On behalf of the Prime Minister, Federal MP Warren Truss recently released the Northern Queensland Sustainable Resource Feasibility Studies, completed by GHD to test the feasibility of major agriculture and power developments in the region, and to identify the economic impacts of the most feasible projects.

GHD’s Project Director John O’Brien said the studies undertaken would provide valuable insight to the technical, commercial and economic drivers of major agriculture and power generation investment in the region, and Northern Australia more broadly.

“These studies identify the immense natural resources available in Northern Queensland, as well as the challenges in developing large-scale projects, particularly agricultural projects that rely on multi-generational water infrastructure. During our investigations we noted the policy focus on northern Australia, regional Queensland, agricultural production and electricity prices – all issues relevant to the objectives of the projects assessed,” John said.

“There are some major challenges financing water infrastructure to support new large-scale irrigated agricultural projects because that infrastructure is designed to operate and will provide economic value to the community for more than 100 years. This is well beyond conventional financing horizons.

“Global markets, investor characteristics and our natural resources are favourable to large-scale irrigated agriculture but the expectation that a single project can bear the entire cost of 100-year water infrastructure is a critical issue to address”, John said.

The Terms of Reference for the studies specifically noted the criteria to achieve downward pressure on delivered electricity costs for major industrial users in North Queensland. It was identified that electricity delivery costs are higher for large industrial customers in North Queensland than other locations, such as Gladstone.

“The delivered electricity price paid by major electricity users in North Queensland was a focus of the Terms of Reference. We identified risks and opportunities associated with the studied projects in relation to their impact on delivered electricity prices,” John said.

“These studies also assessed a range of potential major power station projects. The power station project that was most prospective, from an investment view, was likely to decrease the delivered electricity prices for major users in North Queensland and put downward pressure on wholesale electricity prices across the entire state,” John said.  The studies identified strategies to progress the major power station development.

The studies also identified strategies for potential proponents to progress the most viable major irrigated agriculture project in the region. There are strategies for both the private sector and governments to progress the water and agricultural development.

There are recommended actions that the Australian Government and the Queensland Government could take if they wish to encourage the further development of each project.

In September 2013 GHD, supported by a range of industry-leading advisors, was appointed by Townsville Enterprise to complete the studies with funding from the Australian Government.

John said GHD was proud to have been appointed to conduct these studies given the company’s long history in North Queensland and strong belief in Northern Australia’s economic potential.


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