Govt swamped on Carnegie payment

By Chris Thomson | posted on October 11, 2018

HEATED debate over the Albany wave power project dominated the reopening of Parliament on Tuesday, with Treasurer Ben Wyatt conceding the State may have cooked $2.6 million of taxpayer dough.

Asked by Member for Warren-Blackwood Terry Redman if Carnegie Energy cannot convince the Government it has the financial capacity to complete the project off Sandpatch, will $2.6 million already paid to the firm be lost, Mr Wyatt said: “I suspect so”.

“Because ultimately in nine weeks the State Government will have to assess whether Carnegie has the capacity to deliver the project in the new tax incentive environment,” he explained.

Earlier, Mr Wyatt, outwardly calm under intense Opposition fire, argued that recent changes to the Federal research and development tax incentive that now made the project less viable could not have been foreseen by the State.

Opposition Leader Mike Nahan demanded the Government table any advice it had been given on why Carnegie should have received the $2.6 million.

“We now know that Carnegie is really struggling with its technology and investment off Garden Island,” he said.

“The government did not do an assessment of whether the technology that Carnegie had that was designed to serve isolated naval bases around the world that pay top dollar for energy was competitive down in Albany; it was not.

“We now have Carnegie virtually collapsing as a firm; the man who put it together has left.”

Dr Nahan said Carnegie’s share price had “collapsed to one per cent”.

“It has flogged energy made clean at a 75 per cent loss and it is not capable of undertaking the project, yet it came and asked for its milestone payments,” he added.

“The Government initially baulked, but then gave Carnegie half.

“On what basis did the Government give it … the $2.6 million milestone payment given it has not met the milestones and cannot continue with the project?”

Dr Nahan said the Government did not do its due diligence, and had misled Albany.

“Clearly, the people of Albany wanted to go to 100 per cent renewable energy – fair enough – and the government wanted to titillate them with a renewable,” he said.

“It crab-walked away from it and said the project was not to deliver energy, it was a research project.”

He said Carnegie already had a viable research project in Fremantle that was servicing Garden Island.

“The government has actually undermined that project and probably seriously damaged the whole firm,” he said.

“The Government took this on to get a few votes down in Albany and ruined a good firm.

“Carnegie will not deliver the project and a hell of a lot of money has been wasted just to cater to a marginal seat.”

Premier Mark McGowan retorted, saying: “We proudly support the people of Albany”.

“Again, I do not understand why the Liberal and National Parties dislike the people of Albany so much that they do not want these innovative projects supporting their economic development,” he added.

A question of public interest raised by Mr Redman – that the house condemn the Government for its mishandling of the wave farm and call on Mr McGowan to remove regional development minister Alannah MacTiernan from project oversight – was defeated 34 votes to 19.

In the Legislative Council, Ms MacTiernan, responding to a question from Agricultural Region MLC Martin Aldridge, said: “Of course we looked at the capability of Carnegie and its financial capacity”.

“Carnegie is not in default of its agreement, but we have exercised the right we have under the terms of that agreement to ask it to outline, in this changed legal environment, how it is going to fund its contribution into the project before we make any further commitments,” she said.