I Jj AUJsrHALI,%
PRINU P-I I, S, T R 6 November 1978
LOAN COUNCIL FINANCING OF DEVELOPMENT PROJECTS
The Commonwealth and State Governments, meeting as
the Loan Council, today approved an entirely new borrowing
program which will have a significant impact on Australia's
development. The Loan Council, acting in accordance with guidelines
set at its meeting last June, approved the first projects to
form part of this new program.
The projects approved cover all six States and
provide for a total borrowing program of $ 1767 million over
eight years, commencing with borrowings of $ 158 million . this
financial year. This approval is the culmination of more than two
years of intensive study and discussion. Work commenced in
June 1976 on the examination of particular financing needs in
the provision of infrastructure, especially for development
projects. This work arose out of a concern that future major
development projects, with financing requirements which could
not be accommodated within normal " semi-government" borrowing
programs, might be impeded unless a system of providing special
additions to normal borrowing could be developed.
At its meeting in June 1978, the Loan Council adopted
= trrangements for infrastructure financing which set out guidelines
for consideration by it of proposals for special additions to
the normal annual " semi-government" borrowing programs and
for overseas borrowing by authorities.
I Under the guidelines, these special additions would
be for proposals which could not be reasonably accommodated within
resou. qces normally available to the Government and the authority;
wohri cpuhb lpirco viudtei listeyr viecnetse rporfi skeisn; d s naonrdm wahlilcyh prhoavvei desdp ebcyi alGovernment
significance for development. Factors which would properly
be taken into account in considering proposals would include
whether the project: ,/ 2
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contributed to the development of Australia's
national resources;
contributed to the balance of payments;
helped strengthen the structure of industry;
contributed to emp Joyment.
These additional borrowings were thus designed to
provide essential facilities which would encourage productive
enterprises to commence or expand. In many instances, the
provision of new infrastructure would speed up the development
of new export-oriented natural resource projects in
decentralised areas.
The Loan Council decided in June it would consider as soon
as practicable later this year the first batch of projects
submitted by the States within these guidelines. The
Conumonwealth Budget was framed in the'knowledge that applications
for such additional borrowings commencing in 1978/ 79 would be
considered by Loan Council.
The State Governments proposed a total of 12 projects
for special borrowing under the program and since June these
projects have been the subject of intensive examination and
report by Commonwealth and State officials.
In assessing its attitude to the projects, the
Commonwealth has been particularly conscious of its overall
economic managerent responsibilities and the need to ensure
that the level of special borrowings approved, both in total
and annual requirements, is consistent with the Commonwealth's
fiscal and monetary policy objectives. There could be no
question of allowing the level of special borrowings to
compromise our steady progress towards economic recovery.
Subject to this overriding economic policy constraint,
the individual projects were assessed in relation to the
program guidelines. one major group of projects approved will encourage
further substantial private development of our natural resour-ces.
The development of Australia's coal export industry
r quire3 the provision of efficient port facilities for loading
thlre coal. There are two coal-loader projects one from
New South Wales, the other from Queensland. a Wt
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Port Kembla Balmain Coal Loader Project
( special borrowing addition of $ 89 million approved)
This involves a new coal loader and stockpiling
facilities at Port Kembla, more than doubling annual
capacity; and augmentation of the Balmain loader to
increase its capacity significantly. This extra
loader capacity is required to accommodate the expansion
of mines in the West, South West and Southern coalfields.
The project will enhance economic growth and nonmetropolitan
employment in N. S. W.
Coal Export Facilities at Hay Point ( Qld.)
( special borrowing addition of $ 75 million approved)
involving the provision, at Hay Point, south of
Mackay, of on-shore facilities such as rail unloading
and stockpile area and off-shore facilities including
trestle and conveyor, a berth and dredging the
special addition is for the off-shore facilities.
The project will enable the development of major
export coal projects ( German Creek and Oaky Creek)
around which new townships will be developed. The
coal development will add to Queensland State
revenues through payroll tax, royalties and rail
freight.
Two other projects closely related to major private
resource development will not involve immediate expenditure
in 1978/ 79. However, approval now will indicate to the companies
concerned that the necessary infrastructure is assured and
encourage them to make favourable decisions for development.
