oakajee agreement deadline pushed back

Oakajee agreement deadline pushed back

The state government says it will wait for an indication of federal funding for the $1.5 billion development of the Oakajee port and rail project before finalising an agreement with the proponent.

In a statement today, Premier Colin Barnett said the government and Oakajee Port & Rail will wait to see whether the project will receive funding through the Building Australia Infrastructure fund.

As a result the agreement finalisation date has been pushed back from November 30 to February 28 next year.

The extension follows assurances from Murchison Metals, half owner of OPR, that it was close to securing an agreement with the government at its annual general meeting last week.

In October, Mr Barnett nominated five priority projects for possible federal funding from the Rudd government's Building Australia fund, with an interim list of projects expected at the end of this year.

Mr Barnett said today that while the government was pleased with the progress both sides had made in negotiating the terms of the development agreement, awaiting a federal decision on its potential level of involvement through the fund was a prudent move.

"The development of Oakajee Port is a priority for the Liberal-National Government and I am hopeful the Federal Government will see it as a crucial nation-building project and provide some funding through Building Australia," Mr Barnett said.

Last week, Murchison revealed that the state government required OPR to include Chinese suppliers in the development of the project, which is viewed as critical to several iron ore projects in the Mid West region.

However earlier this week, losing bidder Yilgarn Infrastructure stated that its Chinese partners, which it cultivated alliances with over the past few years, had indicated they will only develop the port with Yilgarn.

Since losing the tender process earlier this year, Yilgarn has continued with its rearguard bid for a slice of the project, saying it was entitled to build a berth and associated rail infrastructure as announced last year by then planning minister Alannah MacTiernan.

The privately held Yilgarn has also sought the commitments of Mid West mining companies, with Golden West Resources signing a "foundation customer" agreement for the provision of iron ore haulage.