Wednesday, 18 October 2023

Victorian Auditor-General’s Office

Eloque: the Joint Venture between DoT and Xerox

David DAVIS (Southern Metropolitan) (17:39): Today I want to draw the chamber’s attention to the extraordinary Victorian Auditor-General’s Office report – and I pay tribute to their work – on Eloque, the joint venture between the department of transport and Xerox. This independent assurance audit I think is a ripper. They have done very good work. They have really dug down hard to find out what has gone on, where and why.

And it is a shocker – a shocker. Jacinta Allan, now Premier, at the time the Minister for Transport Infrastructure, was responsible for VicTrack and for Transport through some of that period too. She was responsible for Mr Campbell Rose, the CEO, and the board. These people went, dare I say, right off track. They decided that they would do this joint venture with Eloque and Xerox. They got $20 million. I note the question on notice that we put on the 26th of the 5th, 2020, which asked Jacinta Allan about some of this money, and $50,000 was allocated as early money from the Public Sector Innovation Fund. The trial budget was $2 million, but they went much further than that. They would not at the time provide us with the details of the concept trial. They refused. They said that was commercial-in-confidence. But they did go and establish a small holding company, which was an extraordinary step, to cover who was actually in charge of Eloque, and that holding company was – let me read this. And I note that the VicTrack board did not meet for eight months at one period, as Mr Rose went right off the track, with the minister’s active connivance and support. He did not use a competitive process. I am quoting here from page 4 of the report:

Mr Rose concurrently held roles at VicTrack, HoldCo and Eloque. They were:

• CE, VicTrack

• interim CEO, Eloque –

the new company –

• company secretary and public officer, HoldCo –

which was the company that oversaw that, a wholly owned state government company –

• corporate representative and proxy for the government shareholder – Head, TfV.

But what he did whilst all that was happening is he set up a superannuation or a special shareholding arrangement and bonuses that were to be paid. And let me just say one thing: he was to be the beneficiary. So it is a real ripper. Let me make one other point that I think is very, very important:

… HoldCo did not address these issues –

the ones that are raised by the audit report –

or raise these matters with DoT or the minister. Members of the HoldCo and VicTrack boards told us that this was because they understood the share scheme –

this strange share scheme –

as a future plan for permanent employees would involve staff seconded from VicTrack.

So they were all going to help themselves to this. The problem was that the technology was not mature. It was known not to be mature at that time. But one of the most concerning things, again on page 14 of the report, is:

While VicTrack’s June 2020 submission asked government to note its decision to invest $32.5 million of its own funds –

let us be clear, the total loss is more than $20 million of state government money, taxpayers money –

the VicTrack board only committed to contributing the funding in February 2021, following receipt of the minister’s –

statement of expectations. Who was that minister? It was Jacinta Allan. She gave the green light. She gave the tick. She said, ‘You go ahead with this technology company,’ and let us be clear what this technology company was meant to do. It was meant to have these precision electronic things to check the strength of bridges all around the state. No orders ever came from anywhere else around the world. Queensland actually looked at it and they rejected it. They said that the technology was not mature. But Victoria ploughed the money into this extraordinary company, a private company in which the CEO of VicTrack was also the key mover, and then they were establishing this special shareholding. I mean, this is an absolutely corrupt shocker, and Jacinta Allan allowed this overt corruption to occur. There is no break. In fact, she green-lighted this corruption, and let us call it for what it is.