The Commonwealth will secure an equity arrangement with the NT as part of $2.5bn package

Treasurer Jim Chalmers has promised $1.5bn to help the Territory Government develop Middle Arm – but it comes with a catch. Find out what.

The Commonwealth’s $1.5bn commitment to fund infrastructure at Middle Arm comes with a catch – a slice of equity in the project.

Federal Infrastructure, Transport and Regional Development Minister Catherine King announced the funding on Sunday in a targeted release before Labor’s first budget on October 25.

In March the Coalition Government announced funding of $1.5bn on port infrastructure at Middle Arm but provided scant details of where the money would be spent.

The Coalition implied the money would build a new port and former Defence Minister Peter Dutton indicated Middle Arm could provide a defence role.

On Sunday the Federal Labor Government moved to end speculation around budget infrastructure funding and released its national spending including a whopping $2.5bn for the Northern Territory.

Only Victoria, with $2.57bn, will receive more infrastructure support in Treasurer Jim Chalmers’ October 25 budget than the Northern Territory.

Interviewed on ABC television on Sunday morning, Ms King said the Government’s revised commitment represented a shift from Josh Frydenberg’s March budget pledge funded under the Coalition’s energy security package.

“It’s the same money, but there’s two things we’re doing slightly differently,” Ms King said. “We want to equity fund this so we want the Commonwealth to have a stake.

“This is a really substantial build within Darwin. It’s a big economic boost for Darwin.”

Ms King said it would not be a new port.

“This got completely confused during the election campaign when we suddenly saw this Defence infrastructure where Peter Dutton muddied the waters.

“Middle Arm is currently an existing patch of land that’s under-utilised.

“It’s actually about building a big jetty out to be able to actually able to potentially get hydrogen and other goods in.

“It’s actually not a port in and of itself it’s enabling infrastructure to allow goods and services in and out and it’s not a container port or anything like that and it’s definitely not a defence facility.”

Ms King said the new facility could be used for hydrogen transfer.

“It may be for hydrogen — It is one of the things that has been talked about as a possibility for the project.”

Former Deputy Prime Minister Barnaby Joyce in Darwin during the Federal election campaign answers questions about Middle Arm. He’s flanked by Damian Ryan, David Littleproud and Jacinta Price.

In addition to the $1.5bn for Middle Arm, the Commonwealth committed another billion dollars for Territory infrastructure projects including $440m in equity to support development of regional logistic hubs, $350m to seal the Tanami Road and upgrades to the Central Arnhem Road and $332m towards the NT Strategic Roads package.

Ms King said funding for freight hubs and intermodal hubs around Katherine are “part of this long term project.”

While details of the planned equity arrangement are yet to be worked through, the Commonwealth’s funding is an investment into the Middle Arm project and the Australian Government will expect a return on investment down the track.

Chief Minister Natasha Fyles welcomed the funding and equity arrangement.

“The Commonwealth have had discussions with the Northern Territory,” Ms Fyles said.

“It’s not a loan, it doesn’t need to be repaid but if there was profit made from this infrastructure that the Commonwealth would like a share back.

“This is enabling infrastructure. This is key to developing the north, but we’ll continue to work with the Commonwealth around that equity request.”

In 2015 the Country Liberals government leased Port of Darwin to Chinese company Landbridge for 99 years.