Chapter 3Funding
Introduction
3.1This chapter provides an overview of the funding commitments of the Commonwealth Government and the NT Government, including a chronology of key funding announcements.
3.2It explores the Commonwealth’s assessment of the precinct as an infrastructure proposal as well as the decision-making processes underpinning its $1.9 billion funding commitment including:
the role of government departments and agencies involved in assessing the proposal;
the status of the assessment process before a final equity decision is made; and
the source of any remaining funding needed for the proposal to go ahead.
3.3The chapter then outlines key support in relation to the Commonwealth funding and concludes with the concerns raised by some participants.
Chronology of Commonwealth funding commitments
Former Commonwealth Government
3.4As part of the 2022−23 Federal Budget released in March 2022, the former Australian Government announced funding of $2billion toward the Middle Arm Industrial Precinct, as part of a $7.1billion funding program to support the development of the gas industry and creation of regional hubs. At the time, a breakdown of the $2billion was given as:
$1.5 billion to build new port infrastructure, such as a wharf, an offloading facility and dredging of the shipping channel, to boost the region’s importing and exporting ability;
$300 million to support low emissions Liquified Natural Gas (LNG) and clean hydrogen production at Darwin Harbour, coupled with associated carbon capture and storage infrastructure; and
$200 million to further develop the Middle Arm Industrial Precinct, delivering enabling infrastructure such as a rail spur and a new road network to strengthen supply chains.
Current Commonwealth Government
3.5In the 2022-23 Commonwealth Budget released in October 2022, the new Albanese Government re‑committed funding to the Middle Arm Industrial Precinct proposal, as part of its plans to support economic growth and development across regional Australia. The new Government announced ‘$1.9 billion in equity investment’ for the development of the Precinct, including ‘common use marine infrastructure and regional logistics hubs.’
3.6The Commonwealth’s allocation of funding for the precinct varied slightly between the former Government’s March 2022 Budget and the Albanese Government’s October 2022 Budget, comprising:
a reduction of total funding from $2 billion to $1.9 billion over seven years; and
a new breakdown of costs as follows:
$1.5 billion in planned equity to build shared marine infrastructure at the Middle Arm Industrial Precinct; and
$440 million in planned equity to build new regional logistic hubs in Tennant Creek, Katherine and Alice Springs to support supply links to export sites like Middle Arm.
3.7The Federal Minister for Infrastructure, Transport and Regional Development, the Hon Catherine King MP, stated in October 2022 that the Commonwealth’s investment in the precinct would go to ‘enabling infrastructure, to allow goods and services in and out’ and not to build a new port.
3.8Further, the Australian Government also noted that the equity investment would ‘help support the creation of a major new export hub for clean energy, including green hydrogen.’
3.9In June 2024, the Department of Infrastructure, Transport, Regional Development, Communications and the Arts (DITRDCA) noted that the $1.9billion of Commonwealth funding committed to the precinct was being ‘held in the contingency reserve subject to [the Australian Government’s] final investment decision’.
Assessment of infrastructure proposal
3.10This section examines the main assessment process led by Infrastructure Australia (IA). This assessment is required as the NT Government is relying on significant Commonwealth funding in order for the Middle Arm development to proceed. As per the Infrastructure Australia Act 2008, IA is required to evaluate any proposals seeking over $250 million of funding from the Australian Government.
3.11It is important to note that the assessment process of Middle Arm as an infrastructure proposal is being conducted separately to the environment assessments of the impacts of the proposal under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) and the relevant NT environmental regulations. These two environmental assessment processes—at both the Commonwealth and Territory level—are discussed in‑depth in Chapter 4.
3.12Following an outline of IA’s process, the roles of other departments and agencies in implementing and advising on the Commonwealth’s final equity decision will be discussed.
Infrastructure Australia’s four-staged assessment process
3.13As the Australian Government’s independent infrastructure advisor, IA assesses and prioritises projects based on an evaluation of ‘strategic fit; economic, social and environmental value; and deliverability’. IA is not responsible for funding decisions. Rather, it assesses proposals and advises the Minister for Infrastructure, Transport and Regional Development and other relevant Ministers on which projects represent a priority for investment.
