19 December, 2003] GAZETTE, No. 80 1271

DEPARTMENT OF STATE DEVELOPMENT copy State Development and Public Works Organisation Act 1971

NOTICE

The Governor in Council has approved the as shown on the map annexed as Schedule A, as an infrastructure facility that is of significance, particularly economically or socially, to Queensland and the Wide Bay-Burnett region.

Nanti ngo-Maidenwell Road 4 1272 QUEENSLAND GOVERNMENT GAZETTE, No. 80 [ 19 December, 2003

State Development and Public Works Organisation Act 1971

STATEMENT GIVING REASONS (INFRASTRUCTURE FACILITY OF SIGNIFICANCE) . NOTICE (No 1) 2003

Short title

1. This notice may be cited as the Statement Giving Reasons (Infrastructure Facility of Significance) Notice (No 1) 2003.

Statement Giving Reasons (Infrastructure Facility of Significance) [s.125(5) of the Act]

2. Paul Fennelly, Coordinator-General, pursuant to Section 125(5) of the State Development and Public Works Organisation Act 1971 has prepared a statement giving reasons, as adopted by the Governor in Council, and as set out in the Schedule below as to why the Tarong Power Station infrastructure facility was approved by the Governor in Council by gazette notice on 19 December 2003 pursuant to Section 125( 1)(f) of the State Development and Public Works Organisation Act 1971 as an infrastructure facility having significance, particularly economically or socially, to Queensland and the Wide Bay - Burnett region, being the region in which the infrastructure facility is to be constructed.

SCHEDULE

STATEMENT GIVING REASONS WHY THE GOVERNOR IN COUNCIL APPROVED BY GAZETTE NOTICE ON 19 DECEMBER 2003 AN INFRASTRUCTURE FACILITY AS HAVING SIGNIFICANCE UNDER THE STATE DEVELOPMENT AND PUBLIC WORKS ORGANISATION ACT 1971

1. Decision

On 19 December 2003, the Governor in Council approved by gazette notice under section 125(l)(f) of the State Development and Public Works Organisation Act 1971 ("SDPWO Act") the Tarong Power Station as having significance, particularly economically or socially, to Queensland and the Wide Bay - Burnett Region, the region in which the infrastructure facility is to be constructed.

2. Introduction

On 3 December 2003, the Coordinator-General received an application , dated 1 December 2003, from Corporation Limited ("Tarong Energy ") requesting that the Tarong Power Station be approved by the Governor in Council as an infrastructure facility having significance under section 125(1)(f) of the SDPWO Act. The Tarong Power Station facility is comprised of the electricity generating units and associated facilities including the ash disposal dam, coal conveyor and storage systems and cooling water dams.

Section 125 (1)(f) of the SDPWO Act provides that the Coordinator-General may take land for the purposes of an infrastructure facility that is:

(a) of significance, particularly economically or socially, to Queensland or the region in which the facility is to be constructed; and

(b) approved by the Governor in Council, by gazette notice, as having that significance.

Pursuant to section 125(2) of the SDPWO Act, in considering whether an infrastructure facility would be of economic or social significance, the potential for the facility to contribute to community wellbeing and economic growth or employment levels must be taken into account. In accordance with section 125(3) of the SDPWO Act, in assessing such potential, the contribution the infrastructure facility makes to agricultural, industrial, resource or technological development in Australia, Queensland or the region in which the appropriate infrastructure facility is to be constructed is a relevant consideration. 19 December, 20031 QUEENSLAND GOVERNMENT GAZETTE, No. 80 1273

3. Evidence or Other Material on Which Findings of Material Questions of Fact are Based

In forming the decision to approve the infrastructure facility as having significance, particularly economically or socially, to Queensland and the region in which the facility is to be constructed, the Governor in Council had regard to the following materials:

• Letter dated 1 December 2003 from Mr Andrew Pickford, Chief Executive Officer of Tarong Energy to the Coordinator-General enclosing Tarong's application requesting that the Tarong Power Station be approved by the Governor in Council as an infrastructure facility having significance under section 125(1)(f) of the SDPWO Act;

• Department of State Development Briefing Note dated 16 December 2003 to the Honourable Tom Barton MP, Minister for State Development, containing the Coordinator-General's recommendation in relation to whether the Tarong Power Station is an infrastructure facility of significance under Section 125(l)(f) of the SDPWO Act;

• Extract from State Development and Public Works Organisation Act 1971, sections 125 and 174; and

• Appendix A of SDPWO Act Guidelines for acquisition of land for infrastructure projects by persons other than the state, September 1999;

• Appendix C of SDPWO Act Guidelines for acquisition of land for infrastructure projects by persons other than the state, September 1999;

• Appendix C of SDPWO Act Guidelines for consultation and negotiation with native title interests, September 1999;

• Centre for Australian Financial Institutions, Economic Impact of Tarong Energy on the Wide Bay- Burnett Region. Prepared for Tarong Energy Corporation Ltd.

