Public inquiry call as NTG reacts to Project Sea Dragon calling in the administrators

Pressure is building for an inquiry into how the NT government facilitates development in the wake of another major project collapsing.

The Territory government will continue to invest in major projects despite the collapse of Brisbane-based Seafarms Group’s flagship Project Sea Dragon.

Seafarms posted with the Australian Stock Exchange on Tuesday it had suspended trading immediately and had appointed administrators to the troubled project.

The NT Government spent $56m on public roads to support the project including $32.2m to upgrade Gunn Point Rd to two-lane sealed standard, dubbed by critics ‘the road to nowhere’.

The commonwealth contributed $63.5m and the WA government $15m on support roads.

Environment Centre NT has called for a public inquiry into government spending on the back of the project collapse.

Billed as the world’s largest aquaculture project, Project Sea Dragon was to be a land-based aquaculture development at Legune Station near the NT-WA border.

When completed, the company wanted to produce prawns year-round for export.

It’s the latest collapse of government-backed project in recent months to hit rocky waters.

Last month, the developers of Sun Cable announced the project was in voluntary administration, and Clough - the joint partners in the Darwin shiplift project - collapsed.

But despite the poor track record backing winners, Infrastructure Minister Eva Lawler said the government would change its processes.

Infrastructure and Planning Minister Eva Lawler stands by investing in projects in the Territory. Picture: (A) manda Parkinson

“What we do in the Territory is we have that process around major projects, but that’s the reality of business, that’s the reality of business in the Territory, it’s the reality of business across the world where you have proponents who come in and some of these projects are large projects, there is large risk around them but that’s what those businesses do,” Ms Lawler said.

“They take those risks, they work with government.

“Of course government is going to support those but we do due diligence around those projects.

“Some projects get up, some don’t necessarily get up or may get up at a later date but that’s how things work in business.

“The best people to talk to is to talk to Seafarms and talk to Sun Cable or those proponents.

“What government does is we facilitate that.

“We facilitate those conversations, we facilitate those opportunities otherwise we’d be getting criticised for having a closed door.

“We’d shut the door to all of our businesses in the Territory and say, ‘don’t come here we’re not open for business in the Territory’.”

Environment Centre NT chief executive Kirsty Howey said Project Sea Dragon was a “white elephant” and waste of taxpayer money.

Kirsty Howey, from the Environment Centre NT, says Project Sea Dragon is a “white elephant”. Picture: Glenn Campbell

“Project Sea Dragon is another white elephant that the Labor government has wasted taxpayer funds on,” Ms Howey said.

“Territorians are right to ask how on earth this road to nowhere has been funded by Territory taxpayers, when our hospitals, schools and communities are crying out for help and costs of living are soaring.

“We need a public inquiry into how and why this money has been expended, and what checks and balances were put in place by the government before this happened.”

Earlier this month Seafarms posted on the ASX an adverse finding by the Royal Institution of Chartered Surveyors was adjudicating a contractual dispute with construction company Canstruct over Project Sea Dragon.

In a statement to the ASX on February 3 the company stated: “The adjudicator has determined a total amount of $13.9m (excluding GST) is payable to construct as per claims of money owed following the suspension of work on Project Sea Dragon (PSD) in December 2021 and later termination of contracts in April 2022.”

The adjudication proved to be a tipping point for the troubled project.

A Project Sea Dragon trial pond at Legune Station. Pictured: Supplied

Seafarms chief executive Rod Dyer pointed to the decision’s implications for the project, describing the judgment as “disappointing”.

“We are extremely disappointed with the decision of the adjudicator in the contractual dispute with Canstruct,” he said.

“Seafarms provisioned $8.7m for a settlement of this dispute in its 2022 accounts, and has the capacity to cover the balance.

“We believe the determination to be excessive and are now considering our next steps on this matter, including legal redress.

“Once that legal advice is received and considered the company will provide the market with a further update.

“With respect to the future of Project Sea Dragon, as stated in our announcement of November 30, 2022, the assessment of key risks to Project Sea Dragon in 2022 found there was no technical reason why it should not continue.

“We remain focused on the development of a new business case for Project Sea Dragon.”