Oakajee fed funding unusable

The WA State Government cannot use the $339 million Federal funding allotted for the suspended Oakajee port project for anything else.

The $6 billion Oakajee project was abandoned late last week after Japanese company Mitsubishi stopped all further work and also shelved its Jack Hills mine expansion for care and maintenance.

The news came as the project was halted in November to cut costs. Former Federal Resources Minister Martin Ferguson later said the project would go ahead despite the suspension.

State Treasurer Troy Buswell said yesterday the government is looking at alternatives for the money allotted to the project, The West Australian reported.

A spokesman for the Federal Department of Infrastructure and Transport reiterated the state government cannot use the Federal funding commitment, which was first made in 2009.

“The Australian Government made provision for a possible equity contribution of $339 million towards the development of the Oakajee Port common user facilities – this provision cannot be reallocated by the State Government,” the spokesman said.

“The use of State Government funds is a matter for the WA Government.”

Buswell said the government will decide on the reallocation of the Oakajee funds before the State Budget on August 8.

“We are working through the budget now, there is money allocated in a special purpose account for Oakajee and we will assess that as part of normal budget practice,” he said.

It was reported in 2011 the capital cost of the Oakajee project had burgeoned from $4.4 billion to $6.7 billion due to volatile commodity prices and instability in the global metals market.

Murchison Metals denied this report.

Western Australian premier Colin Barnett last week said he is still hopeful of the Oakajee project going ahead after visiting Beijing and talking to China’s National Development and Reform Commission, the body that makes investment decisions for China’s state-owned enterprises.

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