Plans to build renewable energy facility at Gillman scrapped after Veolia fails to ‘meet milestones’

In the latest chapter of a long-running saga, plans to build a major renewable energy facility at Gillman have been scrapped.

Plans to build a major renewable energy facility on a controversial parcel of land at Gillman have been scrapped.

Renewal SA has announced that waste and energy company Veolia had agreed with the state government to terminate the existing plans, which had been promised to generate thousands of ongoing jobs.

It is the latest chapter in a long-running saga involving the land, which has been the centre of a botched sale, a Supreme Court inquiry and a corruption investigation.

Through a tender process in 2017, the then Labor government selected Veolia Environmental Services to develop the 200ha site at Gillman.

At the time, then housing and urban development minister Stephen Mullighan said the project had the “potential to generate hundreds of jobs during construction and thousands of ongoing jobs”.

As part of the agreement, which was activated in June 2018 after the company bought 20ha of the land for $7m, Veolia was set to build a nation-leading waste-to-energy facility and a large-scale solar farm.

The company also had plans to build a new headquarters on the site, where 450 employees would have been based.

Aerial shot of the Gillman site where the renewable energy facility was planned. Picture: Supplied by the Office of the Premier of South Australia

“Veolia has not met the milestones set out in this agreement with the South Australian government and has elected not to take up its option to continue with this project,” Renewal SA said in a statement.

A Veolia spokesman said the recent decision to terminate the plans was a result of “global events and unforeseen changes to market conditions”.

“The government will (now) be able to move forward with alternative options to maximise the land’s potential through reuse, something we fully endorse and support,” the spokesman said.

Renewal SA general manager for project delivery and property Todd Perry said he was “disappointed” that Veolia’s development would not proceed.

“This land has long been identified as being of economic importance to the state due to its size and location and Veolia’s departure will delay progress towards the achievement of potential employment-generating activities,” Mr Perry said.

Mr Perry said Renewal SA was reviewing the development strategy for the Gillman site, which he called “immensely strategic and important”.

Treasurer Rob Lucas savaged Mr Mullighan over the failed development.

“Our legal advice indicates that Mr Mullighan’s deal was not negotiated in such a way as to ensure any of these promises by the Labor government of thousands of jobs and millions in revenue would be delivered,” Mr Lucas said.

“The spectacular failure of this Mullighan deal is a clear warning sign to South Australians should Mr Mullighan ever be in a position to approve similar deals in the future.”

Treasurer Rob Lucas criticised his opponent Stephen Mullighan for penning the deal when he was in government. Picture: Tricia Watkinson

Stephen Mullighan argued Veolia’s development was hamstrung under the Liberal government. Picture: Matt Loxton

Mr Mullighan argued Veolia’s development was hamstrung due to Renewal SA not having a chief executive between June 2018 and November 2019 after the departure of John Hanlon.

“Veolia has made it clear ‘unforeseen changes to market conditions’ are responsible for not pursuing any further land purchases,” Mr Mullighan said.

“In any event, the Liberal government made it difficult for Veolia to progress any plans had they intended to, as Renewal SA was left without a chief executive for nearly 18 months.”

Before penning the agreement with Veolia, the land at Gillman had plagued the Labor government for years.

In October 2015, former Independent Commissioner Against Corruption Bruce Lander savaged the $100m Gillman land deal signed with private consortium Adelaide Capital Partners (ACP), finding that the process was marred by maladministration.

Prior to Mr Lander’s report, the Supreme Court ruled the sale of the land to ACP was “irrational”, “unlawful” and did not ensure the best return for taxpayers.

ACP failed to pay $45m for the site by the government’s deadline in 2016, leading to a new tender process, which Veolia won.

When the Labor government announced the Gillman project prior to the 2014 election, it was presented as a future oil and gas hub.

Then treasurer Tom Koutsantonis said the site would support 6000 jobs.