Verging on banana republic kind of stuff without the bananas - that is the only conclusion to draw from the deeply disturbing report into the shonkiness surrounding the Government's selection of SkyCity as the preferred builder and operator of a national convention centre.

The Prime Minister's attempt to downplay Deputy Auditor-General Phillippa Smith's findings in advance of their release yesterday by saying he had not lost any sleep from reading draft copies may turn out to be a costly political miscalculation.

John Key may have escaped personal blame for the serious flaws in the old Ministry of Economic Development's handling of the convention centre project but the report is far worse than he had been leading people to believe.

He is taking refuge in the report's assurances that no evidence could be found to suggest "inappropriate considerations", such as connections between political and business leaders, were behind the final decision for the Government to negotiate with SkyCity as the preferred bidder.


In other words, no corruption. Or at least none that could be found.

Smith's report, however, does not mince words when it comes to slamming the whole selection process from the seeking of expressions of interest to their evaluation as being neither transparent nor even-handed, with four other interested parties seeking the nod to build the convention centre being kept in the dark for months while the Government got cosy with SkyCity.

Things got so bad that some officials expressed concern to superiors that proper procedures were not being followed.

The outcome was that one bidder - SkyCity - was treated differently from the others. In particular, SkyCity had a clearer understanding of a critical factor in determining who was successful - that the Government did not want to commit money to the capital costs of the convention centre.

The Deputy Auditor-General's finding that the process lacked fairness and credibility should carry enough weight to call a halt and go back to square one.

National will turn a deaf ear to Opposition demands for that to happen. However, the report offers copious material for Opposition parties to fling in National's face and Key's in particular. And the lack of an official clean bill of health for the project keeps the Government on the defensive even before the haggling over how many more pokies SkyCity will be able to run on its premises and the arguments over problem gambling resume.

Key may not be losing much sleep. But this report is no comforting, soft bed of hay. It is a bed of nails.