Hi All,
My uneducated take.
I'm not sure about the material part,
@Jazzasax. Our counterparties (NAIF, Qld Govt especially) have had more than enough opportunity to jump ship - in my experience, their continued support suggests they're both as motivated as we are and believe we can get it done.
Love to hear others perspective but I feel its more expectation (mis)management than anything remotely related to the project. Perhaps we can afford the team more than two weeks of Q4, especially after they've recalibrated dates to 31 Dec/ 30 Jan. Investors were advised of an update within weeks and I'm hopeful they'll deliver on it. When you're in an ASX echo chamber and you're financially invested delays certainly feel like they kick you twice. In my previous line of work infrastructure projects (private and public) both experience a similar amount of delays. The optimism bias, which we're certainly guilty of, is the facade you maneuver with to put polite pressure on your stakeholders and generate both public, media and investor interest. The fact that locals in Townsville are talking about the jobs created post-COVID by K2H continues to be a very good thing.
As a point of comparison, Infigen's Flyers Creek Wind Farm was designated Critical Infrastructure by the NSW Government back in November 2009. It'll likely reach FID next year. Adani probably wanted to be generating cash by now. Kennedy Energy Park is years behind schedule and might lose a Gov't PPA over it.
Secondly, I feel the recent Canaccord Genuity broker report highlighted the complexity of the new Genex x Powerlink arrangement. Powerlink's position seemed to be if we don't build anything past K2H that the O&M defaulted to Genex. We likely were pushing for the complete opposite and, at least, a liability on K2H proportionate to the relative proposed renewable energy projects to be built on the line. This new agreement/framework was handed to Genex (& Powerlink) on September 22nd, but no doubt some work needs to be done.
Finally, it's hard to tell whether the optimism re: the JV update back in August was necessary. This comes back to expectation management and I don't think there's a perfect answer here. First Sentier (who have ~$10mn in GNX) seem rather confident in the global partner we're working with. To be fair to the JV partner, they're fronting $100mn in cash, accepting a loan liability for $300mn and the fine details of what their involvement is, is complex. These guys were notified of their preferred JV status in May-ish. Hell of a lot of due diligence to be done in 4-5 months on an 80+ yr investment...
I'm personally unsure of whether the tradeoffs in opting for realism, rather than optimism, is worth it. However, I do agree it's a sobering experience. The reason I've mulled it over far more than I needed to is that we've got a Board that are happy to take on constructive feedback and it's always worth passing your experience as a shareholder along.
Regards,
Jeremy
