State government initiative gives local Whyalla businesses a boost as creditors descend on steelworks city

Businesses reeling from unpaid bills by Whyalla Steelworks will receive a new ray of hope in the form of a fresh state government initiative.

The state government has announced a new initiative aimed at helping businesses affected by the Whyalla Steelworks. Picture: Dean Martin

Treasurer Stephen Mullighan is today announcing a new scheme to give struggling Whyalla businesses an edge for work in the region as creditors descend on the steel city to hear the full extent of the steelworks’ demise.

Local businesses hammered by lay-offs and unpaid bills from the Whyalla Steelworks and mines are among those to benefit from the new 30 per cent weighting that aims to have local businesses deliver a larger chunk of government project work in a new Whyalla Special Economic Zone.

This would include work on major new projects like the Whyalla Airport runway upgrade, Whyalla ambulance station and the Lincoln Highway Whyalla upgrade.

Treasurer Stephen Mullighan said the new scheme would give struggling Whyalla businesses an edge for government project work in the region. Picture Dean Martin

Mr Mulligan, Premier Peter Malinauskas and other senior ministers are in Whyalla on Monday to make the announcement and meet with creditors in the city as they gather for the first creditors meeting with the administrator of the Whyalla Steelwork and mines KordaMentha.

“It’s crucial that the local industry and workers in Whyalla are given a competitive edge, in the wake of the steelworks going into administration,” he said.

The new scheme will give local businesses a competitive advantage of 30 per cent over other South Australian or national businesses in tenders that are evaluated against a number of criteria with a score against each given a weighting.

This would apply to projects Mr Malinauskas announced in January including a $13.8m contribution to a $32.4m upgrade of the Whyalla airport runway along with a $5m funding boost to upgrade Whyalla Surf Club and Cafe.

These projects were expected to generate “tens of millions of dollars of economic activity in Whyalla” and are all in the new zone.

The news is expected to be welcomed by local businesses reeling from lay-offs and unpaid bills by former Whyalla Steelworks and mines owner GFG Alliance, with many gathering at a first creditors’ meeting with KordaMentha at the Westland Hotel.

Creditors will hear what KordaMentha has learned after taking over OneSteel Whyalla offices in Sydney and Whyalla, including the list of unpaid bills expected to be in the hundreds of millions of dollars and the state of the steelworks.

The new industry participation plan would measure the number of businesses in the Whyalla Special Economic Zone that were involved in delivering any new government projects.

It would also track the number of local workers engaged in project delivery, particularly recently displaced Whyalla Steelworks employees and also support the local businesses by giving them and workers training, skills development and upskilling opportunities.

Mr Mullighan said the same model was successful in helping bushfire-affected regions including Kangaroo Island and Adelaide Hills regain their economic feet.

The announcement also follows the state and federal government announcing its $2.4bn rescue package for Whyalla.

“By establishing the Whyalla Special Economic Zone, the State Government is ensuring local businesses are prioritised when it comes to government projects in the area,” Mr Mullighan said.

“We remain committed to ensuring the viability of the greater Whyalla region and that includes helping support the local economy to grow and thrive.”