• Letter dated 11 June 2003 to Tarong Energy from the Environmental Protection Agency enclosing the Compensation Report for Revocation of Part of Yarraman State Forest.

• Letter dated 11 December 2003 to Tarong Energy from the Queensland South Representative Body Aboriginal Corporation.

• Tarong Energy, Tarong Energy Annual Report, 2002/2003.

• National Electricity Market Management Company, 2003 Statement of Opportunities.

• , Annual Planning Report 2003.

• National Institute of Economic and Industry Research , The Outlook for the NEM States to 2012-13.

• Letter dated 3 December 2003 from the Coordinator-General inviting submissions from persons affected by the infrastructure facility.

• Five submissions received from affected persons in response to the Coordinator -General's letter dated 3 December 2003 inviting submissions from persons affected by the infrastructure facility.

• Explanatory Memorandum to Executive Council Minute in respect of the Tarong Power Station.

4. Findings of Material Questions of Fact

From the material to which regard was had the following findings of fact were made.

4.1 Type of Infrastructure Facility Proposed Including Land on Which the Facility is to be Located

The application from Tarong Energy identified the components of the Tarong Power Station as:

(i) 4 x 350MW coal fired electricity generating units; and 1274 QUEENSLAND GOVERNMENT GAZETTE, No. 80 [19 December, 2003

(ii) ancillary facilities including a coal conveyor and storage systems, cooling water dams, 15MW emergency gas turbine and an ash dam.

Details of the infrastructure facility are set out below:

Tarong Power Station is located 180 kilometres north-west of Brisbane. The area of the infrastructure facility includes a 1388.5 ha site, owned by Tarong Energy, and described as Lot 1 on SP138386 and Lot 90 on Crown Plan FY2695, and 47 ha of SF289 on FTY 1640 (known as Yarraman State Forest) in the Shire of Nanango.

The first of Tarong Power Station's four generating units became operational in May 1984 and the station was completed in 1986 at a cost of more than $1.2 billion.

Coal for the power station is principally sourced from the neighbouring Meandu Mine owned by Pacific Coal Pty Ltd. The station burns up to 5.5 Mt per annum of coal depending on coal quality and generation load. Raw water for cooling purposes is sourced via water pipelines from the Boondooma and Wivenhoe dams.

Tarong Power Station supplies low-cost, reliable electricity to the National Electricity Market (NEM). On average, Tarong Power Station generates about 25% of the electricity consumed in Queensland.

The ash dam is an integral part of the Tarong Power Station. Furnace and fly ash is collected from various parts of the Tarong Power Station and deposited in the ash dam which is approximately 2 km north of the generating plant. Ash produced from Tarong North Power Station is also disposed of in Tarong Energy's ash dam under the terms of a Site Service Agreement between Tarong Energy and the join venture owners of Tarong North, Tarong Energy (via a special purpose subsidiary, TN Power Pty Ltd) and TM Energy (Aust) Pty Ltd which is owned by Tokyo Electric Power Company (TEPCO) and Mitsui & Co. Ltd.

The ash dam will reach capacity in mid 2005. Tarong Energy is proposing to rectify this situation by augmenting the ash dam by raising the spillway crest from the current RL 434 to RL 435.9 in which will increase the storage capacity of the ash dam by 9.5%. These works will result in some additional flooding of adjacent State Forest land during large flooding events. The works will need to be completed by no later than mid 2005. These augmentation works will provide an interim solution for ash disposal while long term solutions are being developed by Tarong Energy.

4.2 Demand Projections for the Services Associated with the Infrastructure

Economic forecasts prepared by the National Institute for Economic and Industry Research for the National Electricity Market Management Company ("the NEMCO Report") in June 2003 enable all states comprising the National Electricity Market (NEM) to prepare load projections using a consistent economic scenario. The NEMCO Report indicates that Queensland's compound growth rate is well above the expected national trend with the State's Gross State product ("GSP") between 2001/2 and 2006/7 averaging 3.9 per cent. The NEMCO Report estimates Queensland GSP growth from 2001/2 - 2012/13 will be at an average rate of 3.6% per annum. For the year 2005/6, the NEMCO Report indicates that investment associated with large resources projects is expected to induce a strong upturn in the Queensland GSP. Further, NEMCO has forecast a summer reserve deficit of 59MW for the 2005/6 while the demand forecast for 2007/8 is expected to exceed supply.

