19 December, 2003] QUEENSLAND GOVERNMENT GAZETTE, No. …€¦ · Tarong Power Station supplies...

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19 December, 2003] QUEENSLAND GOVERNMENT GAZETTE, No. 80 1271 DEPARTMENT OF STATE DEVELOPMENT State Development and Public Works Organisation Act 1971 NOTICE copy The Governor in Council has approved the Tarong Power Station as shown on the map annexed as Schedule A, as an infrastructure facility that is of significance, particularly economically or socially, to Queensland and the Wide Bay-Burnett region. Nanti ngo-Maidenwell Road 4

Transcript of 19 December, 2003] QUEENSLAND GOVERNMENT GAZETTE, No. …€¦ · Tarong Power Station supplies...

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19 December, 2003] QUEENSLAND GOVERNMENT GAZETTE, No. 80 1271

DEPARTMENT OF STATE DEVELOPMENT

State Development and Public Works Organisation Act 1971

NOTICE

copyThe Governor in Council has approved the Tarong Power Station as shown on the map annexed asSchedule A, as an infrastructure facility that is of significance, particularly economically or socially, toQueensland and the Wide Bay-Burnett region.

Nanti ngo-Maidenwell Road 4

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1272 QUEENSLAND GOVERNMENT GAZETTE, No. 80 [ 19 December, 2003

State Development and Public Works Organisation Act 1971

STATEMENT GIVING REASONS (INFRASTRUCTURE FACILITY OF SIGNIFICANCE). NOTICE (No 1) 2003

Short title

1. This notice may be cited as the Statement Giving Reasons (Infrastructure Facility ofSignificance) Notice (No 1) 2003.

Statement Giving Reasons (Infrastructure Facility of Significance) [s.125(5) of the Act]

2. Paul Fennelly, Coordinator-General, pursuant to Section 125(5) of the State Development and

Public Works Organisation Act 1971 has prepared a statement giving reasons, as adopted by theGovernor in Council, and as set out in the Schedule below as to why the Tarong Power Stationinfrastructure facility was approved by the Governor in Council by gazette notice on 19 December 2003pursuant to Section 125( 1)(f) of the State Development and Public Works Organisation Act 1971 as aninfrastructure facility having significance, particularly economically or socially, to Queensland and theWide Bay - Burnett region, being the region in which the infrastructure facility is to be constructed.

SCHEDULE

STATEMENT GIVING REASONS WHY THE GOVERNOR IN COUNCIL APPROVED BYGAZETTE NOTICE ON 19 DECEMBER 2003 AN INFRASTRUCTURE FACILITY AS

HAVING SIGNIFICANCE UNDER THE STATE DEVELOPMENT AND PUBLIC WORKSORGANISATION ACT 1971

1. Decision

On 19 December 2003, the Governor in Council approved by gazette notice under section 125(l)(f) ofthe State Development and Public Works Organisation Act 1971 ("SDPWO Act") the Tarong PowerStation as having significance, particularly economically or socially, to Queensland and the Wide Bay -Burnett Region, the region in which the infrastructure facility is to be constructed.

2. Introduction

On 3 December 2003, the Coordinator-General received an application , dated 1 December 2003, fromTarong Energy Corporation Limited ("Tarong Energy ") requesting that the Tarong Power Station beapproved by the Governor in Council as an infrastructure facility having significance under section125(1)(f) of the SDPWO Act. The Tarong Power Station facility is comprised of the electricitygenerating units and associated facilities including the ash disposal dam, coal conveyor and storagesystems and cooling water dams.

Section 125 (1)(f) of the SDPWO Act provides that the Coordinator -General may take land for thepurposes of an infrastructure facility that is:

(a) of significance, particularly economically or socially, to Queensland or the regionin which the facility is to be constructed; and

(b) approved by the Governor in Council, by gazette notice, as having thatsignificance.

Pursuant to section 125(2) of the SDPWO Act, in considering whether an infrastructure facility would beof economic or social significance, the potential for the facility to contribute to community wellbeing andeconomic growth or employment levels must be taken into account. In accordance with section 125(3) ofthe SDPWO Act, in assessing such potential, the contribution the infrastructure facility makes toagricultural, industrial, resource or technological development in Australia, Queensland or the region inwhich the appropriate infrastructure facility is to be constructed is a relevant consideration.

