22
February 2001
The
Prime Minister, John Howard, and Chief Minister Denis Burke on Monday night
announced that the Commonwealth and Northern Territory Governments would each
provide $26.5 million in stand-by financial support for the Adelaide to Darwin
Railway.
Mr
Howard said: “We in the Federal
Government are prepared to join the Northern Territory and South Australian
Governments in delivering that extra commitment so that the project can
commence.”
Chief
Minister Denis Burke said the stand-by funding would allow the project to
proceed while the consortium explored further avenues for private sector
investors.
The
stand-by support is not a grant, but a commercial arrangement. The important elements are that the stand-by support:
·
is not a grant, but essentially finance by
way of loans and investment
·
the stand-by facility is “up to” $79 million,
and is required only if alternative investors cannot be found
·
the first portion, if required, would not be
payable for 18 months, and the remainder up to six years away
·
Because it is commercial, the support, if called
upon, can be sold to private sector investors and funds returned to the
Government.
There
is only just sufficient time between now and the start of the Dry Season to
achieve financial close if all parties work together, in an environment of
certainty, with all parties committed and working with complete dedication.
The
start of construction at the commencement of this Dry Season is a fundamental
requirement of the project and critical to avoiding escalating costs which could
affect the financial structure of the project.
Several
alternative investors have been referred to the Asia Pacific Transport
Consortium. These options are being
pursued by the consortium.
The
above stand-by support by Government does not preclude bringing in another
investor. However it provides for this to be done in an orderly and professional
manner without prejudicing other financiers, contributors and supporters of the
project.
The
support announced on Monday night is part of a package of $79 million proposed
to be shared by the Commonwealth, Northern Territory and South Australian
Governments.
What
is the additional financial support?
The
support of up to $79 million is not
additional grant funds, but is provided, if necessary, on a stand-by
basis on commercial terms.
The
standby support is stand-by finance to provide loans and investments to the
project on commercial terms, should it be required because alternative investors
are not available or unable to complete the due diligence, negotiations and
financial documentation in time for financial close.
If
alternative investors are found, the amount of the stand-by facility will be
reduced accordingly.
When
is the stand-by funding required?
The
stand-by funding, to the extent required, could be called between the period of
September 2002 and 2006.
Why
commit the additional support now?
Because
there is only just sufficient time between now and the start of the Dry Season
(4-6 weeks) to achieve financial close if all parties work together, in an
environment of certainty, with all parties committed and working with complete
dedication.
The
start of construction at the commencement of this Dry Season is a fundamental
requirement of the project and critical to avoiding escalating costs which could
affect the financial structure of the project.
The
above stand-by support by Government does not preclude bringing in another
investor. However it provides for this to be done in an orderly and professional
manner without prejudicing other financiers, contributors and supporters of the
project.
Internet
http://www.nt.gov.au/railway
Return to Railpage Online News