Ord deal goes unsigned despite flying start

The Chinese funded company developing farms on the Ord River irrigation scheme is growing anxious about keeping the project moving after a long delay signing a contract with the State Government.

Kimberley Agricultural Investments, touted by Government as a billion-dollar investor in a major sugar industry, is rapidly running out of room to move after making a flying start on turning thousands of hectares of bush into farms.

KAI has cleared about 2000ha under a special licence issued by the Government but its operations have been limited to select plots.

A development agreement remains unsigned almost a year to the day since Premier Colin Barnett and Lands Minister Brendon Grylls named KAI as the preferred developer of 13,400ha released as part of the second stage of the Ord scheme.

KAI general manager Jim Engelke said yesterday that the company, owned by Chinese construction giant Shanghai Zhongfu, expected the agreement to be signed three months ago.

"We want to get the development agreement signed, " Mr Engelke said. "KAI is taking a significant risk in developing land in the absence of an agreement but . . . we are backing our ability to complete the job."

Mr Engelke revealed that the agreement would not include leases. KAI is required to meet onerous development targets over several years before any lease issue. KAI is expected to invest millions of dollars in clearing land, laser levelling, farm development, building irrigation channels, drains and tail water recycling construction and growing crops before securing leases.

KAI has formed a strong working relationship with the Miriuwung Gajerrong Corporation, which represents the traditional owners, and has invested heavily in the project and Kununurra.

Capital expenditure so far is about $15 million, it has just signed a $10 million contract to buy the Kununurra Country Club from Aspen and snapped up 180ha of mahogany plantations for $2.6 million earlier this year.

Mr Engelke said KAI planned to breathe new life into the country club and was harvesting the mahogany trees for furniture and carving production in China.

It is also sending logs cleared from the 7400ha Goomig land release back to China for furniture and carving. The 6000ha Knox land release remains subject to an Aboriginal development package - part of the stalled development agreement.

The Government, which said it in July that it expected the agreement to be signed within weeks, is expected to discuss the issue with KAI next week. It has said long-term leases over Gooming and Knox are conditional on KAI delivering a sugar mill or processing infrastructure.

KAI has said a $600 million-plus investment is not viable unless it can secure more land, including thousands of hectares in the NT, through another extension of the irrigation channel.