06/12/2013 - 15:01

$700m Ord plan closer with contract

06/12/2013 - 15:01

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The state government has formalised plans for Chinese group Shanghai Zhongfu to develop thousands of hectares of irrigated land in the Kimberley, more than a year after naming the company as its preferred proponent for the land.

$700m Ord plan closer with contract
Premier Colin Barnett with Zhongfu's Pui Ngai Wu (right) and MG Corporation chairperson Edna O'Malley last year at the announcement of the Chinese company’s investment plans. Photo: Annaliese Frank

The state government has formalised plans for Chinese group Shanghai Zhongfu to develop thousands of hectares of irrigated land in the Kimberley, more than a year after naming the company as its preferred proponent for the land.

Shanghai Zhongfu's wholly-owned subsidiary, Kimberley Agricultural Investment, plans to invest up to $700 million in establishing a sugar industry in the Ord River area.

Its proposal includes spending $450 million to construct a sugar mill and a further $200 million on farm infrastructure developments, as well as $50 million on upgrades to Wyndham Port.

The state government announced KAI as its preferred proponent to develop the land in November last year, but the signing of a formal agreement is reported to have been delayed by several months.

KAI has cleared about 2,000 hectares of land in this time under an early access arrangement but is understood to have been limited in its activities in the absence of a formal agreement.

Today's formal agreement paves the way for KAI to make further progress on the significant project milestones it must achieve over four years before it can secure a long-term lease over about 7,400ha of the land.

KAI also has a three-year option to develop a further 6,000ha of land but must first secure federal environmental approvals and deliver an Aboriginal development package.

Premier Colin Barnett said the state government would contribute $322.5 million through the Royalties for Regions program to support the Ord development.

“The state this year has successfully completed 41 kilometres of new road, a 40- kilometre extension of the main irrigation channel and 86 kilometres of supporting channels and flood protection levees,” he said.

“This has provided an injection of about $92 million into the local economy across 82 businesses, including indigenous ones.” 

The government expects around 300 jobs in agriculture and manufacturing to be created over the long term if KAI is successful in pursuing its development.

The Miriuwung Gajerrong Corporation, which represents the land's traditional owners, is working with KIA to ensure jobs are created for local Aboriginal people.

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