Adani’s silent partners

A month after Adani got the final approvals for its Carmichael mine, it’s still hard to work out what’s going on with Adani and the Galilee Basin in general. Adani has been making a fair bit of noise, but the project still seems to consist of tree clearing and road building.

To get past this stage, and without significant in-house experience of major projects, Adani needs partners: engineering design firms, construction contractors, and so on. And even if no external funding is needed, the project still needs insurance, which is getting harder to come by.

Adani claims it has insurance lined up, but declines to say which firm is providing it. Assuming the claim is true, the obvious explanation is that the insurer is worried about reputational damage from being associated with such a toxic project. Presumably, that concern will be reflected in higher premiums.

The same is true as regards engineering. It’s widely rumored that global firm Gutteridge, Haskins and Davey will get the job, but so far GHD has refused to comment. As well as reputational damage, GHD needs to consider the fact that Adani has burned a string of previous contractors. They are still fighting their last partner, AECOM over a payment of $12 million. AECOM must surely be regretting ever getting into bed with Adani, ending up losing their money as well as their reputation.

Any firm looking at this history, and tendering to Adani, would want a high price and money up front for its services, as well as trying to keep its involvement as quiet as possible. That in turn raises the question of how a project that was marginal to begin with can manage to pay over the odds for everything it needs. This at a time when a company like Whitehaven is relying for its continued profitability on the assumption that existing producers will leave the market.

On the jobs front, Adani has been advertising positions in its Townsville office (about 60, as of today). But that’s barely enough to replace the cuts made last year. There’s no sign of the promised thousands of jobs so far.

Irregular email update

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Hi all,

It’s been quite a while since my last email news, which I sent out before the May election.  Following Labor’s loss, I resolved to avoid commentary on political strategy or day-to-day politics, and to spend more time thinking about global and long term issues, such as climate change and the global choice between socialist and Trumpist futures.
I’ve mostly stuck to that resolve discussed the topic. I did a radio debate with conservative US commentator Joshua Muravchik, on the topic Is socialism still relevant in 2019?  and wrote articles about the need to face up to climate change sooner or later and Libra, the new Facebook cryptocurrency

The Brisbane launch for Economics in Two Lessons was at Avid Reader on 25 June and the Sydney launch at Gleebooks on 27 June.

On my blog,  I discussed A new two-party system? and whether globalisaton can be reversed looking at trade and migration.

Inevitably, though, I’ve felt the need to say something about current Australian policy issues including

The Murray-Darling Basin scandal: (economists have seen it coming for decades),  Adani (I remain sceptical that the project will go ahead without public money)  and of course Israel Folau (where I focus mainly on protecting workers’ rights)

Coming events

Melbourne launch for Economics in Two Lessons at Readings, Hawthorn Wednesday 17 July and also at University House, Melbourne Uni, 4-6 pm Friday 19 July

What Should Our Economy Look Like in 2030? Brisbane Seminar 6 August

How to follow what I’m doing (if you want to!)

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Best wishes