Is the delay for Oakajee a significant setback?By Peter...

Is the delay for Oakajee a significant setback?
By Peter Kennedy

Posted Fri Nov 5, 2010 12:25pm AEDT


There will be a delay in building the Oakajee port and rail, north of Geraldton (OPR)

The delay in the targeted completion date of the $4.4 billion Oakajee port and rail project is the latest setback for the ambitious development, which was first mooted 30 years ago.

There is a lot at stake. The Federal and State Governments have committed almost $700 million to fund common-user infrastructure at the proposed deepwater port, 25 kms north of Geraldton.

This will cover the costs of the shipping channel, breakwater, turning basin and administration offices.

But most of the financing will have to come from the private sector, with foreign interests expected to take a leading hand.

It has been seen as the key to the opening up of a new iron ore province for Western Australia, and the development of an industrial estate which would help transform the Mid-West.

The Premier Colin Barnett has been an enthusiastic supporter of the project since his days as Resources Development Minister in Richard Court's government in the 1990s.

That Government committed $20 million for the purchase and clearing of the site, and backed a plan by the Kingstream company for a $2 billion steel mill there.

But Kingstream passed into administration in 2001 and the development dream looked doomed.

That was until the worldwide resources boom took off about five years ago. The then Labor Government seized the moment, and moved ahead with plans to build a port and rail network for the region, focussing on Oakajee.

Rumours that deadlines would not be met surfaced in September when it was reported that a Japanese company crucial to one of the mining ventures was having second thoughts about its viability.

But the chief executive of Oakajee Port and Rail, John Langoulant, a former State Under Treasurer, is keen to reassure the doubters.

He has pointed to the complexity of the project, involving the construction of three new mines and 570 km of railway, which have to be dovetailed with the development of the new port and industrial estate, as a challenge in co-ordination.

In these circumstances, he says: "A six month extension in a project of this scale, and with its projected 50 year life, is minor."

Observers who have seen the Oakajee dream wax and wane, hope that he is right.



Is the delay for Oakajee a significant setback?