By Chris Thomson | posted on November 22, 2018
ALBANY will “wear the pain” if Carnegie does not deliver a wave energy plant for the city, NationalsWA Leader Mia Davies told Parliament this week after the struggling company said it would not meet a revised milestone for State funding.
On Tuesday, heated debate over the plant dominated proceedings in the Legislative Assembly for the second time in recent sittings.
Earlier that day, the ABC aired audio of Carnegie CEO Jonathan Fievez saying the firm would not meet a renegotiated State-set deadline to prove it could finance the wave farm.
“We certainly won’t have $26 mil- lion in a bank account within three weeks,” he said.
“Carnegie’s always been a company that’s raised money to continue to do the work it does.
“It’s reshaped projects as required.”
In Parliament, Ms Davies did not share Mr Fievez’ confidence.
“What an absolute debacle!” she said.
“The government is doggedly defending a sinking ship; there can be no other way to describe Carnegie Clean Energy.
“Despite every new revelation that Carnegie is under a cloud and is un- able to meet its commitments, come hell or high water this government, this Premier and this Minister for Regional Development…is so entangled in this business that the Government cannot back out.”
Ms Davies said the Government would eventually back out, and when it did Albany’s goal to become a 100 per cent renewable energy city would be “left in tatters”.
She said the “community of Albany will wear the pain”.
Opposition Leader Mike Nahan shared Ms Davies’ concerns.
“Look at its balance sheet – [Carnegie] does not have the money!” he said.
“Where is Carnegie going to get $25.6 million for the project?”
He recounted that in July, Carnegie renegotiated its first contract milestone with the State, receiving a half-payment of $2.625 million and a promise of the other $2.625 million – if, by the end of the year, it demonstrated it could finance the plant.
“The negotiation took place and … Carnegie got the money on 28 August,” Dr Nahan said.
“The next day the final audit reports came out and they said that this business is on the way to insolvency.”
Dr Nahan said Carnegie got the $2.625 million after the audit had been completed.
“Did the Premier and Minister for Energy ask to look at the books before they handed over the $2.6 million?” he posed.
“If they had, they would have seen an audit report saying this firm, on its standing, is going under.”
In Carnegie’s financial report for the year ended June 30, an independent auditor concludes there is “material uncertainty that may cast significant doubt about [Carnegie]’s ability to continue as a going concern”.
The auditor highlighted that Carnegie incurred a net loss after tax of $63,349,694 and net cash outflows of $7,193,984 for the year and had $8,436,530 cash at the bank.
In an announcement to the Australian Securities Exchange on October 31, Carnegie nominated receipt of the State’s $2.625 million as a “highlight”.
On Tuesday, the company took a $2 million loan from a firm controlled by Carnegie director and former AFL chairman Mike Fitzpatrick.
The loan will cost Carnegie eight per cent a year until February 28, after which it skyrockets to 18 per cent.
Responding to a motion by Ms Davies that the contract with Carnegie be cancelled and Regional Development Minister Alannah MacTiernan be removed from her portfolio, Premier Mark McGowan said she was “doing a very good job and is a hardworking and diligent minister in her responsibilities”.
“As the Minister for Regional Development said on a couple of occasions, … the Federal Government has changed the research and development tax arrangements to limit and cap them at $4 million, which obviously affects Carnegie’s business model because it is a research and development company,” Mr McGowan added.
Ms Davies’ motion was lost, along party lines, 15 votes to 36.
A subsequent motion by Warren-Blackwood MLA Terry Redman – that an inquiry into the awarding and amendment of the wave energy project be initiated – was lost along party lines 15-35.
Mr Fievez declined to speak to The Weekender.
