Government puts brakes on $3.1bln Marinus Link cable project as cost projections soar
Despite cost concerns over the contentious Marinus Link electricity connector across Bass Strait, the Federal Government remains committed to the multi-billion dollar project. LATEST
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Despite cost concerns over the contentious Marinus Link electricity connector across Bass Strait, the Federal Government remains committed to the multi-billion dollar project.
Federal Climate Change and Energy Minister Chris Bowen said on Saturday he wants to continue to work with the Tasmanian Government “to ensure its benefits are realized”.
Premier Jeremy Rockliff told delegates to the Liberal Party’s state council he was confident of a “good outcome for Tasmania”.
And the two Liberal MPs who quit the party and plunged his government into minority – Lara Alexander and John Tucker - also cautiously welcomed what they called Mr Rockliff’s “u-turn” on Marinus saying it vindicated their “repeated calls for more transparency and accountability”.
The Marinus link was estimated to cost $3.1bn but the Mercury believes the estimated cost is now approaching $5.5bn prompting the government’s concerns that Tasmania’s share of the price might be too much.
Mr Bowen is still keen to continue discussions on the project which will export Tasmanian renewable energy to power 1.5 million homes interstate.
“Marinus Link is an important project for Tasmania and Australia – and is facing similar pressures to other major energy and infrastructure projects around the world,” he said.
“The Albanese Government will continue working with the Tasmanian government to ensure its benefits are realised.”
Mrs Alexander and Mr Tucker said they would continue to push for parliamentary scrutiny of the Marinus Link.
“When we announced our decision to resign from the Liberal Government in May and move to the crossbench, Mrs Alexander and I cited serious concerns surrounding the Marinus Project as one of the key reasons behind our decision,” Mr Tucker said.
The pair welcomed Mr Rockliff’s re-commitment to a Tasmania First energy policy with Mrs Alexander saying it was “a welcome sign of a return to energy sanity”.
“The crux of the matter is that Tasmanians are being asked to foot one-third of the bill to help mainland status with their energy problems for what amounts to $1.15 per week off their own power bills.
“This is hardly putting Tasmania and Tasmanians first, as Premier Rockliff and Energy Minister (Guy) Barnett claimed they will always do.”
Meanwhile, Mr Rockliff reiterated to the party the virtues of Tasmania having a Tasmania First Energy Guarantee.
“This is all about securing Tasmanian energy for Tasmanians, at Tasmanian prices,” he said.
“The first step is securing the future of the Marinus Link Project on terms that put Tasmania first.
“For the right price, Marinus Link is an important project for Tasmania, it will help to boost extra renewable energy development and support growth in business and industry.
“The right price does not mean any price.”
TCCI call for urgent action to establish ‘must-have’ link
August 4: The state’s peak business body has urged the state government to stick with the Marinus Link project – and to build it as quickly as possible.
Reacting to the government’s announcement on Friday that the project would not proceed “at any cost”, Tasmanian Chamber of Commerce and Industry CEO Michael Bailey said there should be no doubt.
“Marinus Link isn’t a project that would be nice to have at some point in the future, it is a must-have now,” Mr Bailey said.
“Marinus Link is an investment in Tasmania’s future that will pay dividends for decades to come. It will pay for itself many times over because it will unlock Tasmania’s renewable energy potential.
“As anyone who’s ever built a house will tell you, the longer you wait, the higher the costs. It’s time to get on with it and build Marinus.
“Tasmania urgently needs more clean, renewable generation, which Marinus Link will help facilitate.
“We already know there are businesses that are being told that growth in demand is outpacing supply.
“Even TasNetworks’ Annual Planning Report shows that demand is outpacing supply.
“Unless we bring online more generation soon, Tasmania may not be able to keep up with the growing demand for power and we could be sleepwalking our way to the next energy crisis.”
However, Bob Brown Foundation patron Christine Milne said the project should be dumped.
