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A parliamentary committee has recommended the Northern Territory government finish building the $820 million Darwin ship lift project, despite holding no right to the revenue it will generate. The NT Public Accounts Committee (PAC) released its report into the embattled ship lift on Thursday, providing five recommendations, including the project proceed with stricter cost controls. First announced in 2015, the Giles Country Liberal Party (CLP) government initially committed $100 million to the ship lift, without undertaking a business case. That initial investment was to help the project get off the ground, with private industry to construct, own and operate the facility. But in 2019 the Territory Labor government committed to self-funding, building and owning the asset, which will ultimately be operated for profit by Australia's largest pearling company, Paspaley Group. The public cost to build the ship lift has increased on three separate occasions since 2019 and now sits at $820 million. Almost $250 million has already been spent on construction. Committee considered NT government withdrawal In the PAC report, chair Clinton Howe said the Northern Territory government would carry more than $1.8 billion in "lifetime cost exposure", while "holding no right to revenue generated by the facility it is building". He said the PAC "examined alternatives including cancellation or withdrawal", but that "contractual decisions made" had left the government in a position "where cancellation would still require taxpayers to pay for the ship lift in full, plus substantial penalties". The report found that "a range of commitments exist within …. various contracts, including break fees", which would likely cost the government close to $600 million if it were to withdraw. Mr Howe said the five-member PAC — which includes three Country Liberal Party government members — was "particularly concerned" by contracts executed by former Labor chief ministers Michael Gunner and Eva Lawler. "These agreements transferred significant commercial benefit of the ship lift's operations to a private entity, while assigning substantial financial risk, capital cost and long-term liability to the Territory," Mr Howe said. "These decisions have left taxpayers underwriting a commercially operated but Territory owned asset for decades to come." The PAC recommended that the government implement "strict cost controls" and any further variations to contracts require approval from the treasurer. Government sources have previously told the ABC the cost of building the ship lift could rise to more than $1 billion. Although the NT government will not receive any direct revenue, the PAC found that the ship lift was "an important piece of infrastructure that will provide substantial benefits for the territory". "It is clear it will be a critical enabler of the marine industry in the NT, which will support defence capability and enable growth in a range of commercial activity," the report said. "Even on the lower end of revenue and job estimates, the benefits to the territory will be substantial." The report also recommended the NT government legislate an access and pricing regime for the ship lift as soon as possible. It said the regime would ensure fair access to the ship lift for its users.
