Australian news, and some related international items

The real purpose of Northern Australia Infrastructure Fund? – to supply $billions to Adani

Northern Australia Infrastructure Fund set up to funnel billions to Adani, Independent Australia Mark Zanker 15 July 2017, The NAIF was set up to allow the Coalition Government to pump billions of dollars of public money into Adani’s Galilee Basin coal mine and other coal mining projects, writes former public servant Mark Zanker.

THE Northern Australia Infrastructure Facility(NAIF) was set up ostensibly is to fund the states and territories to carry out infrastructure works to assist economic growth and increased population in northern Australia. However, a close look at the bill, and the people and circumstances surrounding it, suggests that it is, in fact, a tiny fig leaf behind which the Federal Government seeks to hide its desire to shovel billions of dollars of taxpayers money into Adani’s Galilee Basin coal mine project.

The legislation precludes the appointment to the board of representatives of traditional owners, pastoralists, scientists, environmentalists, the tourism industry, and historians. These groups also have significant expertise in northern Australia — pastoral, cultural, spiritual, historical and scientific. Pastoralism, aquaculture, tourism, including conventional, cultural and ecological tourism, are very important industries in northern Australia, but none of them have a seat at the table here.

With the possible exception of Innisfail Mayor Bill Shannon, the board members of the NAIFall have strong links to the mining industry. Chair Sharon Warburton was a board member of Gina Rinehart’s Fortescue Metals Group, and previously worked at Rio Tinto and other resources companies.

Board members Justin Mannolini and Khory Mccormick have decades worth of experience working as energy, mining, resources and commodities lawyers. Fellow lawyer Sally Pitkin was deputy chair of the Export Finance and Insurance Corporation — coal, of course, is Australia’s biggest export. NAIF board member Karla Way-Mcphail  is a mining employee trainer, coal mining enthusiast and personal friend of Minister for Resources and Northern Australia Matt Canavan, as well as being an LNP donor and supporter. Way-Mcphail also has a significant conflict of interest with respect to Adani, owning two companies that stand to directly benefit from the Galilee Basin mega-mine if it goes ahead.

The final board member, Barry Coulter, was previously executive chair of Sherwin Iron Ore. Sherwin set up an iron ore operation in the Northern Territory at the height of the last commodities boom. In August 2013, I wrote to the then minister responsible for mining activities, asking why the Sherwin project had been given the go-ahead when adequate infrastructure for the transportation of the ore was not in place. In particular, I wanted to know why it had not been a pre-condition of this operation that Sherwin had a contract in place with Genesee and Wyoming railway to transport the ore from Mataranka, or another suitable location to Darwin port, instead of using road trains that would substantially damage the Roper and Stuart Highways.

The reply I received on behalf of the NT Government conceded that it would have been preferable for arrangements to have been made from the start for the transport by rail of the ore, but justified giving a hasty go-ahead to the project on the basis of the mining royalties:

‘… revenues from mining operations … bring great benefit and it is through this income that we can afford the normal Government services that you and other people of the NT enjoy.’

Less than 12 months later, in July 2014, the Sherwin project collapsed, going into voluntary administration, leaving little other than a battered highway.

From an outside point of view, this project looked like a scramble for a fast buck, rather than a well planned project that took account of community interests, commodity prices and such issues before it started. The absence of commercial finance for a project is an indicator of lack of planning.

There have been other big dollar infrastructure projects in the north in the past, like the Humpty Doo Rice project and the Ord Irrigation scheme.   ……..

In the second reading of the NAIF bill, then Minister for Resources, Energy and Northern Australia Josh Frydenberg said:

“The expert, transparent and arms-length design of the board established by this bill will cultivate credibility in financial markets, while ensuring that the government invests in projects which are viable, provide public benefits and unlock the potential of the North.”

However, the Investment Mandate states that funding for projects must not be provided unless the Board is satisfied the Project would not otherwise have received sufficient financing from other financiers. Is it truly realistic to believe the Commonwealth will recoup its expenditure from investments that commercial financiers have assessed to be unviable?

On the face of the constituent documents of the NAIF, there seems to be no basis for “political” intervention in investment decisions, but it would be unrealistic to believe that political considerations will not influence the decisions of what is after all a government agency. The Commonwealth and Queensland governments have demonstrated a sort of religious fervour in the belief that coal is good for humanity, that there can be such a thing as clean coal. ……..

Ministers have attacked attacked banks that have been reluctant to invest in coal, and universitiesover moves to divest themselves of fossil fuel assets. However, NAIF potentially provides cover for governments to appear to be legitimately trying to assist “new and exciting” big projects that will supposedly involve job creation in circumstances where no prudent investor would fund the project concerned and where even the project proponent does not believe there will be vast numbers of jobs created, or that those that are created will be long lasting.

Legal advice to the Australian Conservation Foundation suggests that channeling funds through this facility to underwrite Adani coal mining activities may be unlawful due to its financial risks. Oliver Yates, former chief executive officer of the Clean Energy Finance Corporation has raised similar concerns………,10504#.WWl6ZCrWkIk.twitter

July 15, 2017 - Posted by | AUSTRALIA - NATIONAL, climate change - global warming, politics

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