Kwinana Petrochemical Plant

Last updated

The Kwinana petrochemical plant was a never-realised petrochemical plant proposed in the late 1980s to be developed in Kwinana, Western Australia.

In September 1986 Petrochemical Industries Company Limited (PICL), a joint venture involving companies controlled by property developer Dallas Dempster and merchant banker Laurie Connell, [1] :p 9 proposed the development of a major petrochemical project at Kwinana, and on 2 November 1987 agreements were signed by the state government-owned State Energy Commission of Western Australia and PICL for the former to supply the latter with natural gas from the state's North West Shelf, at a commercially realistic price, linked to CPI. By December 1987, though, it was becoming apparent that Connell's merchant bank, Rothwells, was no longer a viable financial institution, and Dempster had been unable to secure 100% debt finance for the project. [2] :p 22 [3] :p 166

Due to outstanding loans to Connell and Connell-associated entities, Rothwells was short $300 million or more needed to restore its solvency and produce an acceptable balance sheet, and without these funds Rothwells would have to cease trading on its reporting date, 31 July 1988. In order to deal with Rothwells's impending crisis, a mid-1988 meeting involving representatives of the state government, Rothwells and Alan Bond's Bond Corporation agreed that the government would give a discounted energy price and other guarantees to PICL so as to boost the company's value to $400 million, and Bond Corporation and the government would then purchase PICL for that price – $350 million to be paid to Connell so that he could repay $300 million of his debt to Rothwells and add $50 million of liquidity, and $50 million to Dempster for his share. [3] :pp 168–70

When PICL was sold to the state government and Bond Corporation its sole real asset was a heavily-mortgaged block of land in Kwinana valued at $100,000.[ citation needed ]

Related Research Articles

<span class="mw-page-title-main">City of Kwinana</span> Local government area in Western Australia

The City of Kwinana is a local government area of Western Australia. It covers an area of approximately 118 square kilometres in metropolitan Perth, and lies about 38 km south of Perth central business district, via the Kwinana Freeway. Kwinana maintains 287 km of roads and had a population of almost 39,000 as at the 2016 Census.

<span class="mw-page-title-main">Peter Dowding</span> Australian politician

Peter McCallum Dowding SC is an Australian lawyer and former politician who served as the 24th Premier of Western Australia, from 25 February 1988 until his forced resignation on 12 February 1990. He was a member of parliament from 1980 to 1990.

Brian Thomas Burke is an Australian former politician who was the 23rd premier of Western Australia from 25 February 1983 to his resignation on 25 February 1988. He was a member of the Western Australian Legislative Assembly from 30 March 1973 to 25 February 1988, representing the electoral districts of Balga and Balcatta at various points, and was the leader of the Australian Labor Party in Western Australia from 18 September 1981 to 25 February 1988. Burke studied law at the University of Western Australia for one year before dropping out. During the 1960s and early 1970s, he worked as a journalist for The West Australian newspaper, 6PM radio station, and Seven News Perth. He was elected to Parliament at the 1973 Balcatta state by-election, becoming one of the most popular local members over the following years. In 1981, he became the leader of the Labor Party in a leadership spill. He led the Labor Party to its first election victory since 1971 at the 1983 Western Australian state election, defeating the Liberal-National government of Ray O'Connor.

<span class="mw-page-title-main">Crown Perth</span> Resort and casino in Burswood, Western Australia

Crown Perth is a resort and casino located in Burswood, Western Australia, near the Swan River. The resort consists of a casino, a convention centre with meeting rooms, theatre and two ballrooms along with 32 restaurants and bars, a nightclub and recreational facilities. It also features three hotels: the 405-room Crown Metropol Perth, the 291-room Crown Promenade Perth and the 500-room luxury hotel Crown Towers Perth, which was opened in December 2016.

<span class="mw-page-title-main">WA Inc</span> 1980s Australian political scandal

WA Inc was a political scandal in Western Australia. In the 1980s, the state government, which was led for much of the period by premier Brian Burke, engaged in business dealings with several prominent businessmen, including Alan Bond, Laurie Connell, Dallas Dempster, John Roberts, and Warren Anderson. These dealings resulted in a loss of public money, estimated at a minimum of $600 million and the insolvency of several large corporations.

Lawrence Robert "Laurie" Connell was a Western Australian business entrepreneur. As chairman of the Rothwells merchant bank, he was well known for his dealings with the Government of Western Australia and his close relationships with a former premier of Western Australia, Brian Burke, and with entrepreneur Alan Bond, during the WA Inc period in the mid to late 1980s.

The State Energy Commission of Western Australia was an Australian energy provider. It was established on 1 January 1975 as an amalgamation of the State Electricity Commission of Western Australia plus the Fuel and Power Commission.

<span class="mw-page-title-main">Verve Energy</span>

Verve Energy was a Western Australian Government owned corporation responsible for operating the state's electricity generators on the state's South West Interconnected System (SWIS). It was split from the then vertically integrated Western Power Corporation, in 2006 during reforms to the state's electricity sector.

<span class="mw-page-title-main">Synergy (electricity corporation)</span> Electricity corporation in Western Australia

Synergy is a corporation owned by the Government of Western Australia. Synergy is Western Australia’s largest energy retailer and generator with more than one million industrial, commercial and residential customers, generating total annual revenue of more than $3.2 billion.

