A $1 billion government loan will be worthwhile if it helps build an open access railway that rewards local businesses, Derel Wust, managing director of rail signalling firm 4Tel, has said.
A recent push by Indian conglomerate Adani for roughly $1 billion in funding from the Commonwealth’s Northern Australia Infrastructure Facility to build a coal railway has been criticised on environmental and economic fronts.
But Wust thinks the funding would be justified if the project was built and operated the right way.
“If this money has the purpose of creating an open-access railway that will contribute to the opening-up of the Galilee Basin to other mines, local industry and jobs growth, and royalties to the Government and taxpayer, then a $1 billion investment makes sense,” he said late last week.
Wust, whose business commonly competes with foreign firms for local contracts, believes the Adani funding would only be justified if measures were taken to ensure value is realised in Australia.
He believes the rail line should be operated by a nationally-owned infrastructure company, “with Adani only being a minority shareholder and having a board seat”.
“This [will] allow the Government to competitively source Australian services and technology on the line to promote Australian jobs and technology exports,” he said.
“This nationalistic approach is quite normal overseas when governments invest,” he explained.
“They make sure the national companies receive competitive preference in supplying strategic items to stop the investment simply flowing overseas into foreign coffers.”
Wust is opposed to the funding if these measures aren’t taken.
“If the Government via its fund is going to commit $1 billion of taxpayer funding, while promoting a wider innovation agenda for jobs and export growth, whose jobs and growth are they referring to with this [investment]?” he asked.
Adani’s chairman, Guatan Adani, met with Prime Minister Malcolm Turnbull last week to confirm the company’s intentions to apply for NAIF funding for its railway.
Environmental groups have rejected the bid, saying the NAIF should only be used for projects which do not contribute to global warming.