SkyCity deal has deficiencies: report

Numerous deficiencies in the government's convention centre deal with SkyCity have been identified in an auditor-general's report - but there were no "inappropriate considerations" influencing the deal.

Deputy Auditor-General Phillippa Smith released her report into the deal on Tuesday afternoon, eight months after her inquiry was first announced following a complaint from the Green Party.

The inquiry looked at the process the Ministry of Economic Development followed in 2010 when it chose SkyCity to build the $350 million Auckland centre, in exchange for a law change allowing up to 500 more pokie machines in its casino.

The report says there were a "range of deficiencies" in the advice provided to the government, and in the steps taken leading up to the decision to enter negotiations with SkyCity.

It found that feasibility and exploratory work about building a new convention centre, up to March 2010, was carried out reasonably.

However, by the time it was expected SkyCity would put a firm proposal to the government, officials should have been working to understand and advise on the procedural obligations and principles governing the next steps.

"We found no evidence that officials were doing so at this stage," the report says.

The next step, the expressions of interest process, was "poorly planned and executed", with insufficient attention given to planning and management, and risks were not adequately addressed and managed.

Although officials worked in good faith to evaluate the government's options, the auditor-general's office found the process was "unsatisfactory" and fell short of good practice.

Even after the expressions of interest process began, ministerial office staff were still meeting with SkyCity to talk about its proposed development plans and what it might want in return.

Those meetings were not appropriate, the report said, adding that SkyCity was given a better understanding of the government's thoughts - including that it did not want to contribute funding to the convention centre - than other submitters were given.

While that was unlikely to have made a material difference to the outcome of the process, it was "symptomatic of the lack of attention to procedural risks, and therefore to the fairness and credibility of the process", it said.

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