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Media Release

Media Release: Palaszczuk’s broken promise on QIC Adani trainwreck

31 March 2017

Palaszczuk’s broken promise on QIC Adani trainwreck

Friday 31 March, 2017: Support to Adani’s rail infrastructure from QIC is in clear breach of Queensland Premier Annastacia Palaszczuk’s election promise not to use public money to prop up the controversial coal project, according to environmental finance group, Market Forces.

“QIC, wholly owned by the Queensland government, manages money on behalf of institutional investors around the country, including super funds QSuper, SunSuper and HostPlus. In using QIC to invest in the Galilee, Annastacia Palaszczuk is shifting the risk of this project onto unwitting super fund members,” said Market Forces Executive Director Julien Vincent.

“It’s a cowardly move from the Premier who promised no state funds for the Adani coal mine to then sneakily use a government-owned investment vehicle to do just that. It leaves public service retirees wearing the risks of a project which is more train wreck than train line.”

“The reality is the Galilee Basin and its related infrastructure are completely unable to stand on their own two feet. With commercial lenders steering clear, the only possibility of it reaching financial close is through politicians throwing around public money like confetti.”

Ironically, QIC’s intervention comes barely a month after the fund manager released a major new climate report – building resilience in infrastructure assets – which made clear the importance of considering “the implications of climate change for the assets we currently hold as well as when considering future investment opportunities.”

“Before making an investment decision, QIC Chief Executive Damien Fawley could do worse than read his own organisation’s report on the potential for stranded assets in the fossil fuel sector,” said Vincent.

12 international banks have already ruled out money for Adani’s Carmichael megamine, with the National Australia Bank also rejecting the project.

In January 2017 Deutsche Bank amended its guidelines to entirely rule out any future project finance funding for greenfield thermal coal mines or greenfield coal fired power plant construction globally, followed in February by the Australian Prudential Regulatory Authority (APRA) highlighting the systemic risk posed by climate change.

Moreover, Adani Enterprises remains a perilous investment due to its heavy financial leveraging, its links to off-shore tax havens and significant question marks over its ability to sell low quality thermal coal from Carmichael into a rapidly shrinking market.

“It tells a compelling story of the lack of coherence of this project that the only potential finance is a $1 billion Federal Government subsidy and money taken from the pensions of public service retirees in Queensland,” said Vincent.