Pressure builds on Adani to start construction of its $16.5 billion Carmichael coal mine

DOUBTS are growing over a $16.5 billion project in Queensland as politicians question if Aussies have been promised “fake jobs”.

AUSTRALIANS appear to be losing patience with Adani as scepticism grows about whether construction of its mega coal mine will begin and deliver much-needed jobs.

Funding appears to have dried up for the $16.5 billion coal mine in Queensland’s Galilee Basin, with yet another setback revealed last week.

Rail operator Aurizon walked away from plans to build a rail line linked to the mine, withdrawing its application for a $5 billion government-funded loan from the Northern Australia Infrastructure Facility (NAIF).

The decision comes after Adani was previously denied a $1 billion NAIF loan to build its own rail line, after the Queensland Government vetoed it ahead of the state election.

Adani has previously insisted it could pay for the mine without government assistance but there has been no confirmation the project has secured funding, despite company chairman Gautam Adani announcing last year the project had received Final Investment Decision (FID) approval.

The company continues to insist it is moving forward with the project and told news.com.au the Aurizon NAIF application did not impact the Carmichael Project.

“We are focused on early works and are confident of progressing our project,” an Adani spokesman said.

In the past week Adani has been spruiking the fact it has 800 people working in Queensland.

“Each month we pay $7.2 million in salaries to our direct staff and seconded employees,” the spokesman told the Townsville Bulletin.

But an Adani spokesman has since confirmed with news.com.au that these 800 staff were actually employed across its renewables, corporate head office and port operations — not just the Carmichael project.

“235 people are based in the Townsville headquarters working on the Carmichael project,” the spokesman said.

Despite its assurances, there are growing calls for work to start on the mine as politicians question whether the project will provide the “10,000 direct and indirect jobs” boost it has promised.

“Adani gave itself the green light eight months ago — it’s time for Adani to start delivering,” a spokesman for the Queensland government said on Friday.

Even Townsville Mayor Jenny Hill, who copped criticism for agreeing to provide $15.5 million to co-fund an airport for the mine, told The Australian Adani must start construction by August or face an erosion of trust.

“I think it’s important for everyone that they get their financial close and start the main engineering work, and they need to do that within six months,” she said.

The comments come after Labor leader Bill Shorten cast doubts on the project’s viability ahead of a party meeting last week to decide whether to support it.

“I’m beginning to wonder if the people of north Queensland are being led on with this promise of fake jobs and they’re never going to materialise,” he told reporters in Canberra.

“I also believe that we need to make sure that all scientific approvals have been diligently researched.”

The controversial mine is causing problems for Labor in Melbourne as the Greens ramp up their campaign against it, ahead of a crucial by-election in the seat of Batman.

The party has been deliberating over whether to support the mine, or come out in opposition.

While it has not confirmed an official policy, Mr Shorten appears to have changed his previous noncommittal stance to say he was “increasingly sceptical” of the project saying Adani hadn’t convinced a single Australian bank to finance the massive mine.

Queensland Labor Premier Annastacia Palaszczuk has also called on Adani to prove it has finance and the project was moving ahead.

“I was at a signing ceremony eight months ago — it’s up to Adani to demonstrate to the people of this state that those jobs are forthcoming,” she told ABC last week.

“Some of those milestones appear not to have been met.”

Adani Group chairman Gautam Adani meets with Queensland premier Annastacia Palaszczuk at the Port of Townsville in December 2016. Picture: Cameron Laird/AAP

HAS WORK ACTUALLY STARTED?

Adani keeps making announcements that suggest the project is moving forward but it’s telling that politicians both locally and federally are questioning whether work has begun.

The Carmichael mine was previously delayed by court challenges brought by environmental groups as well as the need to change to the Native Title Act to legitimise an Indigenous Land Use Agreement it had signed.

The native title change was the last legal hurdle the project faced and this was passed by both houses of parliament on June 14, 2017.

Ahead of the decision, Adani Australia chief executive Jeyakumar Janakaraj told The Courier Mail he would be flying to India to ask the board for a financial decision, which should pave the way for construction to begin in August.

“The next three weeks will be game changers for the Galilee Basin,’’ Mr Janakaraj said at the time.

Adani even signed a deal with Arrium’s struggling Whyalla steelworks in South Australia for 54,000 tonnes of steel, although this was contingent on the project getting finance.

In June, Adani’s chairman announced in a statement he had signed off on the project.

“I am proud to announce the project has Final Investment Decision (FID) approval which marks the official start of one of the largest single infrastructure — and job-creating — developments in Australia’s recent history,” Gautam Adani said.

Pre-construction work on the project was expected to begin in the September quarter.

Ahead of this date, Mr Adani issued a statement in August confirming the start of works.

