Corruption flourished amid post-amalgamation chaos, ICAC finds

The amalgamation of three western Sydney councils created a ‘chaotic’, poorly governed environment in which a former senior Inner West Council project engineer was able to get away with corrupt conduct, the ICAC has found.

Chief ICAC Commissioner John Hatzistergos

Against this backdrop, IWC project manager Tony Nguyen was able to engage in schemes which resulted in IWC contracts, some worth more than $1 million, being awarded to companies that were owned by his friends, ICAC’s report released on Tuesday says.

“Between 2016 and 2020, Mr Nguyen engaged in elaborate collusive tendering schemes with multiple IWC subcontractors, with which he had an undeclared association, to influence the awarding of IWC contracts. The schemes included dummy bidding, collusive tendering and order splitting,” the ICAC says.

Chaos after amalgamation

Chief Commissioner John Hatzistergos says there is evidence that the forced amalgamation in 2016 of Leichardt, Ashfield and Marrickville councils to form Inner West was followed by a period of chaos and uncertainty that contributed to failures of oversight and governance.

“Following amalgamation, IWC experienced a period of ongoing change that made it very difficult to establish effective organisational systems,” he writes.

“These included at least five changes to organisational structures that impacted on the governance and/or risk structures within IWC, which made it difficult to establish robust systems and processes in procurement, project governance and staff management.

“This contributed to control deficiencies at IWC including poor enforcement of procurement rules, deficiencies in managing building projects and personnel, and poor conflicts of interest oversight between IWC contractors and officers.”

By the time Mr Nguyen resigned from IWC in October 2020, his actions had helped some businesses benefit from up to $1.4 million worth of contracts, the report found.

Corrupt activity spreads

During its investigation into IWC the ICAC uncovered the spread of the corrupt activity to also include Transport for NSW and construction company Downer.

While employed at IWC, Mr Nguyen was also conducting business with his TfNSW associates, and the investigation identified multiple instances of collusion between project Downer and private contractors tendering for subcontracts on TfNSW projects, many of which involved Mr Nguyen.

Some of the contracts were worth millions of dollars, with three alone totalling $4.6 million in value.

The Commission’s investigation mainly involved two multimillion-dollar TfNSW work programs: the Transport Access Program, which was aimed at modernising NSW public transport infrastructure; and the New Intercity Fleet Program to replace ageing train services. 

The watchdog makes corrupt conduct findings against multiple people in relation to TfNSW projects and programs including Mr Nguyen, TfNSW project manager George Panagakis, Downer project engineer Sairam Pilli and Sydney Trains employee Benjamin Vardanega.

It also recommends that the NSW Government considers a debarment scheme against suppliers with a history of misconduct and breaches.

ICAC has referred the report to the Director of Public Prosecutions (DPP) for consideration of charges against Mr Nguyen as well as a number of other individuals named in the report.

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