North­ern Aus­tralia fund for over­haul

The Australian - - THE NATION - GE­OFF CHAM­BERS JOE KELLY

The Turn­bull gov­ern­ment’s highly vaunted North­ern Aus­tralia In­fras­truc­ture Fa­cil­ity pro­gram will be over­hauled to “make it eas­ier for projects to at­tract fi­nance” from the fund.

With the NAIF hav­ing pro­cessed only one ma­jor project since its es­tab­lish­ment in mid-2016, Re­sources Min­is­ter Matt Cana­van will to­day an­nounce changes in a move to “in­crease its flex­i­bil­ity and im­prove its po­ten­tial” and ac­cel­er­ate in­vest­ment in north­ern Aus­tralia.

Mr Cana­van said the pro­gram had “proven more chal­leng­ing than we thought”.

“It’s a chal­leng­ing ex­er­cise. It’s quite an in­no­va­tive way of seek­ing fi­nance for in­fras­truc­ture,” Mr Cana­van said. “When you find that what you ex­pected is not work­ing as in­tended, you change tack ... and that’s what we’re do­ing with these changes.”

The gov­ern­ment will amend the in­vest­ment man­date of the pro­gram, based on find­ings of an in­de­pen­dent re­view of the fa­cil­ity by prom­i­nent busi­ness leader Tony Shep­herd.

“Mr Shep­herd con­sulted widely with NAIF, in­vestors, project pro­po­nents and gov­ern­ments. He found the im­por­tant need to de­velop the north still ex­ists, but there have been chal­lenges to mak­ing it hap­pen,” he said.

“The gov­ern­ment shares this view and we are com­mit­ted to de­vel­op­ing in­dus­try and job op­por­tu­ni­ties in north­ern Aus­tralia.

“We will im­ple­ment changes to the NAIF in­vest­ment man­date rec­om­mended by the ex­pert re­view, in re­sponse to a key find­ing that (it) is too re­stric­tive.”

Mr Cana­van said he had been ad­vised that a “num­ber of ex­ist­ing pro­pos­als could be fi­nalised be­cause of these changes”.

“I’m also hope­ful that this can be a re­set and re­launch that at­tracts new in­ter­est to look again at the NAIF for fi­nance to de­velop the north,’’ he said.

The pro­gram of­fers up to $5 bil­lion over five years in con­ces­sional fi­nance to “en­cour­age and com­ple­ment” pri­vate sec­tor in­vest­ment in north­ern Aus­tralia in­fras­truc­ture, in­clud­ing de­vel­op­ments in air­ports, com­mu­ni­ca­tions, en­ergy, ports, rail and wa­ter.

Its board last year made its first in­vest­ment de­ci­sion, in­di­cat­ing to the gov­ern­ment it would of­fer fi­nan­cial as­sis­tance of about $16.8 mil­lion for the Onslow Marine Sup­port Base Project in West­ern Aus­tralia.

Mr Cana­van said the changes to the pro­gram’s in­vest­ment man­date would in­clude the re­moval of the 50 per cent cap, in­creas­ing the amount of fi­nance avail­able to in­fras­truc­ture projects by “al­low­ing the NAIF to fi­nance up to 100 per cent of a project’s debt”.

The change would avoid the fed­eral gov­ern­ment in­her­it­ing the ma­jor­ity of fi­nan­cial risk in a project.

“There are cur­rently 17 projects in the due dili­gence and ex­e­cu­tion phases across all three north­ern ju­ris­dic­tions. There are seven in the North­ern Ter­ri­tory, five in West­ern Aus­tralia and five in Queens­land,’’ Mr Cana­van said.

“There are 90 ac­tive in­quiries in the pipe­line. These are from di­verse sec­tors in­clud­ing en­ergy gen­er­a­tion and gas pipe­lines, trans­port, tourism, agri­cul­ture, man­u­fac­tur­ing, wa­ter in­fras­truc­ture and com­mu­ni­ca­tions.”

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