Billionaires given another extension over prime land deal

The timeline to seal the McGowan government’s deal to offload a prime parcel of riverfront land to Perth billionaires Kerry Stokes and Andrew Forrest has been extended yet again.

The old East Perth power station.

The timeline to seal the McGowan government’s deal to offload a prime parcel of riverfront land to Perth billionaires Kerry Stokes and Andrew Forrest has been extended yet again.

Their exclusive period to finalise the purchase of the old East Perth Power Station and surrounding land was to expire at the end of September but The Australian has confirmed it has been stretched to March next year.

The latest extension means it could take almost three years for the deal to be finalised.

The state government has already started spending millions of dollars preparing the site for development in the years since the initial redevelopment plan was announced in April 2020.

The government has also incrementally added to the pool of money it has promised to pump into that preparatory work. It had initially earmarked $30m to go towards remediation when it first began seeking expressions of interest for the site in 2019 and had bumped that up to $50m at the time it announced the deal for Mr Stokes’ Australian Capital Equity and Mr Forrest’s Tattarang to redevelop the site.

Since then, the total amount of government funding allocated to the project has grown to more than $110m. The state’s land development agency has also been negotiating performance warranties over the site that would address risks associated with potential delays in the site works and decontamination.

The deal has been closely scrutinised since its announcement because of the growing pool of taxpayer money being directed towards a project involving two of Perth’s richest men.

The ties between WA Premier Mark McGowan and Mr Stokes – whose business interests include newspaper The West Australian, and the Seven television network – became clear earlier this year when text messages between them were aired in the Premier ‘s defamation battle with Queensland billionaire Clive Palmer.

The 105-year-old East Perth power station has sat dormant at the eastern end of the Perth CBD, just across the river from Perth’s Optus Stadium, for more than 40 years. It is one of only four remaining examples in the world of a ­Cathedral-style power station, and two of those – London’s Tate and Battersea – have been the subject of lauded redevelopments.

The 8.5ha East Perth site has been complicated primarily by the need to relocate critical electricity infrastructure that services the Perth CBD. Rising construction costs in WA have also added to the cost of the preparatory site works.

The initial plans by ACE and Tattarang’s Koomba Kalark joint venture involved spending $218m to develop a mixed residential, commercial, recreational and tourism precinct.

Mr McGowan’s spokeswoman confirmed the latest delay: “Negotiations on the East Perth power station project development deed with … Koomba Kalark joint venture have progressed but given the complexity, the exclusive working period has been conditionally extended until March 3, 2023.”

Mr Stokes’ ACE was in the box seat to take on redevelopment of the South Fremantle power station but state-owned utility Synergy – which owns the oceanfront site – in September said he had pulled out of a conditional sale agreement after concluding it would be too expensive to restore.