Mr Janakaraj said the Charters Towers-based civil contracting firm GA Services would be among the first regional contractors to benefit. The company was hired to refurbish camp accommodation, with 245 rooms expected to come online by early September.

He told Reuters in October that Adani was aiming to tie up financing for the mine by March 2018, adding it would look to sell a minority stake in the project to help raise funds.

Mr Janakaraj said physical construction of the mine was scheduled to start in weeks.

Since then a NAIF loan to Adani has been denied and an official ceremony to unveil the mine in October — which Deputy Prime Minister Barnaby Joyce was expected to attend — was cancelled due to rail and never rescheduled.

Disney Station south of Belyando Crossing is where the rail corridor for the Adani mine project is located.

Crucially, Adani has yet to announce how it will finance the project.

Banks overseas and in Australia have distanced themselves publicly from Galilee Basin coal export projects, or introduced policies that prohibit financing Adani’s mine.

As a reporter for the Australian Financial Review pointed out last year, funding of the massive project relies on royalty relief from the Queensland Government (which Adani has secured) and a $1 billion taxpayer-funded loan from the Federal Government’s NAIF (which has now been rejected).

It was also revealed last year that Adani may have wanted the Carmichael mine to go ahead to ensure it got its $1.5 billion debt refinanced for its Abbot Point Coal Terminal, which is only currently operating at 50 per cent capacity.

ARE THERE FAKE JOBS?

One of the biggest reasons the mine has received support in the past has been Adani’s promise to create jobs in an area that’s struggling with a high unemployment rate.

Adani says the project will create 10,000 direct and indirect jobs and has rejected suggestions from Mr Shorten that it was offering “fake jobs”.

A spokesman told the Townsville Bulletin last week the company had 800 people working in Queensland.

“Each month we pay $7.2 million in salaries to our direct staff and seconded employees,” the spokesman said.

An Adani spokesman has since confirmed with news.com.au that these 800 staff were actually employed across its renewables, corporate head office and port operations — not just the Carmichael project.

“235 people are based in the Townsville headquarters working on the Carmichael project,” the spokesman said.

“From the engineering team working on the detailed design to our accountants and HR professionals, they are committed to delivering jobs and economic development for regional Australia.”

A reporter from the The Bulletin visited Adani’s offices in Townsville recently and saw “scores of people, over three floors and some 3000sq m of office space”.

“If they are not going ahead, they put on a good show,” he wrote.

Ms Hill also defended the jobs, telling The Bulletin Adani had created 300 jobs in Townsville so far with the prospect of more to come.

Adani officers at work in South Townsville. Picture: Evan Morgan

A project overview on the Queensland State Development’s website lists up to 1075 jobs associated with construction of the mine and another 1400 for the railway line.

On top of this there’s an estimated 3800 operational jobs associated with the mine and up to 120 for the railway line.

But the real number of jobs to be created was questioned during a Land Court of Queensland case in 2015, when Adani’s own expert witness agreed the mine would increase average annual employment by just 1206 job full-time equivalent jobs in Queensland and 1464 jobs across Australia, once jobs lost in other sectors were taken into account.

RELATED: The hunt for Adani’s 10,000 jobs brings up ‘zero results’

WHY DON’T PEOPLE LIKE THE MINE?

Initially much of the concern around the mine stemmed from environmental groups who were concerned about the impacts of dredging and carbon emissions on the Great Barrier Reef.

But over time, stories about Adani’s environmental track record in India, its financial arrangements and concerns about an unlimited water licence it was granted in April have emerged.

Earlier this month, questions were also raised over an altered lab report that Adani reportedly submitted while appealing a fine for spilling coal-laden water on to sensitive wetlands. According to The Guardian, the original report found worse pollution than had earlier been alleged.

The decline of coal has also raised questions about the future viability of the mine and whether Australians will ever see the full benefits of the project — especially one that is relying on a royalty holiday to get started.

A survey commissioned by The Australia Institute found 68 per cent did not support the government providing a taxpayer loan to help with the construction of the mine.

On the weekend, Adani warned that political decisions on the project were undermining Australia’s reputation.

Mr Janakaraj told The Weekend Australian that Labor’s attacks on the project had cast doubt on Australia’s ability to remain an attractive destination for capital.

But deputy opposition leader Tanya Plibersek rejected this.

“It is a bit rich for a company who originally said that they didn’t need taxpayer support for this project to go ahead and then five minutes later stuck their hand out for a $1 billion loan to be talking about whether we’re an attractive investment destination,” she told ABC TV on Sunday.

“We have every right as a nation to say we’ll make decisions in our own best interests, in the best interests of our economy and our environment.”

Lilli Barto and Natan Shlomo protest against the mine. Photo Front Line Action on Coal

— With AAP