The NSW government has confirmed it is reviewing the City of Newcastle's controversial decision to lease its pools to a private operator and the deal will require ministerial approval before it can be signed off.
However, Newcastle council downplayed the investigation and said the application was going through the "normal assessment process".
Under the Local Government Act, a council must not grant a lease long than five years without the Local Government Minister's consent if there has been a submission objecting to the proposal.
It's understood the council's proposal to lease its five pools at Stockton, Mayfield, Wallsend, Lambton and Beresfield for 21 years to BlueFit attracted 13 objections when it was advertised in July last year.
The Newcastle Herald asked the NSW government when the review was started and when a decision was expected, however it declined to answer specific questions.
"The Department of Planning, Housing and Infrastructure is preparing a report for the Minister for Local Government in relation to the proposed lease, as required under the Local Government Act," a NSW government spokesperson said.
"Once the minister has reviewed the report he will make a decision."
In the interim, BlueFit has been granted a 12-month extension of its existing lease to manage the pools.
"The [new] lease pending minister consent relates to all five pools," a BlueFit spokesperson said.
Labor councillors Elizabeth Adamczyk and Deahnna Richardson said the "interim arrangements" would remain in place until "the NSW government makes a decision on the tender".
A Newcastle council spokesperson reiterated the tender was going through the due processes.
"The application is going through the normal assessment process by relevant government departments prior to determination by the minister," they said.
"We look forward to hearing the outcome in due course."
In July, Newcastle City Council was criticised for quietly advertising a public notice about the pool tender in Sydney newspaper The Daily Telegraph, which did not include NCC branding or a logo.
The public noticed the 28-day public submission period. At least one of the submissions made in response objected to the proposal, which triggered the government review.
Wallsend MP Sonia Hornery, a long-time opponent of the pool management lease, has been a vocal critic of the BlueFit tender.
"NSW Labor has a policy against any further privatisation, it's disappointing that City of Newcastle doesn't respect that and aren't behaving like a Labor majority council should," Ms Hornery said.
"At the end of the day, the decision to privatise the pool - whether for seven years or 21 year - will be the legacy of these councillors. I remain strongly opposed to it."
In a statement, the Newcastle Labor councillors said they had previously saved Beresfield pool from closure and Bluefit had managed the operations of council pools for more than 10 years,
"The extension of the management contact lease is now ultimately up to Sonia Horney and her NSW Labor government," the statement said.
"The minister will decide on the lease to operate the pools due to the issue Hornery created, forcing councillors to recuse themselves from the decision."
