It might be playing with fire to own a pair of asbestos gloves these days, but Colin Barnett should borrow a pair before finalising a red-hot deal to sell the Kwinana Bulk Terminal to building materials king, Len Buckeridge.
Promoted by Mr Barnett and Mr Buckeridge as a way of resolving a 13-year dispute, the proposal has the potential to destroy the state government in much the same way previous attempts to mix business and politics brought down earlier governments.
On one level, what’s been revealed so far appears innocuous and might even be described as legally elegant, with Mr Buckeridge dropping a threatened $1 billion law suit if the government sells him the bulk terminal.
Mr Buckeridge can, quite correctly, point to a deal he negotiated with the state government in 2000 and the failure of successive governments to honour the agreement, presumably because of personal and political differences.
For his part, Mr Barnett can quite correctly say that it is not in the interests of the state to be drawn into a long-life legal brawl with an uncertain outcome.
The problem is not that either man has intentions other than to resolve a dispute; it is that one has a strictly business view of what needs to happen and the other has a political view – and situations like that produce unfortunate outcomes.
In 1987, Brian Burke was a popular premier of Western Australia who thought he would be able to mix business and politics when he rode to the aid of the financially struggling Bell Group, led by the enigmatic Robert Holmes a Court.
At the time, it seemed like a good idea. The WA government would lend a helping hand, Bell would be saved, and Australia’s biggest company, BHP, might be forced to shift its head office to Perth.
Elegant? Maybe. Totally impractical? Definitely.
Mr Barnett will be well aware of how the Bell deal led to Mr Burke’s disgrace; but what he might not be aware of is how the Bell rescue started as a simple proposal that would take a few hours to structure and be complete within a few days.
In fact the Bell deal took more than 20 years to be resolved, and only after winning the title of Australia’s most expensive legal dispute.
So far, Mr Barnett’s position on the Kwinana terminal proposal is that voters should trust the government to get the best result for the state.
Unfortunately, that’s pretty much what Mr Burke told me at a famous dinner organised by the short-lived Holmes a Court charitable foundation on the night he set about resolving the problems of Bell Group.
What Mr Barnett really has to do, given that Mr Buckeridge appears to have a reasonable case against the state, is construct a valuation process that is beyond criticism before striking a price with Mr Buckeridge.
To achieve that he needs to produce an ironclad valuation of the Kwinana terminal, perhaps by appointing a panel of five international valuers, averaging their assessments, and then offering it to Mr Buckeridge with the proviso that if he doesn’t pay the price it will be offered to the wider market.
As the deal currently stands it appears to be a private negotiation between the government and the Buckeridge Group, which is how most business deals are handled.
But at some point the public must have the deal explained – and that’s when Mr Barnett’s career will be on the line, just as Mr Burke’s was 25 years ago.
Until recently, Mr Barnett had not made many mistakes as premier (a bit like Mr Burke).
Mistakes have been piling up since the election earlier this year, however, with the worst being a failure to understand the sanctity of solar-power supply contracts and the appalling attempt to simply break those contracts.
The Kwinana terminal negotiation is the next big test for Mr Barnett; and while he might think he understands business, the truth is that he has very limited experience of actually running a business for profit – something that Mr Buckeridge has done brilliantly for more than 50 years.
The best advice for Mr Barnett is to negotiate a deal that ends the fight with Mr Buckeridge, but don’t for a second think that some parts of that deal can remain private or confidential after it is signed, no matter what Mr Buckeridge wants.
Business likes privacy. Politicians cannot survive if they keep secrets from the voters.
