Wodonga Council is already bracing for ratepayer backlash from a proposed complex deal to install a gas gate at Logic industrial hub.
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Council staff are recommending the design, supply and installation of the gas gate be awarded to Australian Gas Networks for the sum of $5.26 million and also "gift or transfer" about 880 square metres land near the Woolworths distribution hub to accommodate the facility.
In order to clinch the deal, councillors have been asked to authorise a variation to the 2019-20 budget for an additional $1.7 million to be added to the existing $1 million allocation to the project.
Another part of the complex deal is a "Mains Extension Work Agreement" which will eventually result in the gas gate being owned by the successful tenderer and not council.
The agreement must be signed off by March 26 with no confirmed user of the gas locked in to date.
"This poses a potential risk to the council in that the infrastructure may lie dormant or under-utilised for some time," the council agenda report states.
"While this is possible, and may cause some political, community sensitivity, local media scrutiny or an external audit, the risk rating remains significant.
"This risk is however mitigated by the fact that the council's project costs are reduced to approximately $2.7 million as a result of grant funding.
"The opportunity however that this provides to the council is that the supply is in place and that a potential gas user can take immediate advantage of the supply should they wish to establish within Logic."
Completion of the project will take 12 months with council hoping companies which have previously expressed interest in moving to Logic, but been thwarted by no gas gate, will commit.
"Over recent months, some limited interest has been shown for a gas-dependent manufacturing plant within the estate," agenda notes state.
"This could be a significant development and one which could provide the necessary impetus for accelerated investment within Logic.
"With the recent funding announcement from the State Government, the council's investment is reduced to approximately $2.7 million, making the award of the tender a viable option to increase the attraction of gas-dependent development into Logic."
The recommended gifting or transfer of the land will be subject to the normal process including the ability for residents to make submissions.
