COUNCILLORS have demanded staff come clean on allegations due diligence was not taken when accepting Traxion’s expression of interest (EOI) to develop an intermodal freight hub at Bomen.
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Some believe adequate checks into the company behind the proposed $75 million project could have foreshadowed its financial position, before falling into voluntary administration on April 30.
But a WWCC spokesman has confirmed due diligence was carried out before and during the process of engaging with the proprietary limited company.
“The due diligence that we’ve been told about but haven’t seen is disproportionate to the complexity and risk of the project to the city,” Cr Andrew Negline said.
Cr Negline believed expensive use of consultants muddied the relationship between council and potential commercial players and distanced councillors from the project.
A WWCC spokesman said an evaluation panel and advisors took due diligence prior to making a recommendation by: a session with Traxion and the financier representatives; comment from the industry, including the ARTC; conducted an ASIC search to confirm information provided in the EOI; researched projects completed by Traxion and the financier; and assessed a warranty that the entities were financially solvent.
“What this is is just a company snapshot, that’s not due diligence and it would have showed up for what is if it had been done correctly,” Cr Paul Funnell said.
“This goes to the heart of what I’ve been saying for ages and that is our organisation lacks the skill set to conduct this type of business and this is why we continue to fail.”
Cr Julian McLaren believes due diligence, which he defines as looking into the viability of a company, was not taken.
A WWCC spokesman clarified EOIs were assessed by an evaluation panel of four council staff and an external expert based on criteria relating to capability and capacity, commitment, net benefits and consistency with council’s vision for the site, on top of legal and technical advice also being obtained.
“Further due diligence on the separate company and sources of finance was to occur as the negotiations progressed,” he said.
Cr Garry Hiscock believed due diligence was being carried out initially, but was questioned as the project unfolded and now that the project was "iffy".
