A corruption watchdog has found the NT Government approved a $12 million grandstand grant without following proper processes. 

A report by the NT's Independent Commissioner Against Corruption (ICAC) has found that the business case for a publicly funded grandstand at the Darwin Turf Club included “ill-founded and spurious claims”.

The documents were prepared just one day before Cabinet ministers agreed to hand over $12 million for the project, which includes a three-level corporate facility at the Fannie Bay racecourse. 

The NT government approved the plans in mid-June 2019. The turf club then formed a selection panel that awarded the construction contract to a company co-owned by the club's chairman.

The subsequent ICAC hearings have uncovered multiple findings of improper conduct. One was that the turf club's grant application should have been assessed under the government's market-led proposal [MLP] policy, but this did not occur because the club did not supply the necessary documentation for assessment.

“It cannot be said that the grant was justified by any rigorous process within the government,” the ICAC report says. 

ICAC Commissioner Ken Fleming also found that the turf club's funding application contained many “bare assertions”.

“The barest is the claim for a grant of $12 million as being the cost of construction,” the report states.

“There is no basis contained in the submission for that figure. None existed.”

The commissioner described the weak business case as “ill-founded and spurious”, making “unverified” claims about likely attendance of events at the proposed venue.

“Other claims in the balance of the submission, such as the proposition that, when constructed, it would employ 100 people (which would have about tripled DTCI's employees) are fantastic and false,” the report says. 

The Chief Minister says his government did not know of the shortfalls in the submission when it approved the grant.

“Cabinet did not have the knowledge the proposal had not been rigorously tested and validated prior to Cabinet's consideration,” Michael Gunner said.

“The market-led proposal process was subverted and it led to bad and incomplete information coming to the Cabinet room and Cabinet making the decision it would not have made if it had all the information that should have been made available to it.”

Mr Gunner said the government would attempt to implement changes recommended by the ICAC, including giving ministers monthly briefings on any market-led proposals.

“The intent behind the MLP process is a good one — to ensure applications for government support are developed at arm's length from the Cabinet who eventually make these decisions,” he said.

“But as this process has shown, when ministers stepped away, it was easier for unsatisfactory conduct to occur.”

The Chief Minister has also threatened civil action against any private entity or individual who may have benefited from the grant. He said the $12 million provided to the turf club would be recovered through a reduction in funding over coming years.

Mr Gunner called on the turf club board to resign.