China group in Ord River buy bid

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The West Autralian | 2 December 2014

China group in Ord River buy bid

by Nick Butterly and Brad Thompson

A Chinese company has confirmed it wants to buy land in the Ord River area, triggering concerns in Canberra about foreign ownership of farmland.

Kimberley Agricultural Investment, owned by Chinese company Shanghai Zhongfu, has told the State Government "on an informal basis" it wants freehold ownership of the 6000ha Knox Plain area.

Knox Plain forms a major chunk of stage 2 of the Ord River scheme, the ambitious plan to open up the north of Australia to farming.

But NSW Liberal senator Bill Heffernan claims Shanghai Zhongfu wants to buy the land so it can subdivide and sell parcels of land to investors in Hong Kong.

Senator Heffernan says he spoke to a senior representative of Shanghai Zhongfu who had travelled to Canberra for the recent visit of Chinese President Xi Jinping.

"My take from the conversation was they wanted to hawk this on the Hong Kong market," Senator Heffernan told The West Australian.

Shanghai Zhongfu won the sole right to develop stage 2 of the Ord River scheme in a deal struck in 2012. Under the terms of the original deal, it would take out a 50-year lease on the land on the condition it was cleared and developed for farming.

The WA Government and the then Federal Labor government agreed to tip in a combined $510 million to build road and irrigation infrastructure around the land to sweeten the deal.

"I am aware KAI is interested in seeking freehold ownership of Knox Plain," Premier Colin Barnett said. "However, this issue has only been raised with the Government on an informal basis."

KAI general manager Jim Engelke said it would cost about $25,000 a hectare to develop farmland on the Knox Plain site and KAI could only get value on its investment through freehold ownership.

He said it was ridiculous to suggest the Knox Plain land could be subdivided and then sold off.
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