SA govt land deal 'irrational', says judge

The controversial deal to sell off a prime piece of industrial land in Adelaide without going to tender was irrational, a Supreme Court judge has found.

"It was made in disregard to prudent commercial principles," said Justice Malcolm Blue.

But "notwithstanding the infirmities of the decision making", he found the contract between the government's Urban Renewal Authority and development consortium Adelaide Capital Partners (ACP) was valid.

The 407ha site at Gillman, in Adelaide's north, was offered to ACP for $100 million.

Acquista Investments Pty Ltd and Veolia Environmental Services (Aust) Pty Ltd sought a judicial review of the decision.

"The decision by the chief executive to enter into the contract was made in ignorance of matters that were fundamental prerequisites to making an informed, prudent or rational decision," the judge said.

"It was an irrational decision and a decision that no reasonable person in the position of the decision maker could rationally have made."

He said there was no objective reason why the general principle that sale be undertaken by a competitive sales process should not have been applied to the land.

The decision to enter the contract also contravened a section of the Public Corporations Act, he said but concluded the contract was not void.

Opposition treasury spokesman Rob Lucas said the findings justified the Liberals' pursuit of the government on the issue.

"The Weatherill Labor government's decision to enter into this deal without proper commercial consideration may have led to a bad deal for South Australians," he said in a statement.