A $1bn federal loan to builders of a railway line between the proposed Adani coalmine and the coast would be a direct breach of government policy, a legal group has claimed.
Environmental Justice Australia has lodged a formal complaint with the Productivity Commission over the prospect of the Northern Australia Infrastructure Facility partially funding the 400km rail line.
It is believed two companies – an Adani-related entity and the rail company Aurizon – have made rival bids for $1bn in government loans.
But EJA said government funding of the line would be a clear breach of competitive neutrality principles and potentially against the criteria of the “developing the north” white paper.
Competitive neutrality principles require governments not to use their legislative or fiscal powers “to advantage their own businesses over the private sector”, according to government agreements.
“We submit that for the Adani and Aurizon proposals there is no ‘market failure’ and Naif support would encroach upon the domain of the private sector in breach of competitive neutrality principles,” said the complaint, filed on behalf of the Institute for Energy Economics and Financial Analysis.
“We also submit that the Naif is non-transparent, ineffective, inefficient and has an inadequate governing framework.”
Adani mine railway loan would breach government’s policy, says legal group