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Townsville Councillors railroaded by Labor Power Brokers on Adani airstrip

Councillors - Premier Annastasia Palaszczuk addressing Indian community

Councillors serve Premier’s campaign strings

The Chief Executive Officer. Ms. Adele Young of the Townsville City Council is coming under increased pressure to resign in the wake of the local council’s vote of seven to one in favour of approving the $18.5 million airstrip inducement deal with Adani Enterprises.

Ms. Young is being accused of misinforming and possibly misleading the Councillors about the risks and sensitivities of the $18.5 million inducement deal to Adani.

Growing opposition to the Mayor Cr Jenny Hill has manifest in a number of petitions by the Ratepayers social media and community change groups.

One petition lead by the local Ratepayers Association has attracted nearly 53,000 objections to the Council’s decision since the Adani inducement was announced. These objections were hand delivered this week to the Council by its President, Mr. Peter Newey who has lived in Townsville for 47 years.

Mr. Newey commenting to the ABC 7.30 Report program this week said “Why does a billionaire want two Councils to pay for an airstrip? He could afford a dozen of them. It doesn’t make sense.”

Rebuttal by Finance Experts

In a fierce rebuttal to the criticism from ratepayers and in support of the embattled CEO, the Chief Finance Officer, Mr. Matt Thompson said that accounting firm KPMG have modelled the fly-in fly-out hub and that it would create a new stream of positive revenue for the city.

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KPMG has projected that the $18.5 million contributed to the Adani airstrip would return more than $1 million per year in rates and service charges with an annual economic impact of $90 million from secondary jobs circulating in the community. The TCC will not release the KPMG report.

The newly appointed CFO and ex-Deloitte and Price Waterhouse Coopers delegate commented to reporter Domanii Cameron from the Townsville Bulletin that “without the investment of the airstrip, Townsville would not have received a single new FIFO job.”

However, this assertion is disputed by observers close to the negotiations because Townsville’s initial pitch was for 80 percent of the jobs while Adani had no intentions of choosing an exclusive hub.

Hoax of Exclusive Fly-in Fly-out Hub

A thorough feasibility assessment of Major Projects including the Adani fly-in fly-out hub by former Queensland Rail risk manager, managing director and founder of McLeod Investment and Consultancy said that “Adani was unlikely to choose one city for its exclusive fly-in fly-out hub.”

“The risk to Adani’s supply chain from adverse weather events, emergency response contingencies from cyclones and the high likelihood of ongoing protest and picketing action from Green groups to all of Adani’s transportation and logistics assets makes the exclusive hub plan unfeasible”, Mr. McLeod said.

Councillors - Townsville City Council CEO Adele Young and Mayor Cr Jenny Hill with executive staff
Image: Townsville City Council CEO Adele Young and Mayor Cr Jenny Hill with executive staff

Adani Enterprises has clearly defined the fly-in fly-out hubs as “marshaling points”, which as applied in the context of logistical risk dynamics, the mine operation and its construction projects would become completely disabled through a probable act of God.

The exclusive Adani marshaling idea for Townsville was a hoax, at the very optimum a media beat up and very least a State Labor spin. And in the boardroom of the TCC, it is alleged this miscalculation of Adani’s negotiation plan has cost Townsville ratepayers $18.5 million unnecessarily.

TREN’s sources inside the TCC alleged that dissenting voices against the Adani airstrip deal may have been intimidated by the CEO, pressuring Councillors and staff that such dissent would destroy their careers.

Executive support staff has even resigned and decided to take up positions in other government departments because of the toxic climate that has been created by the CEO and Mayor’s handling of the restructure.

The Mayor is understood to be frustrated with the CEO for allowing excessive numbers of staff to take redundancy packages, much more than the 144 originally budgeted for in the Nous Report, to the extent that up to 350 staff have left or are leaving the local government authority.

Councillor Dissent

Minutes of the council’s “special purpose meeting” on 10th July 2017 confirms the Townsville fly-in fly-out hub and Galilee Basin airstrip negotiations with Adani were discussed. One dissenting voice on the Adani inducement deal was Councillor Paul Jacobs, who is now Labor’s candidate for the State seat of Hinchinbrook.

The lone Councillor voted against the motion at the council special purpose meetings because he “believes there is not sufficient return to the community on the proposed opportunity to warrant Council considering the matter further and setting up a Special Purpose Vehicle.”

The City’s bid was for 80 percent of the total construction jobs. This bid demonstrates the exclusive marshalling point for Adani in Townsville was never a credible plan. The 80 percent jobs target was an arbitrary pitch that formed the centrepiece of the CEO’s negotiation tactic for achieving a politically tolerable compromise.

