Carnegie future blowing in the wind

Swirling doubts over the ability of Carnegie Clean Energy to deliver a marquee wave power project in Albany have intensified after the Premier described the company’s predicament as “very concerning”.

Mark McGowan, who visited Albany for a two-day caucus retreat, insisted this week that the State Government would give Carnegie until February 15 to prove it could come up with its share of the funding for the Albany wave farm.

That deadline is an extension from one Carnegie failed to reach in October 2018 but was later given an extension to this month and a $2.6 million payment.

But the Premier acknowledged he had held doubts about the embattled group’s financial capacity and said its problems were largely outside the State Government’s control.

In November, Regional Development Minister Alannah MacTiernan threw Carnegie a lifeline when she agreed to extend the deadline for the company to produce a funding plan until mid-February.

The plan had been due by December 7 under an agreement for the Government to provide Carnegie with a $15.75 million grant, $2.65 million of which has already been awarded to the struggling firm.

Mr McGowan said if Carnegie failed to show it could meet its obligations the State would consider how it could reallocate the unspent balance.

But he stressed the Government would not cut short Carnegie’s contract unless it had no other option, arguing that doing so would leave the State legally exposed.

“To jump ahead of that process we’d obviously set ourselves up for legal action and we don’t want to do that,” he said.

Mr McGowan sheeted much of the blame home to the Federal Government, which has proposed changes to research and development tax concessions that threaten to cripple Carnegie’s business model.

He said that until a Senate committee investigating the R&D changes reported this month, the Government would be unable to tell whether Carnegie could meet its funding requirements for Albany.

“It’s very unfortunate because the R&D tax concessions by the Commonwealth Government that are important to the business model for Carnegie were changed,” Mr McGowan said.

“That was outside our control.

Warren-Blackwood Nationals MP Terry Redman, who has long questioned the merits of the State Government’s continued support of the company, said questions should be asked about the company and the State Government’s funding commitment.

“I was really surprised (Ms) MacTiernan approved even a part payment of the first milestone given their audit report said there was material uncertainty with the sustainability within the company, let alone its capacity to deliver a significant infrastructure project,” he said.

“I think the minister is over-reaching on this with taxpayer funds, and I think she should pull out and probably shouldn’t have made a decision (to) give the $2.6 million.

“When you are spending taxpayer funds you have to exercise caution, and I don’t think there’s enough caution being exercised in this case.”