3.14IA is assessing the Middle Arm proposal according to a four-stage approach. According to IA, the four stages in its assessment framework reflect the role the agency plays in project development and review, and align with existing state and territory frameworks. The assessment stages are described as follows:
Stage 1: Defining problems and opportunities
Stage 2: Identifying and analysing options
Stage 3: Developing a business case
Stage 4: Post completion review (conducted after the project has been delivered).
3.15At the time of writing, Stages 1 and 2 of the assessment process for Middle Arm had been completed and Stage 3 was underway.
3.16In Stage 1, the NT Government was required to define the problem and demonstrate that addressing the problem would result in nationally significant social, economic and/or environmental benefits. IA then assessed whether the NT Government demonstrated the strategic case for the problems and opportunities and that they are capable of being addressed. IA positively assessed the Middle Arm proposal, adding it to the Infrastructure Priority List.
3.17As outlined in Chapter 1, IA ‘agreed with the evidence in the [Stage 1] submission and that the value to the economy is nationally significant’. Additionally, IA explained that the Stage 1 submission for Middle Arm by the NT Government ‘identified that there are several private sector projects that could add value to the Northern Territory’s economy.’
3.18In Stage 2, the NT Government was required to identify, analyse and filter options to respond to the problems and opportunities identified in Stage 1. That is, it identified a longlist of options, and used a ‘robust and defensible’ methodology to filter options to a shortlist. IA assessed both the long and shortlist of options and positively assessed this submission. According to IA, the Stage 2 submission by the NT Government:
recognised the export and local economic opportunities offered by Middle Arm;
assessed various packages of projects for suitability against economic, climate, and other objectives;
shortlisted packages for IA to consider; and
included a copy of IA’s feedback on the submission.
3.19As part of Stage 3 (currently underway), the NT Government will be required to analyse the shortlist options and identify its preferred option based on merit. IA will then be required to assess the detailed options analysis process, the merit of the preferred option and the deliverability of the proposal.
3.20As at the time of writing, IA confirmed it had received the business case submission from the NT Government, adding that more information was still required before a final assessment decision was made. No timeline was given for the completion of Stage 3.
3.21As a result of the Stage 2 proposal assessment, IA provided extensive feedback to the NT Government regarding the forthcoming Stage 3 business case, including items to be addressed in the submission, such as:
stakeholder engagement with industry, community and First Nations to demonstrate support for the proposal;
demand analysis to support an assessment of private demand for Precinct infrastructure, and design maturity to provide certainty around cost, schedule and delivery risks;
regulatory initiatives to support private uptake of industrial land and Precinct development;
environmental impacts and mitigants to surrounding coastal, benthic and marine ecosystems,
a clear base case which should establish development activity and greenhouse gas emissions in the absence of government provision or coordination of common user infrastructure, and
cost-benefit analysis based on social, environmental and economic externalities.
3.22The feedback from IA also noted that the Stage 3 business case ‘will need to provide a detailed analysis of carbon emissions generated’ and demonstrate how design options have been assessed against climate scenarios and risks. The business case will also need to include the cost of carbon offsets which are directly attributable to the project, if the proponent is required to measure and report emissions under the Climate Change Act 2022.
3.23In Stage 4, proponents and delivery agencies will conduct a post completion review of the project, to demonstrate whether the project achieved its objectives, delivered the benefits described, and whether the outcomes could have been implemented in a more effective and efficient way.
Commonwealth’s equity funding decision
3.24The committee heard that IA was not involved in Commonwealth funding decisions for the Middle Arm Industrial Precinct. Rather, those decisions were a ‘matter for the department of infrastructure or the government of the day’.
3.25The following section outlines the relationship between the different Commonwealth departments and agencies involved in providing advice on and implementing the Commonwealth’s funding decision.
