Fund for the North slammed for lack of transparency

THE Northern Australia Infrastructure Facility has been slammed for lacking transparency and having politicians promoting certain projects.

RIGHT: Australian Resources Minister Matt Canavan speaks to the media during a press conference. Picture: LUKAS COCH

THE Northern Australia Infrastructure Facility has been slammed for lacking transparency and having politicians promoting certain projects, by a new government report.

The Productivity Commission report, to be released today, warned there was little known about the workings of the $5 billion fund, which offers concessional loans to private enterprise to build major infrastructure in the nation's north.

It also warns the NAIF could end up funding "white elephants", which require continual government subsidies to operate and become an ongoing burden to taxpayers.

The commission raised concerns over the governance and transparency of the NAIF, which is considering an application from Adani for a $1 billion loan to part-fund a rail line to service its Carmichael coal mine in central Queensland.

"The lack of transparency to date and the promotion of certain projects by politicians (in the absence of credible supporting investment data) has raised concerns about the viability of future investments under the NAIF," the report stated.

"There is risk of political pressure to develop infrastructure that is unlikely to be able to meet its operational costs, let alone repay the loan.

"For example, the construction of dams that do not comply with the National Water Initiative could become a burden to local and state and territory governments over time."

As well as dams, it also questioned whether the NAIF should consider investing in a "super-efficient coal-fired power station".

"The commercial viability of coal generation has been questioned, particularly if a carbon price is introduced in the future," it stated.

"It is critical that the NAIF adopt best practice governance arrangements and is able to assess their investments on their merits, which should include generating sufficient revenue to cover both operating costs and servicing their loans."

The NAIF, is governed by an independent board which will make recommendations for concessional loans.

Minister for Northern Australia - currently Deputy Prime Minister Barnaby Joyce following Senator Matt Canavan's resignation from Cabinet this week - is required to accept or reject any recommendations.

More than 100 applications to the NAIF have been made, but no concessional loans have been offered to date.

MATTHEW KILLORAN

Originally published as Fund for the North slammed for lack of transparency