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19 December, 20031 QUEENSLAND GOVERNMENT GAZETTE, No. 80 1273

3. Evidence or Other Material on Which Findings of Material Questions of Fact are Based

In forming the decision to approve the infrastructure facility as having significance, particularlyeconomically or socially, to Queensland and the region in which the facility is to be constructed, the

Governor in Council had regard to the following materials:

• Letter dated 1 December 2003 from Mr Andrew Pickford, Chief Executive Officer of Tarong Energy

to the Coordinator-General enclosing Tarong's application requesting that the Tarong Power Stationbe approved by the Governor in Council as an infrastructure facility having significance under

section 125(1)(f) of the SDPWO Act;

• Department of State Development Briefing Note dated 16 December 2003 to the Honourable TomBarton MP, Minister for State Development, containing the Coordinator-General's recommendationin relation to whether the Tarong Power Station is an infrastructure facility of significance underSection 125(l)(f) of the SDPWO Act;

• Extract from State Development and Public Works Organisation Act 1971, sections 125 and 174; and

• Appendix A of SDPWO Act Guidelines for acquisition of land for infrastructure projects by persons

other than the state , September 1999;

• Appendix C of SDPWO Act Guidelines for acquisition of land for infrastructure projects by persons

other than the state, September 1999;

• Appendix C of SDPWO Act Guidelines for consultation and negotiation with native title interests,

September 1999;

• Centre for Australian Financial Institutions, Economic Impact of Tarong Energy on the Wide Bay-

Burnett Region. Prepared for Tarong Energy Corporation Ltd.

• Letter dated 11 June 2003 to Tarong Energy from the Environmental Protection Agency enclosingthe Compensation Report for Revocation of Part of Yarraman State Forest.

• Letter dated 11 December 2003 to Tarong Energy from the Queensland South Representative BodyAboriginal Corporation.

• Tarong Energy, Tarong Energy Annual Report, 2002/2003.

• National Electricity Market Management Company, 2003 Statement of Opportunities.

• Powerlink Queensland , Annual Planning Report 2003.

• National Institute of Economic and Industry Research , The Outlook for the NEM States to 2012-13.

• Letter dated 3 December 2003 from the Coordinator-General inviting submissions from personsaffected by the infrastructure facility.

• Five submissions received from affected persons in response to the Coordinator -General ' s letter dated3 December 2003 inviting submissions from persons affected by the infrastructure facility.

• Explanatory Memorandum to Executive Council Minute in respect of the Tarong Power Station.

4. Findings of Material Questions of Fact

From the material to which regard was had the following findings of fact were made.

4.1 Type of Infrastructure Facility Proposed Including Land on Which the Facility is to beLocated

The application from Tarong Energy identified the components of the Tarong Power Station as:

(i) 4 x 350MW coal fired electricity generating units; and

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(ii) ancillary facilities including a coal conveyor and storage systems, cooling water dams,15MW emergency gas turbine and an ash dam.

Details of the infrastructure facility are set out below:

Tarong Power Station is located 180 kilometres north-west of Brisbane. The area of the infrastructurefacility includes a 1388.5 ha site, owned by Tarong Energy, and described as Lot 1 on SP138386 and Lot90 on Crown Plan FY2695, and 47 ha of SF289 on FTY 1640 (known as Yarraman State Forest) in theShire of Nanango.

The first of Tarong Power Station's four generating units became operational in May 1984 and the stationwas completed in 1986 at a cost of more than $1.2 billion.

Coal for the power station is principally sourced from the neighbouring Meandu Mine owned by PacificCoal Pty Ltd. The station burns up to 5.5 Mt per annum of coal depending on coal quality and generationload. Raw water for cooling purposes is sourced via water pipelines from the Boondooma and Wivenhoedams.

Tarong Power Station supplies low-cost, reliable electricity to the National Electricity Market (NEM).On average, Tarong Power Station generates about 25% of the electricity consumed in Queensland.

The ash dam is an integral part of the Tarong Power Station. Furnace and fly ash is collected fromvarious parts of the Tarong Power Station and deposited in the ash dam which is approximately 2 kmnorth of the generating plant. Ash produced from Tarong North Power Station is also disposed of inTarong Energy's ash dam under the terms of a Site Service Agreement between Tarong Energy and thejoin venture owners of Tarong North, Tarong Energy (via a special purpose subsidiary, TN Power PtyLtd) and TM Energy (Aust) Pty Ltd which is owned by Tokyo Electric Power Company (TEPCO) andMitsui & Co. Ltd.

The ash dam will reach capacity in mid 2005. Tarong Energy is proposing to rectify this situation byaugmenting the ash dam by raising the spillway crest from the current RL 434 to RL 435.9 in which willincrease the storage capacity of the ash dam by 9.5%. These works will result in some additionalflooding of adjacent State Forest land during large flooding events. The works will need to be completedby no later than mid 2005. These augmentation works will provide an interim solution for ash disposalwhile long term solutions are being developed by Tarong Energy.