Redcliff Project
( special borrowing addition of $ 186 million approved)
plans to use liquid hydrocarbons from the Cooper
Basin as feedstock for a petrochemical plant at
Redcliff. The special addition of $ 186 million is
to provide a power station, pipelines for liquids
and gas and other infrastructure to service the
petrochemical complex. The Redcliff project will allow
the inmediate exploitation of natural gas liquid
reserves which would ytherwise be flared and will
accelerate the development of crude oil and condensate
resources. It will provide significant regional
benefits to South Australia.
Dampier-Perth Gas Pipeline
( special borrowing addition of $ 416 million approved)
involving the construction of a pipeline to bring
natural gas 1,500 kilometres from Dampier to Perth,
for use in Perth and the South West of the State.
b / 4
4-
The project is an integral part of the $ 3,000 million
North-West Shelf project and will enable about half
the natural gas resources to be consumied in Australia.
Natural gas supplied to the Perth/ South West region
will assist the future broadening of the industrial
base of Western Australia.
One other project provides infrastructure for a
specific private developirznt.
Wars ley Alumina Project
( special borrow; ing addition of $ 41 million approved)
involves the establishment of a bauxite-alumrina
project in the South Wes-t of Western Australia the
special additions are to provide railway and water
supply facilities for the project. The infrastructure
will contribute to the development of a national
resources project which will provide employment in tne
State and be a stimulus to decentralisation. I
The second major group of projects approved will help
to meet increased investment in the provision of electricity
generating capacity. These projects are of a kind normally
provided by public utilities and reflect the fact that additions
to electricity generating capacity need to be. made in large
blocks. The provision of adequate generating capacity is
necessary for the continued development of Australian industry-.
1hese projects are:
Loy Yanq Power Station ( Vic.)
( special borrowing addition of $ 343 million approved)
a project comprising an open cut brown coal mine,
two power stations and associated works located
near Traralgon in the Latrobe Valley.. The project
is the main element in the long-term expansion
program for meeting Victoria's electricity needs,
and will contribute to the development of Victoria's
brown coal reserves. Industry development will be
assisted and there will be a stimulus to employment. */ 51
Hydro Electric Power Develop~ nent ( Tas)
( special borrowing addition 6f $ 75 million approved)
involving assistance in the funding of peak capital
expenditure in the further development of Tasmania's
hydro-electric power system. The large scale
production of relatively low cost power, using
Tasmania's abundant water resources, is a major
factor in the development of the Tasmanian economy
and an incentive for industrial investment.
Eraring Electricity Project
( special borrowing addition of $ 200 million approved)
involving a major new power station at Eraring on.
Lake Macquarie with associated mines and transmission
lines together with major expansion at two other
stations. The project is needed for the provision
of adequate electrical energy in N. S. W. in the first
half of the 1980' s. Proposed development in the
coal and forest product industries might not proceed
in its absence. Significant employment will bd
created in both the construction and operating phases.
Power Station Projecth ( Qld)
( special borrowing addition of $ 130 million approved)
including completion of the Gladstone power station,
completion of the Wivenhoe pump storage hydro-electric
project and work on first stage of the new Tarong
power station. The projects will require the
development of further coal mines and will make
productive use of available water resources. The
provision of adequate power supplies will aid
Queensland industrial development.
Pilbara Region -Power Supply Integration
( special borrowing addition of $ 111 million approved)
the power generating capacity in the Pilbaira region
has developed in a fragmented manner by individual
companies and the State Energy Commission is seeking
to integrate the system. The integration will
contribute to a rationalisation and more judicious
use of resources and should help decentralisation,
stimulate industria~ l demand and lead to increased
employment.
There are two other projects that do not fall into the above
categories. / 6
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World Trade Centre ( Vic)
( special borrowing addition of $ 56 million approved)
The proposal covers the first stage of the World
Trade Centre complex to be constructed on behalf of
the Melbourne Harbour Trust on the edge of the central
business district of Melbourne. Melbourne is
Australia's leading export port and the proposed
trade centre will be a focal, point 1for the development
of overseas markets, making a positive contribution to
Australia's balance of payments. In giving its
approval to this project, the Loan Council agreed
unanimously that approval was on the basis that no
other State would in the future bring forward a
similar proposal under the infrastructure guidelines.
