Fresh doubt has been cast over the future of a half-a-billion-dollar Northern Territory government project after the collapse of one of the major companies involved.
The government is adamant the $515 million ship lift will go ahead, while its critics have questioned if continued delays and cost blowouts could push the project beyond feasibility.
The taxpayer-funded facility was intended to bring millions of dollars into the economy each year with infrastructure that would service large vessels in Darwin Harbour.
But the plans were dealt a blow this week when Perth-based construction firm Clough — which is designing and building the ship lift with joint-venture partner BMD — entered voluntary administration on Monday.
Administrators from Deloitte are now combing through the company's projects to assess how they could be brought to fruition.
On Wednesday, Northern Territory Infrastructure Minister Eva Lawler said the government was closely monitoring the situation.
"With big projects, we often see these things, where there is some sort of delay," she said.
"These are big projects, there's big risks around these projects."
A government spokesperson said the government was "100 per cent committed" to delivering the project and emphasised it was being built by a joint venture.
Questions have previously been raised about what return taxpayers will get on their investment after it was revealed the facility's operator — luxury pearl company Paspaley — would collect any revenue.
Costs continue to climb
The project has already faced significant delays, with a two-year build initially expected to begin in 2021.
Clough and BMD were appointed to lead the design and construction in July this year, following what the government said was a three-stage procurement process that took place over two years.
The Country Liberal Party today questioned how the tender process could have been as diligent as the government claimed given Clough's recent collapse.
"Clearly, it hasn't worked," infrastructure spokesperson Gerard Maley said.
"It's only been a couple of months since that tender was awarded and now the joint venture has gone into administration, so clearly something needs to change."
The opposition has urged the government to reassess the benefit of the project if costs continue to climb.
The original $400 million cost estimate — underwritten with a $300 million loan from the Northern Australia Infrastructure Facility (NAIF) — has grown to $515 million, with the treasurer blaming rising construction costs.
A NAIF spokesperson said the loan to the NT government would still go ahead.
"NAIF will work with proponents to assess the impact of Clough going into voluntary administration on the project delivery in accordance with internal processes and procedures," the spokesperson said.
Rolf Gerritsen, a research fellow at Charles Darwin University who has previously questioned the project's value for taxpayers, said labour shortages and the potential need to find a new contractor would likely blow the cost out further.
"By the time it's completed, if we get it for less than $600 million, we'll be lucky," he said.
"The only possibility of any public benefit is if the navy is persuaded to use it, and become an anchor customer, but I doubt the navy would be keen on the current arrangements whereby the taxpayer builds it and a private company runs it."
Clough had a hand in a number of major works, including the Snowy Hydro 2.0 renewable energy project, before the collapse of an acquisition deal pushed it into administration.
Ms Lawler said the government's process in awarding the ship lift contract was "absolutely comprehensive work" but did not say whether it would need to go back to tender.
The ship lift is set to be the largest facility of its kind in northern Australia. It's hoped the facility will create hundreds of jobs, position Darwin as a marine services hub, and be operational in two years' time.
Along with a change to the government's public sector wages policy, the rising ship lift cost was blamed for worse-than-expected deficit figures in the NT treasurer's most recent economic update.
