❓ Opposition questions the Premier about the Oakajee Port and Rail project's cancellation and the allocation of taxpayer money. Premier defends the government's actions, highlighting international tensions and ongoing negotiations for a staged development.
AnsweredQoN 269Legislative Assembly
QuestionView source ↗
OAKAJEE
PORT AND RAIL PROJECT
269. Mr M. McGOWAN to the Premier:
I refer to the Premier's loss of the $6 billion Oakajee
Port and Rail project announced on 14 June, and the $330 million of Western
Australian taxpayers' money allocated to this project.
(1) Was the
Premier's Treasurer correct when, yesterday, he left the door open for
the $330 million of WA taxpayers' money to be reallocated for other
purposes in the upcoming budget, or was the Premier correct when he said he
proposed that the WA government ''take prime responsibility for the port''?
(2) Will the
state now be building a port; and, if so, how much will it cost?
(3) Will the state be purchasing the
intellectual property from Mitsubishi?
PORT AND RAIL PROJECT
269. Mr M. McGOWAN to the Premier:
I refer to the Premier's loss of the $6 billion Oakajee
Port and Rail project announced on 14 June, and the $330 million of Western
Australian taxpayers' money allocated to this project.
(1) Was the
Premier's Treasurer correct when, yesterday, he left the door open for
the $330 million of WA taxpayers' money to be reallocated for other
purposes in the upcoming budget, or was the Premier correct when he said he
proposed that the WA government ''take prime responsibility for the port''?
(2) Will the
state now be building a port; and, if so, how much will it cost?
(3) Will the state be purchasing the
intellectual property from Mitsubishi?
AnswerView source ↗
(1)–(3)
The Leader of the Opposition started his question saying the ''loss''
of the Oakajee project. How quickly he gives up on Western Australia. How
quickly he gives up. Western Australians fight for projects, Leader of the
Opposition. That is our culture. That has been the history of this state since
the early 1900s. We cannot lose a project that has not happened. How can we
lose a project that has not happened?
Short history: Labor allocated the
right to develop Oakajee to the Japanese company Mitsubishi, and yet the major
investor and customer is China. Members may well be aware that China and Japan
are at loggerheads. There is a stalemate. Serious international tension exists
over disputed islands in the East China Sea. It is a fact that China and Japan
are prohibited from talking to each other on this project. Mitsubishi advised
me of that late last year, and it was verified during my trip to China and
Japan. It is a stalemate. In that environment, and because of some other
factors related to iron ore prices and Mitsubishi's own financial
position on a number of projects, Mitsubishi came to see me and said it was
stepping back, basically to a care and maintenance position on its Jack Hills
mine. That is where it stands.
In my discussions in China with the
National Development and Reform Commission and the China Development Bank—both
of which the state has a special relationship with—I put the
proposition that the state would concentrate on the port, and the Chinese
interests would concentrate on their mine, their railways and their
port-specific infrastructure. I put the same proposition to the chairman of
Mitsubishi. Everyone agreed that that was the way forward. Having said that,
there is a long way to go. Given the falling iron ore prices and a tailing off
of China's steel production—Chinese steel production went up
significantly this year, but all indications from China are that it is going
to, essentially, level off—there will be some growth but slower. China
has 200 million tonnes of excess capacity in its steel industry. Oakajee is not
going to happen tomorrow, but we now have at least a clear delineation of
responsibility and we will go forward on that basis. It will also, most likely,
be a staged project, with a lesser port and maybe even some lesser
specifications on other infrastructure, but those negotiations are yet to take
place.
Again, people who do not have faith
in this state, such as the Leader of the Opposition, overlook the simple fact—members
opposite laughed last time and I am sure they will laugh on cue again—that
Karara, the first stage of the $2.4 billion Oakajee project, opened this year
with 600 jobs, which are there today but were not there a year ago. Karara
stage 1 is going out through Geraldton. Karara stage 2 cannot fit in Geraldton
and neither can Extension Hill, beyond a few years. Extension Hill is probably
likely to come on —
Ms R. Saffioti interjected.
Mr C.J. BARNETT :
If members opposite listen, they may learn. The Chinese assessment is that
Geraldton port will be adequate until 2017 for its staged developments and that
beyond 2017 Geraldton will no longer be adequate. That is where we are
at.
The Leader of the Opposition started his question saying the ''loss''
of the Oakajee project. How quickly he gives up on Western Australia. How
quickly he gives up. Western Australians fight for projects, Leader of the
Opposition. That is our culture. That has been the history of this state since
the early 1900s. We cannot lose a project that has not happened. How can we
lose a project that has not happened?
Short history: Labor allocated the
right to develop Oakajee to the Japanese company Mitsubishi, and yet the major
investor and customer is China. Members may well be aware that China and Japan
are at loggerheads. There is a stalemate. Serious international tension exists
over disputed islands in the East China Sea. It is a fact that China and Japan
are prohibited from talking to each other on this project. Mitsubishi advised
me of that late last year, and it was verified during my trip to China and
Japan. It is a stalemate. In that environment, and because of some other
factors related to iron ore prices and Mitsubishi's own financial
position on a number of projects, Mitsubishi came to see me and said it was
stepping back, basically to a care and maintenance position on its Jack Hills
mine. That is where it stands.
In my discussions in China with the
National Development and Reform Commission and the China Development Bank—both
of which the state has a special relationship with—I put the
proposition that the state would concentrate on the port, and the Chinese
interests would concentrate on their mine, their railways and their
port-specific infrastructure. I put the same proposition to the chairman of
Mitsubishi. Everyone agreed that that was the way forward. Having said that,
there is a long way to go. Given the falling iron ore prices and a tailing off
of China's steel production—Chinese steel production went up
significantly this year, but all indications from China are that it is going
to, essentially, level off—there will be some growth but slower. China
has 200 million tonnes of excess capacity in its steel industry. Oakajee is not
going to happen tomorrow, but we now have at least a clear delineation of
responsibility and we will go forward on that basis. It will also, most likely,
be a staged project, with a lesser port and maybe even some lesser
specifications on other infrastructure, but those negotiations are yet to take
place.
Again, people who do not have faith
in this state, such as the Leader of the Opposition, overlook the simple fact—members
opposite laughed last time and I am sure they will laugh on cue again—that
Karara, the first stage of the $2.4 billion Oakajee project, opened this year
with 600 jobs, which are there today but were not there a year ago. Karara
stage 1 is going out through Geraldton. Karara stage 2 cannot fit in Geraldton
and neither can Extension Hill, beyond a few years. Extension Hill is probably
likely to come on —
Ms R. Saffioti interjected.
Mr C.J. BARNETT :
If members opposite listen, they may learn. The Chinese assessment is that
Geraldton port will be adequate until 2017 for its staged developments and that
beyond 2017 Geraldton will no longer be adequate. That is where we are
at.
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