new premier stamps his style

New Premier stamps his style



Colin Barnett’s decision to take a direct role in the development
of the $1.6 billion port at Oakajee, north of Geraldton, is the clearest example yet of the difference between the new Premier and his two predecessors.

Geoff Gallop in particular and Alan Carpenter both led process-driven governments obsessed at arriving at decisions only after ticking their way through a painstaking list of boxes.

When then planning and infrastructure minister Alannah MacTiernan could not get the major Mid-West iron ore proponents to work together on the development of rail and port infrastructure, she instigated a preferred developer tender process which eventually granted that status to Oakajee Port and Rail, the infrastructure company backed by iron ore hopeful Murchison Metals and Japanese industrial giant Mitsubishi.

But Mr Barnett, who as State development minister in the Court government in the 1990s spent $20 million establishing the Oakajee port precinct, has now intervened in that process by pushing the Federal Government to join the State to build at least part of the port at a cost of around $678 million.

As far as OPR is concerned, nothing has changed. The company says it is working towards getting its bankable feasibility studies ready by next year with construction to begin in 2010.

A key component of OPR’s preferred developer deal with the State is that it hands over the common user infrastructure at the port — the breakwater, the shipping channel and the turning basin — to the Geraldton Port Authority upon completion. This is the same infrastructure Mr Barnett now wants the State and Federal governments to spend close to $700 million on — to the same end: State ownership, although under the previous deal OPR would collect capital user charges on the common user infrastructure.

Under Mr Barnett’s plan, the State will develop the CUI and collect the fees from shipping while OPR and others develop berths and loading facilities.

OPR’s only competitor in the bidding process, Yilgarn Infrastructure, a company with customer contracts with major iron ore hopefuls Golden West and Mid-West Corporation, which in turn is majority owned by the giant Chinese state-owned steel manufacturer Sinosteel, now appears back in the running and has welcomed Mr Barnett’s commitment.

OPR is walking a fine line between wanting to forge ahead with its agreement and not upsetting the new Premier. It has welcomed Mr Barnett’s proposal while still claiming it is ready to fulfil the obligations of the preferred developer deal.

To complicate matters, the Premier insists he is not usurping the process introduced by Ms MacTiernan which sees OPR as the preferred developer.

“They (OPR) are the party that negotiates with the Government to develop the area . . . and now we get down to detail,” Mr Barnett said yesterday. But it’s pretty clear that Mr Barnett will not give OPR the right to develop the common user infrastructure despite the fact that the original intention was for OPR to do just that and then hand it over to the State.

Ms MacTiernan can’t understand why the State and Commonwealth would throw $700 million at a project the private sector has committed to build.

But Mr Barnett, who has had talks with Yilgarn, OPR and Prime Minister Kevin Rudd, insists that government involvement will anchor the project and he’s not afraid to play the nationalist card in pushing his agenda.

“The process that the previous governments set up of setting China and Japan in competition was very short-sighted,” Mr Barnett said. “Why would we set our major two customers in competition with each other? That was the basic flaw in what the Labor government did.

“I want both Japan and China to be involved in this port in one way or another, but overriding all that I want this to be an Australian port in the development of this State and this nation. This is going to be an Australian port, this is about the development of this country and this State.”

Ms MacTiernan said yesterday that Mr Barnett was hiding behind the nationalism argument to impose his preferred model on the port’s development.

“Mr Barnett is using this argument of the Chinese versus the Japanese for his own purposes, but the way we structured the deal the parties that were participating, be they Chinese or Japanese, had no way of compromising the State or the national interest,” Ms MacTiernan said.

“Really, the issue here is Mr Barnett wanting to recast this project in his image and likeness. He can rightly claim credit for identifying the area and acquiring the land for it but changing something for the sake of changing it and bringing in racial arguments I think is just pathetic.”

Mr Barnett’s proposal could still stumble if the Commonwealth decides it doesn’t need to contribute to a project which already has a strong commitment from the private sector. In that case, Mr Barnett would have to decide whether the State would pick up the entire tab for the common user infrastructure or revert to the original plan.

But whatever happens, Mr Barnett, for better or for worse, has set a standard for asserting his own authority and style over development projects, which is likely to define his time in office.

ROBERT TAYLOR
INSIDE STATE