Council refuses to cover $20M for Whitsunday Paradise works

Mayor says ratepayers should not foot the bill for water and sewage infrastructure. But developers say ratepayers would not have to cough up the cash.

The Whitsunday Paradise development will be built in five key precincts. The development sparked a heated discussion at the council meeting on Wednesday. Picture: Supplied

The Whitsunday mayor has spoken passionately about ratepayers not being forced to foot a $20 million bill for water and sewer infrastructure for the massive Whitsunday Paradise development.

However, developers say ratepayers would not have to cough up any cash.

The issue sparked heated discussion around the council table on Wednesday after developers proposed the council enter an infrastructure agreement for the project.

Council agenda documents state the request proposed the council refund 100 per cent of the costs of providing water to the estate, sewage infrastructure and the costs of decommissioning the existing onsite sewage treatment plant.

The council estimates the total cost of the works to be about $20 million.

Earlier this week, council's development services director Neil McGaffin said the agreement effectively meant developers would pay for the infrastructure upfront and council would give them credits for the cost of doing the water, sewer and decommissioning the plant.

During Wednesday's meeting, Mayor Andrew Willcox said the council gave the project the green light in October because the $1.1 billion project promised to create jobs.

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However it was approved with conditions.

"Conditions that we have for every other development we have in the region, nothing special, nothing different," Cr Willcox said.

Cr Willcox said part of the developers' infrastructure agreement states the works for a water reservoir, land contribution for a water reservoir and sewer infrastructure would be done at no cost to council.

However, a different part of the infrastructure agreement states the costs of those works would be offset by the council.

"What that means is that 100 per cent of the infrastructure for water and sewer is being worn by council," Cr Willcox said.

"That has been a convenient detail that has been left out when this is being pedalled around the community.

"Where does the money come from if the developers do not do it?

"The Tooth Fairy? Santa Claus? The ratepayers.

"The ratepayers who have put us in here to look after the financial stability of the region, of the organisation."

Cr Willcox said the council gathered about $50 million from rates annually.

"I'll let everyone do their own maths of how much extra burden on the ratepayers' this is going to be so developers can make a bit extra money," Cr Willcox said.

"Ever since I have been here and this council, same as the last council, has spent a lot of time trying to make sure that we kept the rates in the Whitsunday region to a minimum.

"If this is supported and we do not decline this, then it is going to cost the ratepayers a lot of money for a long period of time.

"The Whitsundays is open for business but it is open for good business."

Whitsunday councillors unanimously voted to decline to enter the infrastructure agreement for the development.

GRW Group is the developer behind the project and the organisation's general manager Blake Thomas said GRW Group entered good faith discussions with the council about what is trunk infrastructure, which are the main pipes providing water and sewage to suburbs, as well as what are cost offsets.

"Council's refusal to enter into an infrastructure agreement will mean questions over what is defined as trunk infrastructure, and what are cost offsets, will now be determined by the court unless the council agrees to negotiate with the developer," Mr Thomas said.

"The infrastructure agreement was a mechanism for both the council and GRW Group to identify the costs involved in delivering the infrastructure.

"In this case, GRW Group offered to cover the costs, not the council."

Greater Rewards Group general manager Blake Thomas speaking about the Whitsunday Paradise development at the Bowen Chamber of Commerce meeting in August 2020.

Mr Thomas said originally the council planned to deliver a $14.5 million reservoir at Mt Bramston, the area where Whitsunday Paradise will be situated, with the council funding the cost through future developers' contributions.

"In this instance GRW Group was building the infrastructure and accepting all of the costs," Mr Thomas said.

"In exchange, GRW Group wanted these costs recognised by the council and used for future offsets.

"In Bowen, developers pay approximately $30,000 in infrastructure charges to connect a residential property to the trunk infrastructure.

"In GRW Group's case it asked the council to offset some of the initial $20 million against the costs of future connection costs."

The Whitsunday Paradise project was approved by the Whitsunday Regional Council in October 2020.

Mr Thomas said the organisation asked for a 100 per cent offset on future water connections and 30 per cent offset for future sewage connection in exchange for GRW Group spending $20 million to build the infrastructure.

"In other words, GRW would pay approximately $20,000 per property connection instead of approximately $30,000 per connection," Mr Thomas said.

"This would only apply when the properties had been developed.

"There would be no cost to ratepayers as incorrectly purported.

"Ratepayers will now have to contribute substantial funds to defend the council's refusal to enter into the infrastructure agreement."

Mr Thomas said the conditions compromised any development in the Mt Bramston area and made the Whitsunday Paradise development unfeasible if an agreement could not be reached.

"If the parties do not agree, the validity of the conditions will be tested and determined by the court," Mr Thomas said.

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