❓ Opposition Leader questions the Premier about the Muja AB refurbishment project, highlighting the lack of a business case, disproportionate risk-sharing, and foreseeable risks, based on a KPMG report. The Premier acknowledges the project's failure and defends the decision to proceed despite unforeseen issues.
AnsweredQoN 481Legislative Assembly
QuestionView source ↗
MUJA AB —
REFURBISHMENT
481. Mr M. McGOWAN to the Premier:
I refer to the Premier's comments about his decision
to refurbish the Muja AB plant when he said that it —
will be private sector investment,
not State Government or taxpayer funded.
I refer also to the damning KPMG report released today.
(1) Why did the Premier and his cabinet approve this project
when there was no business case?
(2) Why did
the Premier approve the formation of a 50–50 joint venture between
Verve Energy and Inalco, with Verve bearing a disproportionate share of the
risk?
(3) Why did
the Premier approve this project when the KPMG report states that the risks
were foreseeable?
REFURBISHMENT
481. Mr M. McGOWAN to the Premier:
I refer to the Premier's comments about his decision
to refurbish the Muja AB plant when he said that it —
will be private sector investment,
not State Government or taxpayer funded.
I refer also to the damning KPMG report released today.
(1) Why did the Premier and his cabinet approve this project
when there was no business case?
(2) Why did
the Premier approve the formation of a 50–50 joint venture between
Verve Energy and Inalco, with Verve bearing a disproportionate share of the
risk?
(3) Why did
the Premier approve this project when the KPMG report states that the risks
were foreseeable?
AnswerView source ↗
(1)–(3)
I have said a number of times that this has been a failed project. I think if
the Leader of the Opposition reads the report, he will find a number of
references to Verve unilaterally making various decisions. I am not
apportioning total blame on Verve; I do not mean to do that, but clearly
decisions were made within the organisation that proved to be poor decisions
and the degree of scrutiny was inadequate. We have copped that —
Mr M. McGowan :
Copped it?
Mr
C.J. BARNETT : Yes, we have copped it; we have apologised for the effect.
The now Minister for Energy has spent an enormous amount of time looking at
what has happened. He has reviewed both the technical and financial aspects of
it and we have, after a lot of consideration, made a decision to complete the
refurbishment. I remind members that units C and D are operating and they are
operating well. It is an old power station, but the advice that has been given,
particularly engineering advice, is that we can complete the refurbishment and
it becomes part of the power system. So, it is not a happy story. It is not a
happy story at all but, hopefully, we will get out of this and, hopefully, as
is suggested in the reports, the project will end up covering itself.
Mr M. McGowan : It
won't cover itself.
Mr C.J. BARNETT :
The Leader of the Opposition says that, but I am hopeful. I am an optimist; the
Leader of the Opposition is a pessimist.
Mr M. McGowan : You
said it would cost nothing.
Mr C.J. BARNETT :
Yes, at the time that was the proposal that we brought forward. We did not
expect to find corroded pipes.
Several members interjected.
The SPEAKER :
Members!
Mr C.J. BARNETT :
That was the advice that was given to the government of the day.
Mr B.S. Wyatt interjected.
The SPEAKER :
Member for Victoria Park!
Mr C.J. BARNETT :
It is a failed project; I said that right at the beginning.
Several members interjected.
Mr C.J. BARNETT :
Mr Speaker, I am trying to provide an answer.
With a bit of luck and with good management of the project
from here on, hopefully, not only C and D but also A and B will come back into
commission. When A, B, C and D are producing, we will bring about 1 000
megawatts back into the system.
I have said a number of times that this has been a failed project. I think if
the Leader of the Opposition reads the report, he will find a number of
references to Verve unilaterally making various decisions. I am not
apportioning total blame on Verve; I do not mean to do that, but clearly
decisions were made within the organisation that proved to be poor decisions
and the degree of scrutiny was inadequate. We have copped that —
Mr M. McGowan :
Copped it?
Mr
C.J. BARNETT : Yes, we have copped it; we have apologised for the effect.
The now Minister for Energy has spent an enormous amount of time looking at
what has happened. He has reviewed both the technical and financial aspects of
it and we have, after a lot of consideration, made a decision to complete the
refurbishment. I remind members that units C and D are operating and they are
operating well. It is an old power station, but the advice that has been given,
particularly engineering advice, is that we can complete the refurbishment and
it becomes part of the power system. So, it is not a happy story. It is not a
happy story at all but, hopefully, we will get out of this and, hopefully, as
is suggested in the reports, the project will end up covering itself.
Mr M. McGowan : It
won't cover itself.
Mr C.J. BARNETT :
The Leader of the Opposition says that, but I am hopeful. I am an optimist; the
Leader of the Opposition is a pessimist.
Mr M. McGowan : You
said it would cost nothing.
Mr C.J. BARNETT :
Yes, at the time that was the proposal that we brought forward. We did not
expect to find corroded pipes.
Several members interjected.
The SPEAKER :
Members!
Mr C.J. BARNETT :
That was the advice that was given to the government of the day.
Mr B.S. Wyatt interjected.
The SPEAKER :
Member for Victoria Park!
Mr C.J. BARNETT :
It is a failed project; I said that right at the beginning.
Several members interjected.
Mr C.J. BARNETT :
Mr Speaker, I am trying to provide an answer.
With a bit of luck and with good management of the project
from here on, hopefully, not only C and D but also A and B will come back into
commission. When A, B, C and D are producing, we will bring about 1 000
megawatts back into the system.
Explore WA Government Data
Search the full archive in the free dashboard, or query programmatically via API.
Explore more
Government Gazette
Appointments, regulatory notices, planning changes.
Hansard
Debates, questions, speeches and sentiment.
Tabled Papers
Reports and documents tabled in Parliament.
Committees
Committee profiles and recent reports.
Regulations
Subsidiary legislation with filters and summaries.
Bills
Proposed laws and parliamentary progress.
Acts
Current WA legislation and summaries.
Explanatory Memoranda
Bills with EMs (text/PDF) available.
Members
MP profiles, party breakdown and rankings.
Pollie Rankings
Data-driven rankings across 19 categories.
Amendment Chains
Track how schemes and regulations evolve over time.