Donors reaping Pelago rent rewards
Significant Liberal-National Party donors behind a controversial State Government-backed apartment development in Karratha - and their families - are being paid thousands of dollars a week in public money.
The Barnett Government has spent $1.62 million since August 2012 renting 11 two-bedroom apartments for public servants in the Pelago West tower, despite owning 28 apartments in twin complex Pelago East that are sitting empty.
An analysis by The Weekend West reveals nine of the apartments are owned by people or companies with close links to the developer Finbar, its major shareholders or the builder Hanssen.
They include builder Gerry Hanssen, his wife Terturiana, Finbar executive chairman John Chan, members of the Chan family and Finbar chief financial officer Edward Bank.
Mr Hanssen and Finbar last night said the apartments were advertised for sale and anyone had been free to buy them.
Shadow planning minister Rita Saffioti said it was up to the WA Government to explain how it came to rent nine apartments on five-year leases from "significant Liberal and National Party donors or their connections".
The Government has come under fire for signing five-year leases locking in boom-time rents, which have since fallen by a third.
Ten of the apartments are being rented for about $1540 a week. Another is fetching $1153 a week, compared with $1000 a week other apartments at the Pelago complex are receiving.
The Government has been on the back foot amid revelations that it is struggling to sell 28 of the 50 apartments it bought for $30 million in Pelago East in June 2012 in a cooling property market.
The $75,000 Finbar donated to the Liberals in the 2012-13 election year and $50,000 Hanssen gave to the Nationals two weeks after the investment decision have prompted Opposition claims the Government invested unwisely to help companies it was too close to.
While admitting its investment in both towers helped get them off the ground, the Government says it was motivated by a desire to boost housing to bring down Karratha property prices, not by donations.
Housing Minister Bill Marmion said decisions on which properties to lease for public servants were "a departmental matter".
Department of Housing spokesman Greg Cash said Finbar approached it in November 2011 to gauge its interest in signing five-year leases on 10 apartments.
The department was struggling at the time to accommodate public servants and committed to all 10, he said.
"Based on these commitments, Finbar sold these properties to private investors on the back of these long-term lease arrangements," Mr Cash said. "The department had no knowledge of the eventual purchasers."
Mr Hanssen said the department leased the units from Finbar at commercial rates before the developer decided to sell them. "Once they were leased, they then became for sale," he said.
"They were available to any buyer outside. Anybody could buy them. Very few people were interested."
Mr Hanssen said he had long donated to the "coalition" and denied it had anything to do with Government investment in Pelago.
A Finbar spokesman said after apartments were put back on the market, some people associated with the company decided to buy them because it was a good investment opportunity.