In its Annual Planning Report for 2003, prepared in accordance with its obligations under the National Electricity Code, Powerlink Queensland ("Powerlink") states that electricity growth in Queensland has grown strongly over the past ten years, and this trend is expected to continue. In particular, Powerlink estimates that summer peak demand will increase to an average annual rate of 3.6% from 6,462 MW in 2002/3 to 9,172 MW in 2012/13. In south-east Queensland, where the majority of electricity generated by the Tarong Power Station is consumed, Powerlink estimates that summer peak demand for will grow annually by 6%.

Significantly, all projections are based on the continued operation of the Tarong Power Station.

12 19 December, 2003] QUEENSLAND GOVERNMENT GAZETTE, No. 80 1275

4.3 Needs Which the Facility Would Meet and How the Infrastructure Would Satisfy the Identified Need

A continued reliable supply of electricity into Southern Queensland to meet both current demand and projected demands is dependent on the supply of power from the Tarong Power Station. R'

In 2002/3 Tarong Power Station supplied 10,672 GWh of electricity which represents approximately 25% of Queensland's energy requirements. The ongoing provision of power to the Southern Queensland Market is reliant on the Tarong Power Station. Further, the ability of south-east Queensland's electricity needs to be met by alternative sources is limited by the capability of the high voltage transmission network.

The Powerlink Report indicates that the 2005/6 demand for Southern Queensland of around 4,421 MW is 1,400 MW greater than can be supplied from sources outside Southern Queensland. Other power stations located in Southern Queensland (Swanbank E which provide 385 MW, Swanbank B which provides 480 MW and which provides 160 MW during summer due to energy limits) are not able to meet this demand. Provision of this 1,400 MW is reliant on the continued operation of Tarong Power Station.

Further, in the event that Tarong Power Station was forced to reduce its availability of power, unplanned outages at the generating plant, which are typically around 2% - 5%, would seriously compromise the capacity of other power stations in Southern Queensland to reliably meet consumers' electricity demands.

4.4 Timing of Project or Service Delivery

Ash is the most significant waste material produced by Tarong Power Station (and from the Tarong North Power Station which became operational in 2003). Since 1984, the ash dam has been receiving lean phase ash from Tarong Power Station.

In January 2004, the ash disposal system will be changed from a lean phase to a dense phase system, whereby the ash will be dewatered and thickened prior to disposal. This will mean that an increased amount of ash will be able to be stored in the ash dam. Nevertheless, there will be little capacity left in the ash dam from the end of 2004. Thus, urgent augmentation of the ash dam is required to be completed no later than by mid 2005. This timeframe means that structural works on the ash dam are required to commence in mid 2004, due to the 12-month construction period involved.

The land required to enable augmentation works to be completed on the ash dam consists of an area of approximately 47 ha, currently within Yarraman State Forest SF289 and adjacent to the eastern boundary of the ash dam. This area is included within the land required for the infrastructure facility.

4.5 Special Assistance Required from Government other than Land Acquisition

Tarong Energy's application to the Coordinator-General does not identify any new requests of Government related to the provision of the infrastructure facility. However, the land required to enable augmentation of the ash dam is currently within Yarraman State Forest SF289. Approximately 47 ha of land is required to be revoked from the State Forest and transferred to Tarong Energy. The need for this land was identified in the planning stages of the Tarong Power Station and the need for the revocation of that part of the State Forest is well known to Government. Tarong Energy has negotiated the terms of compensation for the loss of part of the protected estate with the former Department of Natural Resources and the Environmental Protection Agency ("the EPA").

In June 2003, Tarong Energy obtained in-principle agreement from the EPA to request the Minister for the Environment to table a motion in Parliament seeking to revoke 47 ha of land from Yarraman State Forest, subject to approval by the Governor in Council and the resolution of native title issues.

Native title has not been extinguished on the land currently within the State Forest.

In the event that the required land is revoked from the State Forest, Tarong Energy has agreed to make payment of compensation to the EPA and subsequently enter into negotiations with the Department of Natural Resources and Mines to obtain freehold tenure over the land. 1276 QUEENSLAND GOVERNMENT GAZETTE, No. 80 [19 December, %003

4.6 Financial Analysis Including Project Risk/ Return

Tarong Energy employs approximately 380 people and has total assets of almost $2 billion. During the 2002/03 financial year, Tarong Energy earned $404.8 million in revenue through the NEM through the sale of electricity and ancillary services and returned as a dividend $76.6 million payable to the Queensland Government.

