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Secretary of the Department of Transport and Communications



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PRIME MINISTER

STATEMENT BY THE PRIME MINISTER, THE HON P J KEATING, MP

SECRETARY OF THE DEPARTMENT OF TRANSPORT AND COMMUNICATIONS

The Secretary of the Department of Transport and Communications, Mr Graham Evans, has today submitted a request to be stood down from his current position and be transferred to other duties.

I have decided not to accede to this request although I have indicated to him there are some aspects of the MDS process that could have been handled with greater care.

The Government today has decided to abrogate the current tender process for new Multipoint Distribution System Licences because of legal flaws. Mr Evans has written to the Secretary of my Department setting out his responsibilities in this matter and a copy of this letter is attached.

There are two dimensions to the problem with the MDS tender process. Firstly, there are technical discrepancies between the original ministerial determination and the subsequent Invitation to Tender, the upshot of which is capable of rendering the Tender process invalid. Secondly, Mr Evans made a judgement

which, while understandable, meant that an earlier opportunity to abandon the process was not taken.

Mr Evans acknowledges in his letter that in retrospect he should have established more formally whether technical deficiencies in the MDS tender process had been fixed by the Court Order arising out of the Commonwealth case in Perth in February this year which dealt with the MDS tender process.

However, I note that the Government's legal advice indicates that Mr Evans' view of the effect of the Court Order to treat tenders "as valid", while not correct, "may be a reasonable understanding by a lay person".

Mr Evans accepts formal responsibility for the Department's lack of attention to detail in the preparation of the original Determination and Invitation to Tender. understand that he has sought a report on the circumstances surrounding this matter.

COMMONWEALTH

PARLIAMENTARY LIBRARY MICAH

I consider that any error of judgement relating to the administration of one particular tender must be balanced against the Department's overall substantial record of achievement in the transport and communications sector over the

past five years.

During that period Mr Evans was responsible for melding together the former separate departments of Aviation, Transport, and Communications so as to greatly improve the overall policy advising capacity in this sector. Under Mr Evans' leadership the Department has successfully pursued the Government's

program of reform in transport and communications. Major legislative reforms have been implemented covering broadcasting and radiocommunications, and telecommunications and aviation have been opened up to competition with substantial benefits to consumers. The vexed question of the third runway at

Sydney airport was dealt with and construction is underway. The Department has supported the reforms of shipping and the waterfront and it has been responsible for establishing new national bodies for the reform of rail freight and road transport.

While we need to await the outcome of the Pearce Inquiry, I have no reason to believe that Mr Evans had any knowledge of or was involved in the decision not to have a deposit requirement for the satellite pay TV licences.

The Department faces some difficult administrative challenges. It will require strong and effective leadership and a close familiarity with the transport and communications sector. I am confident that Mr Evans will be able to fulfil this role.

CANBERRA 17 May 1993

1 A^T^^ r !d in DEPARTMENT OF TRANSPORT AND COMMUNICATIONS Secretary Graham Evans

Dr M S Keating, AO Secretary Department of the Prime Minister _ -- _

and Cabinet 3-5 National Circuit BARTON ACT 2600

Dear Dr Keating

I am writing to ask that the Prime Minister accept a request from me that stand down from my current position as Secretary of the Department of Transport and Communications and be transferred to other duties.

The decision to make this request is entirely my own, and I have been under no pressure to take it. Indeed, those of my senior Departmental colleagues with whom I have consulted have sought to dissuade me from this course of action.

With regard to the decision not to have a deposit requirement for the satellite pay TV licence, I had no knowledge of or involvement in that matter.

However, during the course of a legal challenge on the revocation of the MDS tender process, I was involved in a tactical judgment that the technical deficiencies by then identified in the tender process need not be part of the Commonwealth case.

This tactical judgment was based on the assumption that, because of written advice that the tender revocation decision of 28 January 1993 was legally valid, a new Determination to correct these deficiencies would be able to be issued at the end of the Court proceedings.

I was also advised that Senior Counsel for the Commonwealth had Indicated he was most concerned about arguing the case on the grounds of technical deficiencies and would need specific instructions if he was to do so. A factor relevant to the judgment not to seek further instructions

was the convention that major policy changes should be avoided during the caretaker period.

There was nothing improper in the judgment not to make the technical deficiencies part of the Commonwealth's case in the court proceedings, but it foreclosed the opportunity for the Government to abrogate the

tender process at that time.

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1 also believe, in retrospect, that I should have established more formally whether the technical deficiencies with the MDS tender process had been fixed by the Court Order of 7 April, although I believe my interpretation of that outcome was a reasonable one to make in the context (see also the

legal opinion prepared for the Government), and it was felt within the Department that any remaining issues could be clarified through a further

Information Paper.

I accept a significant measure of responsibility for these judgments.

I would hope that the consequences of these judgments are balanced against the action I initiated on 4 May to have the MDS tender process again reviewed for its legality and, subsequently, my personal oversighting

of the detailed steps necessar y to remedy the problem.

I also accept responsibility for the Department's lack of attention to detail in preparation of the original Determination and Invitation to Tender. approved the Invitation to Tender and the Departmental Information Paper on 7 December 1993, which, although not flawed in policy, were deficient

In a number of technical aspects. I have sought a report on the circumstances surrounding this matter, and I will be attaching that to my broader report of 25 May to the Minister.

In regard to this aspect of the Department's performance I would hope that it would be put in the context of the great pressure that myself and other senior officers in this Department have been working under, and for the very considerable record of achievement across the transport and

communications portfolio over the past five years. This has been comprehensively documented in an article I wrote, published in the October 1992 issue of the Canberra Bulletin of Public Administration .

I have tried to weigh carefully the implications of my request for the good of all officers of my Department. There may be sound arguments for me seeing the Department through its current problems, and these could, in the view of others, be more significant than those for standing down.

However, while it is a matter for judgment by others, my view is that in the current environment the Department's interests, as well as those of the Government, would be best served by the course of action I am taking.

I wish to continue to work within the Public Service, and in this regard will be happy to cooperate with you in any way.

Yours sincerely

GRAHAM EVANS 17 May 1993