Role of the Department of Infrastructure, Transport, Regional Development, Communications and the Arts
3.26In relation to Middle Arm, DITRDCA explained that its responsibilities involve the delivery, rather than the assessment, of major infrastructure programs.
3.27In its submission, DITRDCA set out that its role was to ‘support the implementation of the Australian Government’s planned equity investments’. DITRDCA officials observed that, whilst this is a NT Government-led project, the department plays the role of a ‘significant funder.’
3.28In particular, DITRDCA’s engagement with the proposal has focused on the design, analysis and evaluation of a fit-for-purpose governance structure and delivery vehicle.
3.29DITRDCA further advised that with respect to its role in the Commonwealth’s final equity decision, it would be a decision of Cabinet like any budget measure.
3.30At the public hearing, DITRDCA also sought to emphasise that it has not been a party to commercial negotiations regarding proposed site occupants of the Middle Arm Industrial Precinct, adding that it is the responsibility of the NT Government as the project proponent to ensure the proposal is ‘investment ready’.
Role of the Department of Finance
3.31The Department of Finance outlined its role in advising both DITRDCA and IA according to the provisions of the Commonwealth Investment Framework, which sets out the criteria for equity funding by the Australian Government.
3.32The Commonwealth Investment Framework was developed to support the Australian Government in ensuring realisation of the benefit of its investments for Australian citizens, business and communities. It also provides guidance on where it is appropriate, viable and beneficial to involve the private sector in investments.
3.33Department of Finance officials outlined its advisory responsibilities when engaging with other Commonwealth departments about the Middle Arm equity investment:
When [other] departments are asking for help around structuring investment proposals, which come in under the Commonwealth Investment Framework, whether that's equity or debt, they may or may not reach out to the commercial advisory team within Finance to give them additional help around the negotiations or the structuring of particular debt and equity… They may come to us and say, ‘Here's what the Northern Territory are asking for; can we get your advice on whether that represents good value for money or not?'
3.34Officials also noted that the Commonwealth’s final equity investment decision is likely to have ‘a number of condition precedent as to when funds can be drawn down.’
Support for Commonwealth funding
Commonwealth Government
3.35The Commonwealth Government has highlighted that its equity investment will uplift the precinct’s role in a transition to a ‘carbon neutral economy’. In September 2023, the Minister for Resources and Minister for Northern Australia, the Hon Madeleine King MP, outlined that the Middle Arm proposal will ‘unlock market opportunities in emerging industries, including green hydrogen, advanced manufacturing, carbon capture and storage, critical minerals processing and lower CO2 emissions from LNG.’
3.36In its assessment of the NT Government’s Stage 2 submission for Middle Arm, IA contended that government involvement was required to unlock private sector investment in the Precinct.
3.37Further, DITRDCA has underscored that the Commonwealth’s investment is not targeted ‘at one industry over another’. Rather, it supports the development of the common-user elements of Middle Arm to create opportunities across a range of industries.
NT Government
3.38At the public hearing, the NT Government emphasised that the Commonwealth’s $1.5 billion investment is ‘first and foremost about diversifying our economy in the Northern Territory.’
3.39As outlined in Chapter 2, the Chief Minister of the NT, the Hon Eva Lawler, has indicated that the Middle Arm Industrial Precinct will boost economic growth by providing a large increase in population and in GST, leading to a reduced reliance by the NT Government on future Commonwealth funding. Further, the NT Chief Minister outlined the possible fiscal benefits for both the Commonwealth and NT Governments should the Precinct go ahead:
There will be significant tax revenue and annual revenue boosts for the Northern Territory as well as federally. For the Northern Territory, it's between $200 million and $700 million annually for the Northern Territory government, according to the modelling [not published] that was done by EY. For the federal government, it's between $700 million and $2.4 billion for the Australian government annually.
3.40In response to concerns about a perceived lack of transparency through the funding and assessment process, the NT Government outlined that there have been myriad opportunities for stakeholders to engage and emphasised that early and ongoing consultation ‘takes a lot of people and a lot of time to do properly’:
If we want to consult widely we have to get people engaged at an early stage, even if we don't have the answers, so that the processes that we go through are informed by those consultations.