Tarong Power Station is expected to operate for a further 25 years. During this time, Tarong Energy will seek to provide the greatest return possible to shareholders from the effective operation of the Tarong Power Station. The equity held by the State of Queensland in Tarong Energy was $852.3 million as at the end of the 2003/03 financial year. Tarong Energy has provided an average return on equity of 10.5% over the past 5 years. Tarong Energy is committed to delivering improved shareholder value, growth and diversity, reduced risk and other State goals.

The continued operation of the Tarong Power Station will enable Tarong Energy to continue to make significant returns to the State Government as dividends. However, the continued operation of the Tarong Power Station from mid 2005 is dependent upon the continued availability of the ash dam to store waste furnace ash and fly ash.

If the land required for the ash dam augmentation cannot be secured in a reasonable time to enable ash dam augmentation works to be undertaken as soon as possible, then current estimations are that ash disposal will have to be significantly curtailed by mid 2005. Any disruption to the disposal of ash to the ash dam would result in significant disruption to the State's electricity supply;-reduced earnings and also reduced dividend payments to the Queensland Government.

Also, if Tarong Energy is unable to obtain the land required for the dam augmentation then it is estimated that Tarong Energy will face direct costs in the order of $6 to $10 million to undertake engineering works to prevent ash dam water inundating the State Forest. These costs are subject to the finalisation of design, obtaining all development approvals for and then completing the works in time to enable the augmentation works to be completed by mid 2005. There is a very real risk that these timeframes may not be met. Such works will also incur significant maintenance costs over the life of the power station.

4.7 Possible Environmental Effects

Furnace and fly ash is the most significant by-product of the Tarong Power Station. The disposal of the ash in the existing ash dam is managed in accordance with legislative requirements. The use of new dense phase system is proposed to commence in January 2004. While this will result in increased efficiencies in the use of the ash dam, the existing ash dam will reach capacity by mid 2005.

Land required for the proposed dam augmentation has been the subject of a flora and fauna survey conducted in 1996 which found that the encroachment of the ash dam would have a minimal impact on regionally significant native flora and fauna. While the land required for the dam augmentation contains a fauna species with some conservation value, the majority of the land required is above the expected inundation level of the ash dam.

Using the Forest Evaluation System, the EPA has undertaken an assessment of the ecological and commercial value of the land required for the dam augmentation to calculate the level of compensation to be paid by Tarong Energy for the revocation and subsequent transfer of the land which is currently held as State Forest.

The boundary of the required land was identified to mitigate possible environmental effects by the use of existing clearings/tracks for fire protection and estate management together with access by 4WD vehicles without the need to construct a new road. Potential adverse environment effects on the land proposed to be affected by the dam were prevented or mitigated by the identification of a boundary which would require minimal clearing of existing plantation and native forest areas, the use of an existing track adjacent to the drainage line for fencing thereby reducing the need to clear vegetation, and the inclusion of an existing diversion channel which formed part of the original power station construction works. Environmental and development approvals may be required to achieve the amalgamation of the required land with Tarong Energy's land. The need for any further assessment of the environmental impacts associated with the proposed augmentation of the ash dam will be determined once the land has been revoked from the State Forest. 19 December, 2003] QUEENSLAND GOVERNMENT GAZETTE, No. 80 1277

4.8 Technical and Financial Capacity of the Proponent to Implement the Proposed Facility

Tarong Energy was established in 1997 as a Queensland Government Owned Corporation and a public company established under the Corporations Act 2001 (Cth). Its shareholding Ministers are the Treasurer and the Minister for Energy. Tarong Energy's stated mission is "to be acknowledged as Australia's best performing energy business". To this end, Tarong Energy actively competes with private and public companies and other Government Owned Corporations in the NEM. Tarong Energy generates approximately 25% of Queensland's electricity supply.

In the 2002/03 financial year, Tarong Energy earned $404.8 million in revenue through the NEM as a result of the sale of electricity and ancillary services. In the same period, Tarong Energy had an after tax operating profit of $80.6 million. Tarong Energy's total assets were worth $1.958 billion and its liabilities totalled $1.106 billion.

