Jenolan Story

The most beautiful caves in the world filled with deception, lies and dishonesty

CHAPTER 4 - A HOTEL WITHOUT WATER

Unconscionable Behaviour

Chapter 4 is the story of how the New South Wales government would only provide funding for infrastructure repairs and upgrades to the Jenolan Caves Reserve Trust on the condition no funds would benefit the lessee.[1]

As a result, the government provided unfiltered, toxic water to staff and unsuspecting tourists for two and a half years.[2] It only installed filtration once it acquired the 99 year lease to Caves House at a significant discount.[3]

In July 2003, a Trust internal report on water supply system at Jenolan Caves identified that its staff were often not available to repair water failures when they occurred.[4] The Trust’s internal memorandum stated it would ensure a qualified staff member would be available at all times.[5]

The internal memorandum also identified that water failures would place severe constraints on the operation of Caves House and suggested a backup water supply for Caves House be considered.[6] None of these solutions were implemented.

Government Orders: Don’t Fix the Water

On 3 September 2003, a review, approved by the government, stated that no public funds could be used to benefit the lessee of Caves House.[7] The Trust was therefore unable to meet its duty to provide suitable water for human consumption, 24 hours a day. [8]

Item 3 CCQG

Source: DPC14/05302 A1 p9. Cabinet Standing Committee on the Budget, 3 September 2003.

Under the Services Agreement with the lessee, signed in 1990, the Trust was required to:

  • Provide water suitable for human consumption and sewerage disposal at all times;
  • Maintain all equipment related to water supply, sewerage disposal and emergency electricity;
  • Carry out preventative maintenance of worn or faulty equipment every 30 days; and
  • Provide emergency maintenance when requested by the lessee. [9]

The Trust could not meet these obligations.[10] Its failure to replace dilapidated water infrastructure meant that there continued to be regular water failures and breaking pipes.[11] This severely damaged the businesses and their ability to provide services for a number of years.

In 2003, the Trust’s Manager, Peter Austen, wrote to the lessee regarding a complaint about disruption to the water supply. He stated, “the Trust has little control over unpredictable events such as this. The Trust has at all times operated in accordance with the Service Agreement”. [12]

Figure 1 Broken Water Pipes

Photo 1: Water from broken pipe flooding down the roadway

This was not true. Appendix III of the JMA documents lists 35 occasions when water supply failed or Trust equipment malfunctioned. [13] These could have been avoided with regular maintenance and replacement of the aging infrastructure, as required under the Service Agreement.

At times the 4½ star hotel restaurant was preparing meals for up to 200 guests with water being carried in buckets from taps located downstairs in the village. The businesses were desperate. Water failures meant having to deal with frantic staff and angry guests.

 

Figure 2 Water pipes broken undated 2005

 Photo 2: Broken Trust water pipes below Mountain Lodge

Government Denies Supplying Unfiltered, Toxic Water

  1. Figure 3 Fixing water pipes undated 2005Photo 3: Fixing the broken pipes photo taken

The food businesses could not operate successfully without a continuous supply of potable water. [14] The water that the government supplied was often brown and contained sediment.

The Trust stated it was “well aware of its obligations under the services agreement and treats its obligation to supply water fit for human consumption as a serious matter”. [15]

Robert Bruce, a resort manager, disputed the Trust’s statement and took the photograph of the bath water below. [16] In a declaration he said the water was often discolored and unfit for human consumption: “I have, during the past 13 months, worked in the kitchen washing up [with water like this]”. 

Figure 4 Water sitting 15min after being collected

Photo 4: Photo show water samples collected on 9 June 2005 with statutory declarations

Staff claimed the water caused illness. JMA arranged for independent water tests. Ecolab found the water contained E.coli and other pathogens.[17] Tests by Sonic Healthcare supported these results.[18], [19], [20] The Trust dismissed both reports, claiming the water was safe.[21]

The Department of Health also found toxicity in water collected by the Trust. [22] Its results were kept from the lessee and the public for the next six months. [23] The government continued to write to the lessee stating “the Trust denies your claim the water supplied to Caves House is unfit to drink”. [24]

Deception, Lies and Dishonesty about $8,307 Filter

In June 2005, the restaurant staff signed a Petition. It was sent to the Premier and the Trust. Mr Templeton’s letter and the Petition explained why the water was a health hazard. [25] It comments on bacteria from water tanks with open tops and blocked water lines, [26] and claims these problems were the result of having no water filtration.

Mr Greg Wilkinson, lawyer, commissioned Medland Metropoulos to review the water quality issues. It stated “the water supply is currently poorly managed, and lack of actual filtration to remove particles within the water is a critical fault”. [27] This advice was supported by John Humphreys, a specialist engineer. He recommended the Trust immediately advise the public “not to consume water from the taps in the Caves precinct”. [28]

 

The government took no action to deal with the problem. As a result, JMA took the unprecedented step to alert visitors about the contaminated water by erecting signage. In response, the Trust wrote to the lessee instructing it to “remove the banner before 6:00 today”. [29]

                                        Figure 5 051103 water sign outside Bistro

In December 2005, the bank appointed Receivers and Managers. The government immediately removed the signage[30], again placing JMA patrons at risk. This continued until 10 August 2006 when the government acquired the lease and installed filtration.[31] The cost of installation was $8,307.64. [32]

To sum up…

Documents obtained under FOI note the government’s best option to acquire the hotel at a discounted price was to appoint an administrator without removing the board. [33] When questioned in parliament, the Minister said the government believes the appointment was valid and that this appointment does not require an investigation. [34]

On 30 June 2006, the government acquired the hotel lease at a significantly reduced price.[35] Chapter 5 explains how the government was able to destroy the businesses and conceal dishonesty, lies and deception, in order to get away with it. 