3.41In its submission, the NT Government further explained that it had developed a Communications and Engagement Strategy specifically for the purposes of supporting the precinct’s development. The Strategy seeks to:
…provide regular updates about the development scope and to give stakeholders and the community an opportunity to engage, stay informed and provide feedback. Community engagement activities have been undertaken across Darwin, Palmerston, and the rural area and will be ongoing as part of the strategy.
3.42At the hearing, the NT Government stressed that it remained open to feedback from the community:
All the environmental parts, the industrial parts, the transport parts, the social parts, the cultural parts—there are many different moving parts going into this, and we welcome the feedback that we've heard through this because we will input that back into our planning processes.
Local government
3.43The committee also received evidence from Litchfield Council, the local government presiding over the area of the Middle Arm Industrial Precinct. In its submission, the Council emphasised that ‘such a substantial investment will lead to job creation, increased economic activity, and business.’
3.44Further, the Council underscored the project’s potential to support its local population as it continues to grow, noting that the development of Middle Arm ‘provides an opportunity to address the need for improved transport, healthcare, education, and recreational facilities’ and that the benefits of the project ‘should not be underestimated’.
Representatives of the gas industry
3.45Representatives of the gas industry contended that significant Commonwealth funding was essential to the precinct’s development. Australian Energy Producers (AEP) argued the $1.5billion in Commonwealth funding as ‘vitally important to support marine infrastructure, including modular offloading facility, common user wharf and widening of shipping channels, and to "fast track" the precinct’.
3.46At the public hearing, Ms Samantha McCulloch, Chief Executive of AEP added:
We see [Middle Arm] as a really exciting opportunity for the Northern Territory to grow their economy and to contribute to that goal of having a $40 billion economy by 2030. It provides a magnet for new investment across a range of industries…The Northern Territory has the opportunity to benefit from this, attract new industries, including around low-carbon hydrogen.
3.47Similarly, Tamboran explained that the Commonwealth’s equity funding represented an ‘enormous vote of confidence in the Precinct’, adding that Middle Arm’s benefits toward job creation and economic development in the NT has been recognised by many stakeholders, including the Australian Government.
3.48Quinbrook Infrastructure Partners contended that the Commonwealth Government ‘must continue to support the development of [the Middle Arm Industrial Precinct] given how well it stands to serve Australia’s national interests, announced policies in critical minerals especially given the current age of geopolitical uncertainty’.
3.49Middle Arm Petrochemicals Ltd (MAPPL), an early-stage project developer involved with the NT Government’s industrial development planning, submitted that without Commonwealth and Territory funding, investment in resource projects in the NT are ‘commonly unattractive’:
MAPPL concurs with the growing body of opinion that, as result of changing Government industrial policies and regulatory settings, Australia is increasing being viewed internationally as to have developed a "sovereign risk" problem and thereby becoming an unattractive location for the development of major new resource projects.
Concerns raised regarding Commonwealth funding
3.50A number of inquiry participants raised concerns over the funding of Middle Arm.
3.51Broadly, these concerns relate to the:
Appropriateness and sequencing of Commonwealth funding;
Transparency and accountability concerns; and
Regulatory frameworks at the Territory level.
Appropriateness and sequencing of Commonwealth funding
3.52Amongst some submitters and inquiry participants, concerns were expressed about the sequencing of funding by the Australian Government, as well as the appropriateness of this funding.
Commitment of funding prior to assessments and approvals
3.53The Australian Government’s decision to provide equity funding for the Middle Arm Industrial Precinct before the proposal had been fully assessed by IA and undergone all appropriate environmental approvals was a source of concern amongst some submitters.
