The New South Wales government gave a public relations firm half a million dollars to devise a strategy to combat “negative” perceptions of its controversial $40bn rail corporation, which included posting on LinkedIn and giving itself a different name.
Documents obtained by the Guardian reveal the Transport Asset Holding Entity (Tahe), the scandal-plagued corporation set up to take over control of the state’s rail assets, was so concerned about negative media attention that it hired PR firm Newgate to devise a “corporate narrative”.
The government set up Tahe in 2015 to transfer $40bn worth of rail assets out of the hands of the transport department and into a state-owned corporation. The body has been criticised as an “accounting sham” by the Labor opposition because its establishment significantly inflated the state’s budget bottom line.
It prompted significant concerns from NSW auditor general, Margaret Crawford, who delayed signing off on the state’s finances for months amid concerns the government could be forced to spend another $4.1bn over the next decade to address “significant uncertainties” in relation to Tahe.
The documents seen by the Guardian show that in a bid to fight “consistent negative media and political attention” it hired the prominent PR firm Newgate to develop a three-year “communications and reputation strategy”.
Details of the contract show Newgate was paid $566,412 in December 2021. The contract was originally valued at $181,500 for two weeks, but was later amended to run until the end of 2022.
Littered with corporate speak, the three-year strategy includes plans to develop its own “corporate narrative” to “own the why” of Tahe’s existence and convince people Tahe was a “rational, forward-thinking, commercial and responsible entity”.
That strategy included plans for public events, proactive media briefings and at least “4x LinkedIn stories per month”. It also included plans to win over prominent media personalities, including 2GB host Ben Fordham and the breakfast radio duo “Jonesey and Amanda”.
The strategy also includes plans to rename Tahe once enough time had passed for it to move past bruising public accounting committee hearings, which heard accusations from a former partner at accounting firm KPMG that he was sacked after he refused to change a report suggesting the budget was $10bn worse off than Treasury claimed.
“By 2023, TAHE will have established its corporate narrative and started promoted its positive news stories, and enough time would have passed since the release of the PAC inquiry report,” the strategy states.
Once that happened, the strategy argued, it would be safe to “consider renaming and refreshing” the corporation’s “brand identity” because it would have been “freer from allegations of ‘spin over substance’”.
By 2023, the strategy stated, Tahe could also establish itself as a “thought leadership” organisation by publishing opinion pieces, making as many as “two social posts per week” and consider getting a Facebook page.
Other documents obtained by the Guardian also show how the agency wargamed the release of a damning auditor general report which found the NSW government may be forced to stump up another $4.1bn to fund the agency because of concerns she had on the “financial assumptions underpinning Tahe”.
Prior to that report’s release, an internal media plan shows that the agency’s chief executive held briefings with media – including this reporter – prior to its release, with suggestions for answers to questions about the delay in the sign-off on the state’s finances and a $20bn writedown of the state’s rail assets which followed Tahe’s establishment.
Labor’s shadow treasurer, Daniel Mookhey, has been a vocal critic of Tahe and said the use of an outside PR firm to boost the corporation’s reputation was evidence of its problems.
“For more than a decade Mr Perrottet’s government has spent a fortune hiring spin doctors to cover up their mistakes,” he said.
“Tahe wouldn’t need a battalion of highly paid PR flaks if it wasn’t burning a hole in the state’s finances.
“Instead of using public money to fund the PR industry to peddle fictions about Tahe, Premier Perrottet should tell the truth: it’s a disaster.”
While the strategy concedes that as a state-owned corporation tasked with managing the state’s rail assets Tahe isn’t “required to be a consumer-facing organisation”, the organisation has ambitious plans to morph into a property developer.
A confidential strategy, first reported by the Sydney Morning Herald on Wednesday, outlines how Tahe plans to deliver more than $40bn in revenue by essentially acting as a property developer by rezoning transport-owned land to build hotels and other commercial assets around train stations.
The strategy includes $11.6bn worth of development of 24 hectares of government-owned land around Central Station which it has flagged as potential space for hotels, retail or student accommodation.
“This is not unusual for similar state-owned corporations and infrastructure agencies across the world and is in line with standard business practice,” Tahe said in a statement about the plan.
In the communications strategy seen by the Guardian, Newgate says it’s important for the corporation to establish itself as an “independent voice” due to its “strategically significant role as asset owner”.
In a statement, a spokesperson for Tahe said the hiring of outside consultants was “in line with responsible business management practices”. The spokesperson also said there were no plans to change Tahe’s name.
“Tahe operates with a lean team which means at times, external expertise is required to be brought in. Tahe did not have the internal resources to deliver on the scope of advice sought,” the corporation said in a statement.
“Procurement of consultants is undertaken in accordance with the NSW government’s procurement policy to ensure value for money.
“SEC Newgate was engaged following an appropriate competitive procurement process.
“Sydney Trains and NSW Trains continues to operate and maintain Tahe’s railway assets and infrastructure, providing safe and reliable passenger and freight services. There has been no change to the safe operational management and control of the railway network.”
