The decision to scrap a major upgrade to the Perth Convention and Exhibition Centre (PCEC) could leave Western Australian taxpayers facing a compensation bill running into millions of dollars, on top of the $35 million already spent.
Heated Parliamentary Exchange
During a fiery Question Time in State Parliament on Tuesday, Premier Roger Cook defended his government's controversial move to axe the redevelopment project. The Premier was pressed by Shadow Treasurer Sandra Brewer on whether the state would be required to pay PCEC leaseholders, the Wyllie Group and Brookfield, a further $8.5 million in compensation.
Mr Cook twice refused to confirm or deny the specific figure. "The conversation with the leaseholders is ongoing," he stated. "It continues to be an important conversation, and it's one that we have been undertaking for some time now."
Defending the Tough Decision
The Premier justified the cancellation, which was first announced in January last year, by redirecting the $1.5 billion towards three new hospital projects. He strongly denied that the $35 million already spent on the project's definition phase was wasted.
"This is not money which are sunk costs," Mr Cook argued. "This is important work to understand the site, the opportunities, and ensure that we could understand the engineering constraints. I make no apology for the fact that the Government has made a tough decision."
Leaseholder's Devastating Blow
The government's decision has drawn sharp criticism from the Wyllie Group. Last week, its Managing Director, Melissa Karlson, accused the state of backtracking on support for a deal that would have seen mining giant Rio Tinto move its headquarters into the revamped centre.
"There's no way in the world I would have stuck my neck out, and gone and chased the biggest anchor tenant in a decade in the country, if I didn't think I had the Government behind me," Ms Karlson told The West Australian. "It's disappointing. It's devastating. I thought I had worked closely enough with Government to have deserved a lot more respect."
Despite the controversy, Premier Cook highlighted the existing success of the current PCEC facility, noting it has a full calendar of events, welcomes around 100,000 tourists annually, and recently won awards at the AHA awards for its conference and functions.
