$35bn Australia-Asia PowerLink hanging by thread as Sun Cable goes into voluntary administration

The Territory government is standing by its support of the $35bn energy company placed into administration after a funding spat between its two billionaire backers.

The NT government is confident the $35bn Australia-Asia PowerLink project will go ahead despite the company behind it going into voluntary administration because of a spat between two billionaire investors.

Sun Cable was placed into administration on Wednesday after a dramatic scrap between its two high-profile backers – Mike Cannon-Brookes and Andrew Forrest.

The billionaires clashed over different views on the optimal funding package and strategic vision for the project based in the Northern Territory, which would have sent power from Darwin to Singapore with a 4200km cable.

Andrew Twiggy Forrest. Picture: Supplied

The NT government was only told on Wednesday.

But acting Chief Minister Nicole Manison remained upbeat about the project, saying she believed assurances from company chief executive David Griffin the project would emerge from its current crisis.

“We have been briefed (Wednesday) and they have given us strong assurances that we can have confidence in the future of this project,” Ms Manison said.

“There are a lot of eyes on this project and we’re really proud to be working alongside Sun Cable to deliver it.

“They’ve made a decision to go into voluntary administration.

“We’ve been told the reason for this is a shareholder concern, shareholder issues they are dealing with.

“However they are still proceeding working as a company to progress this project.

“They are confident they will be out of this voluntary administration process swiftly and that we can have confidence in the future of this fantastic project.

Mike Cannon-Brookes. Picture: Dhiraj Singh/Bloomberg via Getty Images

“In the scheme of things we have not yet seen the advice of whether this will effect the delivery of that timeline.

“We have been given big assurances from the chief executive that they’re confident that they will get through this voluntary administration process swiftly and that we can have confidence in this project going forward and they will have significant interest for investment.”

Asked why she believed Sun Cable’s assurances, Ms Manison said “because this is a fantastic project”.

“We need to take a deep breath here and realise that this is a $30bn project,” she said.

“It is going to be globally significant and we make no apologies backing it and working alongside a project like this that looks to deliver renewable clean, green power.”

It has been a rocky 12 months for Territory government-backed projects, with Seafarms reviewing its multibillion-dollar Project Sea Dragon prawn farm investment, Santos’ Barossa gas project being stalled by the courts and the voluntary administration of Clough, one of the $515m Darwin shiplift project partners.

Ms Manison dismissed a suggestion the government backed losers.

“I actually think you’re being pretty narrow-sighted there,” she said.

Acting chief minister Nicole Manison. Picture: Floss Adams.

“We’re really positive about the shiplift and basically Clough going through their processes however of course we’ve got BMD the other partner that is continuing going forward. We will be delivering a shiplift.

“With Project Sea Dragon there has been significant restructuring and I think you’re going to expect to see some good positive announcements going forward this year about Sea Dragon.”

Opposition Mining and Industry spokesman Steve Edgington said the Sun Cable crisis undermined Labor’s promise to grow a $40bn economy by 2030.

“In six years, Labor has not delivered a single major project and all the major projects they were backing for the $40bn pledge are under a cloud or folded,” Mr Edgington said.

He said major projects like Sea Dragon and the Waterfront Hotel failed, and the $100m ship lift project had blown-out to $515m project.

“Labor promised the world but delivered nothing, proving they can’t be trusted with the economy,” he said.

“This Labor government lacks the business expertise or experience to identify and deliver major projects.

“Territorians would be justified in having zero confidence in their ability to deliver a $40bn economy by 2030.”

NT Chamber of Commerce chief executive Greg Ireland said there was no indication of strife at Sun Cable.

“We were shocked to hear the announcement and had no knowledge it was coming,” Mr Ireland said.

“It was a bit of a surprise but if this was going to happen, this is probably the most preferable way because the intent is project recapitalisation under a different ownership structure.

“Given this is an internal process I would hope when we look back in the future it could be a blip on the radar.

NT Chamber of Commerce chief executive Greg Ireland

“Given the local information they’ll be continuing with business as usual we wish them all the best in this process and hope there’s continuity in the project over time.”

MasterBuilders NT chief executive Ben Carter said the project was an important piece of the government’s project pipeline.

“It’s a major project that would deliver substantial benefits,” Mr Carter said.

“The government will be deeply concerned given the project’s prominence in their plans for growth.

“Without knowing the behind-the-scenes detail of what has transpired we have to hope that following the shake-out by the administrators and the investors that the project can still go forward in some way. It would be a shame for the Territory to lose this investment.”

Master Builders NT chief executive Ben Carter

Ms Manison said the government had not provided “grants” for the project but the Land Development Corporation entered into a commercial agreement with Sun Cable for two parcels of land in the Top End if the project went ahead.

The LDC proposed to sell or lease 7.8ha at East Arm to Sun Cable for a solar panel assembly facility and 10ha at Middle Arm to be leased for a battery facility.

LDC chief executive Tony Stubbins said both were negotiated on commercial terms and no land transfer was to occur until after final investment decision.

The announcement took Territory business leaders by surprise.