SYDNEY METRO: Contractors crackdown ordered

Press/Media: Expert Comment

Period12 Sept 2023

Media contributions


Media contributions

  • Title SYDNEY METRO: Contractors crackdown ordered
    Degree of recognitionNational
    Media name/outletThe Sydney Morning Herald
    Media typePrint
    Duration/Length/Size588 words
    DescriptionThe NSW government is tightening rules for contractors and labour hire companies working on Sydney's Metro rail projects after revelations that senior staff were recruited on salaries well above $500,000 a year.

    A week before the state budget, Sydney Metro has started a major review of contractor arrangements to scrutinise their "longevity and value for money".

    As an interim measure, labour hire firms or so-called professional services contractors on deals worth between $50,000 and $250,000 - or variations to them - will need to be signed off by two senior Sydney Metro executives.

    Contracts worth more than $250,000 will require the additional approval of Sydney Metro chief executive Peter Regan.

    It follows Herald revelations that contractors have been repeatedly hired on short-term contracts worth more than $500,000 a year for up to a decade. The investigation also revealed that Sydney Metro allowed senior managers to run private companies that recruited contractors to the agency.

    Regan yesterday told the Sydney Metro workforce that "we can do more" to "refine our workforce balance" and manage consultants and contractors while delivering the country's biggest public transport program.

    "In light of recent public commentary, I thought it was important to update you on what we have done so far to balance our workforce profile, and how we can enhance our existing controls," he said in an internal note.

    Regan said it had been a "difficult week for our staff, consultants and contractors" but reminded them that it was a "good time" to ensure their declaration of association and conflict of interest disclosures were up to date.

    Macquarie University accounting professor John Dumay said the new measures were "a step forward" but that they failed to address transparency issues.

    "Full public disclosure is needed considering the scope and scale of potential conflicts of interest. A more comprehensive investigation is needed," he said.

    The latest audit of contractors will be separate to a review into Sydney's $65 billion metro rail projects, led by former federal transport bureaucrat Mike Mrdak. A final report from the Mrdak review is due to be released next month.

    NSW tender documents show Sydney Metro has inked 495 contracts worth more than $25 billion since 2018. The government agency is charged with delivering the Metro West underground line between the Sydney CBD and Parramatta, as well as two other mega-rail projects.

    Transport Minister Jo Haylen said Sydney Metro's contracting practices needed to be more transparent to ensure taxpayers were getting value for money. "From [Monday], Metro will begin to assess its contracting arrangements and tighten up its hiring practices," she said.

    Greens MP Abigail Boyd, who chaired a parliamentary inquiry into the government's use of consultants, said rebuilding a public sector capable of constructing large projects would be a much harder task for the government.

    "The more consultants and contractors that the previous government allowed to become embedded in Sydney Metro, the fewer public sector workers we've had the opportunity to skill up," she said.

    "You'd hope that this latest review would look into how the Sydney Metro leadership has been so asleep at the wheel."

    Macquarie University accounting emeritus professor James Guthrie said Sydney Metro needed to embed public sector values into the way it manages contractors.

    "This Sydney Metro case highlights the lack of transparency in using consultants whose services and people are not subjected to public sector ethical and integrity regulations," he said.

    Fairfax Media Management Pty Limited

    Document SMHH000020230911ej9c0000h
    Producer/AuthorNigel Gladstone, Matt O'Sullivan
    PersonsJohn Dumay