NSW transport bosses paid companies $300m for work they did not win

NSW transport bureaucrats paid more than $300 million in the past year to transport and infrastructure providers who bid unsuccessfully for huge government contracts, prompting the auditor-general to call for an overhaul of how the state accounts for the high price of tenders.

As the Minns government proceeds with an infrastructure and development pipeline worth more than $116 billion, new Treasury accounts reveal that Transport for NSW paid out $158 million in unsuccessful bid cost payments to companies for work they did not win.

In the same period to June 30, tenders for the $60 billion Sydney Metro rail project resulted in another $175 million going to companies that bid for contracts but missed out.

Critically, the payments are currently booked as an investment – or “capitalised” – in the state’s accounts rather than recorded as an expense, which has prompted NSW Auditor-General Margaret Crawford to call for an overhaul of how Treasury handles the cost.

“The partial reimbursement of costs incurred by unsuccessful bidders is consistent with [Treasury policy] which sets out the arrangements for when and how it will make a financial contribution to unsuccessful bidders to partially reduce the cost of bidding,” Ms Crawford wrote.