no suggestion that the process should be redone. Also none of the other bidders want (as far as I know) for the process to be redone.

The full report is here. A quote:

In our view, the result was that one potential submitter had a clearer understanding of the actual position on a critical issue – that the Government  did not want to fund any capital costs – than any other potential submitters. 

Although this is a fl aw in the process, it might not have had significant consequences. The other submitters still understood that the Government’s finances were constrained, and became more so as 2010 progressed. No other submitter appears to have been likely to be able to adapt their proposal to enable them to fund the full construction costs. We accept that it is unlikely that this flaw made a material difference to the outcome.


Given the nature of the responses, it is likely that the SkyCity proposal was always going to be the most attractive from most perspectives. Indeed, in the course of this inquiry, we have not heard any comment to suggest that other proposers did not understand the reasons why the Government might prefer the SkyCity proposal. …

We accept that officials were acting in good faith to support decision-making by Ministers on some difficult and controversial matters. The fact that the process was unsatisfactory does not automatically mean that the conclusions reached were unsound.

Now this is not to minimise the criticism of the Deputy Auditor-General. MED did not run the process to the standard expected, and the Government should ensure it does so in future. But let’s be very clear that this is a different issue from whether the report of the DAG means the convention centre agreement should not proceed.

Also worth noting:

In the previous Parts, we briefly mentioned that officials have researched the costs of increased gambling and provided advice to Ministers on this. It is not appropriate for us to detail the content of that advice in this report, but we can confirm that we are satisfied that the issues have received adequate attention during the evaluation and negotiation process. As already noted, any reforms of this kind will also be debated publicly and by Parliament before they can be implemented.

Of course the Government and are yet to agree on a package, so the focus will now be on an agreement being struck, and then legislation proposed to implement it.

10 Responses to “The Sky City reports”

  1. Viking2 (14,383 comments) says:

    So, two govt.departments whose CEO’s (Highly paid), would rate as second rate managers.
    what a surprise. No doubt someone is going to come along and tell us we didn’t pay them enough for the useless to be good at their highly paid jobs.

    Every reason for Govt. to get the fuck out of these things.

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  2. burt (11,492 comments) says:

    This should bring the government down… Unlike the situation with the Hawkes Bay DHB where a $50m contract was awarded uncontested to a company that employed the Health Ministers husband – that was a move on situation and not in any way comparable…. It was after all done by a Labour minister and we all know they don’t need to be accountable to anyone….

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  3. Elaycee (4,538 comments) says:

    There must be another Report because I haven’t found the part in any of the pages that justifies this bollocks headline from Stuff:

    SkyCity report slates Government ministers

    Really? This Report doesn’t ‘slate Government ministers at all…. so where is the ‘other’ Report that does?

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  4. toad (3,680 comments) says:

    Nice spin, DPF. Have a read of Toby Manhire’s (admittedly selective) 10 quotes from the report:

    1. “We found a range of deficiencies in the advice provided and steps taken leading up to [the] decision.”

    2. “Although decisions were made on the merits of the different proposals, we do not consider that the evaluation process was transparent or even handed.”

    3. “By the time it was expected that SkyCity would put a firm proposal to the Government for support, officials should have been working to understand and advise on the procedural obligations and principles that would need to govern the next steps. We found no evidence that officials were doing so at this stage.”

    4. “The meetings and discussion between the Government representatives and SkyCity were materially different in quantity and kind from those between the Government and the other parties that responded.”

    5. “SkyCity was treated very differently from the other parties that responded and the evaluation process effectively moved into a different phase with one party. In our view, the steps that were taken were not consistent with good practice principles of transparency and fairness.”

    6. “Overall, we regard the EOI [expressions of interest] process in stage two as having been poorly planned and executed. Insufficient attention was given to planning and management of the process as a whole, so that risks were not adequately addressed and managed.”

    7. “We did not see any evidence of formal discussions or decisions on the evaluation process and criteria, or mapping out of the basic options for what might happen next, or advice to Ministers on how the process would be managed and their involvement in it. We do not regard this as adequate for a project of this potential scale, complexity, and risk.”

    8. “We have concluded that the preparation for the EOI process and the EOI document, fell short of good practice in a number of respects.”

    9. “In our view, the result was that one potential submitter had a clearer understanding of the actual position on a critical issue – that the Government did not want to fund any capital costs – than any other potential submitters … We accept that it is unlikely that this flaw made a material difference to the outcome. However, we have spent some time discussing it because we regard it as symptomatic of the lack of attention to procedural risks, and therefore to the fairness and credibility of the process.”

    10. “We are unable to comment on the value of any contribution the Government might make as part of any eventual agreement with SkyCity, because negotiations have not yet been concluded.”

    Hardly a vindication of what went on, as Key suggests it is.

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  5. Morgy (173 comments) says:

    Who gives a shit……get on and build the bloody thing!!

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  6. Dirty Rat (391 comments) says:

    Has Judith Collins peer reviewed it and taken out the bad bits ?

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  7. Keeping Stock (12,409 comments) says:

    What Morgy said. But watch the Greens and Labour keep whingeing and moaning about no jobs being created whilst they oppose the jobs that will be created in the construction of the Convention Centre, and its ongoing operation. Their hypocrisy is sickening at times.

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  8. James Stephenson (3,056 comments) says:

    Ok, so it turns out that the winner had a much better understanding of what the “customer” wanted than the losers…situation normal in the real world. Next.

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  9. swan (778 comments) says:

    So Sky City had the inside knowledge that the client wanted to part with as little money as possible. Amazing. We always spend a lot of time when tendering in our business deciding whether the client wants to spend more or less money…

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  10. joana (1,983 comments) says:

    What is the definition of corruption? Key in parliament yesterday was at his dogdyiest best. How many of you know people with pokie addictions?

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