19 February 2013
MBIE acknowledges OAG findings on proposed International Convention Centre
The Ministry of Business, Innovation and Employment (MBIE) accepts the Deputy Auditor-General’s findings that some
processes used by the former Ministry of Economic Development (MED) to seek expressions of interest in building an
international convention centre did not meet best practice procurement standards.
However, MBIE Chief Executive David Smol welcomed the Deputy Auditor-General’s conclusion that there was no evidence to
suggest that the final decision to negotiate with SkyCity was influenced by any inappropriate considerations.
“I also welcome the finding that officials worked in good faith to provide a careful and genuine evaluation of the
options, and that issues around the social cost of gambling received adequate attention from officials.”
The Office of the Auditor-General today released its review of the government’s decision to negotiate with SkyCity for a
proposed international convention centre, including the processes used by MED – now part of MBIE.
“The Deputy Auditor-General’s report identifies areas where our processes fell short of best practice,” Mr Smol said.
“I accept that, and we will learn from this report to improve our processes as we establish the procurement function
within MBIE.”
“Prior to the Deputy Auditor-General undertaking this report, work was already underway to strengthen procurement
capabilities and processes across the public sector, including within MBIE.
“Last year Ministers agreed to MBIE’s proposal to establish a team of procurement experts who can advise government
agencies on complex commercial projects like the convention centre. This team is now in place and is supporting a number
of agencies on procurement activities.”
Mr Smol noted the Deputy Auditor-General’s comment that discussions with SkyCity were unusual because they did not fit
easily into any established category of procurement activity and so it was unclear what procedural expectations should
apply.
“There is no off-the-shelf process for making such complex decisions,” Mr Smol said.
“The Deputy Auditor-General also points out that, given the nature of the responses it is likely that the SkyCity
proposal was always going to be the most attractive from most perspectives.
“As she says in her report, no other submitter appears to have been likely to be able to adapt their proposal to enable
them to fund the full construction costs.
“She notes that overall it is obvious that SkyCity’s gambling facilities could give it a unique means of funding the
capital costs of a convention centre, which could avoid the need for substantial central government funding.
“She also says that in the course of the inquiry she had not heard any comment to suggest that other proposers did not
understand the reasons why the government might prefer the SkyCity proposal.”
ENDS