Water Supply Projects ( Tas)
( special borrowing addition! of $ 35 million approved)
involving the augmentation of supply to the Hobart
metropolitan area and to the North Esk Region and
the construction of a regional supply system for the
North West of Tasmania. Each of the projects makes
use of Tasmania' s abundant water resources and will
contribute to industrial development in the Stae.
As a result of this approval, the Tasmanian Premier
agreed that his State would not be seeking any funds
under the current National Water Resources Program.
The additional borrowings approval by the Loan Council
will be phased over the eight years beginning in 1978-79. The
phasing of the projects is such * that there is a relatively
steady borrowing requirement year by year. In 1978-79, the
additional borrowings will be a maximum of $ 158 million. over
the following five years, the annual additional borrowings will be
1979-80 $ 393 million, 1980-81 $ 316 million, 1981-82 $ 3113 million,
1982-83 $ 236 million, 1983-84 $ 283 million. The Commonwealth
Government considers this program to be appropriate and
consistent with the Government's fiscal and monetary policies
and thus will assist in the nation's economic recovery.
Attachment 1 shows the total sum approved for special
borrowing, project by project, and the phasing. Attachment 2
provides more detailed infomration on the individual projects.
Loan Council decided that applications for overseas
borrowing in connection ' with the approved projects will require
3' aparate Loain Council consideration in the light of particular
recauirements of the project concerned and economic and financial
c. rcumstances at the time. In current circumstances,.
applications for overseas borrowings in respect of the 1978-79
approvals could be expected to receive favourable consideration
by Loan Council. / 17
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I would emphasise the care which has gone into the
planning of this impurtant new initiative and the degree of
co-operation attained between the Commonwealth and th4 States.
Commonwealth and State Treasury off i 4ers have been wo ~ king
together on the mratter since June 1916.
The Program will be a continuing one to which new
and worthwhile projects will be added as the initial projects
progress and ' reach completion. Additions to the Program will
of course be subject to Loan Council scrutiny against the
program guidelines and the economic circumstances of the time.
In view of the size of the initial project borrowings approved
today and the concentration of these borrowings in the earlieryears,
the Commonwealth indicated that it would not favour any
additions to the. Program for the next three years.
Loan Council acknowledged that the additional
borrowings approved under this program will need to be borne
in mind in considering the normal " semi-government" borrowing
program in June.
It was unanimously agreed that as far as possible,
all capital equipment required for the projects should be
purchased from Australian manufacturers.
This important initiative is essentially a vehicle
for the long term development of our nation and its resources.
It is designed to strengthen and deepen our capital structure
and hence increase our productive capacity.
The projects will, in the shorter term, provide a
useful addition to employment opportunities and will have longer
term effects arising from privatg sector development which is
encouraged and assisted by the infrastructure provided.
This program is the start of a new era in Commonwealth/
State co-operation in development.* More importantly, it
provides tangible evidence of the confidence which all Governments
in Australia have in our future development -it is our vote of
confidence in the future of Australia.
ATTACHMENT 1
SPECIAL ADDITIONS TO STATE SEMI-GOVERNMENT
ITFRASTRUCTURE FINANCING GUIDELINES
JUNE 1978 PRICES BORROWING PROGRAMS UNDER
AMOUNTS AND PHASING IN
PROJECTTOTAL SPECIAL
ADDITION $ m
Coal Loaders
Eraring Electricity
Loy Yang Electricity.
World Trade Centre
Hay Pt Coal Loaders
Electricity Projects
Redcliff
-Dampier-Perth Pipeline
Pilbara Electricity
Worsley Rail and Water
Hydro-electric power
Water supply projects 89
210 343 56
75
130 186
416 111 41 75 35 DISTRIBUTION TO PROGRAM ( 1)
1978/ 79 1979/ 80 .1980/ 81 1981/ 82 1982/ 83 1983/ 84
24 55 35 10 9
15 10
158 32
80 88 24. 40 11 5
20 15 8
393 33 37
70 8
316 1984/ 85 1985/ 86
119 4
263 16
283
1
15 5-
313 17
27
4
23
Any failure to add crosswise due to rounding.
