Last rites for state's white elephant project

AT long last, the end is in sight for one of the most wasteful and counter-productive projects ever dreamt up by a state government.

Victoria's utterly useless electronic conveyancing system, ECV, is about to be devoured by a truly national e-conveyancing system.

Ownership of ECV's intellectual property has been transferred to the company that will own the national system.

That company, NECDL, intends to merge the Victorian system into a network that will span the nation.

With the end of ECV in sight, Victorian taxpayers should be dancing in the streets. This system has been bleeding public money for years and has failed to deliver anything that remotely resembles electronic conveyancing.

It has been little more than a make-work scheme for consultants and an excuse for plenty of paper-shuffling and interstate travel by bureaucrats.



Solicitors and the big banks wanted nothing to do with it.

When the current Victorian government was in opposition, it had labelled ECV a "$50 million white elephant". But that probably understates things.

In 2009, figures contained in a regulatory impact statement indicated ECV could cost the Victorian government $80m in development costs by 2013-14, much of which was to be spent on contractors and consultants.

The decision to eliminate this system comes after repeated warnings from the big banks that they would only deal with an e-conveyancing network that spanned the nation.

The state's solicitors had also declined to use ECV because the Legal Practitioners' Liability Committee was worried that it would increase their potential liability.




So without the banks and solicitors, ECV could not be used for conveyancing. But it did succeed brilliantly in one area. It delayed for years the development of a truly national e-conveyancing system.

The previous Victorian government had sunk so much money into ECV that it could not accept the reality that it was on the wrong side of history. Before a national system could take root, the state-based system had to go.

The deal that will finally bury ECV is a masterpiece in bureaucratic face-saving.

ECV's intellectual property was independently valued but both the current Victorian government and NECDL say the results of that valuation are "commercial in confidence".

Unless that changes, Victorian taxpayers will never know the size of the financial gap between the valuation and the cost of building the system. Victoria has almost certainly lost money, but the beauty of the deal with NECDL is that those losses have not been crystallised.

In return for the intellectual property, Victoria has emerged with 33.7 per cent of NECDL. Other major shareholders are the governments of NSW, Queensland and Western Australia. But Victoria is the biggest shareholder.

The national system, which is expected to begin operating late next year, will be known as PEXA or Property Exchange Australia.

It is intended to deliver annual efficiency gains of $240m that will be shared between consumers and all those involved in the $1.4 billion conveyancing industry.

The cost of conveyancing for a typical home is expected to fall by between $120 and $130.

What a pity the intransigence of the previous state government meant those savings were not available years ago.

Chris Merritt | Legal Editor | The Australian | 19 Aug 2011