Council’s financial credibility on-the-line

Ed,
Clarence Valley Council is now making some interesting claims regarding the South Grafton Depot project purportedly based on Councils “financial modelling”.
In fact, Council has neither the financial modelling software nor the in-house skills set to do more than very basic “guesstimates”. If it had it could have provided to Councillors a completed business case for the Depot development instead of a “conceptual based” proposal, and it should have delivered that complete business case to Councillors for their examination and review instead of the two page “summary” they were given.
To date, no Councillor has ever seen the completed business case. The $13.5m capital cost claimed is incorrect as more than $1.7m has already been spent bringing the commitment so far to in excess of $15.2. A $13.5M tender price is correct but large construction companies do not make profits on tender prices particularly in Government tenders. They make the profits on the contract variations and usually these are substantial because government contract writing and administration skills can be notoriously poor. Finally, the Depot is more than likely in the wrong place because no works and logistics study was ever undertaken. Councils works recording doesn’t collect the information needed to carry out such a study, mainly because it isn’t aware of just what information it needs to collect. It’s very much a matter of Council “not knowing what it doesn’t know”.
Ian Saunders,
Maclean