15/07/2015 - 16:06

5,000ha Ord land release proceeds

15/07/2015 - 16:06

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The state government has announced plans to release another 5,000 hectares of farm land in the Ord River irrigation area, as Chinese-backed company Kimberley Agricultural Investment continues to seek development approvals for land it secured three years ago.

The state government has announced plans to release another 5,000 hectares of farm land in the Ord River irrigation area, as Chinese-backed company Kimberley Agricultural Investment continues to seek development approvals for land it secured three years ago.

The new release comprises two parcels of land known as Ord West Bank and Mantinea.

“This is an opportunity for the state government to engage with the private sector and develop the partnerships needed to fully realise the potential of the Ord scheme both in Western Australia and in the Northern Territory,” Regional Development Minister Terry Redman said in a statement.

Mr Redman said the new release would increase the size of the Ord irrigation scheme area to 35,000ha.

That includes about 15,000ha that is well established, and a further 13,400ha that was awarded to KAI in 2012 under a long-term lease.

KAI general manager Jim Engelke told Business News his company was interested in the new land, but had a strong preference for freehold title.

A government spokesperson said that, in the first instance, an option to lease would be offered to allow the completion of approvals. 

This will be followed by a development lease (if the option is exercised) that contains conditions and performance milestones to develop and farm the land.

Subject to satisfactory performance under the development lease, the proponent will have the option to convert to freehold tenure.

Mr Engelke said the general lack of certainty facing KAI made it more difficult for the company to pursue its plans.

“Whatever we do, whether its sugar or grains or another crop, it needs scale to drive the investment in processing and ports and other infrastructure,” he said.

“You need scale to be globally competitive.

“It would make things a lot easier of we knew what scale we were going to end up with.”

When KAI was named as the preferred developer of its leasehold land in 2102, the state government said the company planned to invest up to $700 million re-establishing a sugar industry in Kununurra.

However, the company emphasised at the time that it faced significant uncertainty, particularly around its ability to secure access to extra land in WA and the NT.

Mr Engelke said KAI expected to complete the clearing of its Goomig land parcel by the end of the year, by which time around half would be developed for farming.

However, it was still awaiting final approvals to proceed with clearing its Knox Plains land parcel.

“That’s been our concern from day one,” Mr Engelke said.

“I don’t think the state believed us at the time, they’ve been surprised we’ve cleared Goomig this quickly.”

He said KAI would need to stand down about 60 contractors if it was unable to obtain all necessary approvals by the end of the year.

This includes about 20 workers from MG Corporation, which is owned by the region’s native title holders.

THE GOVERNMENT'S ANNOUNCEMENT IS PASTED BELOW

The Ord-East Kimberley Expansion Project continues to grow, with Premier and State Development Minister Colin Barnett and Regional Development Minister Terry Redman today announcing the release of a further two parcels of land.

Mr Barnett said the project involved the development of about 5,000ha of the land, and was another major step in the expansion of the Ord, one of northern Australia’s most significant projects.

“This land release builds on the increasing interest in agriculture in the State’s north and allows the private sector to take part in building the Ord into a larger, world-class agricultural precinct,” Mr Barnett said.

Mr Redman said the successful development of this land would further contribute to building long-term performance of the Ord region and would increase the size of the Ord Irrigation Scheme Area to 35,000ha.

The Ord West Bank and Mantinea Land is considered to be potentially arable and suitable for irrigated agriculture.

“This is an opportunity for the state government to engage with the private sector and develop the partnerships needed to fully realise the potential of the Ord scheme both in WA and in the Northern Territory,” Mr Redman said.

The minister acknowledged the continuing support of the Miriuwung Gajerrong people, whose consent to surrender native title of these lands under the Ord Final Agreement made today’s land release possible.

“This is another example of Royalties for Regions investment helping to build vibrant regions with strong economies,” Mr Redman said.

Request for proposals will open this Saturday, July 18, and close on October 2 2015. The Ord-East Kimberley Expansion Project is a $517 million project, with $322.5 million invested from the Royalties for Regions program.

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