Tarong Energy has substantial experience in the completion of major construction projects which include the completion of the 445 MW Tarong North Power Station and the 34.5 MW Starfish Hill Wind Farm (in South Australia) in 2003.

The implementation of Tarong Energy proposed augmentation of the ash dam will be carried out by experienced contractors, under the direction of Tarong Energy's core project management team consistent with the Tarong Energy's approach to major construction projects in the past.

4.9 Negotiations to Acquire Land by Agreement

The land required for the augmentation of the ash dam is included in an application for a native title claim made by the Wakka Wakka People (QC 99/33). Tarong Energy conducted native title negotiations with representatives of the Wakka Wakka #2 in 2000 with the intention of forming an indigenous land use agreement ("ILUA"). An ILUA was prepared and signed by all but one of the claimants. Tarong Energy is continuing discussions with the various parties in an attempt to finalise the execution of the ILUA and have it registered with the National Native Title Tribunal ("NNTT").

Tarong Energy's efforts to negotiate an ILUA are supported in a letter from the Queensland South Representative Body Aboriginal Corporation ("QSRBAC") as the relevant Aboriginal representative body for the area. In its letter, the QSRBAC confirms the negotiations between Tarong Energy and the Wakka Wakka People between October and December 2000 for the surrender of native title rights and interests in the land forming part of Lot 289 on FTY1640. The QSRBAC's letter indicates that the ILUA was not executed by all native title claimants because of an internal dispute with other Wakka Wakka claimants. QSRBAC has indicated that, given the circumstances of the dispute and Tarong Energy's efforts to negotiate an ILUA together with its intention to comply with the terms of the ILUA, it does not object to the proposed compulsory acquisition.

Tarong Energy has indicated that its preference has been, and remains, to reach agreement with the native title parties and to have an ILUA registered with the NNTT, however, the need to have certainty as to the ability to use the land required for the dam augmentation is now urgent.

4.10 Investigations on the Required Land

The need for the additional land to be used for the ash dam was identified in the planning stages of the Tarong Power Station. The additional land was considered a necessary step for the operation of the station. The proposed construction of the augmentation works for the ash dam will raise the spillway height and cause inundation of the low-lying areas of part of the State Forest.

The boundary of the additional land required for the ash dam was settled through negotiations with the former Department of Natural Resources and the Department of Primary Industries (DPI) in the late 1990s. The boundary was designed to accommodate the flooding of the ash dam during large rainfall events and the operational and practical needs of Tarong Energy and the DPI - Forestry.

In relation to native title, Tarong Energy commissioned a tenure history of the affected land within the State Forest which indicated that native title may exist as there was no extinguishing grant. Tarong Energy then entered into native title negotiations with the native title claimants and reached general agreement on the terms of ILUA in late 2000. 1278 QUEENSLAND GOVERNMENT GAZETTE, No. 80 [ 19 December, 2003

Tarong Energy has commissioned cultural heritage consultants to conduct a cultural heritage survey of the required land within the State Forest. The work was undertaken in August 2000 and a preliminary report was prepared by the cultural heritage consultant on the basis of this field work along with a draft Aboriginal Cultural Heritage Management Plan.

Tarong Energy is involved in discussions with the native title claimants about the further work, which includes digging test pits, required to finalise the cultural heritage survey and Management Plan.

4.11 Economic Significance of the Infrastructure Facility

Tarong Power Station employs about 250 people, 90% of whom reside in the neighbouring shires of Kingaroy, Nanango and Rosalie. As well, Tarong Power Station households contribute 415 workers to Kingaroy Shire, 181 to Nanango Shire and 38 to Rosalie Shire. The benefits to the local communities attributable to Tarong Power Station extend beyond direct contributions and include the multiplier effects created by the employment and finances provided by the power station. An estimated 85% of the total employment created is due to flow-on effects from the operation of the power station.

The report prepared by the Centre for Australian Financial Institutions for the financial year of 2000/01 (the "CAFI Report"), The Economic Impact of Tarong Energy on the Wide Bay-Burnett Region identifies that Tarong Power Station's direct annual economic contribution to the Wide Bay - Burnett Region includes spending $4.5 million on purchasing goods and services locally (excluding coal purchases, salaries and wages) as well as contributing $1.95 million in water delivery to farmers downstream of the facility along Meandu Creek. The value of water discharged to the creek over the next 25 years has been estimated, in net present value terms, at $6.6 million with a resulting net increase in annual farm revenue of $140 000.