STATE NSW
VIC QLD SA WA TAS
ERARING ELECTRICITY PROJECT ( NSW)
Brief Description A major new station at Eraring on Lake Macquarie of
4 x 660 MW units, and associated mines and transmission lines,
together with major expansions at two other stations ( Vales
Point and Wallerawang) create a peak expenditure situation
over the three years commencing 1978-79. Work for the first
two units at Eraring has been in progress since 1977 and
contracts have been let for some components of the other two
units. Funding Arrangements A total of $ 682 million at June 1978 prices, will be
required over the three years. $ 456 million of this is required
for Eraring. The availability of funds from internal generation,
depletion of reserves and normal loan allocations is anticipated
to be $ 472 million, at June 1978 prices, leaving a shortfall
of $ 210 million. Special additions are sought for this.
Phasing Expenditure at June 1978 prices, in the three years
commencing 1978-79 of $ 211, $ 238 and $ 233 million ( total
program) and $ 87, $ 174 and $ 195 million ( Eraring). Very
little flexibility exists in these timings. The special
additions to borrowings will be required as follows:
1978-79 1979-80 1980-81
Sm 55 80
General Comments Project is needed for the provision of adequate
electrical energy in New South Wales in the first half of the
1980' s. Proposed developments in the coal industry and forest
product industry might not proceed in the absence of clear
indication of energy availability.
Improvement of employment opportunities in a country
region a peak of 1,100 workers will be employed during
construction and some 1,700 will be required for operating the
power stations and coal mines.
COAL LOADING FACILITIES ( NSW)
Brief Description New coal loader and stockpiles for Port Kembla
to more than double annual capacity to 15 million tonnes
and to increase from 70,000 to 110,000 tonnes the size of
ships that can be handled. Augmentation of Balmain loader
and stockpiles to increase capacity from 2.8 to 4.5 million
tonnes per annum and ship size from 40,000 to 55,000 tonnes.
Tenders called for some parts of the works, others in
advanced stages of planning.
Funding Arrangements Expected cost at June 1978 prices of $ 89 million.
Other commitments of industry and Maritime Services Board
necessitate financing in full by special additions.
Phasing Special additions required in the three years
commencing 1978/ 79 of $ 24, $ 32 and $ 33 million at June
1978 prices. Delayed completion would be at the expense
of economic development, employment and sales of export
coal. General Comments Exports of coal from the West, South West and
Southern Coal fields already exceed loader capacity.
Mines cannot expand unless loaders are provided and the
increased ship sizes able to be handled will aid market
diversification. Will benefit balance of payments through
increased export earnings.
Benefits for non-metropolitan employment: will
aid decentralisation; will contribute to New South Wales
State revenues.
I
LOY YANG POWER STATION ( VIC)
Brief Description The Loy Yang project is a major base-load power
development comprising an open cut brown coal mine, two power
stations, each with an installed capacity of 2000 MW, and
associated works located near Traralgon in the Latrobe Valley
( approximately 160 kilometres from Melbourne).
Preliminary work on the Iroject commenced on site
early in 1977 and all major contracts for the first 2000 MW
stage have been let.
Funding Arrangements The project, to be constructed by the State Electricity
Commission of Victoria, is estimated to cost $ 2,050 million at
June 1978 prices. Special additions to the Commission's borrowing program
totalling $ 343 million at June 1978 prices, are required to
assist in financing the initial stages of the project.
Phas ing The special additions to borrowing would be required
as follows: $ m 1978-79 1979-80 1980-81 1981 -82 1982-83
88 37 119 64
It is essential for construction work to continue
as planned in order to ensure that the first generating capacity
will be available for commission in 1983/ 84.
General Comments The Loy Yang project is the main element in the
State Electricity Commission's long-term expansion program
for meeting Victoria's electricity needs.
During construction of the project there will be
some 1,500 people directly employed. On completion the
project will directly employ an additional 1,000 persons in
the Latrobe Valley.
WORLD TRADE CENTRE, MELBOURNE ( VIC)
Brief Description The proposal covers the first stage of the World
Trade Centre complex proposal for construction by the
Melbourne Harbour Trust on the edge of the central business
district of Melbourne. The first stage of the complex comprises
the world trade centre itself, a trade mart and office
accommodation foi organisations and firms having a close link
with overseas trade, including the Melbourne Harbor Trust.