3.54However, Commonwealth departments emphasised the early and ongoing nature of the Middle Arm investment analysis and governance planning process. In response to concerns about the sequencing of Commonwealth funding, officials from the Department of Finance emphasised that:
…it is not unusual for this to happen. Other infrastructure projects have gone through similar types of processes before…where we've had equity investments that have this kind of staged process in terms of commitment or announcement versus then the details around finalisation of commercial terms and then signing of agreements.
3.55However, some environmental organisations, such as Environment Centre NT (ECNT), expressed concerns over the decision to announce Commonwealth funding when the project was still at Stage 1 of the IA assessment framework, and prior to IA providing any advice on the proposal.
3.56The Wilderness Society was similarly highly critical of the approvals process and allocation of funding by the Commonwealth, calling it ‘an opaque decision‑making process that has lacked transparency’.
3.57At the same time, the Institute for Energy Economics and Financial Analysis (IEEFA) submitted that advice from consulting firm EY to the NT Government indicates that some aspects of the project were too speculative to be supported by public funds.
3.58Likewise, Doctors for the Environment Australia (DEA) echoed concerns about the premature commitment of Commonwealth funding to the project, adding that this decision was taken ‘in the absence of a completed environmental or health impact assessment, a detailed business case or cost-benefit analysis, or input from Infrastructure Australia’.
3.59DCCEEW advised that a strategic assessment is currently underway which considers cumulative impacts of the development, and that the NT Government is also undertaking their own environmental impact statement which is expected at the end of 2024. These two separate environmental impact assessments are explored in Chapter 5.
Funding toward the gas processing industry
3.60In addition to the concerns about the sequencing of funding, environmental groups, such as the ECNT, called the Commonwealth funding a ‘fossil fuel subsidy’, referring to the Stage 2 submission which showed that the Commonwealth’s commitment of $1.5billion would be used ‘for dredging the harbour and the construction of up to five jetties and wharves labelled for shipping of LNG, methanol, ethylene, ammonia and “clean petroleum”. The remaining wharf is labelled “hydrogen”.’
3.61Relatedly, Greenpeace Australia argued that Commonwealth funding should not be used to directly or indirectly fund gas-related industries at the Precinct, including infrastructure used to enable gas-related industries.
3.62Meanwhile, Middle Arm proponent Tivan voiced its concerns that the Commonwealth's investment could be ‘perceived as working against the energy transition’.
3.63Likewise, Climate Analytics observed in relation to the gas demand associated with the project:
The Middle Arm Industrial Precinct and the Beetaloo gas Basin are in symbiosis in what sounds like circular reasoning. The gas supply from the sub-Basin is required for the operation of the precinct, and the precinct would generate local demand for the gas from the sub-Basin, making it viable.
3.64The ACF suggested that Commonwealth funding for Middle Arm should not proceed until it is certain that the Santos Barossa and Beetaloo projects ‘can fit within the federal government's own apparatus under the safeguard mechanism’.
Calls for Commonwealth funding to be redirected
3.65Some submitters called for redirecting the Commonwealth’s $1.5 billion investment, arguing the funding should instead focus on supporting Australia’s transition to renewables.
3.66For example, Tivan argued that government funding should support green transmission corridors and terrestrial infrastructure rather than marine infrastructure for gas. Tivan noted that there are existing solar projects which could be connected with appropriate infrastructure:
…there are several solar projects in the NT right now that are stranded because of that lack of transmission infrastructure… If you could bring those jobs in, without dredging, pulling up mangroves and hammering in with a pile driver…then I think you'd find that Darwin would really swing behind the project.
3.67Similarly, Springmount Advisory argued that the focus for Darwin and Katherine should be on connecting renewables to the grid:
…the challenge for the NT is that it is currently hooked to very expensive gas for its own electricity generation. This [the Middle Arm proposal] will not transition it; it will merely exacerbate its dependence on gas… I find it very hard to see how we can build a competitive industrial future when the Darwin-Katherine interconnected system, from which the majority of the businesses are procuring their electricity, doesn't have a road map to get those renewables in. We have three large-scale solar farms, which have been built for three, almost four, years and are still not connected.