4.2 Demand Projections for the Services Associated with the Infrastructure

Economic forecasts prepared by the National Institute for Economic and Industry Research for theNational Electricity Market Management Company ("the NEMCO Report") in June 2003 enable allstates comprising the National Electricity Market (NEM) to prepare load projections using a consistenteconomic scenario. The NEMCO Report indicates that Queensland's compound growth rate is wellabove the expected national trend with the State's Gross State product ("GSP") between 2001/2 and2006/7 averaging 3.9 per cent. The NEMCO Report estimates Queensland GSP growth from 2001/2 -2012/13 will be at an average rate of 3.6% per annum. For the year 2005/6, the NEMCO Reportindicates that investment associated with large resources projects is expected to induce a strong upturn inthe Queensland GSP. Further, NEMCO has forecast a summer reserve deficit of 59MW for the 2005/6while the demand forecast for 2007/8 is expected to exceed supply.

In its Annual Planning Report for 2003, prepared in accordance with its obligations under the NationalElectricity Code, Powerlink Queensland ("Powerlink") states that electricity growth in Queensland hasgrown strongly over the past ten years, and this trend is expected to continue. In particular, Powerlinkestimates that summer peak demand will increase to an average annual rate of 3.6% from 6,462 MW in2002/3 to 9,172 MW in 2012/13. In south-east Queensland, where the majority of electricity generated bythe Tarong Power Station is consumed, Powerlink estimates that summer peak demand for will growannually by 6%.

Significantly, all projections are based on the continued operation of the Tarong Power Station.

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19 December , 2003] QUEENSLAND GOVERNMENT GAZETTE, No. 80 1275

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4.3 Needs Which the Facility Would Meet and How the Infrastructure Would Satisfy theIdentified Need

A continued reliable supply of electricity into Southern Queensland to meet both current demand andprojected demands is dependent on the supply of power from the Tarong Power Station.

In 2002/3 Tarong Power Station supplied 10,672 GWh of electricity which represents approximately25% of Queensland's energy requirements. The ongoing provision of power to the Southern QueenslandMarket is reliant on the Tarong Power Station. Further, the ability of south-east Queensland's electricityneeds to be met by alternative sources is limited by the capability of the high voltage transmissionnetwork.

The Powerlink Report indicates that the 2005/6 demand for Southern Queensland of around 4,421 MW is1,400 MW greater than can be supplied from sources outside Southern Queensland. Other power stationslocated in Southern Queensland (Swanbank E which provide 385 MW, Swanbank B which provides 480MW and Wivenhoe Power Station which provides 160 MW during summer due to energy limits) are notable to meet this demand. Provision of this 1,400 MW is reliant on the continued operation of TarongPower Station.

Further, in the event that Tarong Power Station was forced to reduce its availability of power, unplannedoutages at the generating plant, which are typically around 2% - 5%, would seriously compromise thecapacity of other power stations in Southern Queensland to reliably meet consumers' electricity demands.

4.4 Timing of Project or Service Delivery

Ash is the most significant waste material produced by Tarong Power Station (and from the TarongNorth Power Station which became operational in 2003). Since 1984, the ash dam has been receivinglean phase ash from Tarong Power Station.

In January 2004, the ash disposal system will be changed from a lean phase to a dense phase system,whereby the ash will be dewatered and thickened prior to disposal. This will mean that an increasedamount of ash will be able to be stored in the ash dam. Nevertheless, there will be little capacity left inthe ash dam from the end of 2004. Thus, urgent augmentation of the ash dam is required to be completedno later than by mid 2005. This timeframe means that structural works on the ash dam are required tocommence in mid 2004, due to the 12-month construction period involved.

The land required to enable augmentation works to be completed on the ash dam consists of an area ofapproximately 47 ha, currently within Yarraman State Forest SF289 and adjacent to the eastern boundaryof the ash dam. This area is included within the land required for the infrastructure facility.

4.5 Special Assistance Required from Government other than Land Acquisition

Tarong Energy's application to the Coordinator-General does not identify any new requests ofGovernment related to the provision of the infrastructure facility. However, the land required to enableaugmentation of the ash dam is currently within Yarraman State Forest SF289. Approximately 47 ha ofland is required to be revoked from the State Forest and transferred to Tarong Energy. The need for thisland was identified in the planning stages of the Tarong Power Station and the need for the revocation ofthat part of the State Forest is well known to Government. Tarong Energy has negotiated the terms ofcompensation for the loss of part of the protected estate with the former Department of Natural Resourcesand the Environmental Protection Agency ("the EPA").

