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Colin Barnett concedes State and Commonwealth taxpayers will not see a commensurate return for their $512 million investment in the Ord Stage 2 expansion but says the project is justified because it will create indigenous jobs and develop WA's north.

Under questioning from Opposition Leader Mark McGowan in State Parliament yesterday, the Premier refused to confirm the Government will next week award 15,000ha of Ord irrigated farmland to China's Shanghai Zhongfu group to grow and process sugar for ethanol production.

But he did confirm the land would be leased, rather than sold, and hailed the expansion - which has blown out by more than $120 million - as a visionary piece of nation-building infrastructure that would complete the Ord project 40 years after its first stage opened for business.

"What this is, along with the proposed James Price Point development, is an example of combining social development, education, health, housing, development of indigenous people to give them economic independence and real jobs," Mr Barnett said.

"No, neither the State Government or the Federal Government will recover the cost of this. But what we will do . . . is develop the north of WA. That is in the national interest."

Mr McGowan said he had "grave concerns" that $320 million of State money had been spent with no prospect of an economic return.

And sugar being grown to produce ethanol undermined the Government's claims the Ord investment was for a new "food bowl", Mr McGowan said.

Mr Barnett rejected the criticism, saying the Government would not dictate to a private operator what it should grow.

"Food bowl is a phrase. It's the development of agricultural industry in the north of the State," Mr Barnett said.

Outspoken Queensland MP Bob Katter panned the deal, claiming governments were "selling your country out from under you".

Kununurra resident Wayne Paul, a former manager at the Ord sugar mill that closed in 2007, welcomed the news. "It's probably good for the town - what we need is jobs and the flow-on effects for local business," he said.