Ord deal has bipartisan backing

21 Nov, 2012 03:00 AM
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FORMER Prime Minister Kevin Rudd (left), with WA Premier Colin Barnett and WA Nationals Leader Brendon in Kununurra, for a previous announcement of the Ord-East Kimberley Expansion project.
FORMER Prime Minister Kevin Rudd (left), with WA Premier Colin Barnett and WA Nationals Leader Brendon in Kununurra, for a previous announcement of the Ord-East Kimberley Expansion project.

CANBERRA has given bipartisan support for a new foreign investment deal of up to $700 million to develop irrigated farming, sugar production and ethanol in Western Australia’s remote far north, in addition to $500 million in State and Commonwealth funding.

On Tuesday, the WA government confirmed recent speculation that Chinese company Shanghai Zhongfu had won a competitive tender bid on a 50-year lease to build 15,100 hectares of irrigated farmland in the State’s Ord river region.

Shanghai Zhongfu’s parent company is a major Chinese construction group, Shanghai Zhongfu Real Estate, but its Australian subsidiary Kimberley Agricultural Investment (KAI) will undertake the Ord expansion.

WA Premier Colin Barnett and Regional Development Minister Brendon Grylls announced KAI would lease and develop 13,400 hectares into irrigated farm land under the Ord-East Kimberley Expansion Project.

KAI is proposing to invest up to $700 million over the next six years to establish a sugar industry in Kununurra that’s expected to return 4 million tonnes of cane and 500,000 tonnes of export sugar crystal annually.

The company has indicated it will offer sub-leasing and share-farming partnerships with Australian growers on up to 20 percent of the new farmland.

Another 1700ha of newly developed land in the Ord West Bank area will become available for other producers and crops, creating about 25 new and locally run farms, not limited to sugar production.

KAI’s multi-million dollar investment will also see a sugar mill constructed at an estimated cost of $425 million in the burgeoning northern food bowl.

About 350 local construction jobs and more than 400 operational jobs are anticipated, once full production is achieved by 2021. There is also the potential to build an ethanol plant and a medium density fibre board plant producing up to 300,000 tonnes annually.

An industrial park in Kununurra and major upgrades to Wyndham’s port facilities are also on the cards.

Mr Barnett said the new project was a major step towards the Ord region reaching its full potential. He also acknowledged the Commonwealth government’s “significant investment” of an additional $195 million to build social and community infrastructure in Kununurra, Wyndham and surrounding communities to assist the project.

“This investment in large-scale agricultural industry and downstream processing will be the start of an exciting new era for the East Kimberley and northern Australia,” he said.

“It was the Liberal-National Government’s decision to invest in a new main irrigation supply channel and core transport infrastructure that laid the foundation for the development of a long-term, sustainable agricultural industry in the north of this State.”

Mr Grylls said KAI was one of several companies that registered expressions of interest.

He said the WA Liberal-National Government’s decision to invest $311 million of Royalties for Regions funding into the Ord-East Kimberley Expansion Project had delivered 31kms of new main irrigation supply channel, as well as 40kms of sealed public roads to the land that will be developed into operating farms under this proposal.

Mr Grylls said contract negotiations would be conducted and finalised over the next six months, while KAI must also obtain all relevant approvals and fund associated infrastructure.

The State will retain ownership of the irrigation channel, sealed road and other infrastructure developed under the Royalties for Regions Ord-East Kimberley Project. It’s understood the Chinese company will only pay a peppercorn rent in return for clearing and developing the land.

Federal Agriculture Minister Joe Ludwig said he wasn’t involved in any formal discussions or responsibility in negotiating the Ord deal, but he has spoken to WA Agriculture Minister Terry Redman about the exciting potential for developing farm production in the State’s far north, given access to large, consistent water supplies, quality soils and arable land and favourable growing conditions.

Minister Ludwig said he was cautious around foreign investment that required Foreign Investment Review Board (FIRB) approval but welcomed the Ord announcement.

“I have supported and will continue to support foreign investment that supports jobs, investment opportunity and particularly the transfer of skills, knowledge and research,” he said.

“On face value this deal holds all of those prospects. This is a good investment for Australia.”

The Nationals moved to quell initial criticism when speculation surfaced last week that Shanghai Zhongfu had won the tender bid, ahead of the Australian Agricultural Company (AACo) and others.

Riverina Nationals MP Michael McCormack questioned why taxpayer funds were being used to develop irrigation projects in WA’s Ord river region to assist a foreign owned company, while uncertainty surrounded the Murray-Darling Basin’s future.

But Mr McCormack and other dissenting Nationals were eventually hauled into line after several phone hook-ups explained the difference between Shanghai Zhongfu investing in a green-fields project on leased land, and the stinging criticism which accompanied the federal government’s recent approval to sell Australia’s largest cotton irrigation farm, Cubbie Station, to a Chinese-dominated consortium.

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READER COMMENTS

Bushie Bill
21/11/2012 5:53:19 AM

Thank god there are still some intelligent thinking economically literate politicians who do not give in to irrational populist ignorance, which, of course is always the most vocal.
Tigerdicky
21/11/2012 7:42:51 AM

These dingoes will do anything to sell us out!
Archibald
21/11/2012 8:43:35 AM

Look on the bright side, if the Chinese own half of Australia, they'll be less inclined to bomb it into oblivion when they invade later on!! Besides I'm not sure the Chinese will be able to cope with our political saviours whom have such excellent economic credentials. They might eventuallty go broke like the rest of our famers whom are struggling to make a go of it under the burden of legislation, regulation, green dreams, and all the other imposts that have really been good for farmers.
mark2
21/11/2012 2:29:10 PM

Ah BB you're predictable. I can't wait for the labour conflicts to arise on the 80% of the project that is more than likely not subject to our laborious workplace laws. Oh yes , and will the carbon emmissions be ours or theirs?
Sam
21/11/2012 4:25:20 PM

Well nothing has been happening in the Ord for years so they might as well have a go. No one else seems interested.
Nev
21/11/2012 6:29:00 PM

I can live with this one, this is really what Foreign investment should be about, greenfields development on a lease, unlike Cubbie and the dairy deal which are neither of those. Lets hope the devil isn't in the detail!
Jock Munro
21/11/2012 7:16:32 PM

Should anyone be surprised that there would be bipartisan support amongst the urban political elite for the sale of our prime assets to the communist Chinese Government? Google Liberal Wheat Treachery and watch the Liberals laugh with the Rudd Labor Government as they abolish our iconic wheat marketing arrangements. They do not know anything nor do they care.
Bushie Bill
21/11/2012 8:43:31 PM

"I can't wait for the labour conflicts to arise on the 80pc of the project that is more than likely not subject to our laborious workplace laws", says mark2. Please explain, in the words of your intellectual hero, says I. And oh yes, those "emmissions" (sic) are ours. Why do you need to ask?
Deej
21/11/2012 10:03:56 PM

Yes, & keep it to "lease only" please - not outright sale of OUR soil
The Bug
21/11/2012 11:39:22 PM

Don't you love how Brendon Grylls is wearing a name tag in the picture, while standing next Kevin Rudd and Colin Barnett. Go the WA Nats. Bet they know who Grylls is now - get him to Canberra ASAP and bring Terry Redman along. And Barnett, he can be next PM if Grylls doesn't want the job.

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I'm pretty sure I can speak on behalf of the Senator in that he supports poppy seed farming, not
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"Farmers are no different to anyone else when it comes to a liking for other people’s money".
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Government has a poor record in relation to biosecurity and want the famer to be responsible for