GFG Alliance fails to trigger $50m in state government funding pledged eight years ago
Millions of dollars in promised Whyalla steelworks support has been holstered and left languishing as locals struggle under the weight of unpaid bills.
Not one cent of $50m in taxpayer funds promised to the Whyalla steelworks owner for vital new infrastructure has been spent in eight years, as its owners’ financial challenges now threaten Whyalla and the state’s flagship hydrogen project.
State opposition leader Vincent Tarzia is calling for the languishing funds to be freed up to help Whyalla locals as the steelworks’ owner fails to pay “tens of millions of dollars” in unpaid bills scattered across the state.
“I think at the moment that money seems to be quarantined, there needs to be a mature debate about how that money could be better utilised for the future of Whyalla,” he said.
Former Premier Jay Weatherill pledged $50m for “technological efficiencies and upgrades” at the Whyalla steelworks eight years ago, and the money has stayed on the table through two new governments led by Steven Marshall and Peter Malinauskas.
Another $63.2m in taxpayers’ funds earmarked for installing low-carbon electric arc furnace technology and work to transform Whyalla into an “international green iron and steel export hub” was announced by the federal climate change minister Chris Bowen in January last year.
To date $10m has been spent with funds paid when project milestones are reached.
Mr Tarzia called on the state government to be more transparent about taxpayer funds, also referring to its $593m flagship hydrogen project election commitment turning into an “experimental hydrogen hoax” as plans to build a plant with the steelworks as its major customer fall apart.
Around $23m of taxpayers money continues to be spent on a dedicated hydrogen SA office, 55 staff “and minimal progress”, Mr Tarzia said, as Premier Malinauskas opens the door to scaling back his flagship hydrogen plan and pumping the money into a Whyalla rescue mission.
Mr Tarzia also raised concerns about the government not telling the public earlier about GFG Alliance owing $15m to SA Water and failing to say how much in royalties was owed to the government.
“The government has shown a lack of transparency,” he said.
His trip to Whyalla on Friday would uncover more details about how precarious the future is for the region, with meetings planned with a GFG Alliance representative, the local council and creditors.
Treasurer Stephen Mullighan dismissed Mr Tarzia’s push to have the $50m funding pledge re-purposed, saying it was important to Whyalla and creditors that the state government remains committed to the steelworks’ future and that money stays “on the table”.
“The last thing anyone in SA wants to see is any move by the government that reduces the importance for the operator of the steelworks to invest in the plant,” Mr Mullighan said.
He also committed the government to continuing to support its hydrogen plan and again urged the steelworks’ owner Sanjeev Gupta to take action to pay his bills.
Meanwhile, Port chief executive officer Matthew Richardson backed sponsor GFG Alliance today and would not be drawn on how much the company may owe Port Adelaide Football Club through their deal.
It is understood GFG Alliance, one of two “co-major partners” at Port Adelaide, has failed to meet some sponsorship payments.
“All I would say is that… it’s not really about us, it’s first and foremost, it’s about the people in the community of Whyalla, it’s about South Australia, and Port Adelaide will continue to support GFG just like there are many businesses and people in Whyalla doing the same thing,” Mr Richardson said.
Mr Gupta said “the GFG business in Whyalla is currently navigating one of the most challenging periods in its history, and we understand the anxiety this creates for our people and stakeholders about the future.”
“Despite these challenges, rest assured my commitment to Whyalla will not be shaken,” he said.
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Originally published as GFG Alliance fails to trigger $50m in state government funding pledged eight years ago
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