In June 2003, Tarong Energy obtained in-principle agreement from the EPA to request the Minister forthe Environment to table a motion in Parliament seeking to revoke 47 ha of land from Yarraman StateForest, subject to approval by the Governor in Council and the resolution of native title issues.

Native title has not been extinguished on the land currently within the State Forest.

In the event that the required land is revoked from the State Forest, Tarong Energy has agreed to makepayment of compensation to the EPA and subsequently enter into negotiations with the Department ofNatural Resources and Mines to obtain freehold tenure over the land.

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4.6 Financial Analysis Including Project Risk/ Return

Tarong Energy employs approximately 380 people and has total assets of almost $2 billion. During the2002/03 financial year, Tarong Energy earned $404.8 million in revenue through the NEM through thesale of electricity and ancillary services and returned as a dividend $76.6 million payable to theQueensland Government.

Tarong Power Station is expected to operate for a further 25 years. During this time, Tarong Energy willseek to provide the greatest return possible to shareholders from the effective operation of the TarongPower Station. The equity held by the State of Queensland in Tarong Energy was $852.3 million as atthe end of the 2003/03 financial year. Tarong Energy has provided an average return on equity of 10.5%over the past 5 years. Tarong Energy is committed to delivering improved shareholder value, growth anddiversity, reduced risk and other State goals.

The continued operation of the Tarong Power Station will enable Tarong Energy to continue to makesignificant returns to the State Government as dividends. However, the continued operation of theTarong Power Station from mid 2005 is dependent upon the continued availability of the ash dam to storewaste furnace ash and fly ash.

If the land required for the ash dam augmentation cannot be secured in a reasonable time to enable ashdam augmentation works to be undertaken as soon as possible, then current estimations are that ashdisposal will have to be significantly curtailed by mid 2005. Any disruption to the disposal of ash to theash dam would result in significant disruption to the State's electricity supply;-reduced earnings and alsoreduced dividend payments to the Queensland Government.

Also, if Tarong Energy is unable to obtain the land required for the dam augmentation then it is estimatedthat Tarong Energy will face direct costs in the order of $6 to $10 million to undertake engineering worksto prevent ash dam water inundating the State Forest. These costs are subject to the finalisation ofdesign, obtaining all development approvals for and then completing the works in time to enable theaugmentation works to be completed by mid 2005. There is a very real risk that these timeframes maynot be met. Such works will also incur significant maintenance costs over the life of the power station.

4.7 Possible Environmental Effects

Furnace and fly ash is the most significant by-product of the Tarong Power Station. The disposal of theash in the existing ash dam is managed in accordance with legislative requirements. The use of newdense phase system is proposed to commence in January 2004. While this will result in increasedefficiencies in the use of the ash dam, the existing ash dam will reach capacity by mid 2005.

Land required for the proposed dam augmentation has been the subject of a flora and fauna surveyconducted in 1996 which found that the encroachment of the ash dam would have a minimal impact onregionally significant native flora and fauna. While the land required for the dam augmentation contains afauna species with some conservation value, the majority of the land required is above the expectedinundation level of the ash dam.

Using the Forest Evaluation System, the EPA has undertaken an assessment of the ecological andcommercial value of the land required for the dam augmentation to calculate the level of compensation tobe paid by Tarong Energy for the revocation and subsequent transfer of the land which is currently heldas State Forest.

The boundary of the required land was identified to mitigate possible environmental effects by the use ofexisting clearings/tracks for fire protection and estate management together with access by 4WD vehicleswithout the need to construct a new road. Potential adverse environment effects on the land proposed tobe affected by the dam were prevented or mitigated by the identification of a boundary which wouldrequire minimal clearing of existing plantation and native forest areas, the use of an existing trackadjacent to the drainage line for fencing thereby reducing the need to clear vegetation, and the inclusionof an existing diversion channel which formed part of the original power station construction works.

Environmental and development approvals may be required to achieve the amalgamation of the requiredland with Tarong Energy's land. The need for any further assessment of the environmental impactsassociated with the proposed augmentation of the ash dam will be determined once the land has beenrevoked from the State Forest.

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4.8 Technical and Financial Capacity of the Proponent to Implement the Proposed Facility

Tarong Energy was established in 1997 as a Queensland Government Owned Corporation and a publiccompany established under the Corporations Act 2001 (Cth). Its shareholding Ministers are the

Treasurer and the Minister for Energy. Tarong Energy's stated mission is "to be acknowledged asAustralia's best performing energy business". To this end, Tarong Energy actively competes with privateand public companies and other Government Owned Corporations in the NEM. Tarong Energy generatesapproximately 25% of Queensland's electricity supply.

