Indian infrastructure firm GVK’s $10bn Alpha coalmine, port and rail project in Australia’s Galilee basin is financially unviable, according to a report by US-based Institute for Energy Economics and Financial Analysis (IEEFA).
The report, titled, ‘Stranded: A financial analysis of GVK’s proposed Alpha Coal project in Australia’s Galilee basin’, stated that the project is uneconomical and poses an unacceptable level of risk to potential investors.
IEEFA co-author Tom Sanzillo said that Alpha Coal Project is a quagmire, not an investment. According to the report, the coal project faces potentially several regulatory, environmental, operational, logistical and financial obstacles, which have the potential to delay the implementation of the project and increase costs.
The latest report comes at the time when the India-based firm is in talks with Australian rail operator Aurizon on building of rail and port infrastructure of Alpha with an investment of $6bn. GVK bought the Alpha Coal Project from Hancock prospecting in a $1.26bn deal in 2011.