ICAC calls for rotten RailCorp restructure

By Adam Coleman

The Independent Commission Against Corruption (ICAC) has completed its investigation into corruption at RailCorp and recommends sweeping changes to a body that improperly allocated almost $19 million in contracts.

After one of the largest investigations in the Commission’s history, the corruption watchdog has made 40 recommendations to combat what it called an ‘extraordinary extent of public sector corruption’.

The investigation found almost $19 million in improperly allocated contracts were awarded to companies owned by RailCorp employees, their families and/or friends in return for more than $2.5 million in corrupt payments.

“Corruption in RailCorp is not a few bad apples," ICAC Commissioner Jerrold Cripps says in the report.

“Corrupt employees appeared to be confident that they would not be caught or if they were, that not much would happen to them. The very structure of the organisation and the way it operates allows and encourages corruption.”

The Commission found a series of factors worked in unison to allow widespread corruption to develop at the organisation.

Among these, it highlighted a decision to outsource the provision of certain goods and services in an environment of dysfunctional markets, a lack of internal firewalls within procurement positions, an inability of management to properly manage the procurement process, and weak oversight of the RailCorp Board as contributing elements.

Record-keeping at RailCorp is described as “shambolic” in the report and it says that the organisation’s form of contracting, process design, reporting arrangements, management competence, culture and oversight arrangements all contribute to ‘endemic corruption’.

Four critical areas the ICAC identified for reform include:

  • The reduction of procurement risk by ensuring that it buys only what it can adequately monitor
  • The creation of firewalls that remove end-to-end control of procurement by single individuals
  • The improvement of overall managerial effectiveness in the Asset Management Group, and;
  • The improvement in oversight and ensuring corruption risk management strategies are implemented.

The report made a total of 97 corrupt findings at RailCorp against 31 people across the whole investigation.

The final report and the Commission’s preceding seven reports are available on the ICAC website at www.icac.nsw.gov.au.

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