HRL has spent $20 million in State Government funds preparing for a dual-gas plant in the Latrobe Valley which now looks unlikely to be built.
In response to speculation last week the company had already spent part of the initial $50 million State Government allocation to the project, State Member for Morwell Russell Northe yesterday confirmed his advice indicated this was the case.
Potential for the proposed 600 Megawatt dual-gas project to proceed was placed in serious doubt last week, when the Federal Government said it would not proceed with a $100 million grant for the project after HRL failed to meet the conditions set out in the funding deed.
The State Government subsequently said it was considering whether to also withdraw a $50 million grant for the project.
Green groups claimed the Federal Government’s decision was likely to be the “final nail in the coffin” for HRL’s proposal.
Yesterday, Mr Northe said he understood the contractual arrangement between the State Government and HRL allowed the company to spend an initial $20 million and “I understand they have drawn down that amount for engineering and scope and design work as well as work on the technical design aspects of the project.”
He said a decision on whether the remaining $30 million would be withdrawn from the project would not be made until formal discussion had taken place with HRL.
“We have not had an official announcement that the project is dead and buried but we are acutely aware of the Federal Governments decision,” Mr Northe said.
“But until discussions and negotiations have taken place (between the state government and HRL) we have to sit and wait.
“We are supportive of the notion that the money was committed to a Latrobe Valley project and remain hopeful it will stay in the community.”
Meanwhile, a medical group has welcomed news the project might not proceed, claiming “burning coal has serious implications for our health”.
Doctors for the Environment Australia said “toxic pollutants released from coal cause lung and heart disease and impact on the lung function of children.”
Despite repeated requests for a comment from HRL, the company did not return calls from The Express by time of publication.
