Almost a million dollars of taxpayers’ money will be paid to a company with just $100 in equity, one director and a business address listed as a suburban Sydney home if it fails to win rights to build one of the nation’s largest infrastructure projects. The Australian can reveal the Northern Territory government has contracted to give Merlin Energy Australia the cash if it is unsuccessful in its bid to build the planned $1 billion North East Gas Interconnector pipeline between the Territory and the east coast.
Merlin Energy Australia, a company created in December, was chosen as one of four “top-quality” short-listed bidders by a panel including NT public servants.
It is directly connected to businessman Charles “Vic” Alexander, who in 2010 oversaw the collapse of four companies, including the listed Minerals Corporation, owing creditors $8.5m.
Jason Schoolmeester, executive director, strategic oil and gas development in the Department of the NT Chief Minister, said the government would make a “contribution” to each of the three final bidders not selected for the NEGI project. “The NT government has agreed to make a contribution to each unsuccessful proponent’s costs in preparing their final proposal,” he told The Australian.
“The NT government’s legal and financial advisers confirm that contributions of this type are not unique to the Northern Territory and consistent with industry practice across Australia for similar competitive tender processes for major infrastructure projects.
“The contribution recognises the significant costs which each proponent will incur in preparing a final proposal, and the benefit that government will derive from the competitive process.”
The NT government did not confirm the amount to be paid to the underbidders, however a source close to the project said it was “almost $1m” for each party.
The sole director of Merlin Energy Australia is Mr Alexander’s partner, Yue Ming “Diana” Shen, and the company’s business address is listed as a Cherrybrook house in Sydney’s west, understood to belong to Ms Shen’s parents. Ms Shen and Mr Alexander are separately the sole directors and shareholders of a Hong Kong-based company called Merlin Energy Limited which was created in September and has just $US2 in equity.
Merlin Energy Australia was in December named one of four short-listed bidders to complete the Territory pipeline, ahead of global infrastructure giants including Berkshire Hathaway Energy and Macquarie Capital.
NT Chief Minister Adam Giles has previously declared “full confidence” in the bidding process. “The government has appointed a range of respected corporate advisers to the project, including Port Jackson Partners to oversee the bid process, and Merit Partners to oversee probity,” he said.
Mr Alexander did not respond to questions from The Australian.
Regarding his involvement with Minerals Corp and associated companies ACC Ecominerals, Skardon River Kaolin and Swan River Kaolin, Mr Alexander has previously said he was a “scapegoat” and a “sitting duck” following the collapse of the companies, and he denied any wrongdoing.
A spokeswoman for Mr Giles has said Merlin Energy Australia was a “special purpose vehicle” linked to the China Petroleum Pipeline Bureau, a subsidiary of China National Petroleum Corporation."
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