A $2.2b rail link to the huge Carmichael project has gained conditional approval for commonwealth funding

This article is more than 3 years old

This article is more than 3 years old

The environmental movement is up in arms over a move towards federal funding of up to $1b for a railway that will serve Adani’s proposed Queensland coal mine.

A $2.2b rail link to Adani’s huge Carmichael mine in the untapped Galilee basin has gained conditional approval for a commonwealth loan, days before its billionaire promoter, Gautam Adani, is due to meet state and federal political leaders.

The 310km North Galilee Basin Rail Project has met the economic, financial and employmentconditions for a 50% loan over five years under the Northern Australia Infrastructure Fund (NAIF), the Courier-Mail reported.

The railway, which will open up coalfields that reef scientists argue must remain untapped for the survival of the Great Barrier Reef, will require more detailed assessment before the NAIF panel agrees to fund it.

The preliminary approval of the loan, one of 80 unmet funding requests to the NAIF, was news to Queensland government ministers familiar with the project on Saturday, Guardian Australia confirmed.

Great Barrier Reef progress report: We have to do better on water quality, says Australia Read more

A spokesman for Adani said he was unaware of any official advice received by the company on the rail loan request. A spokeswoman for the federal minister for northern Australia, Matthew Canavan, was contacted for comment.

Gautam Adani is due to join the Queensland premier, Annastacia Palaszczuk, for an announcement in Townsville on Tuesday, as well as the prime minister, Malcolm Turnbull, in a separate meeting.

Last week, Australia sent a progress report to Unesco on its conservation plan to save the reef, which has lost 22% of coral after its worst ever bleaching event this year.

Previous Unesco scrutiny of a possible “in danger” listing for the World Heritage site was prompted in part by Adani’s earlier plans to expand its Abbot Point coal port through dumping dredged seabed in reef waters.

Those plans were scrapped before the Queensland government banned capital dredge from being dumped at sea and insisted Adani gain “financial close” on its $22b coal project before the Abbot Point expansion could begin.

It also ruled out state funding of hundreds of millions of dollars for the Galilee rail project that was flagged under the former Newman Liberal National government.

Environmental challenge to Carmichael coalmine dismissed by supreme court Read more

But the state government recently declared the Carmichael coal project “critical infrastructure”, heading off legal challenges after a raft of court cases brought by environmental groups and traditional owners.

The Queensland Greens senator Larissa Waters said a federal government decision to fund the Galilee project was “condemning the reef to worse bleaching and jeopardising the 70,000 jobs it provides”.

Waters criticised the state government for “creating loopholes for Adani and fast-tracking this disastrous project”.

“[With] the federal Liberal-Nationals moving to pour in public money, it’s clearer than ever that big corporations call the shots, not ordinary Australians,” she said.

“Big coal has captured our politics, but we will fight them every step of the way.”

The Greenpeace Australia Pacific reef campaigner Shani Tager said public funding was “a trainwreck of an idea and it must be stopped”.

“While the world is moving away from coal, the federal government is looking at funding a project that some of the biggest banks in the world won’t go near and the Queensland Treasury has called unbankable,” she said.

“It’s absurd to prop up a project that banks won’t touch.

The government's report on the Great Barrier Reef is a 'dog ate my homework' moment | Larissa Waters Read more

“No more taxpayer money should be wasted on coal projects that threaten our Great Barrier Reef.”

The Australian Conservation Foundation chief executive, Kelly O’Shanassy, said the loan would be “a serious misuse of public money”, claiming Adani had “a mining licence but no social licence”.

She said if Adani was unable to ultimately fund the mine, “Australia will be left with a railway to nowhere and an unpaid billion-dollar loan”.

“The NAIF board must release the assessment documents that show how it has determined the environmental and social benefits of this project,” she said.

Waters said there were “clean energy alternatives to this climate-wrecking disaster” that could boost Queensland regional communities hard hit by the crash of the mining boom.