The Northern Territory government has abandoned plans to recover a controversial $12 million grant from the Darwin Turf Club, instead proposing a funding agreement that diverts $6 million away from the club.
The government had repeatedly said it would recover the $12 million it awarded the Darwin Turf Club for a grandstand in 2019.
That grant was the subject of a damning report by the Independent Commissioner Against Corruption, although it has since been successfully challenged in the Northern Territory Supreme Court.
On Monday, Racing Minister Chansey Paech said the government had put a new funding agreement to Thoroughbred Racing NT of $17.88 million over the next 10 years, with a condition that $6 million would be diverted from the Darwin Turf Club into regional racing.
Mr Paech said the proposal effectively ended the $12 million grandstand saga.
"I've been acutely aware [that], at some point, I have to draw a line in the sand over the ongoing issues when it comes to Darwin Turf Club," he said.
"This agreement is about providing opportunities for the Northern Territory government, Thoroughbred Racing NT and the Darwin Turf Club to all move forward together in the right direction."
In March, the Darwin Turf Club said it would be crippled should it be forced to repay the full amount of the grant, and questioned the government's position after ICAC findings did not recommend the turf club repay the money.
Opposition Leader Lia Finocchiaro also opposed the repayment on the basis the grant was the responsibility of Michael Gunner, the chief minister at the time the grant was issued.
Mr Paech said racing clubs in Alice Springs, Tennant Creek, Katherine and Adelaide River would be the beneficiaries of the redirected money.
"These are clubs, who do the hard work, and it's important to recognise that they, too, need much-needed investments in that infrastructure," he said.
"If this investment is delivered, we can grow the industry in our regions."
Thoroughbred Racing NT said it had not yet seen a draft of the proposal and no agreement had been reached.
When asked if the government's proposal meant taxpayers would not recover the $12 million given to the Darwin Turf Club, Mr Paech said the funding agreement was "a new way forward".
"I … have worked through those issues and those challenges," he said.
"I acknowledge that the Darwin Turf Club has implemented the number of the [ICAC] recommendations around strengthening their governance practices."
The Darwin Turf Club said it would comment on the announcement on Tuesday.
