Plan B, Separable Portion 1 and the new Adani proponent
Adani launched ‘Plan B’ on September 13, 2018.
Adani are retaining a 200 km section of the often quoted 388km “Carmichael Rail Project” (a fictional project). That 200km section is made up of the Carmichael Coal Mine and Rail Project (CCMR), Separable Portion 1 (SP1) – 78km and the remnants of the North Galilee Basin Rail Project (NGBR) which we can suppose is roughly 120km.
On September 14 I had a conference call with the media team at the Queensland Department of State Development, Manufacturing, Infrastructure and Planning (DSD). They asked me a lot of questions about my interest in when and how Adani had switched proponents for the NGBR and added a joint proponent to CCMR. I gave them my theories about the ENGOs, think tanks, the Greens, and non-NewsCorp newspapers avoiding mentioning the NGBR as it would highlight the Traditional Owners who signed with Adani in 2014.
At one stage in our call the DSD media people indicated that I may have to submit a right to information request to discover the date Adani made communication with them indicating that there was a new proponent, and the date the DSD website was updated. They also said something about there being “no time limit” for Adani to inform the DSD that there was a change of proponent. The idea that there is no time limit for a change of proponent leaves me with many questions about what it took to legally change proponents (for the world’s largest proposed coal project) and how easy it may have been for Adani to stealth in a new proponent, approvals, and accreditations. Indeed the approvals and accreditations granted by the DTMR and DNRM in May and September of 2017 have confirmed to me that it is absolutely necessary to identify the exact date and procedure for transferring proponents between companies within a conglomerate like Adani.
On September 19 I received a call back from Rebecca, the Adani media person. Rebecca was able to confirm that Adani had sent a communication to the Qld DSD in March 2018 asking to change the name of the listed proponent for the North Galilee Basin Rail Project (NGBR) and add a new proponent to the Carmichael Coal Mine and Rail Project (CCMR). They were also able to confirm that the DSD added the new proponent names to their website, ‘project overview’ pages in May 2018. It is on these DSD hosted pages that the key project information such as EIS documents are provided.
Here’s a link to the National Library of Australia web archive showing that on March 18, 2018 Adani Mining Pty Ltd were listed as the proponent for the NGBR.
Here’s a link to the DSD project overview page for the NGBR which shows that the new proponent is Carmichael Rail Network Pty Ltd.
Accreditations and Approvals
On May 15, 2017 the Carmichael Rail Network Pty Ltd was accredited as a ‘rail transport operator’ by the Queensland Department of Transport and Main Roads (DTMR). On September 24, 2018 I sent a set of questions to DTMR asking them to provide information about how and when Carmichael Rail Network Pty Ltd applied for and received accreditation. I can expect a response by October 16, 2018.
Here’s a link to the download page for Rail Regulator’s Reports:
‘Rail Regulator’s Report 2016–17: A report on safety performance on the rail network in Queensland’. ‘Appendix 1: Accredited Rail Transport Operators as at 30 June 2017’. https://www.tmr.qld.gov.au/Safety/Rail-safety/Rail-regulator-yearly-report
It should be noted that, according to a report by Jenny Wiggins on September 14, 2018, the Carmichael Rail Network Pty Ltd had no employees and $1000 in assets at the end of the 2016/17 financial year. If this is the case then DTMR gave accreditation to nothing but a shell company.
Aecom’s contract was with Carmichael Rail Network, a subsidiary of Adani. But as its most recent annual report for the year ending March 2017, the Carmichael Rail Network had no employees and only $1000 in assets.
The ABC’s Stephen Long reported in March 2017 that Carmichael Rail Network Pty Ltd were assigned the royalty deed sold to Adani by Linc Energy in August of 2014. Long described Carmichael Rail Network Pty Ltd as a “shell company”.
But in August 2014, in dire financial straits, Linc Energy agreed to sell the royalty deed back to Adani at a fire sale price: just $150 million.
The obvious course would have been to extinguish the royalty deed, because it represented a multi-billion-dollar liability for the mine which is ultimately owned by Adani Enterprises Ltd, the Bombay-stock exchange listed company.
Instead, the royalty deed “was assigned by Linc Energy Limited to Carmichael Rail Network Pty Ltd as trustee for Carmichael Rail Network Trust,” notes in financial reports of Adani Mining Pty Ltd say.
Carmichael Rail Network is one of a group of companies behind the proposed North Galilee Basin rail line, which Adani is currently seeking a subsidised loan of up to $1 billion from the Federal Government’s Northern Australia Infrastructure Facility to build.
“What this means is that one of the companies currently seeking up to $1 billion in public subsidy is going to profit to the tune of up to $3 billion if the mine goes ahead,” Mr Walters said.
