Economics Committee Wednesday 19 October 2011
Senator LUDLAM: I would like to turn attention to the matter of the proposed Commonwealth radioactive waste dump. Has the department been involved? Do we have Mr Davoren here or anybody who can speak-
Mr Hoffman: We certainly do. He has been waiting around all day; we might as well bring him forward.
Senator LUDLAM: Welcome back, Mr Davoren.
Mr Davoren: Thank you.
Senator LUDLAM: It is nice to see you again. Has the department been involved in any further desktop or field work in relation to the proposed national radioactive waste dump at Muckety? If so, of what nature?
Mr Davoren: None at all. The situation is as it was at the last estimates.
Senator LUDLAM: We have had a few of these exchanges. Has the department had any dialogue about or given consideration to at any level at all possible alternative sites for the siting of the national facility apart from the proposed sight on Muckety Land Trust lands?
Mr Davoren: There has been no dialogue since the last estimates and not for several years.
Senator LUDLAM: None at all? No proposals or hints of proposals?
Senator Sherry: The witness is indicating that nothing has changed since you asked the same questions at the last estimates.
Senator LUDLAM: I am just double- and triple-checking. This is a very important question.
Senator Sherry: I know. I am assisting the committee.
Senator LUDLAM: What is the department's budget allocation for work related to this facility or plan, given that it does not appear that anything is going on?
Mr Davoren: In the current financial year, there is $2.6 million in the budget. That is the last year of the currently allocated funds, the allocation of which commenced in 2005-06. They have been rescheduled several times. We are looking at re-profiling the budget context.
Senator LUDLAM: You will have to. What is the current timeline for the development of the project and any such re-profiling?
Mr Davoren: Assuming that the National Radioactive Waste Management Bill is passed by the Senate-
Senator LUDLAM: Not a safe assumption at all.
Mr Davoren: That is in other hands. So assuming that and assuming that negotiations were satisfactorily concluded to secure a site, the timeline, with all the regulatory procedures, is about 4½ years.
Senator LUDLAM: So it is 4½ years from the moment that-
Mr Davoren: We select a site.
Senator LUDLAM: you have gone through your site selection process, not simply from the moment that the bill gets up.
Mr Davoren: That is right. Most of that time is EPBC and ARPANSA processes
Senator LUDLAM: I have spoken to those agencies. Very briefly, regarding compensation, the arrangement as I understand it is that if Muckety is declared the site-and there is a bit of a process to go between here and there-the traditional owners that the Northern Land Council represent will stand to get approximately $12 million in compensation. Is that your understanding?
Mr Davoren: That is correct.
Senator LUDLAM: I understand that about $200,000 was paid the NLC at the time of site nomination. And if this is a complex answer, you can provide it on notice for us. What was the distribution of those funds? Who was it distributed to? What fraction was retained as admin costs by the NLC?
Mr Davoren: My understanding, and I can confirm this, is that none was retained by the NLC; in fact, I think that we have answered this question before.
Senator LUDLAM: It was all disbursed.
Mr Davoren: It was disbursed among senior Muckety people.
Senator LUDLAM: Thank you. I will come back with some of these on notice. Thanks, Mr Davoren. I guess that we will see you again once this project is actually afoot or in February I will ask you the same questions over again. Could we bring someone to the table who can speak to us about HRL and the Commonwealth grants. Thanks for coming forward. Since May of this year, can you tell us what specific progress, if any, HRL has shown in meeting any of the outstanding preconditions to their grant?
Ms Sewell: As we have previously advised the committee, the deadline for HRL to meet its conditions precedent has been extended until 31 December this year.
Senator LUDLAM: Have you told other senators in this hearing today, or do you mean prior to today?
Ms Sewell: Prior to today.
Senator LUDLAM: What is the process for reviewing the grant at the end of the year, including any alterations to time frame or terms of reference?
Ms Sewell: I think you are asking me to speculate on something that we have not been approached about.
Senator LUDLAM: Just tell me then what is going to happen at the end of the year. Do not speculate. Tell us what the process is forthcoming from December.
Ms Sewell: I really cannot answer that in any detail. The HRL Dual Gas project is currently involved in an appeal process in relation to an environmental protection agency ruling. Depending on the outcome of that
process, HRL Dual Gas may well approach us, but in the absence of any formal approach from them I am not in a position to say whether or not the 31 December deadline will require any change to the current position.
Mr Hoffman: They have a deadline of 31 December. They will need to provide us information as to the status of satisfying the conditions precedents by that date. As Ms Sewell has indicated, issues to do with appeals of the Victorian environmental decision will impact on that. That is why it is hard to speculate, but we would certainly expect to see information from them as to their satisfaction or not of those conditions by 31 December, and then a decision will be made on the basis of that information.
Senator LUDLAM: You cannot tell us anything about what it will look like. I can take from that there is no automatic assumption that a grant will be issued or that any particular action will be taken by the Commonwealth. You will consider what they come back to the table with.
Mr Hoffman: Absolutely.
Senator LUDLAM: Since winning the LETDF grant in 2007, has the government advanced or committed any funds to HRL other than this grant, that you are aware of?
Ms Sewell: No, not that we are aware of.
Senator LUDLAM: Not that you are aware of. Could you take on notice to confirm that for the record?
Ms Sewell: Yes.
Senator LUDLAM: Has HRL submitted a revised business model to the department for how it would be commercially viable at 300 megawatts?
Ms Sewell: No, it has not.
Senator LUDLAM: Is an amended business plan of that sort a precondition for the grant?
Ms Sewell: No. The LETDF grant was awarded against the original proposal.
Senator LUDLAM: Is that a no or a maybe?
Mr Hoffman: I think it goes to the point that I made before, that we would expect them to come forward with all relevant information on 31 December in terms of satisfaction or otherwise of their CPs in order that a decision about moving forward or some other action can be taken.
Senator LUDLAM: Without going into hypothesis, will the review be independent or conducted by the department? If it is by the department, by who?
Mr Hoffman: It will be conducted in accordance with the guidelines of the LETDF program, which sets it out. I believe that the decision making process is done within the department.
Senator LUDLAM: Could you tell us on notice if there is any variation to what is understood to be the process of the grant allocation and who specifically-which unit, sub-unit, office or whatever-will undertake that review? Will it include recommendations on whether the grant agreement should be rescinded or withdrawn? I take it that would be the point of undertaking the review.
Mr Hoffman: That is one logical outcome or one possible outcome, yes.
Senator LUDLAM: I have one other question, which might seem a little bit off topic. Are you familiar with the SKM MMA report to Treasury on the carbon price and what it means for the HRL Dual Gas project?
Mr Hoffman: No, I am not.
Senator LUDLAM: I might put these questions on notice for you, that being the case. I will leave it there.
Mr Hoffman: Sorry, can I just clarify? I am aware of it, but not in any detail.
Senator LUDLAM: That is fine. I will put the questions on notice.