Updated
Adani's bid for a $1 billion taxpayer-funded loan may
have been doomed even before it was scuppered by Queensland's
Palaszczuk Government, the Productivity Commission has said.
Key points:
- Qld Govt vetoed critical $1 billion loan for Adani mine
- Productivity Commission says mine may have failed loan criteria anyway
- Qld Govt could also veto rail company loan bid
The miner's proposed Galilee Basin rail line faced rejection by the Northern Australian Infrastructure Facility (NAIF) because it may have failed key hurdles, the commission's latest bulletin suggested.
However, the commission is yet to analyse a rival NAIF loan bid by rail operator Aurizon, which the State Government will also consider blocking in line with an election promise relating to Adani.
It comes as environmental activists plan to target Aurizon over its rail proposal, which would set up an export route for Adani.
State Labor told lobby group GetUp! during the election campaign in November it would veto "any NAIF loan" that enabled Adani's coal project.
The Productivity Commission's December newsletter noted that projects seeking low-interest loans from NAIF must "not otherwise be able attract finance, but would be commercially viable once constructed".
There must also be "a public benefit from the infrastructure [to justify the cost to the taxpayer of the short-term assistance provided]".
"Many of the projects suggested in the media as candidates for NAIF funding — such as the rail line to the Galilee Basin and various large irrigation dams — may fail at least one of these criteria," it said.
This raised the risk of taxpayers throwing good money after bad, the commission suggested.
"If the return on the investment does not cover the operational costs of the infrastructure and the costs of servicing the loan at market rates over the life of the asset, the small initial level of assistance provided by a concessional loan may simply become another case of inefficient resource allocation," it said.
A spokeswoman for the commission told the ABC that the report referred only to Adani's Galilee rail proposal and not Aurizon's.
State Government could veto second loan
Photo:
Annastacia Palaszczuk supports the mine project, provided it is not funded by taxpayers. (AAP)
Annastacia Palaszczuk's first act after being sworn in again as Queensland Premier was to veto Adani's NAIF loan.
The miner, which is battling to meet its March deadline for clinching finance for the $22 billion project, has since been refused support by Chinese banks and parted ways with its main contractor Downer.
Queensland Treasurer Jackie Trad last month reportedly said the Government would soon decide whether to extend the NAIF veto to Aurizon.
"It will be the subject of cabinet discussions," Ms Trad told The Australian newspaper.
An Adani spokeswoman was unable to say whether the miner was currently in talks with Aurizon.
Both the NAIF and federal Minister for Northern Australia and Resources, Matthew Canavan, have written to the Palaszczuk Government asking for clarity on Aurizon.
"I've written to the Queensland Government seeking a straight answer to this question," Senator Canavan told the ABC days after sending the letter.
"I really do need to know because there's no point the Northern Australian Infrastructure facility spending tens of thousands of dollars assessing other projects if the Queensland Government's just going to do what they did last time, and at the last-minute, pull support."
An Aurizon spokesman told the ABC last month it "remains focussed on progressing our rail proposal for the Galilee including (the) application to NAIF".
"Any commercial commitment to invest by Aurizon would require long-term take or pay contracts for the full capacity and at appropriate rates of return, with Aurizon board sign-off," he said.
Galilee Blockade spokesman Ben Pennings said the protest group would be "making sure (Labor) rule out Aurizon's proposed loan to keep this election promise".
"Now Downer is out and Adani are on the ropes, our focus is to prevent a railway to any proposed mine in the Galilee Basin."
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