JMA Parties would appreciate feedback on this Chapter, including information that should be corrected

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Bibliography 


[1] Cabinet Minute by the Cabinet Standing Committee on the Budget, Review of the Jenolan Caves Trust to be undertaken by the Council on the Cost and Quality of Government, 3 September 2003, obtained through FOI-DPC14/05302 (A1).

[2] Letter from David Templeton to Attorney General Smith on 14 October 2011

[3] Filter approved on 10 August 2006 Through FOI- DPC11/01813 (A3).

[4] Review of the Jenolan Caves Water Supply System, compiled by JCRT, 14 July 2003, p4.

[5] Ibid.

[6] Ibid.

[7] Cabinet Minute by the Cabinet Standing Committee on the Budget, Review of the Jenolan Caves Trust to be undertaken by the Council on the Cost and Quality of Government, 3 September 2003, obtained through FOI-DPC14/05302 (A1).

[8] Services Agreement between the Trust and Silbard Pty Ltd (now JCR), Annexure A.

[9] Ibid, Annexure C.

[10]Appendix III M: Trust Essential Services (Water and Electricity) Supply Problems.

[11] Document prepared by JMA parties for the government titled ‘Unfiltered water not fit for human consumption’; ‘Trust no providing not providing 24/7 water supply’; ‘Public safety concerns’.

[12] Letter from Peter Austen to Archer Field Regarding the complaint of water supply dated 5 August 2003.

[13] Appendix III M: Trust Essential Services (Water and Electricity) SupplyProblems.

[14] Re: Jenolan Caves Resort Water Quality Inspection, Discussion and Recommendations by J. K. Humphreys, B.E. M.I.E.A. C.P. Eng, 11th October 2005.

[15] Reeves, N., the lawyer for Jenolan Caves Reserve Trust, letter to Greg Wilkinson, the lawyer for Jenolan Caves Resort Pty Ltd., dated 20 July 2005, the lawyer for Jenolan Caves Reserve Trust, letter to Greg Wilkinson, the lawyer for Jenolan Caves Resort Pty Ltd., dated 20 July 2005.

[16] Statutory Declaration by Robert Bruce on 2 February 2005; Photo of water in thebathtub.Declaration by Robert Bruce on 4 February 2005; Photo of water in thebathtub.

[17] “Water Test Results & Recommendations” by Richard Brown, Business Development Manager, Ecolab Water Care Service, 27 January 2005.Test Results & Recommendations” by Richard Brown, Business Development Manager, Ecolab Water Care Service, 27 January 2005.

[18] “Water Quality Report at Jenolan Caves Resort” by Bob Sinclair, Manager Environmental Testing, Sonic Food and Water Testing, 3 March 2005.

[19] Water Samples analysed by Sonic Healthcare, 8 February 2005.Samples analysed by Sonic Healthcare, 8 February 2005.

[20] Water Samples analysed by Sonic Healthcare, 3 March 2005.Samples analysed by Sonic Healthcare, 3 March 2005.

[21] Letter from Alan Griffin to Archer Field dated 18 August 2005.

[22] Reeves, N., Mallesons Stephen Jaques, lawyers acting for Jenolan Caves Reserve Trust, letter to Bryan Belling, Abbott Tout, lawyers acting for Jenolan Caves Resort Pty Ltd., dated 26 September 2005.

[23] Ibid.

[24] Letter from Alan Griffin to Archer Field dated 18 August 2005.

[25] David Templeton letter to NSW Premier Robert Carr on 15 June 2005.

[26] Statutory Declaration by Alison Jones dated 25 January 2005.

[27] Letter from Chris Medland, Medland Mitropoulos Pty Ltd, to Greg Wilkinson, acting lawyer for Jenolan Cave Resort regarding Jenolan Caves Resort Infrastructure, 1 July 2005.

[28] Re: Jenolan Caves Resort Water Quality Inspection, Discussion and Recommendations by J. K. Humphreys, B.E. M.I.E.A.   C.P. Eng, 11 October 2005.

[29] Letter from Andrew Fletcher, General Manager of Jenolan Caves Reserve Trust, to Archer Field, director of Jenolan Caves Resort dated 4 November 2005.

[30] Statutory Declaration signed by the lessee and JCRT cleaner dated 31 August 2007.

[31] Cost of Water Filter installed by Absolute Filters ordered by Jenolan Caves Reserve Trust, 21 August 2006 obtained through FOI-DPC11/02425 (A3).

[32] Quote of order for water filter installation dated 22nd March 2006.

[33] Jenolan Story - Chapter 1: A Trust without a Board.

[34] Special Review: Jenolan Caves Reserve Trust” conducted by the Council on the Cost and Quality of Government dated 31 October 2003, accessed on 12 February 2015.

[35] Jenolan Deed signed by Administrator on 30 June 2006.   

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