Adani Mining Pty Ltd, the proponent of the Carmichael mine and the holder of its environmental approvals, appears to have lent Carmichael Rail the funds to buy the royalty deed.
A spokesman for the Adani Group said the subsidiary assigned to the royalty right was an Australian registered and regulated company and “as such it pays all applicable Australian taxes charges”.
Long’s reporting relied on analysis from the Adam Walters at Energy and Resource Insights based in Sydney. It appears that it was Walters who provided the Institute of Energy Economics and Financial Analysis, and Environmental Justice Australia intelligence regarding an Adani report to the Australian Securities and Investments Commission indicating that among the “proponents” for the “Carmichael Rail Project” is “Carmichael Rail Network Pty Ltd”.
2. According to company filings to the Australian Securities and Investments Commissiondated 1 July 2015, the Australian domiciled Carmichael Rail Pty Ltd and Carmichael Rail Network Pty Ltd as trustee for the Carmichael Rail Network Trust are the “proponents of the Carmichael Rail Project”.
It was announced on June 6, 2017 that AECOM had a contract to build the rail link from the Carmichael mine to the port. While some reports used the term “Carmichael Rail Network” none specified that the contract was not with the existing proponent (according to the DSD website) Adani Mining Pty Ltd who made ILUAs for the North Galilee Basin Rail Project in 2014 and who were responsible for satisfying ‘unprecedented’ environmental conditions in seeking approvals for the Carmichael mine and associated rail corridors.
At the time of the AECOM contract announcement Carmichael Rail Network Pty Ltd had held rail transport operator accreditation for only 3 weeks. The announcement of the AECOM contract preceded the publication of the 2016/17 regulator’s report which also shows that Adani Mining Pty Ltd had ceased to possess accreditation.
On September 19, 2017 Carmichael Rail Network Pty Ltd was added as an ‘approved entity’ for the purposes of ‘Riverine Protection Permit Exemption Requirements’. The available documents don’t indicate if Adani Mining Pty Ltd have ever applied for, or been added as an ‘approved entity’.
Riverine protection permits allow entities doing work around water ways of various types to conduct earth works. Exemptions are sometimes given by the Department of Natural Resources and Mines for significant works.
It is quite possible that no information was available about the ‘approved entity’ status of Carmichael Rail Network Pty Ltd until after the creation date for the below linked document – August 7, 2018.
1.03 19/09/2017 Carmichael Rail Network Pty Ltd added as approved entity.
Separable Portion 1
In early 2015 Jerome Fahrer provided an affidavit on behalf of Adani in proceedings brought by Land Services of Coast and Country Inc and Conservation Action Trust. Included in the instructions from Peter Stokes, a partner at McCullough Robertson Laywers who were engaged by Adani Mining Pty Ltd are three intriguing points.
Given that Peter Stokes was engaged and presumably briefed by Adani, the significance of the revelations made in the three points under the heading ‘Rail alignment’, must be recognised.
Once you know what “SP1” is the picture becomes clearer. SP1 stands for Separable Portion 1, the first section of the proposed 189km rail component of the Carmichael Coal Mine and Rail Project (CCMR). As the points below show, in early 2015 it was known that less than half of the CCMR rail corridor was going to be retained.
14 As you know, Adani is proceeding with the North Galilee [Basin] Rail Project alignment in preference to the full rail alignment as set out in the EIS and SEIS. The investment associated with this has been calculated at $2.2 billion.
15 However, a portion (but not all) of SP1 as presented in the EIS and SEIS will also be constructed, representing the first approximately 70 kilometres of the rail leading from the mine itself. The investment associated with the whole of the rail aspect of the project is approximately $2.5B (inclusive of contingency and transactional costs).
16 The revised SP1 alignment will no longer connect directly with the existing Goonyella or Newlands rail system.
The reason that the admissions made in the instructions to Jerome Fahrer are so significant is because they show that the “rail” component of the Carmichael Coal Mine and Rail Project (CCMR) had been reduced to less than half only months after the final approvals were given by state and federal governments.
The name of the CCMR suggests that it’s rail component is so significant that it needed to be included in the project name unlike most mines which do not include the rail component in the name. Indeed the majority of Separable Portion 1 is located on Jannga country. The Jannga People represented by Bulganunna Aboriginal Corporation made 2 ILUAs with Adani Mining Pty Ltd for both the NGBR and CCMR. The National Native Title Tribunal numbers for the two Jannga-Adani ILUAs are: QI2014/065 and QI2014/022.