The CAFI Report found that for the financial year of 2000/01, Tarong Power Station households contributed $14.5 million in goods and services expenditure to the economy of the Wide Bay - Burnett Region. Contracts to local service providers also contributed to the region's economy with the associated Coal Combustion Products contractors spending $1.6 million in the region annually.

The CAFI Report found that Tarong Power Station's total annual economic contribution to the Wide Bay - Burnett Region plus the flow-on effects of the expenditure in the Region were estimated as follows:

• change in total output: $518 million; • change in value added: $285.9 million; • change in total household income: $88.9 million; • change in total employment: 1618 fulltime equivalent jobs.

These estimates provide an indication of the substantial contribution of the Tarong Power Station to the maintenance of a higher level of sustainable social and economic activity in the region. The dominant beneficial impacts of the contributions above are the increase in the living standards of local communities and the widely observed increase in regional economic certainty and stability. This certainty has raised the level of business confidence in the region, an issue which is vitally important for future regional economic development and the follow-on benefits of halting the drain of young and qualified people from regional areas.

Because of the significant coal consumption by Tarong Power Station, the power station also plays a role in the development of thermal coal resources in Southern Queensland.

The expected operating life of the Tarong Power Station is considerably longer than the current coal supply contract with Pacific Coal Pty Ltd. To ensure long term future generation requirements, Tarong Energy is actively seeking to secure economic fuel supplies. The development of these new resources such as Tarong Energy's coal resource at Glen Wilga in the Surat Basin will ensure that the economic benefits associated with the power station continue to increase after the current contract for coal from Meandu Mine ends. Tarong Energy is also progressing plans to develop a rail link from the Tarong Power Station to other Surat Basin coal resources to ensure the optimal long-term supply of fuel to the power station. 19 December, 2003] QUEENSLAND GOVERNMENT GAZETTE, No. 80 1279

4.12 Social Significance of the Infrastructure Facility

It is anticipated that the increased electricity generation which will be made possible by construction and operation of the augmented ash dam, an integral part of the Tarong Power Station infrastructure facility, will have the following social benefits:

(a) ensuring a reliable electricity supply for households and businesses in the Southern Queensland regional market; (b) providing further impetus for additional employment opportunities in the Southern Queensland region based on the availability of power, given that the facility generate 25% of electricity needs within the region; (c) providing continued direct employment for 250 employees of Tarong Power Station, 90% of whom reside in neighbouring shires, and continued support to double that number of indirect employees in neighbouring shires; (d) providing multiplier effects of benefit to neighbouring shires, including expenditure on local goods and services by the Tarong Power Station itself and its employees, and increasing the wealth and living standards of neighbouring local communities; (e) affording increased levels of business confidence in the region and other follow-on, economic benefits, such as encouraging young and qualified people to remain in or relocate to the region; and (f) securing the longevity of operation of the Tarong Power Station, given that the facility is expected to operate for the next 25 years and it could face outages if the ash dam is not augmented. The above likely social impacts were highlighted in the application submitted by Tarong Power Station and in the supporting "CAFI Report" which formed part of Tarong Energy's application. In addition, the submission from Tarong North Power Station reiterated the importance of the facility to the entire Wide Bay - Burnett region, and that submission included detailed reference to the integral function that the ash dam contributes to the ongoing performance of the entire facility.

Tarong Energy's direct contribution to the economic and social development of the community is demonstrated by its role in the establishment of the Tarong Learning Program and other community activities and facilities aimed at developing the skills of local residents, particularly the unemployed youth.

While the positive social impacts of the infrastructure facility will be felt most keenly in the immediate Wide Bay - Burnett region, they will also have important flow-on social, and related economic, benefits to the rest of the State, in particular to South-East Queensland.

4.13 Summary of the Public Submissions

As part of the assessment of the significance , particularly economically or socially , to Australia, Queensland or the Wide Bay - Burnett region of the infrastructure facility, the Coordinator -General invited submissions on the relevant issues from affected persons, in accordance with the Guidelines for Acquisition of Land for Infrastructure Projects by Persons other than the State.

The Coordinator-General received five submissions from the following organisations or individuals:

• Gurang Land Council (Aboriginal Corporation) Native Title Representative Body; • Queensland South Representative Body Aboriginal Corporation; • Oscar Chapman (one of the Wakka Wakka #2 Native Title Claimants); • Tarong North Pty Ltd; and • the Environmental Protection Agency. The matter being assessed by the Coordinator-General, ie whether the infrastructure facility is of significance, particularly economically or socially to Queensland or the region in which the facility is to be constructed, was addressed directly in the submission received from Tarong North Pty Ltd and the EPA which supported a finding that the Tarong Power Station has significance. 1280 QUEENSLAND GOVERNMENT GAZETTE, No. 80 [ 19 December, 2003

The submission from the Gurang Land Council (Aboriginal Corporation) Native Title Representative Body advised that it is no longer the legal representative for the Wakka Wakka #2 Native Title Claimant Application and that it no longer accepts correspondence relating to the Claim. Further, the submissions stated that the Tarong Power Station is located within the region administered by the QSRBAC.