Tenders have been called for this stage of the project.
Funding Arrangements The project will be constructed by the Melbourne
Harbor Trust and a special addition of $ 55.9 million is sought
to the Trust's borrowing program.
A decision on the availability of funds is required
to enable work to commence during the last quarter of 1978
calendar year.
Phasing The special addition to borrowing would be made as
f oll1ows: 1978-79 1979-80 1980-81 1981-82
24 20 2
As tenders ' have been called work could commence as
soon as funds have been approved.
General Comments Melbourne is Australia's leading export port.
The proposed trade centre will be a focal point for the
development of overseas markets and for information on
commodity prices, freight and insurance. By promoting export
opportunities for Australian industry it could make a positive
contribution to Australia's balance of payments.
During the construction period the project will
provide employment for more than 1,000 people. In operation
it is exp~ ected to increase the efficiency of port administration.
I e
COAL EXPORT FACILITIES AT HAY POINT ( OLD)
Brief Description Provision of new coal loading facilities at Hay Point,
south of Mackay, to be operational by 1981 to meet planned coal
export growth. On-shore facilities include rail unloading and
stockpile area while off-shore facilities include trestle and
conveyor, a berth and dredging.
Proposed capacity is 12 million tonnes per annum with
provision for future expansion to 24 million tonnes per annum.
Funding Arrangements Estimated cost of facilities is $ 115 million at
current prices. Proposed that private sector ( coal developers) will
provide finance for the on-shore facilities by way of security
c'eposit on shared basis, approximate cost $ 40 million.
In addition private sector will meet the cost of other mining
infrastructure ( township facilities, major railway improvements,
power and water supply). This cannot be fully quantified at
this stat e but the cost of railway improvements alone for the
first tL-wo mines ( which will use only half the proposed capacity)
will be approximately $ 100 million.
Proposed that State meet the cost of off-shore
facilities, estimated cost of $ 75 million at current p~ rices
all b. T special additions.
PhasingZ 1979-80 $ 40 million, 1980-81-$ 35 million.
Detailed planning and construction needs to commence
by end 1978 to enable facilities to be ready for use by 1981
when the first mining project is expected to begin shipments.
General Comments The provision of the facilities will enable the
development of major export coal projects in Queensland ( German,
Creek and Oaky Creek). The projects will contribute significantly
to Australia's balance of payments through increased export
earnings. There would be additions to Queensland State
revenues through payroll tax, royalties and rail freight.
It is expected that townships of around 4,000-5,000
people will developed for each mine.
I. POWER STATION PROJECTS ( OLD)
Brief Description To cover projected growth in demand, additional
electricity capacity will be required over the next five
years, including completion of Gladstone power station
by 1981 ( additional 550 MW).
Completion of Wivenhoe pump storage
hydro-electric project by end of
1983 ( 500 MW), and
Work on first set of new Tarong power
station to be completed by 1985
( total. Tarong 1,400 MW).
Funding Arrangements Total requirement is in excess of $ 1,200 million
( at current costs), $ 130 million of which is required as a
special addition balance to be funded internally including
normal loan allocation.
Phasing 1979-80 $ 70 million, and 1981-82 260 million.
Approval required now to enable planning of development
and level of power tariffs.
General Comments The projects are needed to maintain power supply
in the State at anticipated levels. The stations at Gladstone
and Tarong will require the development of further coal mines;
while Wivenhoe will make use of avcilable water resources.
The development of industry in Queensland will be aided by the
provision of adequate pover supplies.
REDCLIFF ( SA)
Brief Description The project plans to use liquid hydrocarbons from
the Cooper Basin in South Australia as feedstock for a
petrochemical plant at Redcliff. The special addition to the
Loan Council borrowing program is to provide a power station,
pipelines for liquids and gas and other infrastructure to
service a petrochemical complex at Redcliff. The current
status is that Dow Chemical ( Aust) Ltd is ready to carry out
detailed feasibility studies as soon as infrastructure is
assured. Funding Arrangements Total investment in the Redcliff project is estimated
at W95 million ( in 1978 prices).
