Councils go quiet over Adani airstrip controversy

Adani – a long way from Townsville or Rockhampton

In October 2017 Townsville City Council and Rockhampton Regional Council announced that they would jointly fund a $30 million airstrip for the Adani Carmichael coal mine in Central Queensland.

The announcement was made even though the construction of the mine itself remains uncertain, and despite the fact that the airstrip is hundreds of kilometres from both cities.

The rationale for the expenditure was that the airstrip would be used by hundreds of fly-in-fly-out (FIFO) workers for the mine, bringing hundreds of millions of dollars to the cities’ economies. The councils also said that the expenditure would ensure that they ended up owning the airstrip.

It now emerges that while the councils will pay for the airstrip, Adani will own it. The discrepancy has seen the councils referred to Queensland’s Crime and Corruption Commission (CCC), which has asked Queensland Department of Infrastructure. Local Government and Planning to investigate.

The referral to the CCC was made by Townsville businessman Philip Batty. He initially claimed corruption on the part of Townsville Mayor Jenny Hill, which the CCC rejected for lack of evidence, but it is proceeding with its inquiry on the basis of Mr Batty’s allegation that Townsville Council did not follow due process.

That is based on a statement by Mayor Hill that the investment would leave the Council owning the airstrip, which has now been revealed to not be the case.

“Councillors yesterday approved the investment of up to $15.5 million over two financial years in a joint venture with Rockhampton City Council, to build and own the airport down in the Galilee Basin,” Mayor Hill told the ABC in October 2017. But both councils have now admitted that Adani, not they, will own the airstrip.

The two councils, who were very happy to broadcast the benefits of the airstrip when it was announced, have now gone very quiet on the subject, and have refused to release details of their agreement with Adani.

The Guardian newspaper has been following the case closely, and has been unable to extract comments from the CCC or the Department, both of whom say they cannot talk about issues under investigation, or from Rockhampton Regional Council, which simply refuses to talk about the subject and refers questions to Adani.

Townsville City Council has been more forthcoming. A spokesman told The Guardian this week that both the land and airport would be owned by Adani and the two councils would operate it “for the life of the mine via an exclusive long-term lease.” This would appear to be a direct contradiction of what Mayor Hill said when she announced the investment in October.

A lot depends on the fate of the mine, which remains uncertain. Adani says the mine will proceed, and it has opened an office in Townsville, but its construction is far from certain. Its viability depends upon a rail line to the mine’s isolated location.

During the recent state election campaign the Queensland Government said it will veto a loan to Adani for the construction of the railway from the Northern Australian Infrastructure Facility (NAIF). It still ostensibly supports the mine, on the condition it receives no taxpayer funding.

A number of Australian and international banks have said they will not fund the mine or the railway, and construction company Downer, which was to have built the mine, has pulled out. Adani says this was to save money, and that it will be owner operator, but it does call into question the rationale for Downer’s initial involvement.

Cairns based NAIF was established in July 2016 to invest up to $5 billion over five years in infrastructure in northern Australia, but has still yet to commit to a single project. Many believe it was specifically established to help fund the Adani project, and that it is the continued controversy around the project that has prevented it from doing so.

Rail company Aurizon, formed in 2010 with the privatisation of the freight operations of Queensland Rail, has now applied for a loan from NAIF to build and operate the railway infrastructure. But, in something of a chicken and egg situation, the mine cannot proceed without the railway line and railway line cannot proceed without the mine.

The fate of the airstrip is also uncertain. Townsville based engineering company Wagners has been contracted by Adani to build the airstrip, but has not yet begun construction. This week the Townsville Bulletin quoted Wagners CEO Cameron Coleman is saying  the contract will not be in effect until Wagners receive a start date from Adani.

It appears everybody is waiting for somebody else to make the first move. In the meantime Townsville City Council and Rockhampton Regional Council are under investigation, not so much for for committing to spending ratepayers money on building an airstrip in the middle of nowhere, but for claiming they will own it when they will not.

The slow-motion Adani saga still has many acts to play. The exact role of two Queensland councils is but one of the subplots.

 

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