Queries over Pelago rent hike
The State Government is paying higher rent to developers of Karratha's twin Pelago apartment towers, despite average rents in the Pilbara city falling 55 per cent.
Labor has renewed its call for a public inquiry into the State's "speculative" 2012 property investment, describing it as a bad deal which keeps getting worse.
The Liberal-Nationals Government weathered a storm in September over its $30 million investment, which helped get the Pilbara development off the ground but left it with 28 apartments it couldn't sell in a cooling market.
Much of the criticism was over State-owned apartments sitting idle in one tower while the Government leased 11 privately owned apartments for public servants at another tower at boom-time rents.
That controversy intensified when it emerged nine of the 11 apartments were owned by people or companies with links to the developer Finbar or its preferred builder Hanssen, both of which donate to the Government.
Despite identical apartments in the complex fetching $1000 a week, the 11 leased to the State were rented for $1537 under five-year lease deals struck in August 2012. Recent answers to questions in Parliament show that despite Pelago rents dropping further to $800 a week since September, the 11 apartments being rented by the Government have gone up $45 a week to $1582.
Karratha's average weekly rents have fallen for 13 consecutive quarters from $1784 in September 2011 to $820 in December.
Department of Housing spokesman Nigel Hindmarsh said the apartments' rents were reviewed annually, but initially the only way they could go was up.
"Under the terms, the first two annual reviews included a CPI or 2 per cent increase in rent, whichever was higher," Mr Hindmarsh said.
It was not until a mid-point review in August that market prices could be taken into account.
Labor's government accountability spokeswoman Rita Saffioti said taxpayers had been put in "an extraordinary situation" of increasing rents despite dramatic falls elsewhere, "while taxpayer-owned units nearby are sitting empty".
A Finbar spokesman said the apartments were leased in August 2012 at below-market rent.
Finbar and Hanssen have previously said the apartments have been available for anyone to buy but there has been little interest from the public.
