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Huge Payout, No Backup Service and an Aging Daintree Ferry

"Be very clear this all started over a year ago, from a Mayoral Minute that contained no cost-benefit analysis, no risk management, no back-up plans and no thought process as to what could occur..."

DOUGLASNEWS.NETWORK

After 12 months of uncertainty, closed meetings and angry Councillors, Douglas Shire Council has exercised its right to forcibly acquire the Daintree River Ferry from the current owner/operator for $4.5 million.

Two Councillors opposing the motion, Crs Noli and Zammataro, state that the substantial payout stems from Council’s decision not to finalise contract negotiations.

In December 2019, Council agreed to enter a contract with Sirron Enterprises Pty Ltd for the supply of a two-ferry service to begin operation on July 1, 2021.

The main ferry service was to be provided by a new solar-assisted, electric ferry with a second ferry used to carry peak-season loads, and be available as a backup.

Councillors and the public first became aware that the contract negotiations not been finalised when the new Mayor issued a “Mayoral Minute” at the first meeting of the new Council in April 2020.


Opposing the motion to purchase the existing ferry service, Cr Noli said, had the contract been executed, as instructed by Council, the new ferries would have been operating on July 1.

“This is a last-minute bid to make sure there is a way to cross the Daintree River from July onwards.

Be very clear this all started over a year ago, from a Mayoral Minute that contained no cost-benefit analysis, no risk management, no back-up plans and no thought process as to what could occur.

In July 2021, we should have before us a two-ferry solution, one of them solar -assisted to cross the Daintree, bringing in revenue in this cashed-up tourist market. Instead, we are paying out millions, have only the old ferry, and no ability to carry peak season volumes which, in the past, have meant long queues, complaints from tourism operators losing custom and residents being forced to wait.

Councillor Abigail Noli, Douglas Shire Council

Crs McKeown and Scomazzon both supported the Mayor and the motion to purchase the ferry.

Cr Scomazzon expressed her profound disappointment with being left with little option but to outlay significant ratepayer funds to continue the ferry service.

Crs Noli and Zammataro, opposing the motion, said they preferred to extend the current contract rather than having to meet the purchase and compensation cost.

Defending the buyout, Cr Kerr referred to his Mayor Minute, “…it was legal, and most certainly was appropriate. It was a decision that I have no regrets in proceeding with to have finally brought this continuing ferry-bridge fiasco to the forefront of this community.”


At the first meeting of the new Council last year, Cr Kerr cited the reason for the contract negotiations having stalled was to explore options for a bridge rather than a ferry.

Consequently, a firm was engaged to carry out public consultation. The result was a 2:1 preference favouring retention of the ferry as a gateway to the Daintree Coast.

The result mirrors earlier consultation by the previous Council.

Crs Noli and Zammataro both said that once the second public consultation was complete, the ferry contract should have been signed and the two-ferry solution brought to fruition, albeit with a delayed delivery date.

According to a DouglasNews.Network source the huge payout reflected 15 years of lost business to be suffered by Sirron as a result of its having won the tender in December 2019, with a contract that was not finalised, and then allowed to expire.


Ratepayer and resident, Ian Locke, describes the community as shocked at this huge and unnecessary expense when the proposed two ferries would have been earning money for the Shire,

$4.5 million is about 12% of the Shires total estimated revenue from rates and utilities ($35,464,803). That means Council would have to increase rates by 12% unless they take it some, or all of it, out of reserves,Mr Locke said.


Ratepayer and resident, Robyn Jarram, with over 20 years of writing and managing tenders ranging in value from $100,000 to $6 billion, describes having “never witnessed the type of chaos created by the 2020 elected Douglas Shire Council.

“In a formal motion by the previous Council the Douglas Shire Council CEO was clearly directed to commence negotiations with Sirron Enterprises to implement a two-ferry solution.

“It is my understanding that this direction was based on a recommendation from the CEO himself after a thorough tender evaluation and risk assessment process was followed in accordance with the Council’s Procurement Policy and the Local Government Act.

“It was also based on the community’s unwavering and consistently communicated desire for the Daintree River ferry service to remain in place.

“The community is still yet to receive any proof that the negotiations with Sirron ever commenced.

“During the ferry/bridge community consultation phase, the Council’s elected spokesperson gave me written reasons why the two-ferry contract execution had been delayed – those reasons contradict other statements published by other members of the Council. I thought this was supposed to be a transparent activity!

“In the publicly released documents for the Interim Ferry tender procurement, the Douglas Shire Council told tenderers on 1st March 2021 that they had ‘commenced the process to procure the ferry’ and asked tenderers to assume that the Douglas Shire Council owned the ferry and to submit tenders on that basis.

“On 3 March 2021, Council issued a tender addendum stating “the vessel is a Council asset”, then attempted to withdraw their statement without following the agreed and proper process for issuing addenda.

“These types of misrepresentations by the Douglas Shire Council could result in the resultant Interim Ferry contract being void giving the tenderers the right to take action against the Council.

“And of course, all of this could ultimately result in the community not having an appropriately procured ferry operator to operate the ferry – a ferry which we have all paid for, without being consulted, and must now maintain using ratepayer’s money.

“Where’s the transparency in that?


“I’m reasonably confident, given my experience in asset management, that the Douglas Shire Council hasn’t had enough time to undertake a full lifecycle assessment of the ferry required to develop a properly detailed Strategic Asset Management Plan which should address the cost of maintenance over a five, ten and 20 year lifecycle.

“Have they ascertained what spare parts are required, the availability of those spare parts, where the spare parts can be purchased and the cost of those spare parts including the delivery if they are to come from overseas?

“What is the strategy and cost to dispose of the ferry and the environmental impacts of that disposal at the end of its operational life?

“All of these matters, and more, should have been addressed prior to the purchase of the ferry to determine the whole-of-life outcomes.

“In the spirit of true transparency, I think the community has a right to see the Douglas Shire Council’s results of the lifecycle assessment and the short-, medium- and long-term maintenance costs, if they indeed even exist yet”.


In summary, Robyn describes how “a perfectly compliant procurement activity conducted in 2019 has been completely derailed by an inappropriately used Mayoral Minute in an effort to avoid probity issues and to find a way to build a bridge across the Daintree River.

“No risk assessment was performed to identify and mitigate the possible impacts on the community prior to the Mayoral Minute being issued- and that looks like extreme negligence to me.”


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