Colin Barnett

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April 6th, 2011

PREMIER Colin Barnett says he will not grant a time extension to the proponents of the $4.3 billion Oakajee port and rail project unless they meet some "exacting conditions".

In November, one of the project's partners Murchison Metals said the Oakajee project, in WA's mid-west, would be delayed for up to six months as it waited for key agreements to be finalised.

As a result, Murchison asked the WA government for an extension to its bankable feasibility study, which had a deadline of April attached to it.

Today, Mr Barnett said he had written to the Oakajee Port and Rail consortium, which consists of Murchison and Mitsubishi, in early January outlining the conditions.

``I did so early in the New Year outlining some conditions we would require before extending that mandate and those discussions are going on, and I am sure we will reach some agreement over the next couple of weeks,'' he said.

``I am frustrated that the project is not going as quickly as I want,'' he said.

``My frustration is, in part, because mines are being built right now in the Mid-West and those mines require a railway to transport the ore and a port to export it from. So, the time is getting short.''

If the government does not grant Murchison an extension it may mean it will lose its exclusivity rights over the project and open the door for another proponent to join.

Mr Barnett said he always had wanted a Chinese company to be involved in the project and hoped that that would still be possible.

``What I hope would evolve is that this project will not only go ahead but go ahead as an Australia, Japanese and Chinese project and it will be the first major project of that kind anywhere in this country,'' he said.

The Chinese-backed Yilgarn Infrastructure lost out to Murchison Metals and Mitsubishi in a limited tender process with the WA government over the Oakajee project in 2008.

He said it was mistake by the previous Labor government to set up competition between the Japanese and Chinese as to who would build that project.

The first shipment through the port is expected some time between late 2014 and early 2015.