Watchdog denounces $3.3m grant for coal power study
THE Auditor-General has released a damning review into the federal government's $3.3m Shine Energy grant, damning the project's credibility.
Brisbane-based company Shine Energy was awarded an ad hoc grant in February last year to conduct a feasibility study into a new coal-fired power station in Collinsville.
The Australian National Audit Office found five issues with the process the Department of Industry, Science, Energy and Resources (DISER) used to recommend the two grants for new energy projects, including the power station and another for Blue Hydro.
Multiple Coalition MPs have backed the project but the Opposition has long claimed the proposed power station was just an election stunt.
This audit has fuelled the fire, with one Labor senator saying this was just more proof it was a bid to buy votes.
The audit looked at the Supporting Reliable Energy Infrastructure Program, which was developed to provide ad hoc grants to new energy projects, and procure a study to examine central and northern Queensland's current and future energy needs.
The audit report found funding was not fully informed by an assessment process and sound advice on the awarding, nor did it comply with the Commonwealth Grants Rules Guidelines.
The ANAO discovered there was no probity framework covering the whole program, which was more broad than the grants that were awarded, and there were no appropriate arrangements to manage conflicts of interest.
"While some stakeholders had been consulted and some analysis undertaken", consultants had not done modelling or developed recommendations. It also discovered due diligence was incomplete and in Shine Energy's case, not up to date.
However, the two applications were assessed against the eligibility and appraisal criteria with Shine Energy not meeting two eligibility requirements because the study would not be completed by June 30 this year and the budget contained ineligible expenditure.
While the audit found advice given on the Blue Hydro grant was "largely appropriate", the Shine Energy grant was only "partially appropriate". The written briefings that recommended the grant had not clearly outlined how each application met the selection criteria.
Energy Minister Angus Taylor signed off on the grants based on advice from the Department of Industry, Science, Energy and Resources. "This is a grant program that's focused on delivering for the people of Queensland," Mr Taylor said.
"Departments always do everything they can to follow the principles. Some issues were identified by the Auditor-General and the recommendations have been accepted and the department will be making sure that those principles are followed in the future."
DISER has welcomed the report and accepted the audit's three recommendations, which included developing a single set of opportunity guidelines and addressing probity risks.
" (DISER) is either already compliant with obligations or is considering how to best effect their implementation," a spokesman said.
"Implementation of the recommendations will be overseen by the department's Assurance and Audit Committee. "The department is committed to continued compliance with the Commonwealth Grant Rules and Guidelines and to effective administration of government policy."
Shadow Northern Australia minister Murray Watt said the report was "proof this project was just a dodgy election stunt".
"The LNP went to the election promising a new coal-fired power station in Collinsville. Now we learn we'll only get a half-done feasibility study," Senator Watt said. "This report shows the LNP has gifted over $3 million in public funds to a company that has never built a power station and hasn't got the money to build one."
Queensland Conservation Council director Dave Copeman said the audit shows the power station was "never a feasible proposition".
"We need the federal government to support Queensland's potential to be a renewable superpower, and stop wasting time trying to conjure the mirage of a new carbon polluting coal-fired power station," he said.
Shine Energy could not be contacted.
Originally published as Watchdog denounces $3.3m grant for coal power study