Reports also suggest that Cr Jacobs colluded with fellow Labor Councillors in a strategic decision to vote no on the Adani airstrip deal to serve as a decoy for State Labor doing backroom deals with the Greens while protecting the jobs rhetoric of the Premier that has vehemently defended Adani’s 10,000 direct and indirect jobs estimates.

The internal Labor party deal served to limit a ratepayer backlash against the Mayor and Labor party in favour of Cr Jacob’s nomination for the seat of Hinchinbrook.

However, Cr Jacobs is believed to be the recipient of the CEO’s wrath of intimidation for voting against the Adani airstrip deal and more broadly the CEO’s aggressive agenda – translated by Cr Hill as “the dog eat dog world we live in today” – to set up beneficial enterprises or “special purpose vehicles” with private capital suiters.

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Ex-Councillors have verified that the dominated Labor Council has exercised strategic voting behaviors on politically sensitive issues relating to developments, planning, infrastructure and budget decisions in the past to manipulate the political agenda and internal Labor party deals.

The timing of Cr Jacobs’ decision to vote against his Labor council colleagues just before announcing his candidacy for State Labor raises serious questions about the involvement of the State Labor party in a decision concerning the explicit legal obligations of a sitting Councillor to ratepayers.

TREN sources could not verify any collusion with respect to TCC’s negotiations with Adani in that the TCC could have gifted “manufactured equity” to Adani in the airstrip asset to improve Adani’s capacity to win the $900 million Northern Australia Infrastructure Facility (NAIF) loan.

But the credibility of the Labor government that is wanting to fast-track the jobs announcement from the Adani fly-in fly-out hubs before the State election date was announced by the Premier, was absolutely purposefully.

And in the context of Cr Jacobs dissent and distrust of the TCC executive and the Mayor, State Labor powerbrokers offered an olive branch to the well-liked Councillor to the State seat of Hinchinbrook in the party’s desperate bid to keep the Premier’s “jobs at any cost” campaign together.

As a Councillor, Mr. Jacobs is bound by contract and local government legislation to keep the business of Council confidential and secret, but it has put fellow Labor Councillors on edge and very defensive when asked who is fulfilling Cr Jacobs duties while he is on leave.

Questions around the Adani airstrip deal and Cr Jacobs olive branch to the seat of Hinchinbrook is meet with defensive questioning by constituents of the disruptive Councillor.

Yet Cr Jacobs’ official council phone is redirected to delegated Councillors who are unwilling volunteers, actively avoiding the duties to ratepayers of the Councillor in his absence.

Meanwhile, the wife of TCC Director Stephen Beckett, Labor Councillor Cr Shayne Sutton resigned from her Morningside ward in Brisbane to join her husband in Townsville.

Whispers within the Labor party suggest Ms. Sutton is tipped to run for the vacant seat of Cr Jacobs on the Council should Cr Jacobs win the State seat of Hinchinbrook, adding enormous strength and further domination of the Labor party in the boardrooms of local government bureaucracy.

Real and present danger for Adani

Queensland-based rail operator, Aurizon being the largest coal transport business in Australia, has placed a solid competitive bid to the NAIF Board to build and operate the railway corridor from Abbott Point to the Galilee Basin. If the Aurizon bid is successful, it is likely to have a serious and even fatal impact on the Adani financing model. As a consequence, Townsville’s recovery of the $18.5 million inducements could fail too.

The TCC has expressed clear intentions of becoming equity partners and capital partnership stakeholders with private capital companies through the “special purpose vehicle” or beneficial enterprise provisions in the Local Government Act.

With such a bold financial decision, Townsville and Rockhampton have real skin in the game of the Adani projects proceeding without failure or disruption. Because if the railway and coal mine construction fails to materialise, the $18.5 million may be stranded on the Galilee Basin airstrip hundreds of kilometres from the Townsville ratepayer.

The Mayor claims the Council has secured a bank guarantee from one of Adani’s Australian banks despite the fact all Australian banks have ruled out any funding for Adani. Initially, the Mayor represented the Council’s security from Adani for the 900 jobs commitment in the form of a special levy if Adani does not deliver the economic benefits.

Financial innovation CEO’s justification

The CEO decided to play the cat and mouse game under Adani’s rules. The deal struck was a 50 percent split with Rockhampton. But the CEO already knew before the July special meeting of the Council that Adani wanted the taxpayers to pay for the airstrip. The foreign-owned company also had an interest in spreading the political joy across Queensland, which the State government encouraged.

