On a showery Friday morning in May, several hundred mourners, including a former prime minister and at least three billionaires, gathered at Sydney’s Town Hall to farewell a tycoon.
But it stands to make at least five times that much from its client, Western Sydney University, which has been accused of overpaying by as much as $1 billion under decades-long contracts entered into without a tender while Walker remained company chairman.The university leases the site from the Canterbury-Bankstown council and then subleases it to Walker Corporation for a peppercorn rent. Then, through another sub-lease, the roles are reversed.
Compared to its older, sandstone rivals, WSU has fewer high-fee-paying international students and postgraduates to help fund new works. “Ratepayers have been shortchanged in this highly unusual and controversial land deal to the tune of tens of millions of dollars,” Coorey said. Walker Corporation agreed to foot the bill for the building’s design and construction costs, which added up to $340 million.
“The fees that they would earn out of that building would be enormous. That gives them cashflow above and beyond what they would have had they not built the building.”While acknowledging the university would pay several times more than what Walker Corporation spent, Cook doubted WSU would have been able to borrow hundreds of millions of dollars for the upfront costs.“They have all the demand for university places and for courses – that generates fees. But they don’t have the capital upfront.
The university now plans to raze the campus and turn the land into a residential housing project led by the developer Mirvac, a move the council opposed and that has angered parts of the local community.“It’s the squandering of an irreplaceable resource,” said Paul Judge, a community campaigner whose three children attended the campus.
“If the university were to perform the role of developer, this would have necessitated capital costs being funded from borrowings, thereby incurring interest costs,” the spokeswoman said.