❓ Mr. Castrilli asks about the profitability of the Muja AB refurbishment project for Synergy. The Minister for Energy responds, highlighting the project's completion under budget and ahead of schedule, and its expected return on investment, contrasting it with other projects deemed unprofitable.
AnsweredQoN 272Legislative Assembly
QuestionView source ↗
MUJA POWER STATION — REFURBISHMENT — KPMG REPORT
272. Mr G.M. CASTRILLI to the
Minister for Energy:
I refer to the minister's brief ministerial statement
earlier today. Could the minister explain how the Muja AB refurbishment project
is forecast to return a profit to Synergy?
272. Mr G.M. CASTRILLI to the
Minister for Energy:
I refer to the minister's brief ministerial statement
earlier today. Could the minister explain how the Muja AB refurbishment project
is forecast to return a profit to Synergy?
AnswerView source ↗
I thank the member for that question. I know that it is
important to his electorate because the project has employed a large number of
people in his electorate and will for the foreseeable future.
Today I released a statement about the progress in
refurbishing Muja AB and announced that the unit is up and running. It is made
up, I remind members, of four units. All units are up and running and
certified. More importantly the refurbishment project came within budget, in
fact below budget by $27 million; and on time, in fact a month early.
I also tabled a report by KPMG, the second report by that
organisation into this project. I also tabled a letter from the CEO of Synergy
that indicates that Synergy expects confidently on conservative estimates to
cover the full cost of investments in the project—that is, not only the
loan of $150 million but also all capital spent over 15 years on the project.
This vindicates the very tough decision we made last year to go ahead with the
project. Labor members were arguing that we should cut and run, panic and just
abandon it. They said we should run and not do the tough things. Instead, we
stopped, we looked, we assessed, we made a tough decision and went ahead with
it. We kept to the refurbishment period and brought it in on time. The project
is on time and is expected on conservative estimates to pay for the entirety of
the cost. This is no Office of Shared Services. This has an operating plant
that is producing electrons in a very essential way to the great southern area.
This is not even Perth Arena, which is a lovely facility but will never pay for
itself. This will, on the best estimates done on a conservative basis from an independent
authority, pay for itself. I expect that if members opposite had the ticker,
they would go out and admit to the public of Western Australia that they have
been misleading them about the losses on this project—but I do not
expect that.
Mr
P. Papalia : How's it going?
Dr
M.D. NAHAN : Very well. Importantly, this project has been playing an
essential role —
Several members interjected.
The
SPEAKER : Member for Cockburn, I call you to order for the first time. I am
just going to repeat what I have said. A number of people are on three calls. I
do not want to ask people to leave the chamber but if you persist you will be
asked to leave the chamber.
Dr
M.D. NAHAN : Thank you, Mr Speaker. Importantly this project has been
providing essential back-up to the great southern. The great southern had
basically quadruple safety provisions to provide electrons. First there was the
wind system in Albany, then the two transformers and then Muja AB. The wind
system is operating well but sometimes the wind stops. We have had some trouble
with the transformers over the month of March, and without Muja AB being on
line there would have been 19 days in March when we would have had to shed
load; that is, decrease the supply of electrons to Albany and other places. For
19 days—the majority of the month—the great southern area,
including Albany, would have had potential outages. That is the role of this
project. In Western Australia, unlike on the eastern seaboard, all of our
system is integrated. We cannot just cut things out. Muja AB was built to
supply energy to the great southern. When we took it out, we had to find other
alternatives. We did find some but with less security. This project has played
an essential role in providing electrons to the great southern and in ensuring
a safe, reliable supply to our state. It shows the benefits of this project. I
hope that members opposite do the right thing and admit that we did the right
thing: it was a tough decision but we made it—but I do not expect that.
important to his electorate because the project has employed a large number of
people in his electorate and will for the foreseeable future.
Today I released a statement about the progress in
refurbishing Muja AB and announced that the unit is up and running. It is made
up, I remind members, of four units. All units are up and running and
certified. More importantly the refurbishment project came within budget, in
fact below budget by $27 million; and on time, in fact a month early.
I also tabled a report by KPMG, the second report by that
organisation into this project. I also tabled a letter from the CEO of Synergy
that indicates that Synergy expects confidently on conservative estimates to
cover the full cost of investments in the project—that is, not only the
loan of $150 million but also all capital spent over 15 years on the project.
This vindicates the very tough decision we made last year to go ahead with the
project. Labor members were arguing that we should cut and run, panic and just
abandon it. They said we should run and not do the tough things. Instead, we
stopped, we looked, we assessed, we made a tough decision and went ahead with
it. We kept to the refurbishment period and brought it in on time. The project
is on time and is expected on conservative estimates to pay for the entirety of
the cost. This is no Office of Shared Services. This has an operating plant
that is producing electrons in a very essential way to the great southern area.
This is not even Perth Arena, which is a lovely facility but will never pay for
itself. This will, on the best estimates done on a conservative basis from an independent
authority, pay for itself. I expect that if members opposite had the ticker,
they would go out and admit to the public of Western Australia that they have
been misleading them about the losses on this project—but I do not
expect that.
Mr
P. Papalia : How's it going?
Dr
M.D. NAHAN : Very well. Importantly, this project has been playing an
essential role —
Several members interjected.
The
SPEAKER : Member for Cockburn, I call you to order for the first time. I am
just going to repeat what I have said. A number of people are on three calls. I
do not want to ask people to leave the chamber but if you persist you will be
asked to leave the chamber.
Dr
M.D. NAHAN : Thank you, Mr Speaker. Importantly this project has been
providing essential back-up to the great southern. The great southern had
basically quadruple safety provisions to provide electrons. First there was the
wind system in Albany, then the two transformers and then Muja AB. The wind
system is operating well but sometimes the wind stops. We have had some trouble
with the transformers over the month of March, and without Muja AB being on
line there would have been 19 days in March when we would have had to shed
load; that is, decrease the supply of electrons to Albany and other places. For
19 days—the majority of the month—the great southern area,
including Albany, would have had potential outages. That is the role of this
project. In Western Australia, unlike on the eastern seaboard, all of our
system is integrated. We cannot just cut things out. Muja AB was built to
supply energy to the great southern. When we took it out, we had to find other
alternatives. We did find some but with less security. This project has played
an essential role in providing electrons to the great southern and in ensuring
a safe, reliable supply to our state. It shows the benefits of this project. I
hope that members opposite do the right thing and admit that we did the right
thing: it was a tough decision but we made it—but I do not expect that.
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.