The Northern Territory government’s decision to grant its biggest ever water licence to a private business is an “extraordinary” giveaway of a public asset worth up to $300m for employment benefits that are “largely illusory”, a new report commissioned by the Central Land Council claims.
Last year the NT government granted Fortune Agribusiness a free 30-year licence to extract up to 40,000 megalitres of groundwater a year from aquifers under Singleton station, near Tennant Creek. The NT does not currently have a water pricing regime and does not charge developers for water.
Fortune Agribusiness said Singleton will be one of the country’s biggest fruit and vegetable operations, will create 110 permanent and 1,350 seasonal jobs, and provide an economic benefit to the NT worth about $100m a year.
But in a report commissioned by the Central Land Council on behalf of traditional owners, a team of economists from the University of South Australia business school reviewed the Singleton business case and found the employment benefits were “largely illusory”, especially for Aboriginal people.
The report said Singleton is likely to generate only 25 to 36 full-time equivalent jobs in the NT, and only five to eight of those would go to Aboriginal people in the Barkly region. A “realistic” estimate of economic benefit to NT was between $13m and $28m a year, the report said. The report’s authors said their findings are based on analysis of information provided in the Fortune Agribusiness business case.
The team, led by Prof Jeff Connor, was scathing about the NT’s decision.
“The NT government appears to have decided to gift a public asset worth between $70m and more than $300m for a project likely to create very limited NT employment and likely adverse impacts on the social and economic wellbeing of Aboriginal traditional owners, residents of neighbouring remote communities and the environment,” Connor said.
By analysing prices paid for water on Australian projects in other states, the economists valued the subsidy being given to Fortune by the government at between $70m and $300m.
The report was peer-reviewed by Prof Quentin Grafton, the director of the Centre for Water Economics, Environment and Policy at the Australian National University.
Grafton said providing “a large subsidy of ‘free’ water to Singleton horticultural projects [was] not justified from either a public interest or a cost-benefit perspective” and did not constitute “free prior and informed consent” by traditional owners.
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The NT Government is signatory to the national water initiative, which supports the inclusion of Indigenous representation in water planning wherever possible. The Central Land Council chief executive, Les Turner, said the Singleton project “neglected to account for the damage it would do to Aboriginal communities and country” in terms of cultural and environmental impacts.
“We are talking about emptying Sydney Harbour twice, about giving away water worth hundreds of millions of dollars,” Turner said.
Fortune Agribusiness said it needed time to fully consider the report and its claims, but was “perplexed” that the company was not contacted “to seek any relevant details”.
In an earlier statement to Guardian Australia, the company said the Singleton proposal was based on a series of detailed studies “by leading Australian professionals in agronomy, farm management, horticulture, farm processing, market analysis, logistics, water management, ecology and many other disciplines”, which demonstrate the economic feasibility of the farm.
A spokesperson said Fortune’s projections around employment and revenue and opportunities for NT businesses “are well founded and we stand by these”.
“More than 150 permanent positions will be required for the farm along with a number in support services. More than 1,350 seasonal workers will also be required once the farm is fully developed,” the spokesperson said.
“We are committed to maximising the involvement of local Indigenous people in all aspects of the farm.
“At the end of the day our goal is to grow food in a sustainable way and provide substantial investment into the region. The whole Western Davenport community can be part of this.”
In February, Aboriginal traditional owners and the CLC launched legal action in the supreme court against the NT government, saying the decision to grant the water licence failed to consider Aboriginal cultural rights to the water.
The case will be heard again in September.
A spokesperson the NT government said that given the matter is before court, it would be inappropriate to comment on the study and its findings.