A corruption inquiry has heard that an evaluation committee who decided on which mining companies would be awarded exploration licences paid no heed to whether the companies actually had the financial capacity to carry out the work.
William Hughes, a senior public servant who was the head of a three-person evaluation committee, admitted that the committee did not assess the expertise, skills or "know-how" of any mining companies who were tendering for multi-million dollar coal exploration licences.
The Independent Commission Against Commission is inquirying into the granting of coal exploration licences in 2009 by the department of then resources minister Ian Macdonald. The commission has heard that the family of Labor powerbroker Eddie Obeid used inside information to gain profits of $100 million.
Another member of the evaluation committee Ado Zanella admitted that the committee ignored one of the selection criteria which was "the demonstrated financial ability to fund work programs and subsequent mine and infrastructure development."
Mr Zanella agreed with Commissioner David Ipp's proposition that "a bunch of $2 companies...who could promise the world" could get the licences without having the means to carry out the work.
The commissioner was critical of the committee's failure to properly examine the prospective bids saying that it was representing the people of NSW to ensure "we were going to get value for money."
"We are talking here about gatekeepers..to let the right people get the the exploration licences," said Commissioner Ipp.
Only days before the winning bidders were announced the preferred tenderer Monaro Mining, which had never mined any coal, announced it was pulling out. It wrote a letter to the evaluation committee saying it was transferring its interests to Royal Coal, then in further correspondence it corrected that name to Loyal Coal, then to Voope.
Mr Hughes said he was not "curious to know" who was behind these entities. He also agreed that he made "no inquiry whatsover as to what was going on" with this last-minute change of corporate entities.
Loyal Coal and Voope have been revealed as companies associated with Eddie Obeid, himself a former mining minister.
The story 'Bunch of $2 companies': committee did not assess tender firms, corruption inquiry told first appeared on The Sydney Morning Herald.