15/05/2001 - 22:00

Development in question

15/05/2001 - 22:00

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A REVIEW of the troubled Port Kennedy Resort development, initiated by the State Government, has questioned the viability of the proposed $250 million project.

Development in question
A REVIEW of the troubled Port Kennedy Resort development, initiated by the State Government, has questioned the viability of the proposed $250 million project.

Dating back to 1999, Business News has obtained a copy the independent review conducted by Peter Leonhardt of Brooksfield Capital Pty Ltd, which was commissioned by the State Government after it received numerous complaints about the slow progress of the project which had to meet strict Government guidelines.

The then Burke Government wanted a major tourism and recreation facility on the Crown land site, south of Rockingham.

Except for an 18-hole golf course, little has happened for the past two years, as developers Port Kennedy Resorts and Singaporean financiers Pac-Asia battled for control.

The Leonhardt review – which former Planning Minister Graham Kierath refused to release publicly – stated major changes to the project parameters outlined in the 1992 Port Kennedy Development Agreement Act were needed to ensure its success.

The review labels the planned 225 room, five-star resort as “unrealistic”, an exclusive golf course for hotel guests is “inappropriate” and stated further research was needed before a marina was developed. The mix of short stay and permanent residential accommodation was also in need of revision, according to the Mr Leonhardt’s report.

Under the Act, PKR were granted Crown land to sell off as freehold land in exchange for building public infrastructure and tourism facilities, which were supposed to include a commercial tourism town centre, marina, public and private golf courses, resort hotel and accommodation for 3500 holiday-makers.

But the project hit a wall when Pac-Asia withdrew its financial backing.

While a deal is likely to soon be struck that will see the project continue, the original plans may be changed.

“A fundamental review of the mandatory elements of the project and development timeframes are needed,” the review stated.

“There are strong grounds to question the commercial viability of the project as currently approved.”

Peel MLA Norm Marlborough, into whose electorate the project falls, suggested the Act could be amended, but not before the community had been consulted on what direction the project could take.

“The problem with the Act and the project is that they are based around the thinking of the 1980s,” Mr Marlborough said.

“We now need to sit down with the proponents and look at what is achievable based on a number of things, including how much private investors are willing to invest.”

Hall Chadwick, administrators for cash-strapped PKR, have signalled a sale to the projects overseas backers Pac-Asia as their preferred option and are now waiting for the green light from the State Government.

The Government has indicated it will permit the sale only if it is satisfied with Pac-Asia’s plans for the resort.

Pac-Asia is now believed to be in the midst of finalising a deal with PKR to pay off its debts, estimated at $9 million.

The company is also expected to allow a third resort player, The Golf Club, to continue to manage the existing 18-hole public golf course and build a second private course.

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