3.68Springmount Advisory told the committee that Australia faces a choice between ‘creating a low emissions highly competitive NT economy that leans into its natural advantages in renewable energy’ or ‘a high emissions economy dependent on a gas industry that will pack up and leave once the gas runs out’.
3.69Springmount Advisory suggested that Commonwealth funding be redirected entirely, arguing that greater industry development, job creation and energy reliability could be delivered by effectively addressing Darwin’s energy security. For example, a $328 million large-scale storage capacity battery ‘would allow more solar to get connected’, and ‘provide all the energy storage requirements that the NT region requires’. Springmount Advisory suggested that this could be complemented with:
$50 million into microgrids to reduce the cost of electricity production in remote communities;
$40 million to establish a four-campus northern Australian centre of excellence to train the next generation of electrical workers;
$500 million into the existing industrial precinct at East Arm to avoid spreading infrastructure;
$600 million to assist households by subsidising energy upgrades; and
using the remaining balance (of the $1.5 billion) to build more homes.
3.70Springmount Advisory expanded on the establishment of a ‘genuine, sustainable industry precinct’ in an alternative location:
If…you set up a common-user manufacturing precinct in East Arm—which is where there are already all the existing facilities, including rail-mounted bulk-loading facilities, containerised exports, and rail and truck facilities—you could be renting that land in a similar way to how the WA government leases out the Australian Marine Complex, which is built on a similar basis in WA; so you'd deliver the return via rents from people or companies that establish in that precinct. In many ways, it would probably deliver a longer term set of reserves, because it won't be dependent on the duration of the gas and how long it will run out for.
3.71The Aboriginal Medical Services Alliance Northern Territory suggested that the Commonwealth investment could be used for more urgent local needs:
Instead of subsidising multinational companies whose operations exacerbate climate change, the $1.5 billion could be redirected towards strengthening the climate resilience of Aboriginal communities. For example, there is an urgent need for adequate construction and maintenance of climate resilient housing for Aboriginal people; improving power security with solar installation and replacing the Power Card supply system which causes very high disconnection rates and energy poverty and building climate resilient public shelters and refuges for people who are homeless or otherwise living outdoors.
3.72Various other submitters echoed the suggestion that Commonwealth funding for the precinct be redirected towards housing, health, community organisations and roads, as well as clean energy resources.
3.73Relatedly, a study submitted by the Australia Institute argued that large gas projects often divert jobs and economic activities from other industries, adding that:
Large gas projects involve a short, intense construction phase. This phase requires a large workforce for a short amount of time, but once it is complete, these projects require few workers in the operational phase.
Transparency and accountability concerns
3.74The committee also received evidence regarding concerns about the transparency of industry and governments throughout the approval and development process of the Middle Arm Industrial Precinct, including perceived conflicts of interest between government and industry representatives involved with the project’s funding and advocacy.
Lobbying services and perceived conflicts of interest
3.75Through Freedom of Information (FOI) requests made by various environmental and media organisations, the work to secure Commonwealth funding for the Middle Arm Industrial Precinct by a number of interconnected individuals and lobbying groups has been set out in media reports.
3.76There were concerns raised around lobbying services engaged to promote, support and secure federal funding for the precinct. Most notably, the committee received evidence regarding the lobbying firm Dragoman, which was engaged by the NT Government.
3.77According to the documents obtained by the Australian Broadcasting Corporation (ABC) under FOI, Dragoman—which employs former ministers and gas industry executives—was paid around $150,000 in fees for its services under a select tender process, which means no other companies were asked to apply.
3.78According to the tender, Dragoman was required to ‘provide deep political insight, analysis and strategic guidance in the execution of an engagement strategy to influence the Commonwealth Government to support the establishment of gas-based manufacturing in the NT.’
3.79The Centre for Public Integrity drew on the Middle Arm Industrial Precinct as a case study in its report In Whose Interest: The case for reforming the Northern Territory Lobbying Regime, paying particular attention to the precinct’s connections with a range of lobbying firms like Dragoman and Bespoke Territory.
