A group of prominent economists have told a Senate inquiry the Northern Australia Infrastructure Fund (Naif) is “sorely wanting” on transparency, accountability and its track record for public disclosure, and called on it to make major changes to the way it operates.

In a submission to the Senate inquiry into the governance and operation of Naif, the group discusses the potential $900m loan to Adani for a rail link to its proposed Carmichael coalmine as a case study, and raises serious concerns about the way the body operates.

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Naif has compromised its independence by relying on a government agency for its financial analysis, since that agency can take direction from its minister, the group says.

It also suggests any loan to Adani has been potentially tainted by government interference, is subject to conflicts of interest in both Naif and other agencies Naif relies on, and Naif’s overall operation is beset by a lack of accountability.

The submission writers include a former chief economist of National Australia Bank, former assistant commissioner of the Productivity Commission and former manager at the Clean Energy Regulator. They have also variously held roles in Treasury, the prime minister’s department and the finance department.

“From our backgrounds in both public administration and the financial sector, we have found Naif’s guidelines, transparency and accountability, and its track record for public disclosure to date sorely wanting,” the submission says.

The group puts its weight behind many criticisms that have previously been raised of Naif’s operation, emphasising the lack of transparency.

“There appears to be a substantial lack of accountability for the Naif board,” they write. “Accountability requires transparency. With such large potential expenditures of public funds provided in its mandate, it is important that Naif regularly sets out for the public, either via the parliament or directly, full disclosure of its activities, including at the time of their receipt all lending requests.”

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They point to the board’s refusal to reveal whether any board members have recused themselves from decisions about lending to Adani.

At a Senate estimates hearing the Naif chief executive, Laurie Walker, was asked whether another board member would recuse herself from deliberations on the Adani loan and Walker replied: “Naif doesn’t publicly disclose which directors have recused themselves.”

“What Mr Walker did not answer is why, in the interests of transparency and public confidence in Naif, they do not disclose such information,” the submission says.

“In any consideration by Naif of loan applications, its processes need to be not only independent but be seen to be independent,” the group recommends. “If there is a conflict of interest involved in consideration of a particular application, Naif should be obliged to disclose publicly both the nature of the conflict and the action it is taking to deal with it.”

They also raise a concern the full cost-benefit analyses of potential loans – like that to Adani – are not being properly conducted.

“Their public benefit guideline says that this must be a net benefit: in other words, it must take into account negative as well as positive aspects of the proposed project,” they say.

“Public benefit clearly extends beyond the interests of any one region or state. The Carmichael coalmine is potentially massive, and as a consequence could have significant adverse effects on both the price of coal exports from other companies and regions where mines already exist and future employment prospects for them.”

That particular issue was raised recently when miners from further south in Queensland and in NSW released analysis showing the Carmichael mine would push down global coal prices, and cut jobs and profits to other Australian miners.

The authors also expressed concern that enviromental impacts will not be considered among the potential costs of the loan.

“In addition, even if the risks of environmental pollution of the Great Barrier Reef from a substantial increase in coal loading and transportation from Abbot Point were deemed to be small, the consequences in terms of damage to the reef, to tourism and to regional employment could be catastrophic. A detailed risk assessment involving both the likelihood and consequences of environmental damage needs to be fully factored into Naif’s consideration of the project.”

But the group is criticial of the reliance on the government’s Export Finance and Insurance Corporation (Efic) for the cost-benefit analysis.

“But Efic, unlike Naif, is not an independent body: it is part of a federal government department, and hence acts at the discretion of its minister. One of its board members, Annabelle Chaplain, is also a director of Downer EDI, a company that has a commercial arrangement with Adani and which will benefit if the Carmichael coalmine goes ahead,” they wrote.

That was a particular issue, the group said, since the former resources minister Matthew Canavan has “has put pressure on Naif’s board and potentially compromised its consideration of a loan to Adani due to his strong and repeated endorsement of the proposal.”

“A lot of the stuff Efic does is more commercially oriented,” Robert Henderson, former chief economist (markets) at National Australia Bank and co-author of the submission, told Guardian Australia. “What we seem to have in the Naif potential projects, these will be things that don’t necessarily stack up commercially in their own right but when you take into account the public benefit there may be a good economic case for doing it.”

Henderson said the Productivity Commission would be a much better organisation to conduct that kind of analysis. Henderson once worked for the commission and co-author Sue Holmes is a former assistant commissioner at the Productivity Commission.

He said the Productivity Commission has a long history of offering independent and fearless advice to the government, and had deep experience examining cost-benefit ratios of government assistance packages.

The submission was authored by Geoff Weir, director of Financial Sector Services who formerly worked for the Reserve Bank of Australia, Treasury and the OECD; Robert Henderson, former chief economist (markets) at NAB; Shelley Cooper, former branch manager at the Clean Energy Regulator; and Sue Holmes, former assistant commissioner at the Productivity Commission.