$100 a week rent for $1bn reef paradise on Great Keppel Island

ONE hundred dollars a week rent for 827ha of tropical island paradise sounds like the real estate deal of the century.

ONE hundred dollars a week rent for 827ha of tropical island paradise sounds like the real estate deal of the century.

This is what the man who wants to build a $1 billion resort next to the Great Barrier Reef is being charged to secure the better part of the iconic Great Keppel Island.

The Queensland government has renewed the controversial contract with Terry Agnew's Tower Holdings, even though its own environment department wanted the allotment on Great Keppel Island set aside as a conservation area.

The Sydney-based developer pays annual rent of $5200 for the lease on what is known as Lot 21, covering 70 per cent of the island, one of the few with the reef on its doorstep. That's $6.29/ha a year, or less than 2c a day.

The numbers are even more attractive for Mr Agnew when set against the scale of his proposed resort, which was granted significant project status by the state government before being blocked by federal Environment Minister Peter Garrett 10 weeks ago.

State Natural Resources Minister Stephen Robertson insisted the rent was "appropriate".

"It reflects how limited and restrictive the lessee's use of the land is," Mr Robertson said in a statement to The Weekend Australian.

But dive shop operator Pete Williams, who opposes the development, said he would love to pay the same "pittance" to be on the island, 20km off the central Queensland coast.

"Some of us are paying that just in rates for a little block of land," Mr Williams said. "Who in this day and age pays a few cents an acre, for whatever reason?"

The rollout of the red carpet for Mr Agnew is a measure of the Queensland government's keenness to attract investment in tourism infrastructure.

Only a handful of new resorts have come onstream since failed entrepreneur, the late Christopher Skase, put his Mirage franchise on the map in the 1980s.

When framing the $1.15bn Great Keppel Island project, which would have been the largest tourism development in the country, Mr Agnew and his executives enjoyed direct access to Premier Anna Bligh and her predecessor Peter Beattie.

The doors of government were opened by former deputy premier turned business consultant Terry Mackenroth.

Mr Mackenroth no longer works for Tower Holdings, having relinquished his registration as a lobbyist last year after controversy erupted in Queensland over pay-for-access deals involving ex-MPs and Labor mates.

Mr Agnew signed a statutory declaration in January 2007 affirming that Tower Holdings subsidiary GKI Resort Pty Ltd had received ministerial consent in Queensland for the transfer of the lease on Lot 21 for an annual rent of $4650. This was central to his plan to close the existing Great Keppel Island Resort, confined to a 16ha site on the western beachfront, and replace it with a sprawling development including a 300-room hotel and day spa, 1700 resort villas, 300 apartments, a 560-berth marina, Greg Norman-designed golf course and a sports oval.

The original rent for Lot 21 came to $13.21 a day, which is about what Mr Williams charges to hire snorkelling gear, less GST.

Since then it has risen to $14.77 a day - $5200 a year - due to an increase in the land's unimproved value, according to the Queensland Department of Environment and Resource Management. The lease was due to expire on March 31, but was rolled over for 12 months so an environmental impact statement could be finished.

This was despite a recommendation by the department in 2008 that the land be set aside as a protected nature conservation area. Tower Holdings then reduced its "area of interest" in Lot 21 to 330ha, said acting regional services director Athol Backhouse.

The revised project was declared a significant development by the Queensland Co-ordinator-General, requiring an EIS.

The company declined to discuss the deal when approached by The Weekend Australian.

However, it is known to have prepared a scaled-back version of the project for resubmission to Mr Garrett.

He rejected the original plan under national environment laws last October, citing advice that it would have an unacceptable impact on the reef, coastal wetlands, marine life and vegetation on the island.

A spokesman for Mr Garrett said any "alternative proposal" from the company would be examined.

Second-generation Keppel Island resident Carl Svendsen, who has been a leader of opposition to the Lot 21 deal, said he had no objection to the mothballed Great Keppel Island Resort being redeveloped on its existing site.

Tower Holdings tried to reach agreement with the island's traditional owners to acquire the 170ha of land they control, over four prime seafront allotments, but the Woppaburra Land Trust rejected the offer of $11 million.