<span class="mw-page-title-main">Economy of Western Australia</span> Overview of the economy of Western Australia

The Western Australian economy is a state economy dominated by its resources and services sector and largely driven by the export of iron-ore, gold, liquefied natural gas and agricultural commodities such as wheat. Covering an area of 2.5 million km2, the state is Australia's largest, accounting for almost one-third of the continent. Western Australia is the nation's fourth most populous state, with 2.6 million inhabitants.

<span class="mw-page-title-main">2008 Western Australian gas crisis</span> Major disruption to natural gas supply in Western Australia

The Western Australian gas crisis was a major disruption to natural gas supply in Western Australia, caused by the rupture of a corroded pipeline and subsequent explosion at a processing plant on Varanus Island, off the state's north west coast on 3 June 2008. The plant, operated by Apache Energy, which normally supplied a third of the state's gas, was shut down for almost two months while a detailed engineering investigation and major repairs were carried out. Gas supply from the plant partially resumed in late August. By mid-October, gas production was running at two-thirds of normal capacity, with 85% of full output restored by December 2008.

Formed in Perth, Western Australia in October 1984, the John Curtin Foundation was a fundraising organisation for the Australian Labor Party which attracted the sponsorship of a powerful group of wealthy businessmen, placing them in a privileged circle with direct access to both the Australian prime minister Bob Hawke and the state premier Brian Burke. The foundation was an early step to the creation of a unique network of corporate and government co-operation which was dubbed WA Inc by news media. Its two vice-patrons were Kim Beazley, senior, a former Whitlam Government minister, and Mick Michael, an electrical contractor and former lord mayor of Perth. The executive-government patronage of business was similar to Peronism in Argentina. It caused multiple financial disasters, leading to a royal commission which exposed and condemned the corruption.

Warren Perry Anderson is an Australian businessman and speculative investor whose net worth in 1990 was estimated by BRW at $190 million, although the following year he was reported to have debts of $500 million, and filed for bankruptcy.

Dallas Reginald Dempster was an Australian businessman notable for the original development of Perth's Burswood Resort and Casino and the proposed Kwinana Petrochemical Plant, both of which were among the Western Australian government transactions examined by the 1990–92 WA Inc Royal Commission. In November 2013 The West Australian newspaper named Dempster as one of Western Australia's 100 most influential business leaders (1829–2013).

The Western Australian Development Corporation (WADC) was a trading corporation established in 1983 by the first Burke Ministry of Western Australia. It enabled the state Labor government to involve itself in large-scale business transactions without the normal transparency and accountability of government-guaranteed corporations, and was part of what became known as WA Inc. It appointed John Horgan chairman on a salary of $800,000 p.a., and formed subsidiaries including Exim Corporation which sought to create and exploit export markets for education and other products. The enabling Act provided that "(4.3) The Corporation is an agent of the Crown in right of the State and enjoys the status, immunities and privileges of the Crown..." while "(4.4) Notwithstanding subsection (3), the Corporation shall not be subject to direction by the Minister..."

[T]o make sure he kept secret the dealings of the WADC and its shady subsidiaries such as Exim Corporation, [Burke] pushed through legislation that not only gave them commercial confidentiality but unshackled them from ministerial accountability. The WADC was just one of many Burke creations synonymous with the corporatism of the WA Inc era -- a failed political strategy that folded high-risk business into unethical government and led to financial and social upheaval still resonating a quarter of a century later.

The early 1990s recession saw a period of economic downturn affect much of the world in the late 1980s and early 1990s. The economy of Australia suffered its worst recession since the Great Depression.

The Teachers' Credit Society (TCS) was a credit union founded in 1971 best known for its part in the WA Inc scandal of 1987. Over the 16 years it operated, the TCS grew from a 300-member society into the largest credit union in Australia, with 40,000 members and A$550 million on deposit and millions out on loans. The TCS was considered one of the major driving forces behind the 1980s "debt-funded boom" in Western Australia (WA) and its collapse, along with the collapse of several other large corporations within WA such as Qintex, Bond Corporation and The Bell Group, triggered an economic recession in the state.

<span class="mw-page-title-main">East Rockingham Waste to Energy</span> Waste facility in East Rockingham, Western Australia

East Rockingham Waste to Energy is a waste-to-energy power station under construction located in East Rockingham, Western Australia. Once completed, the facility is scheduled to process in excess of 300,000 tonnes of waste and will produce 29 MW of power.

<span class="mw-page-title-main">1990 Australian Labor Party (Western Australian Branch) leadership spill</span>

A leadership spill of the Western Australian Branch of the Australian Labor Party occurred on 12 February 1990. It resulted in the replacement of premier and party leader Peter Dowding with Carmen Lawrence, making her the first female state premier in Australia. It also resulted in the replacement of deputy premier and deputy party leader David Parker with Ian Taylor. The leadership spill occurred as a result of the government's increasing unpopularity as a result of the WA Inc scandal.

Western Australia, like other Australian states and high-income countries, is a heavy energy user by global standards.

References

  1. State Law Publisher of Western Australia Findings of WA Inc Royal Commission Vol. 4, Ch.18. Retrieved on 9 November 2012.
  2. State Law Publisher of Western Australia Findings of WA Inc Royal Commission Part II
  3. 1 2 State Law Publisher of Western Australia Findings of WA Inc Royal Commission Vol. 5, Ch. 21