Spanish construction group Acciona is keeping its options open after quietly withdrawing its application to the ACCC to buy a giant waste-to-energy plant at East Rockingham.
Spanish construction group ACCIONA is keeping its options open after quietly withdrawing its application to the competition watchdog to buy a giant waste-to-energy plant at East Rockingham.
Acciona’s CEO for Australia and New Zealand Bede Noonan said the group had to take account of feedback from the Australian Competition and Consumer Commission and was seeking a “smooth way” forward.
“We’ve had to take into account the conversations we’ve had because we’re not here to butt heads,” Mr Noonan told Business News.
“Hence, we’ve just pulled back and said, let’s take a bit more time to understand what a smooth way through here is.”
The ACCC said in July it was concerned that, if Acciona bought East Rockingham Waste to Energy, it would substantially lessen competition in the supply of waste disposal services.
That’s because Acciona already owns WA’s only other waste to energy facility, the nearby Kwinana Energy Recovery.
Mr Noonan indicated he took a different view to the ACCC on the relevant market.
“We were thinking that, rationally, the market is the whole waste industry.”
He added that Acciona was not in the waste market and did not intend to buy trucks or collect waste.
The ACCC, by contrast, suggested that waste-to-energy facilities constituted a market in their own right.
“The ACCC views that WtE facilities may compete more closely with each other than with landfills given that they face different policy environments and customers have expressed a preference for WtE facilities over landfills,” it stated in an issues paper.
Mr Noonan said Acciona had plenty of time to assess options for the East Rockingham facility.
“Rockingham is a solid 12 months behind where Kwinana is at so we don’t have to rush things,” he said.
“We thought, on balance, let’s pull back.
“We’ve got the time to think about it a bit more and take into account what we’ve been hearing and work on things in a different way in the future.”
He said the group’s ultimate goal was to make a return on its investment.
“The aspiration is that we want that plant going, making a solid profit, and we get a return out of that plant.”
The sales process for East Rockingham is being run by receivers from insolvency firm Cor Cordis.
The project was placed into administration in October last year and Cor Cordis was subsequently appointed as receivers, after Acciona bought the project’s secured debt.
“Acciona continues discussions with the receiver regarding the future ownership of the facility,” the company stated.
The project is owned by a consortium comprising investment groups John Laing and Masdar Tribe (40 per cent each) along with Acciona and Kanadevia Inova, formerly named Hitachi Zosen Inova (10 per cent each).
Kanadevia Inova and Acciona were the joint engineering, procurement and construction (EPC) contractors on the project.
Cor Cordis signed a new EPC contract with Acciona in May this year to complete the facility, which has faced multiple cost blowouts and delays since construction started in 2020.
It was originally budgeted to cost $511 million but the final figure is believed to be closer to $1 billion.
Acciona said it was focused on getting the facility operational.
“Delivery of the facility continues apace,” the company stated.
“Acciona remains fully committed to working with the receiver to deliver this enduring, important asset to the people of Western Australia.”
Supreme Court action launched early this month has revealed a hitch in that process.
Cor Cordis is seeking access to documents and equipment warranties from Kanadevia needed to finalise commissioning of the plant.
The new claim adds to ongoing legal action related to the project.
East Rockingham Waste to Energy is designed to process up to 300,000 tonnes per year of waste and deliver 29 megawatts of electricity to the South West grid.
The ACCC said the facility was likely to be operational “no earlier than mid-to-late 2026”.
Acciona bought the nearby Kwinana waste-to-energy facility from Macquarie Capital and Dutch Infrastructure Fund in March 2024 after previously being appointed as EPC contractor.
It is licenced to process 460,000 tpa and produce 38MW of power.
In its issues paper published in July, the ACCC signalled that another party was likely to buy East Rockingham if Acciona did not close a deal.
“The ACCC’s preliminary view is that in the absence of the proposed acquisition, the East Rockingham facility would most likely be sold to another purchaser, and the Kwinana WtE and East Rockingham WtE would have two separate owners,” it stated.
