Australian news, and some related international items

Adani coal railway line plan in breach of Australian government policy

Adani mine railway loan would breach government’s policy, says legal group
Complaint lodged over prospect of Northern Australia Infrastructure Facility partially funding 400km rail line, Guardian, 
, 6 Apr 17, A $1bn federal loan to builders of a railway line between the proposed Adani coalmine and the coast would be a direct breach of government policy, a legal group has claimed.

Environmental Justice Australia has lodged a formal complaint with the Productivity Commission over the prospect of the Northern Australia Infrastructure Facility partially funding the 400km rail line.

It is believed two companies – an Adani-related entity and the rail company Aurizon – have made rival bids for $1bn in government loans.

But EJA said government funding of the line would be a clear breach of competitive neutrality principles and potentially against the criteria of the “developing the north” white paper.

Competitive neutrality principles require governments not to use their legislative or fiscal powers “to advantage their own businesses over the private sector”, according to government agreements.

 “We submit that for the Adani and Aurizon proposals there is no ‘market failure’ and Naif support would encroach upon the domain of the private sector in breach of competitive neutrality principles,” said the complaint, filed on behalf of the Institute for Energy Economics and Financial Analysis.

“We also submit that the Naif is non-transparent, ineffective, inefficient and has an inadequate governing framework.”

EJA based its complaint on a report by the Productivity Commission into the Export Finance and Insurance Corporation in 2012. It said said the commission found Efic should cease supporting onshore resource projects and related infrastructure because the private sector was already active in that market.

It also suggested the framework of Efic and Naif were similar, in that it had a “market gap” not “market failure” mandate……

Naif’s mandatory criteria also includes the requirement that the funded project be of benefit to the public and “serve or have the capacity to serve multiple users”.

While Adani’s proposal for the rail line is believed to be for its sole use transporting coal between the Carmichael mine in the Galilee basin and the coastline for export, Aurizon’s has reportedly scoped for a multi-use line – albeit with Adani as the sole operator initially.

Barnden said this did not affect the group’s complaint, and suggested Aurizon would have difficulty justifying a proposal for a multi-user line because the Abbot Point terminal on the coast only had capacity for Carmichael.

“I think we’re reasonably confident that the commission will make findings which would lead to recommendations to the minister to not finance or not provide financial support to large private infrastructure projects in Australia.”…..


April 7, 2017 - Posted by | AUSTRALIA - NATIONAL, legal

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