The State Government has delayed making a decision on the expansion of the Ord River irrigation area, despite calls for a quick decision to help avert the collapse of the region's sugar industry.
The State Government has delayed making a decision on the expansion of the Ord River irrigation area, despite calls for a quick decision to help avert the collapse of the region's sugar industry.
It also emerged today that there has been an apparent breakdown in communication between the government and the Ord's sugar cane growers, who lodged a request for a government grant last Friday.
The secretary of the Ord Canegrowers' Association Paul Mock said advisers in the department of premier and cabinet had told the growers to wait for a response from the government.
"We cannot progress anything until we hear whether they can provide the assistance," Mr Mock told WA Business News.
"Since Monday they have told us to wait."
In contrast, the state government had been waiting for the industry to progress the matter, which it says is a commercial issue.
"The Government had hoped that commercial negotiations would resolve these matters," state development minister Eric Ripper said.
"However, this appears to have not occurred, and the Government has commenced preliminary discussions about options for working with the stakeholders.
"The Government is assessing the status and potential implications of the sugar industry with stakeholders."
Mr Mock said he was planning to have a meeting with officials from the treasury and agriculture departments later today.
This was just 24 hours short of the deadline set by the Ord's sole sugar miller, CJ Ord Sugar, to shut down its loss-making mill unless it can be sold.
CJ was one of 10 parties that lodged an expression of interest to develop land in stage 2 of the Ord River irrigation area, to support an expansion of sugar cane growing. This could have made it feasible for CJ to expand the capacity of its mill.
However it decided to cut its losses after the govermment failed to meet its own deadline, at the end of May, to name short listed bidders for the stage 2 developmnent.
The government has not set a timetable for its revised selection process.
The full text of an announcement from State Development Minister Eric Ripper's office is pasted below
The State Government today announced plans to modify and extend its selection process in relation to the Ord Stage 2, M2 Development Area north of Kununurra.
State Development Minister Eric Ripper said the existing Expression of Interest (EOI) was not compatible with important issues that had emerged at a national level since the selection process began.
"The State Government has been keen to test the commercial investor market. However, since the commencement of the EOI new circumstances have emerged such as the Commonwealth's interest in Northern Australia as a key agricultural region, and the availability of water and its impact on project economics," Mr Ripper said.
"Expanding the selection process presents an opportunity for Western Australia with the development of new and large-scale profitable industries in the Ord River Irrigation Area.
"The Government will now consider expanding the scale of the development to accommodate Commonwealth interest and we hope that by working in partnership with the Commonwealth we will be in a position to provide increased certainty to investors about infrastructure funding issues."
The Minister said he was increasingly optimistic about the role Ord Stage 2 could play in the State's future, and it was the Government's intention to recommence a new process to identify preferred proponents for the development as soon as possible.
"It is clear the Commonwealth sees that the National Water Initiative requires agriculture on the Ord should focus on the best value application of scarce water, and the State agrees with this view," he said.
"Those companies who have responded in good faith to the EOI will have the opportunity to review the situation which now exists in the expectation that the Commonwealth may become involved in some way.
"I also expect this decision will allow the initial, fruitful contacts we have had with the Commonwealth to further develop, including those with the Federal Minister for Water Resources Malcolm Turnbull.
"The expansion of the Ord involves Governments at all levels in various complex matters which, when resolved, will provide the nation with the prosperous and sustainable project that we all want to embrace."
