Ord River's $100m blowout a 'strategic decision'

28 Jun, 2012 07:20 AM

An agricultural irrigation plan heralded as the groundwork in turning Western Australia's east Kimberley into a major Australian food bowl may have blown out by $102 million, but proponents maintain once finished it is expected to add $200 million to the national economy each year.

WA Regional Development Minister Brendon Grylls recently confirmed the state government's contribution to double the size of the existing 15,000 hectare Ord River agricultural region had increased to $322 million, up from earlier estimates of $220 million.

The project was also not expected to be completed within the original two year time frame, with the deadline pushed out to the end of next year.

Proponents believe over the next 10 years the Ord River has the potential to reach up to 50,000 hectares.

Ord East Kimberley Expansion project manager Peter Stubbs said the extra cost was not a "blow out", rather the result of series of deliberate "strategic decisions" aimed at facilitating future expansions down the track, as talks with private investors heated up.

"The strategic decision was made to build the arterial irrigation channel with a large enough capacity to support future expansion of the scheme including across the WA – NT border," Mr Stubbs said.

"That was a conscious choice rather than a blow out."

He said extra funds were also needed to ensure more Aboriginal up-skilling and job creation. And the original timeframe had failed to take into account the Kimberley's wet season, which limits construction activities to only seven months of the year, he said.

But WA opposition leader Mark McGowan said $100 million was "an incredible blowout", adding fuel to his claims the Barnett Government was undervaluing projects and consistently going over budget by millions.

"It follows on from the solar scheme blow out of $400 million, it follows on from the Synergy blow out of $80 million," he said,

"In the last couple of months that's $600 million of losses created by the state government for projects that they budgeted a lower amount for.

"Tax payers have to pay this."

Mr McGowan said there was still a risk the state government could not recoup the costs of the extension project.

"There may be a great loss associated with the sale of that land," he said.

The project's total estimated cost, including the Federal Government's contribution of $195 million, has now reached close to $520 million.

Mr Stubbs said he was in talks with potential investors seeking to invest at least a further $500 million into the project, including Chinese groups, Australian companies and local farmers.

"We've been very pleased with the level of interest and yes there is some Chinese interest – there has been other interest as well," he said.

The physical size of the expanded ore valley would still be relatively small project compared to many of the other irrigation schemes around the world, but as the global population continues to rise, Mr Stubbs said it would play an important role.

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28/06/2012 6:57:52 PM, on Farm Weekly

Its only taxpayers funds!!!!- and the Chinese or corporates may end up with it!? At the same time the Ag Dept is being faced with significant budget cuts which will impact directly on all current mainstream Ag. PRIORITIES?
Ian Mott
2/07/2012 8:06:09 AM, on Farm Weekly

A state Labor MP complaining about cost blow outs? Now I HAVE heard just about everything. And I bet he even said it with a straight face. And for what? A deliberate decision to incorporate future investment options into works that are already in progress with a view to achieving significant savings on those future outlays. You see, therein lies the problem. McGowan couldn't get his tiny brain around a cost benefit relationship that extended past the next election.


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