Media release

Loan for Adani coal railway: lawyers lodge Productivity Commission complaint

April 06, 2017


If the Northern Australia Infrastructure Facility (NAIF) offered a $1 billion taxpayer-funded loan to support a private coal-hauling railway it would breach competitive neutrality principles, a not-for-profit legal practice warned today.

Environmental Justice Australia (EJA), acting on behalf of the Institute for Energy Economics and Financial Analysis (IEEFA), has lodged a complaint with Australia’s Productivity Commission about NAIF’s proposed subsidy for a rail line to be built between Adani’s planned mine in Queensland’s Galilee Basin and the Great Barrier Reef coast.

It is understood mine proponent Adani and coal-rail company Aurizon has applied for NAIF funding.

The complaint alleges NAIF’s regulatory framework is inadequate and says if NAIF was to lend $1 billion for the rail project it would breach competitive neutrality principles.

“Competitive neutrality principles should stop governments from subsidising large companies with cheap debt in existing, well established industries,” said EJA lawyer David Barnden.

“The Productivity Commission oversees the federal government’s compliance with competitive neutrality principles.

“It is our understanding Australian government businesses such as NAIF could not subsidise a Galilee Basin coal-rail line and comply with competitive neutrality principles.

“In 2012 when the Productivity Commission examined another government financier, the export credit agency EFIC, it found no justification for government funding of private sector resource infrastructure projects in Australia.

“Funding Aurizon or Adani to build a coal railway would breach competitive neutrality principles.

“Our complaint alleges that NAIF is non-transparent, ineffective, inefficient and has an inadequate governance framework.

“We urge the Productivity Commission to fully investigate and act on our complaint.”


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