Talking Point: What’s the holdup on Tasmania’s multi-billion dollar Marinus cable?

ANDREW WILKIE: Tasmanian Government is on a go-slow on project worth jobs and billions to the state

STEP UP: Tasmania must get a good deal in return for interstate consumers having access to the state’s reliable, clean energy.

Marinus Link is the $3.5 billion proposal to make Tasmania the battery of the nation with a second undersea electricity connection under Bass Strait connecting Tasmania and Victoria.

Marinus would link Burnie to the Hazelwood Substation in Victoria and deliver low-cost, reliable and clean energy to the mainland. It is one of the biggest projects in the State’s history, with the potential to generate $5 billion dollars in revenue and put Tasmania at 150 per cent renewable energy. This project will create jobs, not just on Marinus but also on the three wind farms and pumped hydro associated with the project. It will encourage further investment in renewables in Tasmania, creating even more jobs. This project has the potential to produce hundreds of millions of dollars for the State, hundreds of millions of dollars for a budget that is failing to properly fund hospitals and schools.

This project is not a question of if, but when. The reports have shown it’s feasible. The Commonwealth Government is desperate to fund Marinus and almost exactly a year ago $56 million of Commonwealth funding was given to the Tasmanian Government for design and approvals. But this phase has not yet been completed, the money has not even been spent, and yet late last year State Minister Guy Barnett was back in Canberra, cap in hand, asking the Federal Minister for more grants. But this project cannot be built on grants. It’s a $3.5 billion project for goodness sake.

Yet for reasons no one can understand or explain, the Tasmanian Government has put Marinus in the slow lane. Indeed I’ve now been reliably informed by a senior official in Canberra that the project could have been financially secured before Christmas, but that it hasn’t because the Tasmanian Government hasn’t done the required paperwork.

Another Canberra source, this time a Commonwealth Government insider, agrees that Marinus cannot progress to shovel-ready stage until the Tasmanian Government puts together a commercial or corporate structure that includes both state and federal governments, as well as professionals such as engineers with the expertise to manage this project. Other states are forging ahead with similar interconnector projects because they had the foresight to create the necessary corporate structures at an early stage. Why hasn’t Tasmania? What’s the hold up?

The vital question of who pays for this project needs to be thrashed out urgently. The answer will decide whether it will make Tasmania more financially independent from the Commonwealth, or lump the state with a multibillion-dollar bill for an interconnector so consumers in Victoria and New South Wales can enjoy access to Tasmania’s low-cost green power.

Who pays is due to be discussed at a COAG Energy Council this month. TasNetworks, which is managing Marinus for the Tasmanian Government, views the current pricing arrangements as broken and says an appropriate pricing outcome is required for Marinus and the new transmissions lines needed in North West Tasmania to proceed. “Although Tasmanian electricity customers would be no better off with Marinus Link in service, they would pay a significant share of the project costs under the current transmission pricing rule,” a TasNetworks discussion paper said. “It shows that New South Wales and Victoria obtain the majority of the benefits, being 42 per cent and 47 per cent respectively.”

In plain English, who pays for the transmission of electricity is currently based on geography, not benefit. So under the current rules, Tasmanian power consumers would be lumped with a multibillion-dollar bill for Marinus so people in Victoria and NSW can access our cheaper power. That’s a dud deal for Tasmania if ever I saw one. The State Government must go to COAG, stand up to the bigger states and the Commonwealth Government and secure a fair deal for Tasmania for its renewable energy. The rules need to change so that Tasmania gets the benefits of exporting its renewable energy to the mainland. Tasmania cannot afford to get this wrong.

The State Government likes to resort to personal attacks when anyone casts doubt on its competency, when what’s needed for Marinus is an honest acknowledgment of the challenges and a genuine commitment to get the best outcome for Tasmania. So I say to the State Government – grip this up and get moving. Tasmania is the jewel in the country’s crown with enormous untapped potential. But our potential will never be unlocked so long as Marinus increasingly looks like an episode of the ABC TV nation-building satire Utopia.

Andrew Wilkie is the independent member for the federal seat of Clark.