A private sector component of $ 649 million
is to be financed by Dow and the Cooper
Basin Producers.
A public sector component for infrastructure
of $ 256 million is to be funded by:
South Australian Government $ 253.5 million
Australian National Railways $ 2.8 million.
A special addition of $ 186 million is
required by South Australia as part of
its contribution.
Phas ing The special addition to borrowings would be raised
as follows: 19-0 1980-81 1981-82 1982-83 1983-84
$ m 11 70 96 4 4
General Commients The Redcliff project will allow the immediate exploitation
of natural gas liquid reserves which might otherwise be lost
flared). It will contribute positively to the balance of
payments in export earnings and by substitution for products
that would otherwise be imported caustic soda; vinyl
chloride monomer). The project will provide significant regional benefits
to South Australia. The Redcliff complex will provide direct employment for
710 people; and it is estimated that the total increase of 1420
jobs -, ill result. The project should create nearly 4500
construction jobs during its peak phase.
THE PILBARA REGION POVER SUPPLY INTEGRATION ( WA)
Brief Description Because of the rapid development of the Pilbara since
the early 1960' s, electricity supplies in the region could not
be provided by the State Government and individual mining
companies developed their own electricity systems. The State
Energy Commission is seeking to progressively assume its full
normal role in -the Pilbara region with the intention of ultimately
supplying all customers, industrial, commercial and residential.
The present fragmented approach to the provision of power in the
region is wasteful of resources. Currently there are ninety
one generating units spread over eleven separate medium sized
systems operated by five different organisations.
Funding Arrangements All capital. expenditure * for the interconnections
and additional plant will be raised by the State Energy
Commission. In June 1978 prices $ 111 million will be needed
and the total amount is sought in the form of special additions
under the infrastructure financing guidelines.
Phas ingr The timing of expenditures is estimated to be
million in 1979/ 80, $ 11 million in 1980/ 81, $ 15 million
in 1981/ 82, $ 16 million in 1982/ 83 and 1983/ 84, $ 27 million
in 1984/ 85 and $ 21 million in 1985/ 86. However this timing
will depend on the pace of development in the region which is
difficult to predict.
It is essential. that integration take place prior
to any fuither major expansion of the mining industry since
power facilities normally take longer to construct than a
mining expansion.
Genera. Comments The proposal will contribute to a rationalisation
and more judicious use of resources. The existence of an
integrated power supply will lower the relatively high costs
of power involved in numerous small plants.
The proposal should help decentralisation and by
stimulating industrial demand lead to increased employment.
WATER SUPPLY PROJECTS ( TAS)
Brief Description Special adelitions are required over the next five
years to assist in the funding of peak capital expenditure
required for augmentation of and construction of new water
supplies in three separate areas of Tasmania. The projects
are: The augmentation of supply to the Hobart
metropolitan area by the Metropolitan
Water Board;
The constru: ction of a regional supply
scheme by the North West Regional Water
Authority; and
Augmentation of the Nort h Esk Regional
Water Supply by the Rivers and Water
Supply Commissi~ on.
Funding Arrangements Total capital expenditure on the three water schemes
in the five year period comff. enci ng 1978/ 79 is estimated to be
million at early 1978 prices. Allowing for amounts to be
funded from ordinary loan sources, special additions of
million are reqiuired.
Phasing The special additions to borrowings are required
as follows: 1978-79 1979-80 1980-81 1981-82 1982-83
Sm 10 8 8 5 4
Project has a planned construction period of
six years and was commenced about one year ago. Project ( 3)
has beer. commenced and should be completed in 1980/ 81.
Project has not yet been started.
Any delays to the planned schedules of works relating
to all three projects will result in further shortages of water
and more severe rationing of domestic supplies.
General Comments Each of the projects makes use of Tasmania's abundant
water resources and will contribute to industry development and
thus to employment. The projects have indirect implications
for Australia's balance of payments through the supply of water
essential to industrial processes.