Initially, the cost of the airstrip was going to be $10 million less than the final estimate so as to accommodate local indigenous requests to move the airstrip to a less impactful site in the Galilee Basin. In which case, it came down to what the CEO could pitch to the Mayor and Councillors in order to “win jobs at any cost”.

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In effect, the CEO could take no risk in loosing the Adani deal or the Mayor’s political standing in the community, and the Premier’s political standing approaching a State election would be lost altogether. The Mayor and Premier are already ducking from the water security issue and economic recession the city has endured.

Ms. Young briefed the council of the KPMG report into the economic impact of the exclusive fly-in fly-out hub in Townsville at the closed meeting of the council. However, these reports did not emphasize the importance of the exclusive hub and therefore set the Council up to offer Adani an excessive bid under emotive conditions set by the Mayor in cohort the Premier’s jobs at any cost mantra.

The TCC CEO could not have managed the proper examinations and analysis, and provide the essential and timely information about the commercial, financial and political risks to the Councillors, all of whom are now feeling the pressure of ratepayer sensitivities and stress of a “dog eat dog” Mayor.

Hence the uprising of anger in the Townsville community that was once a pro-Adani electorate.

Making informed decisions in relation to the Adani airstrip funding and establishment of the beneficial enterprise entity under the Local Government Act and regulations is the Mayor’s and Councillors’ ultimate responsible to the ratepayers.

Should an alleged breach of local government rules be found, the integrity of fiduciary standards for reporting from the CEO’s office to the sworn representative body of the ratepayers could present serious concerns and even lay the grounds to trigger a Queensland Crime and Corruption Commission Investigation.

What is on the Council record

It was at this 10th of July 2017 special meeting that the proposed Adani airstrip site in the Galilee Basin was discussed in more detail and put to the council for consideration, 3 months before the Adani inducement was mentioned by Cr Hill, resolved and carried by all but one Councillor.

The Chairman of Wagners Group, Mr. John Wagner whose Toowoomba-based firm are experts in building airstrips, provided a briefing to the council. The minutes reported that “Council also considered the verbal comments by John Wagner at the meeting”.

Three subsequent special council meetings were held on 14th August, 13th September and finally on the 4th October at which a “special purpose vehicle” was discussed again that included the final approval for the $18.5 million inducements to fund the Adani airstrip.

However, at no time were the Councillors’ informed by the CEO’s reports and recommendations of the speculation that Adani was intending to choose an exclusive fly-in fly-out “marshalling point” for Townsville or Rockhampton.

The most credible scenario was that Adani was seeking multiple centres for its workers and contractors to fly passengers and goods to its airstrip in the Galilee Basin.

Cr Jacobs said he warned fellow Councillors that “the $18.5 million is a waste of ratepayers money and that they really need to look at everything”.

Councillors have seemingly been left in the dark about the Adani plan for an exclusive “marshalling point”, and whether the CEO needed to take such an aggressive approach to using ratepayer funds, is being lambasted by the Mayor and Labor powerbrokers.

Where was the State coordination

Why the CEO did not engage with the CEO of the Rockhampton Council, Mr. Evan Pardon to acknowledge a shared bid strategy for both regions and eliminate the power of the Adani bidding strategy has also come under intense scrutiny.

The TCC has refuted claims the $18.5 million was being borrowed from Queensland Treasury. The Mayor stated the fund come from cash reserves created from the council restructure. Both parties, albeit for different reasons, now depend on capital returns from the Adani coal business.

A lack of engagement and coordination of the Mayors and CEOs by the Minister for State Development, Dr. Anthony Lynham has raised serious concerns about the leadership of the State Labor government getting the best economic outcomes for taxpayers in regional areas.

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The State government’s conspicuous behaviour is driven by its internal party conflicts and clear pledge to not fund Adani’s coal mining interests, raising further speculation that the TCC may have engaged in broader funding discussions with Adani in order to achieve the mutual commercial interest of Adani, Cr Hill, the TCC executive and the Premier’s wildcard strategy to help fund Adani jobs through Council’s “special purpose vehicle”.

If the Council restructure did not occur and savings achieved as Cr Hill claims, funding the Adani airstrip would not have been possible with the State government’s anti-coal mine stance because State Treasury must be requisitioned.

The Premier’s reckless spending and Treasurer’s “innovative” accounting plan to hide debt and justify “jobs” at any cost is clearly evident by the 18,000 government jobs she has bought in three years and the zero reduction of the $73 billion debt she promised would be reduced from the revenue’s of the government’s own corporations.

TREN sources suggest Queensland Treasury and the Premier’s office was unofficially consulted about the Adani airstrip deal, but the imperative “dog eat dog” fight between Councils and the exclusive hub hoax rhetoric provided the credible cover for suppressing public scrutiny and manage the dialogue in the event of a community backlash.

