Canavan discusses NAIF's role with Adani, Rookwood and GKI
MINISTER for Northern Australia Senator Matt Canavan has offered some commentary on the Northern Australia Infrastructure Facility in the wake of the recent Adani controversy.
In his role overseeing NAIF, Mr Canavan was ideally placed to describe how the lending body was travelling, what the impact of the Queensland Government's veto decision was and how investment decisions were progressing.
He first addressed questions about how the NAIF board was functioning and the the speed of its decision making.
"An independent review has given the NAIF's governance processes a tick," he said.
"A comparison of project timelines shows the NAIF completed sign-off on its first project in about the same amount of time it took the Clean Energy Finance Corporation to complete its first investment - even though infrastructure projects are much larger and complex."
The NAIF's first loan to a project in Western Australia last year was the first of many project loan decisions Mr Canavan expected in the coming months.
"More than half of the active inquiries have come from Queensland and there are five Queensland projects in the due diligence phase," he said.
"But investors need confidence that the Queensland Government isn't going to change the rules once projects are in the pipeline."
Last November, NAIF was the word on everyone's lips during the state election campaign when Queensland Premier Annastacia Palaszczuk vetoed the provision of a loan to mining giant Adani for its rail project citing a perceived conflict of interest.
He said the veto made the Queensland Government appear more intent on jeopardising NAIF projects than supporting them.
"That was despite the Queensland Government originally suggesting that very project for a NAIF investment," he said.
"That kind of conduct doesn't engender trust with investors, so for people willing to come and talk to the NAIF.
"I've still had no answer as to whether the Queensland Government also intends to veto any other rail projects in the Galilee Basin."
Mr Canavan said wanted to work with the Premier and the Deputy Premier to deliver investments in the North, but needed reassurances the Government took the process seriously and "won't chop and change on future projects".
Speaking about the ramifications of the veto last month, he said it was not as simple as redistributing the money set aside to Adani to another project.
"The way NAIF works is it's leveraging off private investment so it's 50 per cent private and 50 per cent from the government so there's not necessarily another investor willing to make that kind of large investment straight away," he said.
"There's not a standing queue of people that are willing to invest a billion dollars in Central Queensland if you give them another billion-dollar loan.
"There's no substitute for Adani out there. There's no one on the bench who can run on the field say 'now we're willing to put in hundreds of millions of dollars if you give us the same'.
"In saying that, we've got to get moving on the NAIF, there are some good projects there.
"I am looking to see how in light of the Adani situation if we can free things up a little bit to get money flowing.
"I do want to sit down with the Queensland Government and talk about Rookwood and the Townsville port.
"They are two projects that we can move quickly on and have NAIF funding for.
"It the Queensland Government has difficulties funding their $130m - there's been this to and fro about whether we pay for it - if they want the other $130m, they can come to the NAIF."
Mr Canavan offered some insight about NAIF's involvement in the stalled Great Keppel Island resort project.
"I'm not going to comment on individual investors except to say that project, it's common knowledge that it is before the NAIF and being worked through and the general comments I've said about it before about resorts on islands are always a challenging environment to make pay off," he said.
"The advice I've had from the NAIF is that a boutique gaming licence would strengthen their business case."
After Labor won the state election on an election platform that didn't include a gaming licence for developer of the GKI resort, Towers Holdings, it remains to be seen how it would respond to this situation.
Tower Holdings chair Terry Agnew indicated his willingness to talk with The Morning Bulletin in the third week of January to reveal what next for the beleaguered project.
A spokesman for Ms Palaszczuk disputed Mr Canavan's assertion that the Clean Energy Finance Corporation and NAIF were approving projects at a relatively similar speed.
"The Clean Energy Finance Corporation, established by the former Federal Labor Government, lent almost $1 billion over the same period that the NAIF has been operating and this was achievement at a time when the Abbott Government wanted to shut it down," he said.
The spokesman then went on to call out Mr Canavan and NAIF of being all show and no go.
"Matt Canavan is running a pub with no beer. NAIF is a bank with no loans," he said.
"NAIF and its $5 billion was announced in Canberra almost three years ago.
"It has not lent a dollar, not one brass razoo since."
He said NAIF's track record so far was a solitary recommendation a $16 million loan for a port project on the other side of the country.
"The only lending going on is the lend Mr Canavan is having of people living in northern Australia," the spokesman said.
"He promised to deliver, but all he's given out is platitudes.
"In stark contrast, the Palaszczuk Government has committed to a $40 billion four-year infrastructure program and working with local councils and industry across the State to deliver new job-generating projects and programs."
He said that was why the Australian Bureau of Statistics - another Federal Government body - has said Queensland has the fastest jobs growth across the nation.
"Mr Canavan's former employer - the Productivity Commission - has cast doubt on the NAIF loan for the Galilee Basin," the spokesman said.
"The Productivity Commission said: 'Many of the projects suggested in the media as candidates for NAIF funding - such as the rail line to the Galilee Basin and various large irrigation dams - may fail at least one of these criteria.
"If the return on the investment does not cover the operational costs of the infrastructure and the costs of servicing the loan at market rates over the life of the asset, the small initial level of assistance provided by a concessional loan may simply become another case of inefficient resource allocation'."