The future of a proposed waste to energy facility in Victoria's east is in doubt as the government reviews a $48.2 million grant approved by former prime minister Scott Morrison.
On April 29, three weeks before the federal election, the Coalition announced the grant to Japanese-owned company Opal Australia Paper, under the Modern Manufacturing Initiative.
The $500 million project was pitched to burn kerbside rubbish to power a paper mill at Maryvale in the Latrobe Valley.
It has since been revealed that former prime minister Scott Morrison had final sign-off on grants awarded under the initiative, a move which has been criticised as pork barrelling.
The waste to energy project is one of 17 grants approved before the election that are under review by the federal Labor government.
Industry and Science Minister Ed Husic told RN Breakfast on Monday that the review, which started in June, was to ensure money was being spent in the national interest, not political interests.
"It would be a big call to take money off the the table from businesses that have factored that in, that's why we're going through the review," he said.
Gippsland MP Darren Chester said he had been pushing for the Labor Government to commit to the grant.
"It does cause me some concern that the government and the new Prime Minister, when I wrote to them after the election, indicated that these projects were up for review," he said.
But a Department of Industry spokesperson said the review of the initiative would honour the grants where contracts had been signed, not just announced.
"The department can confirm that the project has not been contracted under the Modern Manufacturing Initiative," the spokesperson said.
When asked whether the grant announcement was politically motivated, Mr Chester said the application had undergone a full assessment.
"The project was assessed and announced as part of normal budget processes and has always enjoyed bipartisan support," he said.
Opal Australia's spokesperson did not respond to specific questions about whether a contract had been signed with the department before the election, instead saying the company looked forward to the outcome of the review.
"We appreciate that the government is committed to following a robust process and look forward to the outcome of this review," the spokesperson said.
