EXCLUSIVE: Altum would need to outsource infrastructure build
ALTUM Property Group would need to contract out the management of its infrastructure development on Great Keppel Island, a Deloitte assessment concluded earlier this year.
A Financial and Managerial Capability Assessment completed in May regarding the potential transfer of GKI land leases from Tower Holdings to Altum said that despite Altum having the experience to manage the building of houses and shops on GKI, it would need to "outsource or contract into the project team the project management capabilities to deliver the complex infrastructure component of the proposed development".
"Deloitte is of the view," the report read, "that the applicant [Altum] has the project management capabilities and experience to effectively deliver the residential/commercial aspects of the project, but their in-house infrastructure experience and capacity is minimal for a project of this scale and complexity."
The independent evaluation adds to Deloitte's finding that Altum "does not have the financial capacity" for the GKI project.
Altum's GKI Revitalisation general manager Leigh McCready confirmed that even though the real estate developer had experience building civil infrastructure, it often hired contractors.
"Although Rob McCready, Altum's Construction Director, has experience in building civil infrastructure such as ports, bridges, and coal loading facilities, we are primarily a residential and commercial builder and typically subcontract most of the building works on our projects," she said.
"At our current $200 million project at Parkridge Noosa, we have engaged Queensland contractor Hutchinson Builders to complete the residential and commercial construction. For GKI, we have consulted with Hall Contracting and The Jetty Specialists, both of which have long histories of delivering government infrastructure, to complete the works if the government chooses to go ahead.
"They [the contractors] are marine infrastructure specialists of high quality and have provided us with detailed quotes to build the break wall, jetty, and barge ramp.
"Altum has offered to prepare a proposal for the State Government for us to assist them in delivering the public infrastructure they have made announcements about. To date, they have not requested we submit this proposal and may choose to deliver the works themselves."
Some of that work is indeed being done by the government: Labor will independently spend a little more than $30 million ($25 million at the time of the announcement) on a jetty, boat ramp, walking trails, and more on the island.
As previously reported, Altum feels that given the difficulty of funding large ventures while COVID-19 is still prevalent in the minds of financiers, it should not be responsible for finding money to build what will be used by the general public - that is, anything from toilet blocks and picnic tables to roads, power, water, and the like (referred to as 'public infrastructure'. The Deloitte report refers only to infrastructure generally).
"When the first half of the [Deloitte] report was completed back in June, Altum pressed 'pause' on further assessment to allow the State Government more time to confirm their funding for the public infrastructure for the GKI project," Ms McCready said.
"We need this information to determine whether the project is feasible. Since that point, there has been no further work done on the Deloitte report as we have waited for the government to finalise their support for the island's public infrastructure.
"Until we are advised by the state which public infrastructure they are committed to building, we are not able to progress any further with master planning, budgeting, design or engineering.
"On Thursday, October 1, just prior to caretaker period, the state did finally provide a written commitment to fund a break wall to guarantee all-weather, equitable access for passengers and logistics, and assist with erosion on Putney Beach, which was a welcome development.
"We still don't know however, which additional infrastructure they are committed to building on state land."
The core of the dispute lies in the State Government having received advice that Altum could not independently afford or manage its proposed development, whereas Altum insists it needs stronger government backing before going to other investors.
Based on Deloitte's assessment, Altum would require about $350 million to complete GKI's infrastructure component alone, although a figure closer to $500 million was previously reported.
The government has not declared it will spend more than the $30 million mentioned above; it said last year that its $25 million was "set in stone" and this year that it was "forging ahead on its own".
Altum said in August that $30 million was "not enough to support the delivery of the common user infrastructure required for the island redevelopment to proceed", which would suggest the present impasse is insurmountable.
Ms McCready had the following to say about the leaked Deloitte assessment:
"It is concerning to us that this half-completed draft report was leaked to the media by either the government department [the Department of Natural Resources, Mines and Energy] or the politicians," she said.
"These are the only two parties, other than Deloitte and ourselves, who had access to the report, which is marked clearly on each page 'Private and Confidential, for internal use only'."
Ms McCready said the department had denied knowledge of any leak and was "as appalled as we are that someone has breached the agreement signed with Deloitte to maintain the confidentiality of the report".
When contacted by The Morning Bulletin, the department could not confirm that statement.