3.80In September 2021, Dragoman registered itself as a lobbyist on behalf of the NT Government in the Australian Government’s Lobbyist Register. Its services to the NT Government were deregistered on 3 February 2023.
3.81In relation to its connection to the Dragoman firm, the NT Government observed at the public hearing that the engagement of Dragoman’s services aimed to
…understand the motivations of the [Commonwealth Government] of the day and the alternative government and where those motivations might align with our vision for Middle Arm.
3.82Concerns were also raised regarding government and industry connections held by significant figures in the precinct’s development, including individuals representing both NT Government and industry viewpoints.
3.83For example, various submitters drew attention to the Territory Economic Reconstruction Commission (TERC), which was co-chaired by Mr Andrew Liveris and the Hon Paul Henderson. The TERC’s final report was supportive of the potential Beetaloo development, and other manufacturing in the NT. The role of Mr Liveris, former Dow Chemical CEO and current Chairman of the International Advisory Board at Dragoman, and Mr Henderson, former Chief Minister of the NT and current Charles Darwin University Chancellor, in securing funding was questioned in submissions.
3.84For example, Greenpeace Australia asserted that these perceived conflicts of interest have not been adequately publicly addressed, adding that:
Lobbying firm Dragoman was engaged by the NT Government between September 2021 and April 2022, however the firm has links with Saudi Aramco director Andrew Liveris. This actual or perceived conflict of interest by decision makers has not been addressed, nor transparently communicated to the public.
3.85Similarly, media reports have also set out the link between political party donations and the gas industry in the NT. According to donations disclosures published by the NT Electoral Commission, NT Labor has recently accepted large donations from Tamboran ($28,000), which is a proponent at the proposed Middle Arm Industrial Precinct, as well as other fossil fuel companies such as INPEX (donations totalling $15,950), and Empire Energy ($4,000).
3.86The same reports also revealed that the Country Liberal Party recently received political donations from key players in the fossil fuel industry—a total of $11,000 from the AEP, Empire Energy and Top End Energy, as well as Mr Andrew Liveris.
3.87Further to this, the ABC reported that Mr Gerard Richardson, co-owner of Brookline Advisory, acted as a political advisor for former NT Chief Minister Natasha Fyles, whilst Brookline Advisory listed ‘Tamboran Resources as one of its clients on the federal lobbyist register since November 8. Mr Richardson deregistered himself as a lobbyist on October 23’.
3.88Environmental and Indigenous groups have also raised concerns about a nine‑year gas sales agreement between the NT Government and Tamboran Resources. The arrangement is for the purchase of 40 terajoules of gas per day from 2026 from Tamboran’s proposed Shenandoah South pilot project in the Beetaloo basin. Media reports indicate that this arrangement was struck without the NT Government running a competitive tender process, and to the exclusion of other possible providers.
Perceived failure of governments to disclose information
3.89Some submitters, such as the ECNT, drew attention to information submitted by the NT Government to IA in March 2023, obtained through FOI requests, which indicated that petrochemical industries would be a central component of the precinct.
3.90At the public hearing in April 2024, the NT Chief Minister, the Hon Eva Lawler MLA, said she would not rule out petrochemicals processing in the Middle Arm Industrial Precinct.
3.91There were also concerns from some environmental groups about how the project has been characterised by proponents. For example, the Australia Institute noted that Middle Arm was initially described as a “new gas demand centre”, only for that description to be abandoned after concerns expressed from environmental groups, despite no changes to the project proposal.
3.92Some submitters, such as Climate Analytics, also expressed frustration over DITRDCA’s refusal to release economic modelling on Middle Arm conducted by the consulting firm Deloitte.
3.93DITRDCA had previously explained that releasing Deloitte’s modelling would not be in the public interest as it could ‘prejudice or impair the future flow of information from state and territory governments to the Commonwealth’.
