PM to question Barnett on Oakajee report18-Jan-2012 by AAP...

PM to question Barnett on Oakajee report

18-Jan-2012 by AAP

Category: InfrastructurePortsResources.

Prime Minister Julia Gillard will write to Premier Colin Barnett about reports the builder of Australia's largest infrastructure project is being directed to import Chinese equipment and services.

Foreign companies are being favoured over local contractors, with Oakajee Port and Rail (OPR) told to endeavour to secure the involvement of private or state-owned Chinese companies, The Australian reported today.

Japanese-owned OPR is pressing on with plans for a $6 billion port and infrastructure project near Geraldton, in WA's Mid-West, to open up the region's junior iron ore plays, despite hitting trouble with its joint venture partner Murchison Metals last month.

Ms Gillard said she understood people were worried Australians would not get a fair share of the work that will go into constructing the port at Oakajee.

"It is my intention to write to Premier (Colin) Barnett today to seek his cooperation to make sure we can get to the bottom of this matter," she told reporters in Melbourne.

"When we look at Western Australia what we see is a huge resources boom and that's fantastic.

"But other West Australians want to know if they are going to get a fair share of the prosperity that comes from that resources boom."

Last month Murchison Metals failed to come up with funds to continue, resulting in the dropping of exclusive rights by the joint venture over the project.

At the time Mr Barnett said the change would create opportunities to attract Chinese investment, reduce the project's capital cost and separate infrastructure development and mining interests.

Chinese input was vital because Chinese companies had major interests in midwest iron ore projects and China was likely to be the biggest customer for the ore, he said.

The WA and federal governments have pledged $670 million between them to fund the port, which would be owned by the WA government.

The long-awaited port, which has been talked about since the 1970s, has been the subject of numerous delays and cost blowouts since it was announced OPR would construct and operate it, about 460km north of Perth, in March 2009.

In March 2009 the cost of the project was at $3 billion, but by June it had gone up to $4 billion. Current estimates now put the cost at $6 billion.

Oakajee was slated to start its first exports in 2012 but it is now expected to be 2014.