Sanjeev Gupta’s GFG Alliance owes SA Water millions in Whyalla steelworks bills, SA parliament told

The latest revelation comes amid mounting concern over the future of the Whyalla steelworks as Premier Peter Malinauskas prepares to head to the Iron Triangle city to meet business leaders on Tuesday.

Embattled GFG Alliance owes taxpayers at least $15m for unpaid water bills at its Whyalla plant, parliament has heard, as the state’s money chief revealed “significant concerns” over the mounting debts.

Despite Sanjeev Gupta’s empire being in arrears with its royalty payments for all of this financial year, newly appointed Treasury boss Tammie Pribanic refused to provide a specific figure due to “complications”.

Just weeks into the role, the new Under Treasurer, admitted on Monday that state government officials were “frustrated” that Mr Gupta owed taxpayers, SA Water and creditors “significant” sums.

Speaking to Upper House MPs ahead of Premier Peter Malinauskas visiting Whyalla on Tuesday, Ms Pribanic said a state government taskforce had “significant concerns” about GFG’s cash flow solvency and its ability to pay its debts.

“We have information about South Australian creditors, for example, from time to time that the Steel Taskforce receives,” she told the Budget and Finance committee.

“We have significant concerns, the Steel Taskforce has significant concerns, about why GFG isn’t able to pay its creditors.

“Look, I think when you are not paying your bills and you are not paying them for a long time and when you haven’t invested in the steelworks, there are some concerns around solvency.”

She revealed the company was on a “payment plan” on its water bills, which had become overdue in the past few months.

GFG Alliance boss Sanjeev Gupta. Picture: Denis Charlet/AFP

Newly appointed Under Treasurer Tammie Pribanic. Picture: LinkedIn

But she said no such plans were in place over royalties or that no security had been placed over the debt, such as caveats - or property restrictions - on the plant.

“If it pays its bills and it pays us then that would be a positive development. If it doesn’t do that then we will need to work through those scenarios with the government,” she said.

Ms Pribanic, who is a member of the Steel Taskforce, declined to outline any contingencies -such as thge company being placed into administration - scenerios or strategies participants had discussed due to Cabinet confidentiality.

“This is a challenging situation,” she said.

Asked if there was a risk if the government made a legal demand for payments, that workers would not be paid, she replied: “I think that is certainly one of the considerations, and some of the small suppliers in Whyalla as well.”

She said Treasury modelling had shown that upgrading the blast furnace, to an electric model to become more sustainable, would cost more than $3bn.

Premier Peter Malinauskas and Federal Minister Ed Husic with Sanjeev Gupta at the Whyalla steel plant. Picture: GFG Alliance/Brenton Edwards

She said, based on its current circumstances, this would be “very hard” for GFG to fund, suggesting a federal and state taxpayer bailout.

Ms Pribanic, who was appointed the state’s top money person after her former boss Rick Persse became Department of Premier and Cabinet chief in December last year, revealed no minutes were taken during taskforce meetings.

But she said “papers” were prepared for Cabinet debate.

“We are talking through a lot of the scenarios and what could the future for the steelworks be and they are the types of information that we are providing through to the cabinet committee,” she said.

“I apologise that I can’t disclose the scenarios that the government has been looking at. I can’t breach confidence(s).”

Mr Gupta and his company have been under scrutiny after Mr Malinauskas last week revealed the state government was owed tens of millions of dollars in royalties from the troubled Whyalla steelworks.

Mr Malinauskas, who will meet community and business leaders in Whyalla on Tuesday along with members of the Upper Spencer Gulf Taskforce, also told state parliament that GFG Alliance information supplied to the government’s steel group had revealed millions worth of outstanding bills to local contractors.

Earlier in the week Mr Malinauskas said he held grave concerns Whyalla due to GFG Alliance’s financial issues and months of uncertainty over the steelworks blast furnace.

Fears for the steelworks survival have also cast a shadow over the Malinauskas Government signature hydrogen plant plans.

Mr Malinauskas on Monday noted reports of US President Donald Trump imposing 25 per cent tariffs on steel and aluminium imports, saying this emphasised the critical importance of “anyone in a position of authority in this country” acting in the national interest.

He said this again emphasised the importance of Australia having sovereign capability with steelmaking for use in this country.

He said he did not know what the GFG Alliance was planning about its financial challenges but the stategovernment was meeting regularly to ensure it could respond, releasing a video of reassurance to the people of Whyalla overthe weekend.

“My government has plans in place to act on every eventuality,” he said, calling for debts to be paid and an investment madeinto the steelworks’ future.

“My message is to people on the eastern states, if you’re a miner in the West, wherever you might be, there’s not a high rise, there’s not a rail line, concrete being paved with reinforced concrete - any long form steel that comes from Australia comes from Whyalla.”

Mr Malinauskas said Australian steelmaking should not become a partisan debate ahead of a looming federal election.

“I hope that all leaders of all political stripes in the federal parliament are as committed to domestic steel manufacturing as much as we are here in the South Australian government,” he said.

Opposition Leader Vincent Tarzia, who will visit Whyalla this week, said the LIberals agreed that steelworks was too big to fail because Australia needed to maintain domestic steelmaking capability.

“Where we disagree with, I think, is on the urgency that this government, labor government, is taking (the issue) both state and federal. I mean, I can’t remember the last time the Prime Minister visited Whyalla,” he said.

Originally published as Sanjeev Gupta’s GFG Alliance owes SA Water millions in Whyalla steelworks bills, SA parliament told