REGIONAL Development Minister Alannah MacTiernan was told of Carnegie Clean Energy’s “unsatisfactory” financial position 21 days before she approved a multi-million dollar payment to the company, new documents have revealed.
Nationals MP Terry Redman presented two briefing notes to State Parliament last Thursday that he said showed Ms MacTiernan had been “ignoring a high-risk independent financial viability assessment of Carnegie Clean Energy commissioned by her department”.
One of the documents was written on September 14, 2018, three weeks before the minister approved a $2.625 million milestone payment to Carnegie on October 5 to aid the construction of Australia’s first commercial wave farm in Albany.
“Seeking an independent assessment, [the Department of Primary Industries and Regional Development] commissioned a Financial Viability Assessment (Report) on Carnegie,” it read.
“[It] rated its financial position to be ‘unsatisfactory’ and scored it 1.6 out of a possible 10.”
Mr Redman, who obtained the documents through a Freedom of Information request, said they were initially partly redacted.
He called on Premier Mark McGowan to remove Ms MacTiernan from Cabinet.
“The issue here is that the minister has been hiding this. She had to be dragged kicking and screaming to put this stuff on the table,” he told Parliament.
“The minister could have used default provisions available to her in the financial assistance agreement to shut it down.”
The second briefing note referenced by Mr Redman was written on October 1, 2018 and signed by Ms MacTiernan four days later.
It stated Carnegie had “provided evidence of a project spend of $1.3 million” and was “holding off on making further significant investments” until there was greater certainty around financing.
“Briefing notes we have in our hands say that Carnegie Clean Energy spent only $1.3 million on the project and would not spend any more, but the Minister decided to pay it $2.625 million on the same day,” Mr Redman said.
“It was not being paid for what it had done; it was being paid for commencing something.”
Ms MacTiernan told the Weekender the independent assessment “was not ignored”.
“It was taken into consideration and risks appropriately managed,” she said.
“The assessment was based on publicly available information. At the time Carnegie remained solvent and a going concern.”
Ms MacTiernan noted the Department received legal advice the State could be at risk if it did not make payment to Carnegie for work already completed.
“We halved the first payment and requested a funding plan. We required our funding to be placed in a separate account,” she said.
The State Government terminated a $16 million contract with Carnegie to build the wave farm, originally promised in 2017, in March this year.
At the time, Ms MacTiernan reported the financial plan requested from Carnegie in February revealed it was “unlikely to meet those obligations” to invest $25.5 million into the project.
She said on Monday her Department had now recovered $1.3 million of the initial funding and noted there were “ongoing public benefits” from the work completed.