In the 2002/03 financial year, Tarong Energy earned $404.8 million in revenue through the NEM as aresult of the sale of electricity and ancillary services. In the same period, Tarong Energy had an after taxoperating profit of $80.6 million. Tarong Energy's total assets were worth $1.958 billion and itsliabilities totalled $1.106 billion.

Tarong Energy has substantial experience in the completion of major construction projects which includethe completion of the 445 MW Tarong North Power Station and the 34.5 MW Starfish Hill Wind Farm(in South Australia) in 2003.

The implementation of Tarong Energy proposed augmentation of the ash dam will be carried out byexperienced contractors, under the direction of Tarong Energy's core project management teamconsistent with the Tarong Energy's approach to major construction projects in the past.

4.9 Negotiations to Acquire Land by Agreement

The land required for the augmentation of the ash dam is included in an application for a native titleclaim made by the Wakka Wakka People (QC 99/33). Tarong Energy conducted native title negotiationswith representatives of the Wakka Wakka #2 in 2000 with the intention of forming an indigenous landuse agreement ("ILUA"). An ILUA was prepared and signed by all but one of the claimants. TarongEnergy is continuing discussions with the various parties in an attempt to finalise the execution of theILUA and have it registered with the National Native Title Tribunal ("NNTT").

Tarong Energy's efforts to negotiate an ILUA are supported in a letter from the Queensland SouthRepresentative Body Aboriginal Corporation ("QSRBAC") as the relevant Aboriginal representativebody for the area. In its letter, the QSRBAC confirms the negotiations between Tarong Energy and theWakka Wakka People between October and December 2000 for the surrender of native title rights andinterests in the land forming part of Lot 289 on FTY1640. The QSRBAC's letter indicates that the ILUAwas not executed by all native title claimants because of an internal dispute with other Wakka Wakkaclaimants. QSRBAC has indicated that, given the circumstances of the dispute and Tarong Energy'sefforts to negotiate an ILUA together with its intention to comply with the terms of the ILUA, it does notobject to the proposed compulsory acquisition.

Tarong Energy has indicated that its preference has been, and remains, to reach agreement with the nativetitle parties and to have an ILUA registered with the NNTT, however, the need to have certainty as to theability to use the land required for the dam augmentation is now urgent.

4.10 Investigations on the Required Land

The need for the additional land to be used for the ash dam was identified in the planning stages of theTarong Power Station. The additional land was considered a necessary step for the operation of thestation. The proposed construction of the augmentation works for the ash dam will raise the spillwayheight and cause inundation of the low-lying areas of part of the State Forest.

The boundary of the additional land required for the ash dam was settled through negotiations with theformer Department of Natural Resources and the Department of Primary Industries (DPI) in the late1990s. The boundary was designed to accommodate the flooding of the ash dam during large rainfallevents and the operational and practical needs of Tarong Energy and the DPI - Forestry.

In relation to native title, Tarong Energy commissioned a tenure history of the affected land within theState Forest which indicated that native title may exist as there was no extinguishing grant. TarongEnergy then entered into native title negotiations with the native title claimants and reached generalagreement on the terms of ILUA in late 2000.

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Tarong Energy has commissioned cultural heritage consultants to conduct a cultural heritage survey ofthe required land within the State Forest. The work was undertaken in August 2000 and a preliminaryreport was prepared by the cultural heritage consultant on the basis of this field work along with a draftAboriginal Cultural Heritage Management Plan.

Tarong Energy is involved in discussions with the native title claimants about the further work, whichincludes digging test pits, required to finalise the cultural heritage survey and Management Plan.

4.11 Economic Significance of the Infrastructure Facility

Tarong Power Station employs about 250 people, 90% of whom reside in the neighbouring shires ofKingaroy, Nanango and Rosalie. As well, Tarong Power Station households contribute 415 workers toKingaroy Shire, 181 to Nanango Shire and 38 to Rosalie Shire. The benefits to the local communitiesattributable to Tarong Power Station extend beyond direct contributions and include the multiplier effectscreated by the employment and finances provided by the power station. An estimated 85% of the totalemployment created is due to flow-on effects from the operation of the power station.

The report prepared by the Centre for Australian Financial Institutions for the financial year of 2000/01(the "CAFI Report"), The Economic Impact of Tarong Energy on the Wide Bay-Burnett Regionidentifies that Tarong Power Station's direct annual economic contribution to the Wide Bay - BurnettRegion includes spending $4.5 million on purchasing goods and services locally (excluding coalpurchases, salaries and wages) as well as contributing $1.95 million in water delivery to farmersdownstream of the facility along Meandu Creek. The value of water discharged to the creek over thenext 25 years has been estimated, in net present value terms, at $6.6 million with a resulting net increasein annual farm revenue of $140 000.