The reality is that the rail component of the CCMR as indicated on the DSD website ‘project overview’ page was effectively severed from the mine project in late 2014 or early 2015. It’s likely that the Jannga People ILUA for the CCMR covers Separable Portion 1 and the Jannga People ILUA for the NGBR covers the remnant Plan B corridor which extends to the eastern boundary of the Jannga People’s determination area.
Separable Portion 1 is only mentioned in two types of documents: EIS documents for the Carmichael Coal Mine and Rail Project (CCMR), and two documents associated with Jerome Fahrer and the consulting firm he leads called ACIL Allen.
In my briefing in the lead up to the senate NAIF inquiry in 2017 I highlight an unreferenced statement about the composition of the 388km the “rail link” by ACIL Allen in their report for the NAIF inquiry commissioned by the Australian Conservation Foundation.
The rail link comprises the 78-km Carmichael rail project from the mining and processing operation to Mistake Creek, and the 310-km North Galilee Basin Rail (NGBR) project from Mistake Creek to Abbot Point. The NGBR facility will be accessible by other enterprises.
Here’s a quote from an archive copy of the Adani Australia website, media releases section from November 1, 2015 (the earliest available).
The NGBR, the principal component of the company’s planned 388 km rail link from Carmichael to the port at Abbot Point, will be Queensland’s first standard gauge rail line, helping drive lower costs for Adani and other producers by with the longest, highest capacity trains for coal haulage in Australia.
The above statement is an acknowledgement of the reality of the fictional “Carmichael Rail Project”. If NGBR is the “principle” component, then Separable Portion 1 is the secondary component. By a fictional creation, a fake name that was unquestioned in the media, among ENGO spokespeople, and their think tank allies Adani masked the composition of their rail link. Through the withholding of information by both Adani and the Queensland and federal governments no reliable or intelligible information sources existed when needed. This created a situation where marginalised Traditional Owners, campaign groups, and the public could not analyse and determine what was really happening.
Additionally, the acknowledgements made in the instructions given by Adani Mining Pty Ltd legal representatives were entirely ignored by organisations like the Australian Conservation Foundation and Land Services of Coast and Country Inc. These organisations are well networked into the StopAdani coalition/alliance. Ignoring the significance of Separable Portion 1 may have strategically disadvantaged collective efforts at preventing the advancement of the Adani’s rail corridor plans.
The statement below from the introduction to the North Galilee Basin Rail Project (NGBR) EIS documents shows that Adani preferred the more direct route offered by the NGBR. I am left wondering if Adani ever intended to actually build the rail component of the Carmichael Coal Mine and Rail Project (CCMR). It seems quite possible that they pursued a less desirable corridor in order to attach a significant rail project to the mine. By presenting a fictional name for the connected rail projects created the suggestion that the NGBR was part of the mine project itself and not a separate project.
The proposed Carmichael Coal Mine and Rail Project includes a 120 km portion of dual gauge rail that will run west to east from the mine site to Diamond Creek, and a 69 km narrow gauge portion that will run east from Diamond Creek and connect to the Goonyella rail system south of Moranbah. This would enable carriage of product coal over the existing narrow gauge networks either directly to the Port of Hay Point (Dudgeon Point Expansion) or indirectly to the Port of Abbot Point. As such, the Carmichael Coal Mine and Rail Project rail infrastructure offers a short-term incremental solution that maintains port optionality, but is primarily only a medium – to long – term solution for export directly to Dudgeon Point.Dual port capability for the export of coal is required by Adani to insure against potential force majeure conditions that may affect one of the mine-to-port supply chain routes. In addition, dual port capability will help to accommodate any future production increases from Adani and/or third-party mines in the Galilee Basin, which may exceed the capacity of one port. Given Adani’s interests in the existing and proposed export facilities at the Port of Abbot Point ( refer Section 1.4), a highly efficient, long-term and more direct transport route to the port was identified as a key business requirement.
Cut n paste journalists and busy people, could, and have quite reasonably assumed that the viability of the rail line would be impacted by any success achieved by the Wangan and Jagalingou Family Council in their efforts to stop the mine. These assumption were made possible by the absence of investigation of the political and economic context of the negotiation of ILUAs for the North Galilee Basin Rail Project. As I have pointed out many many times, the Stop Adani coalition/alliance NGOs and think tanks, the Fairfax, Guardian Australia, and ABC have consistently avoided investigating the reality of the diversity of Traditional Owners in the Galilee Basin coal complex area.
Here’s a map that was provided to DNRM in March 2016 and only made available in a right to information disclosure in February 2018. Neither Adani nor the Queens;land government saw fit to release this very enlightening map when it would have been valuable for public understanding. I have not been able to ascertain which organisation made the initial RTI (DNRM 15-315) that yielded this map. I am left to assume that they did not have an interest in sharing it with the public.