A CHINESE conglomerate has won the right to develop 15,200ha of high-value agricultural land in Western Australia.
Shanghai Zhongfu has been handed all available land in the second stage expansion of the Ord irrigation scheme in Western Australia's Kimberley region for a peppercorn rent, on the condition it is cleared, developed, farmed and a state-of-the-art export sugar mill built, The Australian reports.
The West Australian government will formally announce Shanghai Zhongfu as the preferred developer of the pivotal Ord stage 2 expansion next Tuesday, doubling the size of the East Kimberley's 30-year-old food and farming scheme.
It will argue that because the Chinese company is taking out a 50-year lease on the valuable farmland and will not own the irrigation channels, it is a good deal for the state's taxpayers who paid $315m to get the project ready for food bowl farming.
Behind the scenes, the state and federal governments are bracing for a new furore about foreign ownership of Australian agriculture after the Zhongfu deal is announced.
It follows a public outcry in August when Australia's largest cotton farm and water rights holder, Cubbie Station, was sold to a Chinese textile company.
The Barnett Liberal government claims Shanghai Zhongfu's long-term investment in the East Kimberley region is a very different scenario from Shandong Ruyi's contentious $300m purchase of Cubbie Station because the land is only leased and is undeveloped now.
It will cost Shanghai Zhongfu at least $250m to turn the 7800ha of undeveloped country it will lease on the Knox Plains and Ord West Bank into sugar fields and to build a sugar mill near Kununurra.
The other 7400ha of the Ord stage 2 land at Goomig is already fully irrigated with taxpayer-provided water piped right to each block, land the West Australian government originally hoped to sell to small Australian farmers.
Shanghai Zhongfu beat two other Australian shortlisted contenders, including Australia's largest cattle and land company, AACo, to win the prized tender to develop the second stage of the Ord irrigation scheme into a new Asian food bowl.
AACo chief David Farley said yesterday that since he did not know about next week's announcement in Perth by the Barnett government of the preferred proponent and hadn't been invited to the Ord stage 2 ``ribbon-cutting'' launch the following Friday in Kununurra it was obvious his company had missed out in favour of the Chinese bidder.
"Am I disappointed? Well, if someone can afford more than we could, then good luck to them, because we couldn't make the project work on any more (money or promises),'' Mr Farley said.
West Australian opposition agriculture spokesman Paul Papalia accused the Barnett government of wasting taxpayer dollars in the Ord's expansion, all now to benefit a Chinese company's profits.
"Effectively what they have done is spend more than $300m of public money and given all that land that can now be irrigated and farmed to the Chinese,'' Mr Papalia said.
"It's not like the state will get much benefit from this; the sugar mill will be all Chinese-owned and so will all the profits and where is the food bowl in all this talk of sugar for biofuels?.''
According to West Australian Regional Development Minister Brendon Grylls, Shanghai Zhongfu did not have to gain Foreign Investment Review Board approval for its $500m-plus proposal as it was not buying any land.
Read more at The Australian