In a telephone conversation on 15 December 2003 with an officer from the Department of State Development, Fraser Power, Legal Officer for the QSRBAC, confirmed that while the QSRBAC would not be making a submission to the Coordinator-General, its letter dated 11 December 2003 to Tarong Energy could be treated as QSRBAC's formal response to the Coordinator-General's request for a submission. QSRBAC's letter confirms that negotiations took place between October and December 2000 between Tarong Energy and the Wakka Wakka People, for the surrender of native title rights and interests over part of Yarraman State Forest required for an ash dam. The terms of an ILUA to effect the surrender were agreed to between Tarong Energy and the Wakka Wakka People. However, according to QSRBAC, one registered native title claimant refused to execute the ILUA. As a result of Tarong Energy having negotiated in good faith with the native title claimants to secure a registered ILUA and as result of having stated its intention to seek to comply with the terms of the ILUA, the QSRBAC, as the relevant representative body, advised that it would not object to the compulsory acquisition of the land. This matter, while not of direct relevance to the consideration of the significance of the Tarong Power Station, provides further details of Tarong Energy's negotiations to acquire the land by agreement.

The submission from Mr Oscar Chapman, Chairman of the Eidsvold Wakka Wakka Aboriginal Corporation and one of the native title claimants, advised that the Wakka Wakka #2 Native Title Claimants have interests in the proposed infrastructure and requested that they be notified of all stages pertaining to the project.

The submission from Tarong North Pty Ltd stated that while Tarong North has no right, title or interest in the Tarong Power Station or the ash dam, it fully supported, and had no objection to, the designation of Tarong Power Station as an infrastructure facility of significance. Tarong North's submission indicated that its relationship with Tarong Energy with regard to the ash dam was purely contractual. Tarong North's submission stated that that any works to be undertaken in relation to the ash dam are a matter solely for Tarong Energy.

The submission from the EPA confirmed that agreement has been reached between EPA and Tarong Energy with regard to the proposed revocation of approximately 47 ha from the adjoining State Forest (SF289, Parish of Tarong) and the payment of compensation to the EPA, in order to allow for the expansion of the ash dam. In addition, EPA's submission stated that the revocation process requiring Parliamentary approval, is proposed to commence at the first opportunity in 2004. EPA indicated that it had no objection to the relevant State Forest land being designated as part of the area of the infrastructure facility of significance.

5. The Reasons for the Decision

The Governor in Council approved by gazette notice on 19 December 2003 under section 125(1)(f) of the SDPWO Act, the Tarong Power Station as an infrastructure facility of significance, particularly economically or socially, to Queensland and the Wide Bay - Burnett region, the region in which the facility is to be constructed, for the following reasons:

• Tarong Power Station is one of Queensland' s largest power stations and supplies low cost , reliable electricity to the NEM. It supplies, on average, 25% of the State's electricity needs.

• Tarong Power Station is strategically located near Nanango, 180 km north-west of Brisbane. It cost more than $1.2 billion. The facility plays an integral role in the supply of electricity to southern Queensland and has an expected life of a further 25 years.

• During the 2002/03 financial year, Tarong Energy earned $404.8 million in revenue through the NEM as a result of the sale of electricity and ancillary services.

• The Tarong Power Station employs a workforce of about 250 people, 90% of whom reside in the neighbouring shires of Kingaroy, Nanango and Rosalie. Tarong Power Station households contribute 415 workers to Kingaroy Shire, 181 to Nanango Shire and 38 to Rosalie Shire. Eighty-five percent of the total employment created by the facility is due to the flow-on effects of the power station's operation. 19 December, 2003] QUEENSLAND GOVERNMENT GAZETTE, No. 80 1281

• The Tarong Power Station's direct annual economic contribution to the Wide Bay - Burnett Region includes spending of $4.5 million on the purchase of local goods and services as well as contributing $1.95 million in water delivery to farmers downstream of the facility along Meandu Creek. The value of water discharged to the creek over the next 25 years has an estimated, net present value, of $6.6 million with a resulting net increase in annual farm revenue of $140,000. Tarong Energy has assisted in the establishment of the Tarong Learning Program and other community activities and facilities aimed at developing the skills of local residents, particularly the unemployed youth.

