Companies linked to the proponent of the massive Urannah Dam project in north Queensland have given more than $150,000 to the Liberal National party, including a donation made a week after the Morrison government promised to spend $483m on its construction.
A member of the disbanded National Water Grid advisory body, Stuart Khan, last month wrote to colleagues saying that taxpayer funding to the Urannah project had been allocated for “brazenly political purposes” and before a detailed business case had been scrutinised.
Guardian Australia can reveal that the detailed business case, released publicly in recent weeks, includes an economic analysis that shows a negative return on investment. Every dollar spent would generate about 95c in benefit by 2050, it says.
As questions mount about the merit of the project, more detail has emerged about political connections between the proponent, Bowen River Utilities, a complex suite of associated companies, their employees, and the LNP.
Guardian Australia has previously reported that the sole director of Bowen River Utilities, John Cotter Jr, is a former member of the LNP state executive committee.
Queensland electoral commission data shows that separate companies owned by Cotter and his wife – Initiative Capital and Kinbombi Holdings – are among the largest fundraisers for the Liberal National party. Those companies have donated more than $140,000 to the LNP in recent years.
The company made a “fundraising contribution” of $5,000 to the LNP on 24 March – seven days after the federal funding announcement. Guardian Australia does not suggest that announcement is linked to that donation or that the donation is in any way improper. Initiative Capital also donated about $23,000 to Labor.
Bowen River Utilities employs the wife of federal MP Julian Simmonds, former lobbyist Madeline Simmonds, as its communications manager.
Initiative Capital has previously been described as a private sector investor in the Urannah project, and Cotter has previously spoken about attempts to find additional dam investment in the US. Bowen River Utilities staff have previously listed their employer in online profiles as Initiative Capital.
A spokesperson for Bowen River Utilities said Cotter “has made donations to both the ALP and the LNP, all of which have been publicly declared (with) the Electoral Commission Queensland and Australian Electoral Commission”.
Project facing hurdles
The detailed business case for Urannah estimates incremental costs of about $1.35bn and incremental economic benefits of $1.29bn over a 30-year period – meaning the long-term economic return on investment is about 95c for every dollar invested.
Analysis of a preliminary business case, commissioned by the Mackay Conservation Group, put the potential benefit as low as 26c in the dollar.
Richard Denniss, the chief economist of the Australia Institute, told the Guardian last week that funding projects with low or questionable return on investment was “not taking the job of managing Australia’s economy seriously”.
In addition to concerns about the wisdom of spending taxpayer money on a project that won’t return a net economic benefit by 2050, the project faces significant other hurdles, including difficulty acquiring properties necessary to build the dam.
Some landholders say they oppose the project and won’t sell their properties – a situation that would require compulsory acquisition. The detailed business case talks about the potential need to approach the Queensland office of the coordinator general about acquisition.
However Guardian Australia understands that the coordinator general has told the Urannah Properties Association – an Indigenous group that holds the title for the lease of a key property, Urannah Station – that it would not support compulsory acquisition of the property by a private company.
A significant group of Indigenous traditional owners, including some of the proponents of the controversial Collinsville coal-fired power station, are opposed to the dam project.
A Bowen River Utilities spokesperson said the Urannah Dam “will transform the greater Whitsunday region and deliver thousands of jobs, water security, reliable renewable energy and enormous economic benefits for north Queensland taxpayers”.
“That’s why it is backed by regional communities who have a real determination driving us to build this project. The dam also has bipartisan support from all three levels of government.”
BRU said it had land access and option agreements in place with some landholders, and that it was “continuing conversations with stakeholders”
The company expects to finalise a draft environmental impact statement in the coming weeks.
