Passenger Rail

Inquiry hears of improper contractor payments and lax safety oversight at V/Line and Metro Trains Melbourne

The first days of hearings as part of an inquiry into the handling of Victorian public transport contracts have heard that individuals within rail operators V/Line and MTM failed to uphold ethical best practices when it came to contracts and hiring.

The current inquiry, Operation Esperance, is the second time in three years that V/Line has been the subject of an Independent Broad-Based Anti-Corruption Commission (IBAC) investigation, with Operation Lansdowne in 2017 investigating the awarding of training contracts by the regional operator.

Operation Lansdowne found evidence of nepotism and improper procurement, and in hearings held since Monday this week, former CEO of V/Line James Pinder was heard offering a job to his friend and Metro Trains Melbourne fleet manager Peter Bollas to manage facility contracts, including all cleaning.

While Bollas did not ultimately take the job, Pinder acknowledged that the conversation he was having with Bollas was duplicitous, considering that V/Line was responding to the findings of Operation Lansdowne at the time.

“I accept now and I accept then it was inappropriate,” said Pinder.

Pinder has been the focus of the inquiry’s first three days, which has alleged that Pinder received a loan of $320,000 from cleaning contractor Transclean managing director George Haritos after awarding a V/Line cleaning contract. The inquiry has also heard that Pinder and Peter Bollas received monthly cash payments from Haritos of $8,000 to $10,000 each.

Pinder has said that the payments were part of a gambling syndicate that involved himself, Haritos and Bollas. Bollas has said that he was never involved in a gambling syndicate with Pinder.

Under questioning from counsel assisting Paul Lawrie, Pinder said that the funds that went through the syndicate were sometimes used by Haritos when Transclean was having cashflow issues and that Pinder couldn’t be sure whether the funds that he received were from Transclean or Haritos personally. The funds were always in round amounts and delivered discretely.

IBAC Commissioner Robert Redlich questioned why there needed to be secrecy around the distribution of funds from the gambling system and why Pinder had written a note to Haritos telling him to provide a false reason for the payment of that money.

Pinder replied, “Rightly or wrongly I was panicked and I thought that the fact that I was in a gambling syndicate with somebody that was a supplier to V/Line whilst not necessarily illegal was inappropriate.”

IBAC also heard that Transclean staff were in life threatening situations. In one incident, a cleaned went underneath a Metro Trains train coupling without appropriate protection when the train’s pantograph was connected to the overhead wiring, creating the risk of electrocution.

The incident occurred while Transclean was attempting to secure the stations cleaning contract with Metro Trains Melbourne. In an intercepted phone conversation between Pinder and Bollas, Bollas is heard discussing ways to underplay the incident as the fault of Transclean.

A Metro Trains spokesperson said that the operator was unable to comment.

“Metro is unable to comment while the hearings are ongoing.”

Upon contacting ARA, the spokesperson told Rail Express, “The rail industry has stringent processes in place to ensure procurement is grounded in principles that support a stronger, socially responsible industry for all of us. While this is a very unusual case, it is important we look to the outcomes of this process and learn from them.”

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