DAMPIER-PERTH GAS PIPELINE ( WA)
Brief Description The construction of a pipeline to bring natural
gas from Dampier 1,500 kilometres to Perth, and for marketing
the gas in the South West of the State. The project is a
key component of the North West Shelf gas development which
involves the production of natural gas for the Pilbara, Perth
and South West of Western Australia and liquified natural gas
for export. The Joint Venturers developing the North Rankin
Gas Field are well advanced with their feasibility and design
studies of the overall project and are scheduled to make a decision
with the State in the latter part of 1979 whether or not to
proceed. Funding Arrangements Private sector investment in the North West Shelf
Gas Project is estimated at $ 3,000 million in 1978 prices.
The public sector expenditure in the pipeline is estimated at
$ 442.5 million ( June 1978 prices) of which $ 416 million is
required as a special addition under the infrastructure financing
guidelines. Phas ing Latest timing estimates of expenditure of the
$ 416 million special addition ( June 1978 prices) are $ 133 million
in 1982/ 83, $ 263 million inl983/ 0' 4, $ 17 million in 1984/ 85
and $ 3 million in 1985/ 86.
A decision on the availability of funds is required
now to enable the Energy Commission and the Western Australian
Government to firmly declare their ability to proceed and
enable the developers to compile their feasibility and design
studies an~ d make a decision on the whole North-West shelf gas
project by September 1979.
General Comments The pipeline is an integral part of the proposed
North-West Shelf gas development and will enable about half of
the natural gas resources to be used for Australian consumption.
The natural gas supply from Dampier to Perth/ South-West region
will help broaden the industrial base of Western Australia.
The project should assist the balance of payments by allowing
imported fuel oil to be replaced by gas.
The pipeline project will employ directly some 1000
to 1500 people during the construction phase lasting 18 to
24 months.
1
WORSLEY ALUMINA PROJE~ CT ( WA)
Brief Description The establishment of a bauxite-alumina project in
the South West of Western Australia with an initial alumina
capacity of 1 million tonnes per year is proposed. Bauxite
will be either railed or transported by conveyor to the
refinery and water requirements for the first stage of the
project will be piped from t'ie Wellington Dam. The special
additions to borrowing programs are to provide the railway
and water supply facilities.
Punding Arrangements Assuming bauxite is railed to the refinery the
private sector investment in the total development is estimated
at $ 695 million ( June 1978 prices).
Total public sector investment is estimated at
million ( June 1978 prices) and special additions of
$ 41.1 million ( June 1978 prices) are sought for the provision
of water supply and rail facilities which will be funded entirely
by the public sector.
Phasing The proposed phasing of the borrowings is:
1978-79 1979-80 1980-81 1981-82
SM9 20 12 1
A decision on the availability of funds is required
now to facilitate construction planning programmed to begin
in January 1979.
General Comments The infrastructure proposal is associated wuith a
private investment project that will contribute to the
development of national resources. The alumina project will
generate export income.
The construction of the Worsley refinery will provide
100 construction jobs initially, rising to a maximum of 1600
withan average of 1000 for the duration of the construction
period. The operation of the project will require 164 persons
employed at the mine site and 605 persons at the refinery.
HYDRO ELECTRIC POWER DEVrELOPMENT ( TAS)
Brief Description Special additions are sought over the next five
years to assist in the funding of peak capital expenditure in
the further development of Tasmania's hydro-electric power
system. Two specific projects will be involved, namely the
Pieman River Power Development and another, probably the
Lower Gordon Power Development. The Pieman Scheme was commenced
in 1975 and is now scheduled for completion in 1986.
Construction of the Lower Gordon Scheme is scheduled to start
in a substantial way in 1981/ 82.
Fund injZ Arrangements At January 1978 prices total estimated capital
expenditure by the Commission for the five years commencing
1978/ 79 will be $ 347 million. After allowing for contributions
from internal funds and normal loan allocations, special
additions of $ 75 million are required.
Phasing million per annum for the five years beginning
in 1978/ 79. The decision is required now to enable the capital
construction program to proceed as planned so that the power
system will be able to meet the demands placed on it.
General Comments Water is one of Tasmania's most widespread natural
resources and the large scale production of relatively low
cost hydro-electric power is a major factor in the devellopment
of the Tasmanianeconomy. Production of additional power is
required to meet normal long-term growth as well as supplying
needed increments for major industries.
The Commission employs an outside construction force
of 900 men, together with additional support staff of at least
200.