The CAFI Report found that for the financial year of 2000/01, Tarong Power Station householdscontributed $14.5 million in goods and services expenditure to the economy of the Wide Bay - BurnettRegion. Contracts to local service providers also contributed to the region's economy with the associatedCoal Combustion Products contractors spending $1.6 million in the region annually.

The CAFI Report found that Tarong Power Station's total annual economic contribution to the Wide Bay- Burnett Region plus the flow-on effects of the expenditure in the Region were estimated as follows:

• change in total output: $518 million;

• change in value added: $285.9 million;

• change in total household income: $88.9 million;

• change in total employment: 1618 fulltime equivalent jobs.

These estimates provide an indication of the substantial contribution of the Tarong Power Station to themaintenance of a higher level of sustainable social and economic activity in the region. The dominantbeneficial impacts of the contributions above are the increase in the living standards of local communitiesand the widely observed increase in regional economic certainty and stability. This certainty has raisedthe level of business confidence in the region, an issue which is vitally important for future regionaleconomic development and the follow-on benefits of halting the drain of young and qualified peoplefrom regional areas.

Because of the significant coal consumption by Tarong Power Station, the power station also plays a rolein the development of thermal coal resources in Southern Queensland.

The expected operating life of the Tarong Power Station is considerably longer than the current coalsupply contract with Pacific Coal Pty Ltd. To ensure long term future generation requirements, TarongEnergy is actively seeking to secure economic fuel supplies. The development of these new resourcessuch as Tarong Energy's coal resource at Glen Wilga in the Surat Basin will ensure that the economicbenefits associated with the power station continue to increase after the current contract for coal fromMeandu Mine ends. Tarong Energy is also progressing plans to develop a rail link from the TarongPower Station to other Surat Basin coal resources to ensure the optimal long-term supply of fuel to thepower station.

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4.12 Social Significance of the Infrastructure Facility

It is anticipated that the increased electricity generation which will be made possible by construction andoperation of the augmented ash dam, an integral part of the Tarong Power Station infrastructure facility,will have the following social benefits:

(a) ensuring a reliable electricity supply for households and businesses in the SouthernQueensland regional market;

(b) providing further impetus for additional employment opportunities in the SouthernQueensland region based on the availability of power, given that the facility generate 25% ofelectricity needs within the region;

(c) providing continued direct employment for 250 employees of Tarong Power Station, 90% ofwhom reside in neighbouring shires, and continued support to double that number of indirectemployees in neighbouring shires;

(d) providing multiplier effects of benefit to neighbouring shires, including expenditure on localgoods and services by the Tarong Power Station itself and its employees, and increasing thewealth and living standards of neighbouring local communities;

(e) affording increased levels of business confidence in the region and other follow-on,economic benefits, such as encouraging young and qualified people to remain in or relocateto the region; and

(f) securing the longevity of operation of the Tarong Power Station, given that the facility isexpected to operate for the next 25 years and it could face outages if the ash dam is notaugmented.

The above likely social impacts were highlighted in the application submitted by Tarong Power Stationand in the supporting "CAFI Report" which formed part of Tarong Energy's application. In addition, thesubmission from Tarong North Power Station reiterated the importance of the facility to the entire WideBay - Burnett region, and that submission included detailed reference to the integral function that the ashdam contributes to the ongoing performance of the entire facility.

Tarong Energy's direct contribution to the economic and social development of the community isdemonstrated by its role in the establishment of the Tarong Learning Program and other communityactivities and facilities aimed at developing the skills of local residents, particularly the unemployedyouth.

While the positive social impacts of the infrastructure facility will be felt most keenly in the immediateWide Bay - Burnett region, they will also have important flow-on social, and related economic, benefitsto the rest of the State, in particular to South-East Queensland.

4.13 Summary of the Public Submissions

As part of the assessment of the significance , particularly economically or socially , to Australia,Queensland or the Wide Bay - Burnett region of the infrastructure facility, the Coordinator -Generalinvited submissions on the relevant issues from affected persons, in accordance with the Guidelines forAcquisition of Land for Infrastructure Projects by Persons other than the State.

The Coordinator-General received five submissions from the following organisations or individuals:

• Gurang Land Council (Aboriginal Corporation) Native Title Representative Body;

• Queensland South Representative Body Aboriginal Corporation;

• Oscar Chapman (one of the Wakka Wakka #2 Native Title Claimants);

• Tarong North Pty Ltd; and

• the Environmental Protection Agency.

