Warning of long wait on Ord scheme
The Chinese-backed company developing agricultural land near Kununurra has warned it may take until next decade to extend the Ord River irrigation scheme across the border into the Northern Territory.
Kimberley Agricultural Investments has made no secret of the fact it would like to secure land in the NT as part of plans to develop a sugar industry based around the Ord scheme.
Prime Minister Kevin Rudd announced last week that Labor would give the NT Government $10 million to help settle native title claims on 14,000ha of land earmarked for agriculture if the scheme was extended.
The announcement took KAI by surprise, as did Mr Rudd's visit to Kununurra where the company is based.
The project has little chance of proceeding without a huge investment from KAI, an Australian company ultimately owned by Chinese construction giant Shanghai Zhongfu.
The WA, NT and Federal governments have all pointed to KAI when asked who would pay to extend the scheme into the NT.
KAI has started land clearing after the WA Government named it as the preferred developer of 13,400ha released as part of the second stage of the Ord scheme.
The WA Government spent $311 million on infrastructure, including a 31km extension and upgrade of the main irrigation supply channel. The Federal Government invested $195 million in social and community infrastructure in Kununurra, Wyndham and surrounding communities as a catalyst for major private development on the Ord.
KAI has pledged to spend $700 million developing the land for cropping under a peppercorn lease and to build a state-of-the-art sugar mill. It has always said the land in the NT was needed to make construction of the mill viable as part of an overall investment some estimate could top $1.5 billion.
KAI general manager Jim Engelke said there were many hurdles to cross before talks with the NT Government could begin.
"The project would take the best part of a decade to get from where we are today to its full potential and that is assuming a smooth development progression," he said.
Mr Engelke said development approvals were not in place for the Knox section of the land released under stage two and land clearing at the 6600ha Goomig section had just begun.
"We are looking at two to three years for the Goomig development and then another three for Knox, maybe into a fourth year," he said. "Even if work began in the last two years of the Knox development, any move into the territory might take five years depending on how many resources were thrown at it."
KAI and the WA Government are expected to sign off on a deal this month.
Mr Engelke said there was a misconception that the bulk of the leases were for 50 years. Some were for 10 and 12 years.
It is believed there will be an option to extend shorter leases depending on ground water testing and other conditions.
The project would take the best part of a decade to get to where we are from today. " KAI general manager Jim Engelke
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