Cost of business with political power and private capital

How could the TCC and Mayor explain the news to ratepayers that Adani’s coal mine has been suspended from trading or delayed indefinitely?

Given the Green protest movement and Adani’s challenges attracting funding, this catastrophic risk for the Labor Council and state government is a very credible scenario.

As the News Ltd media in Townsville are implicit in promoting the $18.5 million Adani airstrip inducement deal, resourceful journalistic investigation and balanced reporting of the role of Council in the Adani airstrip negotiations has also come under fire in the ratepayer community.

When the Queensland Nickel business went bust in 2016 there was no commercial skin in the game for the Mayor or the Council. The Adani deal is different. The Adani airstrip inducement deal could easily turn the Clive Palmer villain rhetoric into the Adani taxpayer victim catastrophe as is happening now from anti-Adani protesters during the Queensland state election.

Councillors - Labor ex-Premier Peter Beattie and current Labor Premier Annastasia Palaszczuk of Queensland
Image: Former Queensland Premier Peter Beattie, architect of the “beneficial enterprise” instrument in local government and current Labor Premier Annastasia Palaszczuk Photo: Office of the Premier

Labor lobbyist Cameron Milner has been at the centre of Adani’s relationship with State and Council Labor members. The Townsville and Rockhampton deal with Adani has Labor lobbyists running to protect the re-election of Annastacia Palaszczuk, cutting ties with Adani just in time for the State election.

Surely would be a hell of a price to pay for Townsville ratepayers if the TCC executive were found to have exposed the ratepayers to the Adani airstrip inducement risk under political pressure from the Palaszczuk government’s “jobs at any cost” election campaign.

This also raises the question does the CEO have essential governance and risk capabilities. Considering the KPMG economic feasibility, one would conclude yes. Afterall, it’s the entire purpose of hierarchical organisations and the delegated authorities to ensure the interests of shareholders are protected.

At the head of the local government organisational hierarchy is the Mayor Cr Jenny Hill and CEO Ms. Adele Young, neither of whom are willing to be straight up with the ratepayers of Townsville about the perceived recklessness of funding an airstrip of no direct material financial benefit to the people of Townsville.

Commercial mandate of the CEO

Ms Young said upon accepting the role of TCC CEO that “Roads, rates and rubbish will always be a core of local government, but in tough times I believe that Council must take a more active leadership role in the community and work with peak bodies and business to create jobs and get the city moving.”

Mayor Jenny Hill said, “Ms. Young was able to demonstrate a capacity to lead organisations through significant change and deliver real improvements in productivity through innovation”.

We now know that financial inducements for a $30 million airstrip outside the local government area are clearly within the realms of the CEO’s innovation agenda.

And such benchmarks on which the Mayor Jenny Hill appointed the CEO, could become harder to defend as the deafening chorus of community anger redefines the appetite of a “jobs at any cost” agenda by Mayor Cr Hill and the Hon Premier Palaszczuk’s Labor party alliance.

Councillors - Queensland Premier Annastasia Palaszczuk being officially welcomed by the Queensland Indian community
Image: Premier Annastasia Palaszczuk being blessed by the Queensland Indian community Photo: Office of the Premier


Fingerprints of the Premier

Considering the slippery slope of local government authorities engaging in direct investment corporations, even the elected Councillors and community representatives are being informed of community interests on a “need to know basis”, throwing the value and integrity of the State’s democratic institution of local government under the Premiers re-election expediency bus and into the “waste taxpayers money at any cost” basket.

If anything, the ratepayers are being given a dose of imagination and creative use of government resources to raise revenue.

But an increasing number of the residents and voters do not appreciate a seat at the high rollers table, especially using the loot from 1000s of direct and indirect local Council job cuts to gamble on an incredibly suspicious Adani airstrip deal.

“If it looks like a duck, walks like a duck and quacks like a duck, then it’s a duck.”

Well, the Adani airstrip deal looks like a self-righteous power play by the Palaszczuk Labor party buying and selling jobs at any cost. You can make up your own mind which of the “chicks” are following the mother duck.

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Aaron M, Editior
Aaron is the founder and editor of TREN eMagazine with 15 years experience in the real estate industry investing and helping investors seek value, leverage value and capitalise on value, developing professional and technical skills and capabilities that have enabled his success in business from startups, adoption, asset growth, management and community leadership projects. Aaron also loves travelling, sports, his partner Jodie and helping people discover their "why" and find their few "what's" in life that realise the "wows. The " www" in is one of his why, what and wow's that strive to add valuable content and analysis for readers to participate and win.

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