heres another article from the geraldton guardianChina cash...

heres another article from the geraldton guardian
China cash waiting as port cost spirals

Still bare: The proposed Oakajee Port site, 20km north of Geraldton. Above the port lies the proposed industrial site.



Cost blowouts at Oakajee have been confirmed in State Parliament, as Colin Barnett looks to China for investment in the project.

High profile Chinese politician Jai Quiglin visited WA earlier this week, firming-up Chinese interest in the Mid West port and rail development.

The Premier welcomed Mr Jai?s interest in Oakajee, which is currently owned by Japan?s Mitsubishi Metals and WA?s Murchison Metals.

?I made it very clear to Mr Jai that we would welcome Chinese investment in Oakajee,? he said.

?He was very well briefed on the history of the project and expressed great interest for Chinese involvement.?

On the same day as Mr Jai?s visit, State Development directorgeneral Anne Nolan confirmed speculation about cost blowouts at Oakajee.

Ms Nolan told a parliamentary hearing that the costs of the common-user infrastructure ? jointly funded by the State and Federal Governments ? would exceed original estimates.

At present both governments? funding commitment for the port component of Oakajee is $678 million.

Ms Nolan wouldn?t specify the extent of the rise.

Recent media reports estimated common-user infrastructure at the port would rise $250 million to near $930 million.

Mr Barnett said some aspects of the project were ?over-engineered? and said a blowout would not necessarily flow-on to tax payers.

?We have two options in that case ? to increase the commitment or to reduce some aspects of the port,? he said.

?There would not be any large increase in government spending.?

The cost of the port and rail project was originally tagged at $4.4 billion, but an unnamed source revealed there could be a $2.3 billion cost blowout to more than $6 billion.

Project partner Murchison Metals recently confirmed capital costs at the project were likely to exceed $5 billion.

The cost increases have added pressure to the project?s consortium, adding to speculation the project might not get off the ground.

Mr Barnett said the government was not going to back down on Oakajee and would re-assign the project if required.

?Should OPR not go ahead we have the option of buying the intellectual property rather than going back and doing it all over again,? he said.

The cost of OPR?s intellectual property is estimated at more than $70 million.

Feasibility studies for the project are being finalised and are due by the end of 2011.

An OPR spokesperson said financing for the project was still being finalised and Chinese investment was a strong possibility.

?It would be premature and speculative to comment on the likely final capital cost,? she said.

?OPR is continuing discussions with a range of potential Chinese and industry participants, including with regard to equipment supply, equipment financing and design/engineering participation.?