Government locked in waiting game with GKI investors
THERE is hunger in the community for news about the sale of the Great Keppel Island resort development and the Queensland Government's plan to revitalise the island.
Since it was revealed that Noosa-based Altum Property Group had entered into the due diligence phase to take over the leases from Tower Holdings, information has been scant, with locals and key stakeholders still unsure what was included in the sale, what sort of development would take place on the island or any timelines.
Given the troubles that the Queensland Government had experienced with Tower Holdings shuttering the resort and not going through with its plan to develop the island, there was a determination within the government to be rigorous in its due diligence process with Altum to ensure there was not a repeat of the situation.
Minister for Natural Resources, Mines and Energy Anthony Lynham said the Department of Natural Resources, Mines and Energy continued to work with Altum regarding the transfer of five Great Keppel Island leases.
"This includes discussing new milestones Altum will have to meet if it buys the leases," Dr Lynham said.
"However, DNRME has now been waiting for three months for the necessary financial information to complete due diligence and assess Altum's capability to develop the resort and meet the lease conditions.
"The Government remains committed to doing everything it can to ensure this valuable site is used to the best benefit of Queenslanders."
The Morning Bulletin understands that it could be months yet before the complex due diligence process is finalised.
Integral to the sale of the resort development was the Queensland Government's plan to revitalise the island with the installation of about 13.5km of power, water and telecommunications infrastructure via submarine connections buried two metres below the sea floor between Emu Park across Keppel Bay to Great Keppel Island. .
It was a key promise from Keppel MP Brittany Lauga going into the 2017 State Election.
With the final price tag for the project estimated by the Queensland Government to be around $50 million, those involved have tried fruitlessly to secure the federal support to supplement the $31.6 million the state had committed to the project.
It is understood that the Queensland Government was considering whether or not to tip in additional funding to get the project over the line.
A spokesperson for the Department of Innovation and Tourism Industry Development said the project continued to progress and the team had been working with engineers, experts and industry specialists and suppliers to complete preliminary designs and construction methodologies as well as preparing for future procurement activities.
"Further progression of the design and scope is awaiting the outcome of the sale of the leases, particularly input from Altum, which would be the largest user on the island, on the size and extent of the new development when finalised," the spokesperson said.
"A business case has been prepared with updates required following confirmation of key details such as Altum's development plans and the key timing of development on the island.
"A decision to release the business case at an appropriate time will be considered as part of the project's assessment."
The spokesperson said a cost-benefit analysis did form part of the work on the business case that had been undertaken to date.
"The department is unable to provide further information on project costs at this time as they are commercial-in-confidence," they said.
"The public release of the department's costings could compromise future procurement activities and reduce the ability to maximise value for money through the procurement process.
"DITID intends to commence procurement for the project later this year, however the timing of key activities will be informed by discussions with Altum and the lease transfer process."
To date, the Federal Government has denied all requests for funding support.
The Queensland Government said it would welcome a contribution from the Australian Government for the project which was estimated to generate 1500 jobs.
Last year Livingstone Shire mayor Bill Ludwig called for bipartisan support towards funding the revitalisation which would ensure that existing GKI businesses would have a competitive edge operationally, and GKI was infrastructure 'shovel ready', to attract the massive enabling investment needed to realise the Capricornia region's full tourism potential.
"In relation to power, connection to the mainland grid will allow access to an appropriate mix of energy sources including mainland-based solar farms, limiting the need for major vegetation clearing on the island itself," Cr Ludwig said.
"Mainland reticulated water will also protect the island's fragile natural water aquifers which will be a win-win for both tourist operators, residents and the island's environment."
While she supported the Great Keppel Island project, Capricornia MP Michelle Landry said last year that she was unable to act given she had not received a cost figure from the Queensland Government for the project.
Her comments were challenged by a DITID spokesperson, who referred to a Morning Bulletin article where they were quoted saying, "all we need from the Federal Government is $25 million to get the job done".
It is understood that the project leader - the State Government - would bear any additional costs for the major project.
The State Government also provided a letter from Deputy Prime Minister Michael McCormack saying the government had ruled out funding through the Regional Growth Fund for the project without requesting a business case or seeking a dollar value.
The Morning Bulletin approached Altum for comment on its progress and plans for Great Keppel Island, but unfortunately did not receive a respond by time of publication.