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Solid Energy accused of cronyism over contracts

Published: 6:16PM Thursday April 18, 2013 Source: ONE News

Claims of cronyism are being levelled at Solid Energy amid revelations contracts did not go through a tender process.

ONE News has seen documents that show the work went to a company that was chaired by a man who is also the acting head of Solid Energy.

Garry Diack, who was chairman of a company called Vera Facienda, has stepped in as interim chief executive of Solid Energy.

Vera Facienda specialises in corporate and business strategy and corporate governance and the paperwork shows that over the last two years Solid Energy had about $790,000 worth of contracts with the company which did not go through a tender process.

Labour says it is a terrible look.

State Owned Enterprises spokesman Clayton Cosgrove says it certainly raises huge issues of cronyism.

"Because an employee is also chairman, you're on both sides of the deal, that is a greater reason to have an open and transparent process," Cosgrove said.

The contracts included about $400,000 for a review of Solid Energy; about $220,000 for a consultant to identify cost cutting measures; about $140,000 to review website security after it was hacked in 2011 and about $30,000 for an organisational review.

Solid Energy says it was not necessary to put the contracts out to tender because Vera Facienda is a specialised company. It says Diack was not involved in the contracting process and his role as chairman was unpaid.

But Cosgrove says "there's a lot of murk and muck about this because there wasn't an open process".

And Labour says it reinforces its call for an Auditor General's inquiry into Solid Energy.