Kangaroo Island mayor Michael Pengilly will not step down as he fends of claims of conflict of interest over port proposal

NO CONFLICT: Kangaroo Island mayor Michael Pengilly says he did not have a conflict of interest relating to a port project proposal at Smith Bay and has brushed aside calls to resign. Photo: Stan Gorton

NO CONFLICT: Kangaroo Island mayor Michael Pengilly says he did not have a conflict of interest relating to a port project proposal at Smith Bay and has brushed aside calls to resign. Photo: Stan Gorton

Kangaroo Island Mayor Michael Pengilly has rejected claims he had a conflict of interest relating to the application to build a deep-water port at Smith Bay and will not step down from his position after calls to do so.

The claim comes only days after Mr Pengilly sensationally stormed out of a parliamentary inquiry investigating whether Deputy Premier Vickie Chapman had a conflict of interest or misled parliament over her decision to refuse Kangaroo Island Plantation Timbers' (KIPT) $40-million port.

Ms Chapman called the inquiry a "mudslinging exercise" after she gave evidence last Wednesday, while on Friday Mr Pengilly refused to answer questions asked by counsel assisting the committee, Rachael Gray QC.

He said the inquiry was a "political beat-up".

"The port application was around Smith Bay and I was quite happy to answer questions pertaining to the application," Mr Pengilly said.

"Anything outside of that was not acceptable.

"[The inquiry] is a complete waste of taxpayers' money and a waste of time."

The Kangaroo Island mayor, who owned land near Smith Bay, refused to answer questions about the suggested truck route for the port going past his property.

Mr Pengilly said he did not have a conflict of interest surrounding the rejection of the application and that as mayor he did not have a casting vote on council decisions unless there was a tie.

He said there had been a study from KIPT relating to a road that had work done on it, with a cost of $28m, but KIPT were not prepared to help with finance and so the council looked at other roads, including Boxer Road, Rose Cottage Road and Ten-Tree Lagoon Road, but there was never a decision made.

"A conflict of interest means I stand to gain by the refusal and I stood to gain nothing," Mr Pengilly said.

"At the end of the day I have no vote in council unless there is a tied vote and I can't recall that anything regarding [the proposal] wasn't unanimous."

SA-BEST's Frank Pangallo - who said he owns a property on Kangaroo Island and had publicly declared his interests - has called for Mr Pengilly to resign as mayor following his conduct during the inquiry.

Mr Pangallo added that a letter, which was only tabled at the inquiry last week, alleged Mr Pengilly failed to disclose conflicts of interest and exerted influence over other councillors.

The 2019 letter written by former Kangaroo Island councillor Sharon Kauppila to senior planning bureaucrat Robert Kleeman accused the mayor of using "his position to influence an extremely important decision of council".

"The mayor lives within two kilometres of Smith Bay and has a demonstrated bias and a perceived conflict of interest," the letter stated.

"As a ratepayer of Kangaroo Island, I am absolutely appalled and disgusted by Mr Pengilly's contempt of a parliamentary committee and its work on Friday," Mr Pangallo said.

"But we now have a damning letter which warns of his power and influence over other councillors, as well as his personal conflicts of interest with the port project."

Mr Pengilly brushed aside the call to quit his post.

"I don't take any notice of what Mr Pangallo says," he said.

"I think he thinks he is still a TV journo and not a member of parliament."

The committee inquiry continues this week and will deliver a final report to the Speaker of the House of Assembly on November 18.