The Northern Territory government and other creditors have met to discuss the future of the Tiwi Islands woodchip venture after it struck financial “tough times”.
The government has stepped in and frozen the Tiwi Plantations Corporation’s repayments on a $6.8m loan provided under the previous Country Liberal party government – but has warned it will provide no further funds.
Guardian Australia revealed on Saturday that the project’s future was in doubt just one year after its first shipment of woodchips left the port. The corporation has been working with Deloitte financial consultants since May.
The government said the focus was now on improving operations to “put them on a sustainable long-term path”. It said the work with Deloitte had seen improvements in “performance and accountability”.
The minister for primary industry, Ken Vowles, said it had to be acknowledged the company was facing “tough times”. “We all want this project to succeed and we are working closely with the lender group and Deloitte to make this happen,” he said.
“While the Territory government has agreed to freeze repayments, we have made it clear that no further capital will be provided beyond the $6.8m loan that currently exists. We will continue to work with the Tiwi people, their land council and other creditors to improve the viability of this project and create jobs for the Tiwi people.”
Tiwi Islands traditional owners took control of a former Acacia plantation in 2009 and with government support launched the woodchip venture.
The project was expected to provide between $140m and $150m in export income over the next five years and create 60 to 80 jobs.
It had also been repeatedly cited by the former government as the main driver behind the controversial Port Melville development, which went ahead without an environmental impact assessment. A decision by a federal environment minister’s delegate to approve the $130m development after a subsequent investigation has since been quashed by the federal court.
Tiwi Plantations Corporation has been contacted for comment.
