NAIF urgently reviewing $3.8b in loans for risk to taxpayers
The federal fund set up to kick-start economic development in Australia’s north is urgently reviewing $3.84 billion in loans it has handed out amid concerns about the risk to taxpayers from cost blowouts and rising interest rates.
Northern Australia Infrastructure Facility chief executive Craig Doyle said the NAIF might back out of up to $840 million in approved loans – but which have yet to receive final sign-off – if projects were deemed too risky, given costs had increased by between 40 per cent and 60 per cent over the past two years.
Northern Australia Infrastructure Facility Craig Doyle said the body funded projects which banks wouldn’t. Jamila Toderas
Mr Doyle revealed that, following the financial collapse of the Kalium Lakes potash project in Western Australia in August, the board considered scrapping a $490 million loan to another salt and potash project in WA that is backed by billionaire Kerry Stokes.
The Kalium Lakes project had already drawn down $83 million in taxpayer money before it collapsed.
“If things are changing we might have a closer look. We might just drop off and choose not to fund because it is too high a risk,” Mr Doyle told The Australian Financial Review.
The NAIF was established as a $5 billion fund by the former Coalition government, and Labor tipped in another $2 billion earlier this year.
Mr Doyle said the facility was looking closely at the $3.84 billion in projects it had approved so far to ensure proponents reached certain conditions before they could draw down on the taxpayer-funded loans.
This included a $490 million loan to BCI Minerals for its Mardie salt and potash project in the Pilbara three years ago.
ASX-listed BCI Minerals is 39 per cent owned by the private company of AFR
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