The matter being assessed by the Coordinator-General, ie whether the infrastructure facility is ofsignificance, particularly economically or socially to Queensland or the region in which the facility is tobe constructed, was addressed directly in the submission received from Tarong North Pty Ltd and theEPA which supported a finding that the Tarong Power Station has significance.

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The submission from the Gurang Land Council (Aboriginal Corporation) Native Title RepresentativeBody advised that it is no longer the legal representative for the Wakka Wakka #2 Native Title ClaimantApplication and that it no longer accepts correspondence relating to the Claim. Further, the submissionsstated that the Tarong Power Station is located within the region administered by the QSRBAC.

In a telephone conversation on 15 December 2003 with an officer from the Department of StateDevelopment, Fraser Power, Legal Officer for the QSRBAC, confirmed that while the QSRBAC wouldnot be making a submission to the Coordinator-General, its letter dated 11 December 2003 to TarongEnergy could be treated as QSRBAC's formal response to the Coordinator-General's request for asubmission. QSRBAC's letter confirms that negotiations took place between October and December2000 between Tarong Energy and the Wakka Wakka People, for the surrender of native title rights andinterests over part of Yarraman State Forest required for an ash dam. The terms of an ILUA to effect thesurrender were agreed to between Tarong Energy and the Wakka Wakka People. However, according toQSRBAC, one registered native title claimant refused to execute the ILUA. As a result of Tarong Energyhaving negotiated in good faith with the native title claimants to secure a registered ILUA and as result ofhaving stated its intention to seek to comply with the terms of the ILUA, the QSRBAC, as the relevantrepresentative body, advised that it would not object to the compulsory acquisition of the land. Thismatter, while not of direct relevance to the consideration of the significance of the Tarong Power Station,provides further details of Tarong Energy's negotiations to acquire the land by agreement.

The submission from Mr Oscar Chapman, Chairman of the Eidsvold Wakka Wakka AboriginalCorporation and one of the native title claimants, advised that the Wakka Wakka #2 Native TitleClaimants have interests in the proposed infrastructure and requested that they be notified of all stagespertaining to the project.

The submission from Tarong North Pty Ltd stated that while Tarong North has no right, title or interest inthe Tarong Power Station or the ash dam, it fully supported, and had no objection to, the designation ofTarong Power Station as an infrastructure facility of significance. Tarong North's submission indicatedthat its relationship with Tarong Energy with regard to the ash dam was purely contractual. TarongNorth's submission stated that that any works to be undertaken in relation to the ash dam are a mattersolely for Tarong Energy.

The submission from the EPA confirmed that agreement has been reached between EPA and TarongEnergy with regard to the proposed revocation of approximately 47 ha from the adjoining State Forest(SF289, Parish of Tarong) and the payment of compensation to the EPA, in order to allow for theexpansion of the ash dam. In addition, EPA's submission stated that the revocation process requiringParliamentary approval, is proposed to commence at the first opportunity in 2004. EPA indicated that ithad no objection to the relevant State Forest land being designated as part of the area of the infrastructurefacility of significance.

5. The Reasons for the Decision

The Governor in Council approved by gazette notice on 19 December 2003 under section 125(1)(f) of theSDPWO Act, the Tarong Power Station as an infrastructure facility of significance, particularlyeconomically or socially, to Queensland and the Wide Bay - Burnett region, the region in which thefacility is to be constructed, for the following reasons:

• Tarong Power Station is one of Queensland ' s largest power stations and supplies low cost , reliableelectricity to the NEM. It supplies, on average, 25% of the State's electricity needs.

• Tarong Power Station is strategically located near Nanango, 180 km north-west of Brisbane. It costmore than $1.2 billion. The facility plays an integral role in the supply of electricity to southernQueensland and has an expected life of a further 25 years.

• During the 2002/03 financial year, Tarong Energy earned $404.8 million in revenue through theNEM as a result of the sale of electricity and ancillary services.

• The Tarong Power Station employs a workforce of about 250 people, 90% of whom reside in theneighbouring shires of Kingaroy, Nanango and Rosalie. Tarong Power Station households contribute415 workers to Kingaroy Shire, 181 to Nanango Shire and 38 to Rosalie Shire. Eighty-five percentof the total employment created by the facility is due to the flow-on effects of the power station'soperation.