Adequacy of publicly available information
3.94There were also concerns expressed by some environmental groups regarding a lack of publicly available information about the precinct’s funding and development processes, prompting many to call for greater scrutiny of the current gaps in public knowledge.
3.95The Environment Defenders Office, for instance, called for a public inquiry process under the Environment Protection Regulations 2020 (NT) to ensure adequate public consultation takes place regarding the precinct, adding that there has been ‘limited knowledge available of the activities to occur at Middle Arm.’
3.96DEA expressed concern that there has been limited detail released about the proposed industries, development and the methodologies being used for strategic assessments, and the short period for public feedback, arguing that this prevents meaningful public engagement.
3.97Likewise, the Central Australian Frack Free Alliance observed:
It is unacceptable that detail about what is proposed (including potential development scenarios) may not be available to the public until the environmental impact statement is publicly released, leaving only a few weeks for the public to become informed about the project and provide meaningful comment on it.
3.98Several submitters also pointed to a lack of information being provided to communities directly impacted by the precinct, in particular First Nations communities. First Nations consultation is discussed in Chapter 5.
Other sources of funding
3.99The committee also received evidence regarding the sources of funding for Middle Arm beyond the $1.9 billion equity injection by the Commonwealth.
NT Government budget commitments
3.100The NT budget for 2022−23 contained the following funding toward the Middle Arm Industrial Precinct:
$10 million for a detailed design, business case development and preliminary works for Middle Arm;
a further $2 million for a business case development and preliminary works specifically to support low or zero emissions industries and technologies at Middle Arm, including CCS; and
an additional $2 million for a business case development and preliminary works, particularly for key land transport infrastructure to connect the common user marine infrastructure to the national road network.
3.101Although it does not appear to be directly related to the proposal, according to the Middle Arm Industrial Precinct webpage, the NT Government ‘allocated $186 million for land release and other initiatives to provide for population growth and has invested $85 million to prepare locals for new jobs’.
3.102In May 2023, the NT budget for 2023−24 allocated $13million for a detailed design and preliminary works for the precinct.
3.103In May 2024, the 2024-25 budget allocated a further $9.1 million for detailed design, strategic environmental assessment, business case development and preliminary works.
Other funding
3.104The committee was interested in the total amount of funding required for the Middle Arm Industrial Precinct to proceed.
3.105According to ECNT, figures presented in the NT Government’s Stage 2 submission option analysis to IA indicated that the total cost of the proposal in some modelling scenarios could reach $3.5 billion.
3.106At the public hearing, representatives from IA observed:
Typically, in most infrastructure projects, the Commonwealth is not fully funding the whole project; it is a contribution to a whole. Therefore, I would expect that the capital cost of the precinct will be a lot more than the $1.5billion that is currently budgeted for.
3.107Further, the committee questioned the Australian Government on where the additional funding for the project would be coming from, should the above scenario eventuate. Officials from DITRDCA responded that:
It's really a question for the Northern Territory government. It's not our project…The question of how additional funds will be secured in addition to the Commonwealth's contribution to the project is a question for the Northern Territory government.
3.108Officials were further queried by the committee over how the Australian Government was getting assurances on a Return on Investment (ROI) for its equity investment into the Middle Arm Industrial Precinct, given an uncertainty about the remaining balance. Officials from DITRDCA confirmed that details regarding additional funding sources are ‘expected to be canvassed during the Stage 3 submission process’.
3.109While not directly part of the proposed Middle Arm Industrial Precinct funding requests made by the NT Government, a request for approximately $1.4 billion has been made to for the proposed Adelaide River Off-stream Water Storage (AROWS), a water reservoir on the Adelaide River. The proposed AROWS project would supply water to the Darwin region with 27,000 ML per annum projected to go towards the Middle Arm Industrial Precinct. That would mean that almost half of the water produced by AROWS would be going towards the development and operations of the proposed Middle Arm Industrial Precinct, strongly linking the two projects.
Next chapter
3.110The next chapter examines the key climate, environmental and health impacts raised in relation to the Middle Arm Industrial Precinct.