Use of contractors by Sydney Metro under review

The NSW government is reviewing the use of contractors by Sydney Metro amid revelations the agency has engaged highly paid senior executives and awarded work to consulting firms run by them.

Sydney Metro CEO Peter Regan was quizzed during budget estimates on November 7, 2023

NSW Transport minister Jo Haylen and Sydney Metro’s chief executive Peter Regan were quizzed about the issue during a budget estimates hearing last week.

The questioning followed an earlier committee hearing which raised questions about utilities director Paul Rogers, project manager Barry McGrattan and Sydney Metro interface management director James Hayward.

The Public Accountability Committee in September heard Mr Rogers was the sole director of a recruitment company that had won contracts worth $13.3 million, with at least six people hired to work at Sydney Metro on $500,000 a year, six of whom reported directly to Mr Rogers.

It also heard Mr McGrattan has been at Sydney Metro for ten years in various roles, and during that time has been the managing director of a company which had been granted 10 different roles on six figure salaries.

One of the people hired under those contracts was Sydney Metro’s interface management acting director, James Hayward, who had been contracted on more than $600,000 a year, the committee heard.

Are you comfortable with the fact that there are senior directors within Sydney Metro who are running their own recruitment companies and then employing people from those recruitment companies into Sydney Metro?

Cate Faehrmann

On November 8, estimates committee chair Cate Faehrmann asked Ms Haylen “Are you comfortable with the fact that there are senior directors within Sydney Metro who are running their own recruitment companies and then employing people from those recruitment companies into Sydney Metro?”

Ms Haylen said reports of this occurring were of concern to her, and she had asked Sydney Metro to look at their use of consultants.

“We’ve put in place some additional protection, some additional checks and balances while an overall review of contract engagement is underway,” she said.

Ms Faehrmann then asked Mr Regan if he had concerns.

“How was this able to thrive for so long at Sydney Metro, with senior directors that are employed as contractors with their own recruitment companies … getting tens of millions of dollars worth of contracts as directors of Sydney Metro?” she asked.

Mr Regan said the individuals in question weren’t involved in decisions to award contracts.

Ms Faehrmann then asked Mr Regan how he could ensure those senior directors didn’t have access to files containing information about their competitors so they could underbid them, to which he replied that processes around procurement were separate and probity rules applied.

“We’ve put in place controls while we undertake a detailed review,” he said.

Asked whether the review would address the issues that arose in September, or if there was an investigation into the tenders of Mr Hayward, Mr Rogers and Mr McGrattan, Mr Regan said he couldn’t comment on the specifics of individual investigations.

He said there had previously been a “number of investigations” into the allegations relating to the directors, and no evidence had been found against them.

“We have put in place an additional review and we continue to investigate as we’re required to do if any material is brought to our knowledge that suggests inappropriate behaviour or contracting,” he said.

He later said he was leading a review within Sydney Metro “looking at, in multiple phases, all of the professional service contractors and their contracts. We’re looking at the value for money and the longevity of those contracts and reconsidering the need for contracts, particularly those that are longer term contracts or that have involved parties who’ve been contracting in different capacities to metro for a long period of time.”

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