A Latrobe Valley community group has questioned the State Government about whether $12.5 million allocated to the defunct Shanghai Electric Briquetting Project will remain in the region.
In June 2014, state and federal governments announced a combined $25 million for Shanghai Electric Australia Power and Energy Development to develop a $119 million demonstration plant at Loy Yang A power station.
The aim of the project, which fell under the state’s Advanced Lignite Demonstration Programs, was to produce briquettes for export to China to fuel a Shanghai power station.
The development was expected to create more than 100 jobs during construction and up to 40 jobs during the project’s operation.
However, funding for the demonstration project was pulled in November as the State Government launched a review into coal development programs.
The government previously said the company was unable to develop the project due to market demand.
Advance Morwell president John Guy said he recently approached Member for Morwell Russell Northe, asking whether the project’s allocated money could be redirected into a Valley job fund.
“We want the money to remain in the Latrobe Valley and not go back into government pockets,” Mr Guy said.
“I think whether you believe in climate change or not, we are going to move away from the generation of brown coal so we need to be looking at new industry or a new use of brown coal that doesn’t have the same effect on the atmosphere.”
Mr Guy highlighted the Coalition’s $15 million Latrobe Valley Industry and Infrastructure Fund as an example of beneficial funding.
Aimed at boosting employment, industry and infrastructure in the region, the program helped create 1200 Valley jobs and leveraged close to $100 million in investment.
“To move past brown coal will require a lot of money and perhaps a research facility located in the Latrobe Valley, that is where the funds should go,” Mr Guy said.
Mr Northe questioned State Energy and Resources Minister Lily D’Ambrosio in Parliament last week about the possible redirection of the money.
He told The Express the community was not looking for more funding, but simply asking whether allocated funds could be used for another Valley development, such as the reestablishment of LVIIF.
“There was that amount of money allocated to one particular project so surely similar funding could be put towards another project seeing as Shanghai Electric is not completed,” Mr Northe said.
There are two other Valley-based projects underway through the ALDP to develop plants at Yallourn Power Station – one to produce a range of products including pulverised injection coal, and another to create synthetic crude oil.
In a statement to The Express, Ms D’Ambrosio said the proponents of the ALDP had set milestones to receive state and federal funding, none of which had been met as yet.
“The former Coalition Government spent all of its $15 million Latrobe Valley Industry and Infrastructure Fund while in government so the Member for Morwell should be able to explain where that money was spent and what jobs were created,” Ms D’Ambrosio said.
A spokesperson for the minister said the milestones for the remaining projects were due in the second half of the year.
If they were not met, the projects would not be state-funded and the money returned to general revenue, the spokesperson said.