Fed: Vic govt made secret payment to Japanese firm

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Fed: Vic govt made secret payment to Japanese firm

By Charisse Ede

MELBOURNE, Aug 14 AAP - The Victorian government made a secret payment of at least$2 million to a Japanese company to ensure its food processing plant was built on time,it was revealed today.

Documents tendered to the royal commission into the building industry this week showthe government gave the Saizeriya company financial assistance after construction of itsfactory in Melton blew out by $12 million to $52 million.

State and Regional Development Minister John Brumby said in a letter to Saizeriya presidentYasuhiko Shogaki on March 4 this year that the grant was in recognition of additionalinvestment at the site.

This was despite an earlier letter from Mr Brumby saying the government would considerthe provision of financial assistance "to ensure prompt conclusion of the project".

But an internal email from a Saizeriya official says the money was a "necessary additionalexpense in order for the construction to be completed by the end of August (2001)".

"The government is prepared to pay for this but if this means Saizeriya has to promiseto increase the number of employees at the factory we cannot agree to this," the emailreads.

"The reason for this is that we are not increasing the size of the factory."

The factory, due to be completed 12 months ago, is still not operational.

The payment was revealed during in-camera evidence by Department of State and RegionalDevelopment official, Ian Kennedy, at the royal commission this week.

The transcripts of the interviews and supporting documents, marked commercial-in-confidence,were made public by Commissioner Terence Cole, QC, late today.

He allowed the exact amount paid to Saizeriya by the government to remain confidentialat least until Friday when he will decide whether to make it public.

But in the transcripts, Mr Cole puts the figure "in the order of $2 million".

Earlier this week, the commission was told the state government was liable for hundredsof thousands of dollars in concessions to unions after Saizeriya threatened to pull outof the project.

And today, the state government told the commission it acted inappropriately for notpreventing the employment of a plumber who didn't work a day at the Saizeriya site.

In a statement of fact agreed between the state of Victoria and the commission, thegovernment said it acted inappropriately in failing to prevent Peregrine Management Groupfrom employing the plumber to satisfy a union demand.

The commission has now asked the government to provide all information about paymentsmade in relation to the Saizeriya project.

The hearing continues tomorrow.

AAP ce/gfr/hu/sb W

KEYWORD: COLE NIGHTLEAD