MUSWELLBROOK's proposed ethanol pilot plant is a step closer to fruition after Muswellbrook Shire Council voted last night to continue negotiating with biofuel company Ethtec over a proposed $10.4 million grant to the project.
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The vote on the project, which was highlighted in Monday's Newcastle Herald, was conducted in a confidential session behind closed doors.
The council issued a statement afterwards, which comprised the text of the four-point resolution adopted by the meeting. The full text appears below.
The resolution made no mention of the size of the $10.4 million grant, but its final point was to authorise council general manager, Fiona Plesman, "to negotiate to finality any agreement with Ethtec and [a related research entity] Apace not generally inconsistent with the amounts and terms set out in the [confidential] report" to the council.
Muswellbrook Mayor Martin Rush, who had championed the project, said after the meeting that he had nothing to add beyond what was in the resolution. The Herald was not able last night to obtain a comment from Ethtec.
Councillor Steve Reynolds, who spoke publicly on Monday questioning why the council was spending "ratepayers' funds" on such a speculative project, said the decision was "disappointing but not unexpected".
"I am not against Ethtec and I wish them all the best, as I said before," Cr Doherty said last night. "But I don't think the council should be taking the sort of financial risk that this involves in this uncertain climate."
The Herald's earlier reporting on this issue: A $30 million Muswellbrook project has Australia's energy future in its sights
As reported on Monday, Ethtec has approval for an $11.9 million grant from the federal government's Australian Renewable Energy Agency (ARENA), which is conditional on matching funding. Ethtec had a Chinese investor until last year, and the $10.4 million Muswellbrook council grant had been proposed as replacement funding.
Summarised, the resolution says the council would decline "the submitted tender offer" to develop a biorefinery because it was not "good value for money and does not provide sufficient legal protection to achieve the desired outcomes".
It would negotiate with Ethtec and Apace and not issue fresh tenders because "the proprietary and innovative nature of sole tenderer's bid", its "substantial grant funding from other levels of government" and its DA approval for the Muswellbrook Industrial Park site meant it "unlikely" a "fresh tender process would . . . improve the competitiveness of any outcome". Other users could use the plant through its "shared access" status.
MUSWELLBROOK SHIRE COUNCIL RESOLUTION
1. That Council decline to accept any of the tenders pursuant to regulation 178(1)(b) of the Local Government (General) Regulation 2005 (the Regulation) as the submitted tender offer, as its presently stands, does not represent good value for money and does not provide sufficient legal protection to achieve the desired outcomes.
2. Pursuant to s178(3)(e) of the Regulation, Council enter into negotiations with Ethanol Technologies Pty Limited (ETHTEC) and Apace Research Limited (Apace) with a view to entering into a contract in relation to the subject matter of the tender and declines to invite fresh tenders as Council is satisfied that:
- because of the proprietary and innovative nature of sole tenderer's bid, that it is considered unlikely that other competitive technologies have advanced to pilot scale research, its receipt of substantial grant funding from other levels of government and that it holds a development approval for a shared-access biorefinery, that a fresh tender process would not improve the competitiveness of any outcome; and
- as the funding is proposed for a shared-access bio-refinery managed independently of the sole tenderer, any other proponent of competing or other technologies would be able to make use of the facility on a cost basis.
3. For the purposes of s178(4)(b) of the Regulation, Council is satisfied, in addition to the reasons set out in 2(a) and 2(b) above, that negotiations with the sole tenderer are likely to overcome the issues that give rise to Council's decision to decline to accept all tenders.
4. That the General Manager be authorised to negotiate to finality any agreement with Ethtec and Apace not generally inconsistent with the amounts and terms set out in the Report.
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Ian Kirkwood
Reporting journalist at the Newcastle Herald since 1987. Editorial writer, general reporter, industrial relations, industry and coal.
Reporting journalist at the Newcastle Herald since 1987. Editorial writer, general reporter, industrial relations, industry and coal.
