It led to an audit by federal Auditor-General Grant Hehir who has found that the department failed to exercise proper due diligence in its purchase of the dairy farming land,and that aspects of the agency's operations"fell short of ethical standards".
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His report,released on Monday,also determined that the department's valuation approach inflated the value of the land,which lead to the Commonwealth paying"more than was proper".
In fact,the Commonwealth ended up paying 22 times more per hectare than what the NSW government paid for a 1.36-hectare slice of the Leppington triangle needed for a realignment of the Northern Road,which is a key north-south link between Narellan and the M4 motorway.
The Auditor-General also found the department's acquisition strategy was focused on"incentivising an unwilling seller"to dispose of its land some 32 years before it was expected to be used for a second runway. The farming land next to the 1780-hectare airport site became known as the Leppington triangle because of its shape.
Upon buying the land,the Commonwealth leased it back to the dairy operator for a decade with options to renew the lease for a further 10 years. The land was valued at $920,000 for lease back.