$14.5 million gas VPA

Energy giant Santos has offered the Narrabri Shire Council a $14.5 million Voluntary Planning Agreement in association with the Development Application for its proposed Narrabri Gas Project.

Council said it’s the largest VPA offer that it has ever received.

“An important point is not only the size of the contribution but also that almost 90 per cent of those funds will be going back to the community for their benefit,” said Narrabri Shire Council Mayor Cathy Redding at Tuesday’s council meeting.

“With a few of our other VPAs – it’s gone to the roads.”

Previous VPAs have included large monetary amounts connected with impact offsets, for example road works, which can dilute the community benefit derived from a VPA.

A VPA is an agreement between a developer and one or more planning authorities, where the developer agrees to make contributions towards a public purpose, and as its name suggests – it is a voluntary agreement.

At Tuesday’s ordinary council meeting, councillors voted unanimously in favour of agreeing in principle to the terms of Santos’ $14.5 million VPA offer that includes $13 million worth of contributions for the Shire and $1.5 million for road maintenance.

The huge windfall would see NSC receive $10 million in cash contributions, over a six year period, for local projects including the redevelopment of the Narrabri Airport Terminal, matching Council contributions to Wee Waa Doctor’s Housing, the Narrabri Sport and Tourism Precinct development, Narrabri CBD master plan upgrades and Narrabri Library relocation and Country University Centre expansion. Following these contributions, Council would receive annually for 14 years 0.025 per cent of royalties payable up to $200,000, up to a total maximum of $3 million.

This portion of the monetary contributions would go towards mutually agreed projects and initiatives between Santos and Council.

Councillors Robert Kneale and Ron Campey both raised questions in Tuesday’s council meeting about the road maintenance agreement.

The agreement includes $1.5 million as an upfront, lump-sum payment.

The recommendation report to Council said the amount is “considered to be sufficient to maintain the roads affected by the Santos project at their current service level for the next 20 years.”

“That’s about $60,000 a year, is there any contingency?” asked Cr Campey.

“Our infrastructure team has done the sums,” said NSC general manager Stewart Todd.

“I’m just wondering whether there should be some form of contingency looked at,” said Cr Kneale.

Cr Kneale said he thought Santos would have an expectation to travel the roads regardless of weather conditions.

“I’m aware of what the country is like, when it gets wet in the Pilliga scrub… people can be bogged for a considerable amount of time,” added Cr Kneale.

“Should we be looking at concrete causeways, sealing of roads, significantly improved drainage, looking more into the longer term and having a better road network that will service this company?” asked Cr Kneale.

The recommendation report to Council stated, “If upgrades to the affected roads are requested or required as an impact by the project; Council, would enter into further discussions with Santos.”

The $14.5 million VPA is a separate pot of money to the Community Gas Benefits Fund, the structure of which is still being established.

“Should such a Fund be established by Santos, this would create further funding streams for the Narrabri Shire,” stated the report to the Council.

With Council’s agreement in principle, a formal agreement can now be drafted between the parties.

If the NGP is approved, a condition will be applied to the development consent requiring the VPA be entered into.

The NSW Department of Planning and Environment is currently reviewing the project before it proceeds to the state’s Independent Planning Commission.

In January, NSW Premier Gladys Berejiklian said she anticipated a decision about the project would be made ‘in the first half of this year’.

Council will now advise Santos of its decision to agree to the VPA offer as well as the Department of Planning, Industry and Environment.

Cr Ron Campbell was not present for the recommendation discussion or vote because of a declared interest in the matter and Ann Loder was an apology for the meeting.