Kempsey cinema’s Public Private Partnership rejected by Office of Local Government

The development of the Kempsey cinema complex has been brought to a halt, with the Office of Local Government refusing to approve the Public Private Partnership as it stands – with the office raising concerns about Kempsey Shire Council’s “procedures and processes” to date. 

In a scathing letter tabled at today’s Kempsey Shire Council meeting, chairman of the Office of Local Government’s project review committee (PRC) Grant Gleeson wrote the body was “unable to form a positive assessment about the project procedures and processes adopted by the Council to date".

In the letter, Mr Gleeson noted that council’s May resolution to proceed with the cinema project “appears to pre-empt matters”. 

Mr Gleeson wrote that the PRC “remains concerned about the procedures and processes followed by Council to this point”. 

The letter states that council has not “fully considered” material relating to the project, including comments made by an independent accountant which included that council’s involvement in the Public Private Partnership with Majestic Cinemas and Gowings Bros was “marginal and beyond normal risk”.

Mr Gleeson wrote that council’s long term financial plan (LTFP) does not appear to outline the full financial implications of the project to the community.

The letter also said that while council has criticised the independent accountant’s report, the PRC noted that council itself had failed to supply an independent cost benefit analysis which supports council’s community benefit position.

“Furthermore, it is not clear whether the Public Interest Evaluation document has been put on public exhibition,” Mr Gleeson wrote, adding that the document does not contain any references to “the substantial risk associated with entry into the project”. 

A positive assessment from the PRC is required before council may resolve to and subsequently sign any contracts relating to the proposal.

The PRC will convene again when council has addressed the matters raised in Mr Gleeson’s letter. 

More to come.