Ian McCormack (left) and Bruce Langley say the government's rush to privatise Land, Property and Information caused the massive error. Credit:Chris Lane Legislation to allow the sale of the one profitable unit, "titling and registry services", was introduced on September 13. On September 21 it passed both the Lower and Upper houses. Interested buyers, who are understood to have included the Carlyle Group and Macquarie Group's MIRA, were required to formally express their interest with sale adviser JPMorgan by the end of October. Ian McCormack, who also worked for more than 50 years at the LPI in various senior roles, says there's little doubt the property debacle was caused by the government's rush to privatise the state's "world-class" land titles registry. "I was there till June 30 and have kept in contact with senior officers I've known for many years and we are all saddened to witness the imminent destruction of the wonderful title system we used to have," says Mr McCormack, a Liberal Party supporter, until now.

NSW Minister of Finance and Services Dominic Perrottet has been preparing the Land, Information and Property Unit for privatisation. Credit:James Alcock "During the period from early June to now, the LPI has been under great pressure to transit from a government agency to a privatised model devised by the Minister Perrottet and the Treasurer Gladys Berejiklian." In response, Minister for Finance, Services and Property Dominic Perrottet, who has been apologetic for the error and distress caused to affected homeowners, dismissed the claims as "conspiracy theories". Dozens of home buyers were not told by the NSW government their properties could be flattened to make way for a freeway. Credit:Dominic Lorrimer "I'm not interested in conspiracy theories. This appears to have been a simple administrative error, and my focus is making sure residents get the assistance they need."

An independent investigation will be conducted into the property debacle to determine the cause and prevent it from happening again. Door-knocking teams will soon begin visiting residents of impacted properties. "I have also personally contacted a number of residents by phone, and in the coming days I will be writing to all those we have identified to communicate the government's apologies," he says. The major administrative error has exposed the government to homeowners pursuing it for a multimillion-dollar damages claim, with legal firm Slater and Gordon considering a class action. Both Mr Langley and Mr McCormack left the LPI at the end of June before the "chaos" erupted. They say a problem of this magnitude hasn't been seen in the highly regarded land title registry's 150-year history. The land titles registry is based on the world-class Torrens Titles system, which means every title is guaranteed by the government.

Margaret Hole, former president of the Law Society of NSW, says the LPI is a monopoly, a critical infrastructure of the state that underpins the economy. "It underpins commerce by providing the secure system relied on in respect of, for instance Development, Leasing, Investment in construction, Banking, Finance, Commerce in general and various forms of taxation. The residential market for housing relies on the integrity of the system," she says. "The consumer generally is unaware of the importance that the title system plays in their lives. Disrupt it and impose costs that are unwarranted then their lives will ultimately be affected," she says. The Public Service Association claims the issuing of incorrect certificates was caused by staff cutbacks as well as remaining experts being instructed to prepare the registry for privatisation. "Once the service is privatised, there will be no regulation and no accountability, only a profit motive," says its general secretary, Stewart Little.

"What private enterprise with a focus on its profits is going to raise its hand and advise the community of its errors?" Fairfax Media has previously reported that a privatised land titles system would make title insurance a necessity and see surveyors and conveyancers pass increased insurance costs to consumers. The 35-year concession is expected to yield between $1.5 billion and $2 billion, which the NSW government plans to splash on new sports stadiums, but experts across the property sector are appalled, saying the registry is world-class, efficient and consistently raking in $50 million a year. The Caryle Group, Borealis Infrastructure's Teranet, a Hastings Funds Management-led consortium and Macquarie Group's Macquarie Infrastructure and Real Assets have been revealed as some of the interested buyers. On October 20, Greens MLC Justin Field asked in Parliament whether the Treasurer was aware of reports the Carlyle Group, one of the world's largest private equity firms with expertise in global intelligence, IT and defence manufacturing, was preparing to bid.

He also asked what due diligence the Government would undertake with regard to bidders to ensure their suitability to run a sensitive service, and to assess any risks they might present to the security of property owner information. His questions were taken on notice. The Roads Minister Duncan Gay added: "Following a series of successful leasing exercises, this government's track record in getting it right and implementing all the appropriate checks and balances is there for all to see." Early indications from the sell-side are the unit could fetch between $1.5 billion and $2 billion. While formal numbers are yet to hit bidders' desks, it's expected to come to market with about $180 million to $200 million in annual revenue and profits in the $120 million to $140 million a year range. The UK government was forced to abandon plans to privatise its land registry after a public uproar over the fact every potential bidder was linked to tax havens. The Treasurer directed Fairfax Media's questions to Minister Perrottet's office.

Loading Note: The original article said the legislation was pushed through both Houses of Parliament in a 24 hour period. Do you know more? ehan@fairfaxmedia.com.au