$8 million payout to Allia
28 Aug 2014 - In April 2014 Allia terminated their contract to operate nib stadium. The decision by Allia to end their contract cost the WA taxpayer $8 million. .
As a consequence of a clause inserted by the Barnett Government, the decision to terminate the nib stadium contract resulted in an $8 million payment being made to Allia by the WA State Government.
The Barnett Government seems to have lost sight of this basic tenet in its agreement with the managers of nib Stadium when it took control of the venue in 2011. The dismal result is that WA taxpayers are on the hook for an $8 million payment to Allia Venue Management because the company wanted to get out of the contract early. West Australian 7/4/14
Allia was to manage nib stadium until the end of 2023. Allia had no requirement to prove that the ongoing works at Peth Stadium resulted in a loss of revenue.
The Allia Venue Management was able to claim millions of dollars in compensation for taxpayer-funded redevelopment works at nib Stadium without having to prove the works caused any loss of revenue. West Australian 5/4/14
The existence of the clause was inserted by the Barnett Government in 2012 against the advice of senior public servants. It was only brought to light due to documents obtained under Freedom of Information.
Despite repeated questioning in Parliament, the Sports and Recreation Minister Terry Waldron Minister was unable to explain why the clause was in the contract.
While it is not unusual for there to be a clause to compensate the operator if the government chose to end the contract early, the Minister has been unable to explain the logic for compensating the operator given the operator decided to cease their operations. The end result is a business being paid $8m for choosing not to operate.