At the time, state treasury economists warned the extra spending could undermine the state's finances and without cuts elsewhere, would lead to WA losing its AAA credit rating. Grylls rejected the criticisms and, despite the warnings, the Liberals struck a deal with the Nationals to form government, promising 25 per cent of mining royalties be redirected to the regions. Former Premier Colin Barnett reassured the public the Royalties for Regions policy could be managed conservatively and responsibly to maintain WA's credit rating. A decade on and a special inquiry into the Barnett government's spending on major projects between 2008 and 2017 has labelled Royalties for Regions the catalyst for the state's finances spiralling to a record $32.5 billion debt. Instead of cutting some of its election promises to make way for the Royalties for Regions policy, the Liberal-National government defied treasury warnings and ramped up its spending, signing off on an additional $3 billion spent outside the budget process in its first term alone.

WA was stripped of its AAA credit rating in 2013. Royalties for Regions was expected to receive around $500 million a year from state royalties, but surges in the price of iron ore and oil saw that figure balloon to more than $1 billion. To 2016-17, the program had funded $6.7 billion worth of projects since its inception. Special Inquirer John Langoulant told Radio 6PR the buckets of money that suddenly became available for regional projects led to ministers scrambling for a piece of the pie. "There was a disturbing incidence of reports back to us that people basically lined up as the financial year came to a close knowing there was money to be spent, and put forward proposals or were allocated money to undertake proposals that were not required," he said.

During the special inquiry hearings, City of Kalgoorlie-Boulder chief executive John Walker said of a $16 million sporting complex built in 2014, 'Did we need it? Probably not. We had quality sporting fields already. But because there is a lot of money there, it had to be spent'. Treasurer Ben Wyatt described the spending as a "feeding frenzy" where ministers grabbed whatever money they could. "I'm horrified and furious that not just will my term as treasurer will be dominated by the term of the former government, but I dare say a few treasurers after me will have to deal with the mess of the former government," he said. Nationals WA leader Mia Davies, who was a minister in the Liberal-Nationals government, said her party stood by its core policy and claimed the special inquiry was a political move aimed at scaling back Royalties for Regions.

"Royalties for Regions delivered more than $7 billion into regional Western Australia via 3700-plus projects," she said. "My Nationals colleagues and I stand behind every dollar spent to improve regional Western Australia. We will not apologise for putting regional Western Australia first." The policy will remain under the Labor government with its $1 billion annual cap, however Premier Mark McGowan has said its processes with be overhauled. "I think Royalties for Regions is supported across the regions, we support it, but I think regional people don't want to see waste, they don't want to see losses, they don't want to see money spent on programs or projects that don't make a material difference to their lives and they don't want to see some of those poor practices the government engaged in," he said. Of the 50 Royalties for Regions projects put under the microscope by the special inquiry, only five were found to have adequate business cases.

The "on-the-run" planning and lack of procedure led to most project's budgets and schedules blowing out. A $24 million workers' camp built for no-one The Ord River Irrigation Expansion project budget blew out by more than 50 per cent. Credit:WA Government Among the worst of the examples was a $24 million workers camp built in the East Kimberley for the Ord River Irrigation Expansion project which aimed to open up more farmland in the Kimberley region. The 250-person workers' camp – originally budgeted to cost $10 million - was never used, with workers on the project instead accommodated within existing towns.

"The Department of Primary Industries and Regional Development advised that it considered that the camp was necessary because the construction period for the irrigation channels and associated work each year overlapped with the peak tourism season for the East Kimberley," the report read. "In 2013, the camp was used as emergency accommodation for the flooded and evacuated Warmun community." Funding for the broader Ord River Irrigation project increased over the period of the project from $220 million to $334 million, with Royalties for Regions funding the entire scheme. "The special inquirer found that the decision to invest in the project was based on outdated planning and information which underestimated environmental issues. This led to delays and increased cost," the report found. "One goal of the project was to deliver employment opportunities for the local Aboriginal community. The special inquirer was unable to conclude whether this has been achieved in the longer term."

$30m aquarium built by company with $100 in the bank Premier Mark McGowan opening the plagued Ningaloo Centre in 2017. Credit:Facebook The $36 million Ningaloo Centre and Aquarium, a Royalties for Regions project which commenced in 2010, remains unfinished and its 55,000 litre showpiece aquarium empty. The special inquiry revealed the contract for the aquarium was awarded to a company with $100 in its bank account which had never built an aquarium of a similar scale. Business modelling around the centre was based on projections the centre would receive visitor numbers in line with Australia's largest privately funded museum, the Museum of Old and New Art in Tasmania, which catered for 338,400 tourists in 2016.

Visitor figures to the broader Exmouth region were estimated at 180,000 in 2008. The Shire of Exmouth's former chief executive spent more than $2 million - $1.5 million over budget – trying to make the centre's outdoor landscaping look like Crown Perth's turf. "The business modelling and original investment decision for the Ningaloo Centre were based on poor assessments and flawed assumptions," the report found. "It appears that the Shire of Exmouth was intent on proceeding with the Ningaloo Centre despite numerous parties expressing concerns." The aquarium partly opened in 2017 however the Shire of Exmouth cannot afford the ongoing operational costs to properly run the facility.

The South Hedland gym that floods every wet season The South Hedland stadium floods annually due to flaws in its design. Credit:Facebook The $35 million Wanangkura Stadium in South Hedland was approved without a business case and built with serious design and engineering flaws. The project, completed in 2012, was constructed in a low lying area and is prone to annual flooding. Three days after it was opened, it was forced to shut its doors due to failing to meet the requirements of the Building Code of Australia.

"There was no business case, planning or initial analysis which would be expected for a project of this scale, and work started without formal funding agreements with the contributors," the report found. "This is another example of funding being provided from an overarching 'bucket' of money and no formal assessment of the individual projects, and in this case without seeking approval from the Department of Sports and Recreation. "Ongoing costs were not well thought through and the annual deficit for the Town of Port Hedland is $380,000." The power project $109 million over budget The project to move the Pilbara's power underground was five years behind schedule. Credit:Daniel Kalisz

The Pilbara Underground Power Project, a project designed to provide cyclone protection to the Pilbara's electricity network, cost the state $239 million and is due to be completed in mid-2018, five years behind schedule. The special inquiry found the agency tasked with overseeing the project, Horizon Power, was not experienced in delivering projects of such a scale. Royalties for Regions originally contributed $100 million to the project, but budget blow-outs forced a further $75 million from state coffers. "Trying to compress a project like that into two years and putting it smack bang in the middle of a boom... the day we started, it was only a question of how it would explode," Mr Langoulant said. He did however add that the benefits of the project once complete will be reaped for decades to come.