Victoria secretly develops third ECV system

Chris Merritt, Legal affairs editor | October 03, 2008 | The Australian

THE Victorian Government has secretly spent tens of thousands of dollars developing a third version of its electronic conveyancing system despite Kevin Rudd's promise to roll out a national system.

The new version of the state-based system is due to be unveiled on October 20, less than four months after the Prime Minister said all states would be using a national electronic conveyancing system by March 2010.

The Government refused to say how much it had spent developing the latest version, known as ECV 3.0.

It has already spent at least $40million developing previous versions of ECV.

The development of a new version of the system is outlined in documents obtained by The Australian, which were presented to federal officials last week.

They have reignited concerns about whether Victoria is seeking to persuade the federal Government to abandon its promised national system and support state systems based on ECV.

Victorian Innovation Minister Gavin Jennings confirmed this week that ECV was still being developed.

"The Victorian Government is continuing to work with state and federal governments and believes Victoria's ECV system provides the basis for a national approach to electronic conveyancing," Mr Jennings said.

"Improvements to the system continue to be put in place to ensure it is as user-friendly as possible. These improvements will also enhance the usefulness of ECV as the basis of a national system."

The new version of ECV has been developed without involvement from the major banks, which are central players in most conveyancing transactions.

The big banks strongly oppose separate state-based systems and have refused to use ECV. They have long argued that the cost savings from electronic conveyancing would be dissipated if they had to deal with eight separate systems instead of a single national system.

The Victorian Government has made no progress in easing solicitors' concerns about ECV. Potential liability problems associated with the system identified last year have prevented the Law Institute from recommending that solicitors use the system.

The fate of ECV has been in doubt since July, when the Council of Australian Governments took control of moves to build a national e-conveyancing system.

Mr Rudd and Finance Minister Lindsay Tanner said on July 2 that ECV's software would be assessed by a new national entity that would build the national system. That entity would be jointly owned by state and territory governments but would be run by a "skills-based board" instead of being dominated by government officials.

They said the new entity would be established by December and would then assess ECV and "to the extent that it is suitable", use it as the basis of the underlying software for the new national system.

Even if some ECV software is used in the national system, the plan outlined by Mr Rudd and Mr Tanner made it clear the national system would operate in all states, including Victoria.

"A national electronic conveyancing system will mean consumers across the country will use the same electronic system to settle all property transactions," they said on July 2.

"This national system will mean consumers will use the same online system and exchange all the documents, certificates and contracts needed to buy their new house," whether they buy a house in Darwin or Dubbo, Bundaberg or Ballarat, they added.

Victoria's continued expenditure on its state system came to light soon after the state auditor-general's office said it was considering a performance audit on the system.

Mr Jennings said ECV had been used for 600 transactions, but just one of those transactions is understood to involve the settlement of a property sale.

State Opposition frontbencher David Davis said the continued expenditure on ECV would be wasted.

"It does not matter what colour you paint a white elephant, it is still a white elephant and it's time the Government realised that and put it out of its misery," Mr Davis said.

"The Government has already spent tens of millions of dollars on ECV and this version will suffer from the same flaws -- lack of support from key groups, including the banks."

Mr Davis said the Government should provide a system that met the basic requirements of industry groups involved in conveyancing.

Over the life of the six-year project the state Government has established an extensive relationship with computer consultancy Ajilon, which built ECV. 

Ajilon employees hold senior management positions in the Department of Sustainability and Environment, responsible for managing electronic conveyancing for the Government. 

Ajilon employee Rick Dixon briefed officials from federal Treasury and federal Business Regulation and Competition Working Group about ECV on September 23. 

The working group has been authorised by the Council of Australian Governments to oversee the introduction of the national e-conveyancing system. 

As well as being an Ajilon employee, Mr Dixon is electronic conveyancing manager in the Victorian Department of Sustainability and Development. 

Mr Dixon presented a series of slides on ECV obtained by The Australian. 

The presentation, made on behalf of the state Government rather than Ajilon, also outlines the massive amount of work generated by the project. 

ECV has generated 3000 pages of detailed design, 3500 "business analyst days" and 90,000 lines of source code. 

The presentation notes that e-conveyancing is on COAG's agenda and a commitment has been made to have a national system operating by 2010. It then says: "How can ECV experience/system best be leveraged: prototyping versus greenfields?" 

Mr Dixon's presentation also refers to the fact that COAG has decided ECV should be assessed, but its view of the assessment process differs from that outlined by Mr Rudd and Mr Tanner. 

Mr Rudd and the Finance Minister said in July that ECV would be assessed and could be used as "the basis for the underlying software for the national e-conveyancing system". 

Mr Dixon's presentation last week said COAG had resolved that ECV would be assessed "for suitability as the national e-conveyancing system and, to the extent appropriate, used to implement that system". Sources close to the affair say this goes beyond COAG's July resolution. 

A spokeswoman for Mr Tanner said this week the federal Government had not committed to use or support any software. A decision on whether ECV software would be used in the national system would be made by the proposed national entity, which would not be established until December. 

Computer consultancy Unisys conducted a preliminary review of ECV this year at the request of the NSW Government and found several problems. 

NSW Lands Department director-general Warwick Watkins told the Victorian Government of the review's results on April 3. "The result of this work is a preliminary view that the system would require modification and enhancement to be suitable in NSW," he wrote.