Exclusive: School projects at risk following contract termination, former senior bureaucrat referred to ICAC 09:58

Now, what about this for a story? I've been working on this for the last couple of days. And there are more than 30 new and upgraded school projects and 100 new public preschools currently at risk. They're up in the air about whether or not they're going to happen. And I'll tell you why. The Minsk government has mysteriously terminated a major construction contract just four months after signing it.

While a former senior bureaucrat has been referred to ICAC. So this thing's called the Manufacturing for Schools Program. 39 million bucks it's worth. It was a three-year contract. And the idea is they were going to use modern construction techniques, effectively like a flat pack. You go off-site, you build the school classrooms.

You truck them into the school and you assemble them on site, like it's IKEA, but for schools. And the promise was you would reduce costs of these new schools by up to 20% and you would save time on the construction of these schools by 30%. So at the moment, it takes four years to build a new school. Under this model, they reckon it will take 13 months. That was the promise anyway. So a $39 million three-year contract was awarded to APP Group.

And it was awarded to them in February. A couple of weeks ago, it was cancelled. Just four months in. Now, the former CEO of Schools Infrastructure New South Wales, Anthony Manning, he was involved in the contract process. And he was dismissed by the Department of Education in February as part of a broader restructure. But senior sources with knowledge of the situation have told me

that the New South Wales government has since referred the procurement process and his involvement to the Independent Commission Against Corruption. Now, Prue Carr, she says that any allegations that have come forward have been immediately referred to the relevant authorities. And the Department of Education also told me

that the APP contract was not terminated because of an ICAC investigation. However, concerns have been raised on how the manufacturing partner tender was undertaken for the work and we have referred those concerns to ICAC. Again, no suggestion of wrongdoing by Anthony Manning, the former CEO of Schools Infrastructure New South Wales. However, his involvement in the procurement of this contract has been referred to the ICAC.

Now, APP Group, they've confirmed to me in a statement that their three-year contract to provide services to the Manufacturing for Schools program has been terminated for just four months. And they say that it is a disappointing decision. And APP Group has been informed that the decision to terminate was not based on performance. And it's our understanding that the New South Wales Department of Education has decided to pursue a different approach to project delivery.

But APP won the contract through the official tender. It was open. And the compensation, well, how much is that going to be? Because if you sign a contract worth $39 million and you tear it up after four months, the taxpayer is going to be up for some dough, right? Now, the concept behind it is it's an interesting one. But listen to the schools that were slated for construction under this.

Sydney Olympic Park, Box Hill, the Gables, Jordan Springs, Gregory Hills and Gledswood Hills, Schofields and Tallawong, Leppington and Madawi. All of those schools were to be constructed under this Manufacturing for Schools program, a contract that has now been torn up.

It also included building 100 public preschools. Remember that? Chris Minns promised we'd have 100 new public preschools as part of his election commitment. And guess what? They haven't got a builder anymore because they've just torn up the contract. Now, they'll be going back out to tender. The Education Department says, look, they won't be delayed or cancelled, these new schools or upgrades. But it doesn't change the fact that they haven't got a contractor right here, right now to do the work.

and I've tried to contact Anthony Manning. I rang him and sent him a text message. I haven't heard back, but clearly there is something quite curious occurring within the New South Wales Education Department, and there's a little bit more information here that I will provide from the Department of Education. They say the New South Wales Government is in the process of restructuring school infrastructure in New South Wales. Now, this is a

body that runs building new schools and classrooms all across the state. It is no longer treated as a separate entity and no longer has a CEO. The former CEO was terminated in the course of this restructure. And they go on to say, the Department of Education is using modern methods of construction as an expanding its program to accelerate the delivery of new public schools. But you don't have a contractor at the moment.

The department has ended its agreement with the APP Group as manufacturing partner for the program. The department is seeking to encourage broader industry participation. We look forward to continuing this important change in major infrastructure delivery in conjunction with all industry partners to deliver the best outcomes for school communities. Well, there is no builder, there is no contractor and there's a referral to the ICAC saying

Because of the way, allegations around the way, the manufacturing partner tender was undertaken. And you haven't got a CEO of infrastructure either. He's been sacked in a restructure. So if you think that everything's going tickety-boo, it probably suggests otherwise. I want to bring in now Sarah Mitchell. She's the Shadow New South Wales Education Minister. She's on the line for us. Sarah, g'day. Good afternoon, Chris.

Just four months into a three-year contract, it seems, well, I think at the very least the government should tell us what the taxpayer had to spend to terminate that contract in terms of compensation, no?

Yeah, absolutely. And, you know, I think there's just a lot of questions raised in terms of why was it cancelled, but also what's the flow on effect going to be? You know, you mentioned there's a number of schools and preschools that modern methods of construction are being looked to use to build. And, you know, will families, will schools, communities and parents be waiting a bit longer? I think that's the million dollar question here as well. Yeah, the government's claiming no, but as it stands today, they don't have a builder.

That's right, and it's really interesting. We started this modern methods of construction approach, and it is quicker and it's cheaper, and you can build a lot off-site and bring it in. There's a number of schools that were built that way during our time in government. Jordan Springs Public School, which is actually in the Deputy Premier's own electorate, was built this way. So it is a good way to be building schools, and a lot of states are looking at it across a range of different

portfolio areas. But, you know, without a builder, without a contractor in place, I do think it does raise questions in terms of any time delays. And as you say, what's the cost to mum and dads and the taxpayers in terms of these cancelled contracts?

$39 million when you sign a contract like this, open tender, this APP group, they're a consortium of building contractors. They've been doing this kind of thing right around Australia. They built Bly Street, the Commonwealth Parliamentary Office, so they're pretty well credentialed. It just seems strange to me that after four months, the government had effectively changed their mind.

Yeah, look, and as I said, I think there's a lot of questions here that the government need to be answering. Certainly in my experience when I was minister, you're right, there are a lot of different but well-renowned companies who have been working in this space. Of course you've got to have appropriate tender processes and the like, and no-one's disputing that. But it is a bit curious, Chris, and as I said, I think there's questions that need to be answered here, and the government and the minister should be coming out and being as honest and open as they can about what's going on.

I know it's difficult when the ICAC is involved or potentially involved, but do you think when it comes just down to, righto, are these schools going to be on time? Are we still going to get them upgraded? And are they still going to happen in terms of the new schools that have been promised? I would have thought that information is incumbent on the government to tell the public about.

Look, I agree, and I think that's the kind of reassurance that those mums and dads will want to hear. And you're right, you've absolutely got to let ICAC follow on with their responsibilities, and no-one's disputing that. But at the end of the day, if people are going to be impacted, if there will be preschools that were meant to be built this term of government that aren't going to be delivered... I know that some North Coast flood recovery projects were looking at these methods as well. You know, these are real people who really do deserve to know

What's happening in my community? How will I be impacted? How will my kids be impacted? Will I be waiting longer for a preschool place? I do think that the government should be more honest and open about what's going on as best as they can be. But as I said, what's going to be the impact on those local communities? I think that that is a given that they should be giving that reassurance to mums and dads. Sarah Mitchell, I appreciate your time.

Thanks, Chris. That's Sarah Mitchell, the Shadow New South Wales Education Minister, former Education Minister in the Perrottet and Berejiklian governments, mind you. 131873. Now, what do you think about all this? It's all very curious, right? The Manufacturing for Schools Program, $39 million contract, signed for three years, terminated after four months. Why?