• For the financial year of 2000/01, Tarong Power Station households contributed $14.5 million in goods and services expenditure to the economy of the Wide Bay - Burnett Region. Contracts to local service providers also contributed to the region's economy with the associated Coal Combustion Products contractors spending $1.6 million in the region annually.

• As a Government Owned Corporation, Tarong Energy has an obligation to its shareholding ministers to return a revenue dividend which will increase the economic benefits to the State.

• There is a demonstrable demand for increased power in south-east Queensland up to the year 2013 particularly over the summer months when demand is expected to increase at an average annual rate of 3.6% from 6,462MW in 2002/03 to 9,172MW in 2012/13 while summer peak demand is forecast to grow on average by about 6% annually. The majority of electricity generated by the facility is consumed within South-East Queensland.

• Tarong Power Station supplies 1400MW of electricity for southern Queensland that is unable to be supplied by other power stations in southern Queensland due to limitations in the grid network.

• The ash dam is an integral part of the generating facility. The ash dam will reach capacity in mid 2005 necessitating Tarong Energy to investigate means of accommodating the disposal of ash. The higher than expected ash content of the coal consumed at Tarong Power Station and the inability to safely pursue dense phase ash stacking within the confines of the existing ash dam has brought forward the timing of the required augmentation.

• Augmentation of the dam by raising the spillway at the eastern boundary of the dam contiguous with the Yarraman State Forest provides the most efficient and cost effective interim solution to the ongoing operation of the power station and disposal of ash. There is a 12 month construction period associated with the dam augmentation construction necessitating that acquisition of the required land is achieved by mid 2004.

• Tarong Energy has a Site Service Agreement for the provision of cooling water, hydrogen, fuel oil and disposal of ash from Tarong North Power Station owned and operated by the joint venture owners of Tarong North Power Station, Tarong Energy (via a special purpose subsidiary, TN Power Pty Ltd) and TM Energy (Aust) Pty Ltd which is owned by Tokyo Electric Power Company (TEPCO) and Mitsui & Co. Ltd.

• Tarong Energy has the necessary financial and technical capacity to enable the construction of the ash dam augmentation.

• Tarong Energy has attempted to negotiate an ILUA about the surrender of the native title rights and interests in relation to the land within the State Forest which is included within a native title claim. Because of internal disputes within the native title claimant group, Tarong Energy has been unsuccessful in executing and registering an ILUA.

• In the event that Tarong Power Station cannot continue to reliably operate at its current capacity, there is a likelihood of outages and interruptions to the supply of power which are not able to be met by other existing power stations.

• Public submissions received on the significance of the facility, particularly economically and socially to Australia, Queensland and/or the region supported a finding that the facility has that significance.

• The continued operation of the Tarong Power Station for the years 2005 to 2008 is dependent upon the continued availability of the ash dam to store waste furnace ash and fly ash. 1282 QUEENSLAND GOVERNMENT GAZETTE, No. 80 [ 19 December, 2003

• In the event that the ash dam cannot be augmented through the acquisition of additional land adjacent to the eastern boundary of the dam and currently within the Yarraman State Forest, by mid 2004, current estimations are that ash disposal will have to be significantly curtailed by mid 2005. Any disruption to the disposal of ash to the ash dam would result in significant disruption to the State's electricity supply, reduced earnings and also reduced dividend payments to the Queensland Government.

• If Tarong Energy is unable to obtain the land required for the augmentation of the ash dam, it is estimated that Tarong Energy will be required to undertake engineering works to undertake engineering works to prevent ash dam water inundating the State Forest at a cost of $6 to $10 million.

• Acquisition of part of the land within Yarraman State Forest will enable Tarong Energy to increase the storage capacity of the ash dam by 9.5% by raising the spillway crest from the current RL 434 to RL 435.9 m. This increased capacity of the ash dam will allow the Tarong Power Station to continue to provide reliable power supply until 2008.

• Tarong Energy's application dated 1 December 2003, requesting that the infrastructure facility be approved by the Governor in Council as an infrastructure facility having significance under section 125(1)(f) of the SDPWO Act adequately addresses the information requirements specified in Appendix A of the Guidelines for Acquisition of Land for Infrastructure Projects by Persons other than the State and adequately demonstrates that the Tarong Power Station is an infrastructure facility of significance. --