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MINING magnate Clive Palmer says the Indian corporation chosen to build a coal railway in central Queensland is unlikely to complete the project.
Mr Palmer's China First Project lost out to Indian-Australian joint venture GVK-Hancock in June to build a rail corridor to link the Bowen and Galilee basins with the Abbot Point coal terminal.
Mr Palmer has questioned GVK's ability to deliver the project after it was caught up in India's "coalgate" scandal.
The company failed to meet the strict deadline set by the Indian government to develop a coal mine in Jharkhand state.
India's Ministry of Coal in early May issued a show cause notice to GVK and joint-venture partner ArcelorMittal asking why they had failed to meet the deadline for developing the mine, but received no response.
As a result the Indian government recommended last week that GVK and ArcelorMittal's bank guarantee for the project be forfeited.
Mr Palmer claims this shows it is unlikely that GVK will complete the Queensland railway.
"It's pretty bad that the Indian government has decided to withdraw GVK's bond," he told AAP.
"If they're not meeting their obligations in India, why does the Queensland government think they will meet their obligations here?
"This project is worth tens of billions but GVK's market capitalisation is only about $500 million, the markets are down too. Do the math."
He also questioned whether proper due diligence was undertaken by those evaluating the proposal in Queensland.
"Why wasn't there a proper discussion with the Indian government and others on a project of national significance?" Mr Palmer asked.
Deputy Premier Jeff Seeney, who approved GVK for the project, refused to make any comment on the firm's recent conduct in India.
"I will not comment on Clive Palmer or anything he has to say," he told AAP.
This article first appeared on www.heraldsun.com.au
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