On his
return from summer holidays, SA Premier Jay Weatherill had no choice but to be
interviewed on ABC local radio about a media focus on a recent Decision
by Supreme Court Justice Malcolm Blue.
Blue’s Decision
followed a state government sale of 407 hectares of industrial land at Gillman
in the outer north western suburbs of Adelaide to developer Adelaide Capital
Partners.
Justice
Blue found that the sale was “...made in disregard of prudent commercial
principles”. The judicial review was sought by another corporation,
Integrated Waste Services. The Decision implied that the government should have
put the sale of the land out to competitive tender. Another big corporation,
French based Veolia, was also upset by the government awarding the purchase of
the land without a competitive tender process.
The media
stories, championed also by ‘the opposition’ Liberal Party, insisted that
governments should facilitate ‘fair competition’ between capitalists when a
government asset was up for sale by having a transparent tender process.
Provided this was done, a ‘fair price’ would be obtained by the government for
the asset sale.
Premier Defends Sale of Public Asset
The Premier
defended the government’s decision to sell the 407 hectare site to Adelaide Capital
Partners for two reasons.
Firstly he
said that the sale price of $30 per square metre resulted in $100 million for
the 407 hectare site, a much higher price than anticipated by government
organisation Renewal SA. Therefore the taxpayer got a good deal.
Secondly, he
said that the new owners of the land, Adelaide Capital Partners, intended to
develop the site to create jobs. His relevant Minister at the time of sale, Tom
Koutsontonis, said the sale would create 6,000 or so jobs.
Jay
Weatherill in the radio interview then added the line designed to silence
opposition to the sale. He said that SA would be losing up to 13,000 jobs with
the closure of General Motor’s Holden plant at Elizabeth and subsequent
closures of companies reliant on that plant for their operations. Without
naming the companies, he said that Veolia and Integrated Waste Services only
wanted the land to expand their waste dumps at adjacent suburb Wingfield
whereas Adelaide Capital Partners actually wanted to create jobs for South
Australians.
Who Really Benefits From The Land Sale?
At the time
of the land sale over a year ago, the Adelaide Capital Partners chairperson,
Stephen Gerlach, announced that the newly purchased ‘industrial hub’ would be
called “Lipson Estate”. This sounded promising with readers imagining an actual
industrial complex where goods of use value to the people of South Australia
and beyond would be made.
Or
perhaps some were imagining that “Lipson Estate” meant the provision of
affordable housing for young families, the elderly and disadvantaged?
After all,
the last proposed development for the Gillman area was the Multi Function Polis
(MFP), a joint venture between the federal Labor Government of the Hawke-
Keating era and Japanese capital. The MFP promised housing for 100,000
residents in a state of the art village setting. (The proposal was dumped by
the Liberal governments at state and federal levels in the mid 1990s.)
However,
things started to come adrift in the readers’ imaginations.
The MFP was a joint government – private capital venture, but has not the
Weatherill state government just ruled out a joint venture this time round by
SELLING the government’s asset and any direct control of what may be developed
on the 407 hectare site?
Ownership of what now happens at the site is in the hands of private
capital in the form of Adelaide Capital Partners.
So what do they actually have in mind? What is their motivation?
At the time
of the sale Gerlach added that the company saw the site as the “ideal
gateway for the world’s major resource companies to establish and support the
global scale projects that will underpin the SA economy over coming decades”.
Adelaide
Capital Partners is made up of a group of companies which started in South
Australia.
They are –
Gerlach Asset Development Pty Ltd, a specialist property and financial services
group.
- Resource Co, an environmental
resource recovery group.
- McMahon group, specialising in
asbestos removal.
- Ahrens group, a fourth generation
family owned construction and steel fabrication business.
Their
Directors and CEOs may have a genuine interest in stemming the tide of economic
decline in South Australia as global capital continually remoulds (or in
many cases demoulds) local economies in pursuit of the global bottom line.
Their allegiance to South Australia may, in Weatherill’s defence and thinking,
be much stronger than the likes of French based multinational Veolia who missed
out on snapping up the land for its own ends.
However the
impelling motive of Adelaide Capital Partners will be to make profit by
providing a mosaic of warehousing and distribution companies to service
resource based companies with operations in SA.
Foremost in
their minds will be the expansion of Olympic Dam by BHP Billiton and perhaps
the logistics associated with food and beverage and defence related industries
in the northern suburbs and Port Adelaide.
The Directors
of the company are well-placed to profit from this type of activity.
Chairperson Stephen Gerlach, who started off as a lawyer and then senior
Partner in business law firm Finlaysons, has held high positions in SANTOS,
Futuris (now Elders) and Southcorp (wine industry).
Andrew
Gerlach, the CEO, has a career in investment markets, including four years in
the USA at an Industrial Park now owned by a US Pension Fund. The Industrial
Park secured as clients some big multinational corporations including FEDEX
(notoriously anti – union), Toshiba, Kumho Tyres and Staples. Andrew Gerlach
also sits on the Industrial Committee of Property Council (SA). The Property
Council (SA) came out in support of the government sale to Adelaide Capital
Partners. No surprise there!
The likes of
BHP Billiton and other users of the newly acquired Gillman site will endeavour
to squeeze the lowest possible lease cost arrangement with Adelaide Capital
Partners or the latters’ warehousing tenants at the site.
There will be
a scramble for a share of profits.
One thing is
certain. The SA Government will not be the landlord at Gillman. The landlord
has been privatised in the form of Adelaide Capital Partners.
If the
company’s plans succeed, private profits will flow to them. Bigger developers
will circle and the land itself may end up being owned by much bigger ‘fish in
the sea’ with government as onlooker, licking its wounds over the sale of a
future lucrative asset for a mere $100 million!
What About The Workers?
It is pretty
clear that most of the jobs at the Gillman site will be in construction
initially and longer term in warehousing and transport. The latter two areas
are not labour intensive and both are renowned for sham contracting
arrangements and/or extensive use of labour hire.
Now that the deal is done by the state government, the least it can do is
work with trade union members and their representatives to ensure that the site
not only provides 6,000 jobs, but decent, well paying, secure jobs to cushion
some of the blow of the destruction to Gillman’s north of the car and car
component industry in Adelaide’s northern suburbs.
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