Albanese govt promises Italians $150m for cable for yet to be approved Marinus Link energy project

Taxpayers are committed to paying a fee to reserve cable for Marinus Link, despite a final investment decision for the controversial energy project being more than a year away.

Marinus Link route - artist's impression.

Taxpayers are committed to paying a fee to reserve cable for Marinus Link, despite a final investment decision for the controversial energy project being more than a year away.

Italian-based cable company Prysmian Group on Tuesday revealed it had struck a “capacity reservation agreement” underwritten by the Albanese government to supply and install a 255km cable under Bass Strait.

“The agreement includes commonwealth government underwriting a capacity reservation fee of up to €90 million ($150m),” Prysmian Group said.

This is despite federal and state governments saying a final investment decision on the $3 billion-plus project – which would increase power exports from Tasmania to Victoria - will not be made until December 2024.

Statements issued by Marinus Link and the state government failed to mention the 90 million euro “fee”.

However, government sources suggested the amount federal taxpayers would pay Prysmian if the project fell over was significantly less than 90m euros, with amounts varying depending the timing.

The deal was defended by project backers as necessary, given strong global demand for cable. However, the commitment of taxpayers’ funds before a final investment decision sparked concern.

Victoria Energy Policy Centre director Bruce Mountain said the Albanese government was “throwing good money after bad”.

“Snowy Hydro 2.0’s massive bailout by taxpayers was presumably influenced by the huge expenditure already incurred,” Professor Mountain said. “Throwing good money after bad is the inevitable consequence.

“Marinus Link is now heading down exactly the same path. If our ministers cannot find the will to commission independent reviews to spare taxpayers from great waste, our parliaments must force it on them.”

Tasmanian Energy Minister Guy Barnett said it was “significant step forward for this vital project”. “This agreement ensures production and offshore installation capacity for one cable of the Marinus Link project, a 750MW cable system, with negotiations continuing for the second 750MW phase,” said.

State Greens leader Rosalie Woodruff accused the government of “secrecy” and bungling. “Tasmanians can’t trust the Judgement of a government that has underestimated the cost of every major project they propose,” Dr Woodruff said.

“They are addicted to secrecy, continually make bad investment decisions and then hide the details. Tasmanian consumers will be paying for the Liberals‘ mistakes for generations if Marinus goes ahead.”

The announcement also created confusion about when a final decision would be made on the project, with Prysmian Group saying “July 2024”. Previously, both governments had indicated a decision in December 2024.