The plug has been pulled on a proposed electric vehicle factory in Morwell after it had been revealed that the company SEA Electric had terminated its agreement with the state government in October.
The Department of Jobs, Precincts and Regions (DJPR) told a Parliament Public Accounts and Estimates Committee (PEAC) yesterday that the agreement between the company and the state government was finished.
“The company has contacted us in October this year, just recently in this financial year, and has advised us they will seek to terminate the grant, and the government is considering that,” DJPR rural and regional Victoria deputy secretary Beth Jones said in the hearing.
Premier Daniel Andrews had visited Morwell in 2018 to make a pre-election promise to deliver the factory in Morwell in a commercial agreement with SEA Electric that would provide 500 jobs.
SEA was to be a lead tenant at the Gippsland Logistics Precinct on council-owned land behind Mid Valley to manufacture 2400 delivery vans and mini buses a year.
Latrobe City Mayor Sharon Gibson said the state government should make good on its promise for 500 jobs in the Latrobe Valley.
“We are sadly let down. Don’t tell me, show me. If this is a promise you made, then find another lead tenant for this project. It’s long term sustainable jobs we are after,” Cr Gibson said.
“If you make a promise, the come good on it, otherwise don’t get people’s hopes up.”
Nationals Member for Gippsland South Danny O’Brien said he was “not surprised” by the outcome as the project had been “in trouble for some time” after he had raised the issue in the PEAC hearing on Tuesday.
“It’s incumbent on Daniel Andrews and Labor to explain what went wrong and to explain why it hasn’t gone ahead,” Mr O’Brien said.
“We understand when you are dealing with the private sector you are not 100 per cent in control, but at least be upfront with the community.”
Nationals Member for Eastern Victoria Melina Bath said the collapse demonstrated the importance of signing agreements with companies that had pre-existing commitments in the Latrobe Valley.
“SEA was really silent on this, they are distant partners with no embedded connections in the Valley,” Ms Bath said.
“It looks like the Premier was looking on the back of an envelope and granted an idea with no substance.”
Member for Morwell Russell Northe said he had asked the state government to find another proposal with the money it had set aside for the project.
“The government had quarantined funding for this proposal, and it should be funded back into the Latrobe Valley,” Mr Northe said.
“They should either find a replacement for SEA to undertake the same work, find another business to come to the Valley or support local businesses to expand.”
The terms of the arrangement between SEA Electric and the Victorian government were of commercial in confidence.
However, SEA had acknowledged that a grant agreement with the Victorian government should come to an end as the company could no longer meet the terms.
The government was providing milestone payments to SEA Electric on condition it was hiring additional workers from the Latrobe Valley, finalising a site and had a contract for construction.
The government had stopped providing payments in 2019, as support was contingent on the company meeting these milestones approved by the SEA board before the agreement was signed.
“We supported SEA Electric and its promise to deliver jobs for the Latrobe Valley but our support for the project was always on the basis it would deliver ongoing jobs in the Latrobe Valley,” a government spokesperson said.
“This government has always backed Latrobe Valley workers, their families and the community through record investments that have contributed more than 3000 additional jobs to the regions workforce – and that won’t change.”
The Express has contacted SEA Electric for a response.