Ship lift election promises continue – this time it’s Labor’s turn

by | Aug 10, 2020 | NT Politics | 1 comment

By Zoe Moffatt

Darwin’s $400 million ship lift project will see calls for expressions of interest this week after negotiations originally began in 2016 under the Giles government – and two years after the Auditor General found there has never been a cost-benefit analysis done on the project.

The ship lift was part of the Giles government’s “strategy to diversify the economy and ensure a smooth transition after the completion of Inpex,” then chief minister Adam Giles said 12 days before the election in 2016.

Chief Minister Michael Gunner announced today – 12 days before the 2020 election – that construction will begin next year and it will contribute around $260 million to the economy each year once opened.

This follows Mr Giles’ August 2016 announcement that Pearl Marine Engineering was the preferred proponent for the ship lift, after being given major project status in December 2015.

Despite being named as one of the Labor Government’s five major projects “aimed at boosting the economy” in April 2017, construction on the ship lift has not yet started.

Chief Minister Michael Gunner said the government is “working on creating new jobs for Territorians” and four years ago Mr Giles said the ship lift will “employ more Territorians”.

The ship lift “will create more than 500 jobs during construction and 400 long term jobs,” Mr Gunner said today.

In 2016, Mr Giles said the ship lift is “all part of the Country Liberals’ plan to… improve our unique way of life here in the Territory,” and today Mr Gunner said “the ship lift will help the Territory become Australia’s comeback capital”.

The Gunner Government has promised $100 million in funding, which was also promised by the Giles government in 2016.

The Northern Australia Infrastructure Facility (NAIF) will kick in the remaining $300 million in the form of a loan to build the lift, NAIF said.

In 2018, Auditor General Julie Crisp found the NT Government’s $100 million figure was plucked out of thin air and that a proper cost-benefit analysis was never completed.

Ms Crisp wrote the decision to offer $100 million “was premised upon the availability of funds rather than the cost of the project”.

“No cost benefit analysis modelling was performed, before or after the announcement, to determine the effect on return that would result from the decision to invest up to $100 million,” she wrote.

An early pre-feasibility report considering the direct economic benefits of the entire proposed marine maintenance precinct found it would return just 65 cents for every dollar spent, but the rest of the project has since been scrapped and will now only be a ship lift facility.

The government is now estimating the project will take two years to build and will be operational in 2023.

Paspaley Group will operate the ship lift under a 10-year renewable agreement, and “intends to relocate its current out-of-water marine servicing operations to the East Arm site, once it is operational,” the Department of the Chief Minister said.

The ship lift will be the largest in Northern Australia and will save 10 days sailing time traveling to another facility, according to the government.

However, Australia Defence have not committed to using the facility.

The ship lift will have four wharves, 20 hectares for repair and maintenance works, and be able to lift vessels up to 5,000 tonnes, NAIF said.

Anyone will be able to pay to use the ship lift and the pricing will be controlled by the utilities commission.

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