“Tasmanians deserve the truth. Marinus Link is way over-budget and way overtime,” she said.
“Having admitted it will now not come on-stream until 2029, they still refuse to tell Tasmanians exactly what the projected cost of Marinus now is.
“What figure is the line in the sand? These same consultants said that two cables coming on-stream in 2027-28 and costing between $3.1b and $3.8b was the optimal scenario and that there was a 90 per cent certainty that these costs would not be overrun. Now it is heading towards double the cost and there is huge supply-chain pressure on the cables.
“There is no good scenario. Project Marinus is doomed.
Government puts brakes on Marinus
The state government has signalled its willingness to walk away from its biggest infrastructure project if rising costs make it too costly for the state budget to bear.
The Marinus Link Bass Strait electricity interconnector was supposed to cost $3.1bn and generate $4.5bn in economic activity by exporting Tasmanian renewable energy to power 1.5m mainland homes.
The Mercury understands the estimated cost is now approaching $5.5bn.
It was to be funded through a joint deal between the Commonwealth, Victorian and Tasmanian governments.
But citing a “material and significant cost increase” Premier Jeremy Rockliff on Friday said that despite the merits of the twin cables and his commitment to what was a “nation-building project”, he was concerned Tasmania’s share of the price might end up being too high.
“There is a line in the sand that Tasmania cannot afford to cross and I will not be crossing it,” he said.
“From day one we have said that the cost benefits of this project must stack up in favour of Tasmania.
“The agreement we made with the Australian Government in October last year intended the project to be funded on the basis of 80 per cent debt, finance and 20 per cent equity shared equally between the Commonwealth, Tasmania and indeed Victoria.
“We have now been advised of a material and significant increase for Marinus Link. This would mean a significant extra cost burden for Tasmanians.”
Mr Rockliff said he has written to and spoken with the Prime Minister about his concerns and asked for him to consider alternative funding options for the project.
“I’m confident that we will reach a good outcome for Tasmania in the very near future,” he said.
Minister for Energy and Renewables Guy Barnett said all options were on the table.
“We’re prepared to do what is ever necessary to ensure that the interests of Tasmania is protected,” he said.
“I’m very confident that the project will proceed but it’s got to be on terms that are put Tasmania first and that are agreeable to Tasmania.”
Mr Barnett said the state was not contemplating exiting the National Electricity Market and the government remained committed to driving down the state’s electricity prices to be the lowest in the nation.
Neither Mr Rockliff nor Mr Barnett spelled out the updated cost of the project nor the exact nature of the line in the sand to which they both referred.
Former Liberal MP John Tucker, who now sits as an independent, has repeatedly raised his concerns about the project adding to the state’s rising debt burden.
Mr Rockliff said the minority Liberal government’s difficult political reality was not a factor in his consideration.
“This is about putting Tasmania first and ensuring that we get the best deal for Tasmanians,” he said.
Labor’s Josh Willie said Friday’s announcement was a major reversal.
“This is a government that has spent ten years talking about Marinus Link, and they’ve spent tens of millions of dollars and now they’re walking away.
“This is another broken promise in the energy portfolio from Minister Barnett and this government.
“Mr Barnett has staked his career on this policy.
“He has said that it’s a great deal for Tasmania and that he’s going to deliver Marinus. Today is walking away from that promise.
“This is a government that is all announcement and no delivery.”
Greens leader Rosalie Woodruff said information about the project had been hard to come by.
“The Liberals have spent six years using merriness as photo opportunities for elections.
“It’s been six wasted years where they haven’t focused on the renewable generation future that Tasmania needs.
“Guy Barnett as minister and previous ministers have never told Tasmanians what the cost of Marinus Link would really be and now we understand it’s likely to be at least 500 million to a billion dollars more.
“Jeremy Rockliff has taken Tasmanians to the edge of a fiscal cliff and he proposes to keep going.
“We’re telling him to turn back.”
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