Australian news, and some related international items

Adani not likely to succeed in its efforts to get tax-payers’ $1b loan for giant coal mine development

Adani $1b loan bid was likely to fail key criteria for NAIF approval, ABC News, By Josh Robertson,  5 Jan 18, 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……

January 6, 2018 - Posted by | AUSTRALIA - NATIONAL, politics

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