Queensland election: ALP’s secret $500m Adani sweeteners

The Palaszczuk Labor government is set to offer infrastructure funding and a royalty holiday for Adani’s Carmichael mine.

Queensland Premier Annastacia Palaszczuk. Picture: AAP

The Palaszczuk Labor government is set to offer infrastructure funding and a royalty holiday for Adani’s Carmichael mine that will together cost Queensland taxpayers almost $500 million over the first five years of production.

Despite vowing that no public funds would go to the coal project, it has emerged that the state government has been in negotiations to take over and upgrade several council roads to the mine in central Queensland at a cost of up to $100m. This comes on top of a secret incentive deal with Adani that will delay the payment of $360m in coal royalties for the five years after it opens.

Sources close to the deal — approved by the Labor cabinet in May and which Premier Annastacia Palaszczuk refuses to detail, claiming it is “commercial in confidence’’ — said it involved a flat payment of $2m a year with the deferred royalties paid back in full with interest in the ensuing years.

In the first week of the election campaign, Ms Palaszczuk announced her government was reneging on its written support to facilitate a concessional federal loan of up to $1 billion for Adani to build a common-user rail line from the Carmichael mine in the Galilee Basin coal province.

Ms Palaszczuk initially said her decision was made because of a conflict of interest caused by her partner working on Adani’s ­application to the Northern Australia Infrastructure Facility, but has since claimed it reflected Labor’s 2015 election commitment that no taxpayer money would go to the Indian giant.

Ms Palaszczuk, who has been accused of publicly distancing herself from Adani because of Labor polling showing widespread opposition to taxpayer funds being used on the project, yesterday again refused to detail the royalties deal.

Asked whether there was any infrastructure the state government would be willing to fund to help the Adani mine go ahead, Ms Palaszczuk said: “ I don’t think so. We said no taxpayers’ money would go towards it.’’

Isaac Regional Council Mayor Anne Baker, whose shire covers the proposed mine site, confirmed the council voted in ­February to negotiate for the state government to take over and upgrade two roads at a cost of up to $100m.

Ms Baker, a member of the ALP who won endorsement from the Construction Forestry Mining and Energy Union for her re-election last year, said the council needed the state to take over the roads, which were originally going to be upgraded at a cost to Adani and retained by the council, because of the impact to its budget through depreciation.

“It’s just not fair, we won’t be carrying the depreciation on those roads,’’ Ms Baker said.

She denied a deal had been struck before the state election, but said the state government would fund the upgrades needed to handle “heavy load’’ mine traffic.

When asked if the state government would have to fund the upgrades if the roads were declared “state controlled roads’’, she said: “That’s correct … it would be state road infrastructure. We don’t want to be funding it … if you say (the upgrade cost) is between $60m to $100m that would be accurate reporting.”

Later in the interview, Ms Baker stressed that there was “definitely no agreement’’ yet with the state government and that it was only an option. “I am not going to unravel the election with this … are you?’’ she said.

Adani declined to comment last night.

The upgrade of the road is understood to have been part of the royalties negotiations. A source close to the deal said the government had agreed to pay for the road upgrades, despite concerns with the Department of Treasury and that the funding was not to be recouped from Adani.

A spokesman for Ms Palaszczuk issued a statement last night in response to questions about the royalties deal and possible funding of the road upgrade.

The statement did not specifically address either, but said the government’s role in the Carmichael Coal project was “in accordance with its resource policy framework for the future development of the Galilee and Surat basins and the North West Minerals Province’’.

“The resource policy framework requires all royalties due to the state are paid over the term of any agreement (inclusive of interest forgone costs), with security of payment and no adverse budget impact to the state,’’ the Premier’s statement said.

“Any agreement with a proponent will not involve the direct expenditure of public funds in the project or in directly related economic infrastructure for that project (noting that government-owned corporations (GOCs) may still supply economic infrastructure on commercial terms to resource project proponents).’’

Earlier in the day, Adani responded to reports about the company seeking funding for its railway from Chinese state-owned banks — previously revealed in The Australian — saying it would still be seeking the NAIF loan.