Audit launched into Daintree Ferry contract renewal

Daintree river crossing

Howard Salkow

Senior Journalist

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An auditor will review the processes behind the Daintree Ferry Contract Renewal. Full Council meeting can be viewed here. Discussions on the Ferry begin at 50 minutes.
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A probity audit spearheaded by Councillor Lisa Scomazzon to review and provide detailed reports about the processes behind the Daintree Ferry Contract Renewal, was unanimously supported in an open Council meeting today.

“Douglas Shire Council today unanimously resolved to request the Chief Executive Officer (Mark Stoermer) to engage an independent probity auditor to analyse the ferry contract process to ensure public trust and understanding in the decision-making.

“The probity audit will cover the period from initial consultations in 2018 until now,” reported Council.

Clr Scomazzon stressed the need for transparency and despite voting in favour of Council purchasing the ferry for $4.5 million, she felt a probity audit was appropriate.

In an open letter to the community last week, Douglas Shire Mayor Michael Kerr revealed that Council had paid $4.5 million for the Daintree Ferry vessel.

“Tourism market research suggests Cape Tribulation and the Daintree are the two top motivators for return travel and play a significant role in the reason people to travel to Douglas Shire.

“This is why Council paid $4.5 million for the Daintree Ferry vessel.

“While the purchase price is significantly higher than the independent valuation of about $800,000, Councillors and I decided we were not willing to sacrifice the livelihoods of local business owners and residents,” said Kerr.

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At a Special Meeting of Council, three councillors – Mayor Kerr, Lisa Scomazzon and Peter McKeown – voted in favour of the purchase. Councillors Abigail Noli and Roy Zammataro opposed it resulting in a 3-2 result.

On December 15 last year, Newsport reported that after months of debate, the issue of the Daintree River Ferry crossing had been brought back before Council with the Mayor and councillors resolving to resume negotiations for a two-ferry contract at the Daintree River crossing.

“However, key points from the negotiated Daintree Ferry contract, including costs, time frames and key performance indicators, will be brought back to a Council meeting before a contract is formally entered into,” the report said.

When Newsport contacted all four councillors to canvas their views on the $4.5 million acquisition, Clrs Abigail Noli and Lisa Scomazzon said why they were against and for respectively. Clrs Roy Zammataro and Peter McKeown did not respond to our request.

Clr Noli said the vote in December 2020 by the current Council was to continue with the negotiations on the two-ferry contract. “This decision is not that.

“There was no consultation by this council as to whether the ratepayers wanted to buy a ferry, consultation was completely disregarded by this purchase.

“There was no transparency. The first time the public knew that buying the ferry might occur was 12 January 2021. The next time was in May of this year, a mere few days before it occurred.

“The speed for this purchase is not good governance; good governance of Council is one of the tasks that a councillor is assigned to do by law,” said Noli.

On the other side of the ledger, Clr Scomazzon said after many weeks she had researched the history of this contract from 2018 to date.

“I looked at the tender process, the current contract and the two-ferry contract, and negotiations which have now expired and based my vote on this research.

“I may not have been happy with the price we paid for the ferry, but I believe that the way I voted was the best long-term option for this shire,” she said.

She added that the information she had requested was given to all Councillors for them to review as well.

Clr Noli said the expense will now be worn solely by the ratepayers, regardless if the money comes from the Ferry Reserve or a loan or elsewhere.

“It must be replaced. As we now do not have a second ferry in the pipeline and thus revenues coming in by increased ticket sales, this may be a long process.

“Paying back the money has to occur sooner or later and that means either a decrease in services or a disproportionate increase in rates.  

“It also concerns me the time it will take to pay back and when it will start to occur. Having an operating deficit happens, but it is no good to continue for extended periods as such it has detrimental flow-on effects to all budget aspects. The longer it is put off in regaining the money, the worst the long-term effects will be,” she said.

She said the timing is not right, in this tough economic time adding that it is not a good idea for a council to take on a 15-year-old depreciating ferry asset.

“My belief is that the best financial decision by Council does not include buying the ferry but continuing with contracting out under an owner-operator. I believe added costs by involving Council staff has not been accounted for.

“There was no risk management done; no cost benefit analysis done; no detailed life-time costs analysis. I worry what the real cost will eventually end up being.”

Mayor Kerr said an independent audit was an essential mechanism to give the community confidence in the decision.

“We will be the first to admit we were not entirely satisfied with the amount of money paid for the vessel.

“However, it was the best result for our community given the cards we were dealt, and our ratepayers deserve to understand how we reached this point,” he said.

A probity audit is an assurance engagement, in which a probity auditor provides an independent scrutiny of a procurement process and expresses an objective opinion as to whether the prescribed probity requirements have been adhered to. ... Independence is essential to a probity audit.

Full Council statement can be found here: 

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