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• The Tarong Power Station's direct annual economic contribution to the Wide Bay - Burnett Regionincludes spending of $4.5 million on the purchase of local goods and services as well as contributing$1.95 million in water delivery to farmers downstream of the facility along Meandu Creek. Thevalue of water discharged to the creek over the next 25 years has an estimated, net present value, of$6.6 million with a resulting net increase in annual farm revenue of $140,000. Tarong Energy hasassisted in the establishment of the Tarong Learning Program and other community activities andfacilities aimed at developing the skills of local residents, particularly the unemployed youth.

• For the financial year of 2000/01, Tarong Power Station households contributed $14.5 million ingoods and services expenditure to the economy of the Wide Bay - Burnett Region. Contracts to localservice providers also contributed to the region's economy with the associated Coal CombustionProducts contractors spending $1.6 million in the region annually.

• As a Government Owned Corporation, Tarong Energy has an obligation to its shareholding ministersto return a revenue dividend which will increase the economic benefits to the State.

• There is a demonstrable demand for increased power in south-east Queensland up to the year 2013particularly over the summer months when demand is expected to increase at an average annual rateof 3.6% from 6,462MW in 2002/03 to 9,172MW in 2012/13 while summer peak demand is forecastto grow on average by about 6% annually. The majority of electricity generated by the facility isconsumed within South-East Queensland.

• Tarong Power Station supplies 1400MW of electricity for southern Queensland that is unable to besupplied by other power stations in southern Queensland due to limitations in the grid network.

• The ash dam is an integral part of the generating facility. The ash dam will reach capacity in mid2005 necessitating Tarong Energy to investigate means of accommodating the disposal of ash. Thehigher than expected ash content of the coal consumed at Tarong Power Station and the inability tosafely pursue dense phase ash stacking within the confines of the existing ash dam has broughtforward the timing of the required augmentation.

• Augmentation of the dam by raising the spillway at the eastern boundary of the dam contiguous withthe Yarraman State Forest provides the most efficient and cost effective interim solution to theongoing operation of the power station and disposal of ash. There is a 12 month construction periodassociated with the dam augmentation construction necessitating that acquisition of the required landis achieved by mid 2004.

• Tarong Energy has a Site Service Agreement for the provision of cooling water, hydrogen, fuel oiland disposal of ash from Tarong North Power Station owned and operated by the joint ventureowners of Tarong North Power Station , Tarong Energy (via a special purpose subsidiary, TN PowerPty Ltd) and TM Energy (Aust) Pty Ltd which is owned by Tokyo Electric Power Company(TEPCO) and Mitsui & Co. Ltd.

• Tarong Energy has the necessary financial and technical capacity to enable the construction of theash dam augmentation.

• Tarong Energy has attempted to negotiate an ILUA about the surrender of the native title rights andinterests in relation to the land within the State Forest which is included within a native title claim.Because of internal disputes within the native title claimant group, Tarong Energy has beenunsuccessful in executing and registering an ILUA.

• In the event that Tarong Power Station cannot continue to reliably operate at its current capacity,there is a likelihood of outages and interruptions to the supply of power which are not able to be metby other existing power stations.

• Public submissions received on the significance of the facility, particularly economically and sociallyto Australia, Queensland and/or the region supported a finding that the facility has that significance.

• The continued operation of the Tarong Power Station for the years 2005 to 2008 is dependent uponthe continued availability of the ash dam to store waste furnace ash and fly ash.

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• In the event that the ash dam cannot be augmented through the acquisition of additional land adjacentto the eastern boundary of the dam and currently within the Yarraman State Forest, by mid 2004,current estimations are that ash disposal will have to be significantly curtailed by mid 2005. Anydisruption to the disposal of ash to the ash dam would result in significant disruption to the State'selectricity supply, reduced earnings and also reduced dividend payments to the QueenslandGovernment.

• If Tarong Energy is unable to obtain the land required for the augmentation of the ash dam, it isestimated that Tarong Energy will be required to undertake engineering works to undertakeengineering works to prevent ash dam water inundating the State Forest at a cost of $6 to $10million.

• Acquisition of part of the land within Yarraman State Forest will enable Tarong Energy to increasethe storage capacity of the ash dam by 9.5% by raising the spillway crest from the current RL 434 toRL 435.9 m. This increased capacity of the ash dam will allow the Tarong Power Station to continueto provide reliable power supply until 2008.

• Tarong Energy's application dated 1 December 2003, requesting that the infrastructure facility beapproved by the Governor in Council as an infrastructure facility having significance under section125(1)(f) of the SDPWO Act adequately addresses the information requirements specified inAppendix A of the Guidelines for Acquisition of Land for Infrastructure Projects by Persons otherthan the State and adequately demonstrates that the Tarong Power Station is an infrastructure facilityof significance. --