The State Government is preparing to take a big parcel of land on the Ord River irrigation scheme to market within months in what shapes as a test of its high hopes of creating an agricultural powerhouse in the far north.
It has been grappling with the issue of what form of land tenure to offer companies interested in developing about 5000ha, taking in the areas known as Mantinea and Ord West Bank.
Chinese-backed company Kimberley Agricultural Investments has thrown down the gauntlet to the Government, saying it would be interested in developing the 4000ha at Mantinea and 1000ha at Ord West Bank, depending on the conditions of the land release.
KAI is developing a 7400ha site known as Goomig and has the right to develop a 6000ha site known as Knox Plains under long-term lease agreements with the Government. It is understood the right to freehold title is the key to any play for the Mantinea and Ord West Bank land.
Casting a shadow over the next land release is work to replace and repair a network of leaky pipes installed to supply Goomig and Knox Plains as part of the Government's $311 million irrigation scheme expansion.
The main irrigation pipes will have to be replaced with the cost of the work so far being met by Leighton Contractors, which was responsible for installing them under a deal with Landcorp.
A local firm started work to dig up and replace the pipes, 1.8m in diameter, last week. It is hoped smaller pipes installed to supply water to the farms already being developed by KAI can be lined to stop their leaking.
Despite the leaky pipe problems, the latest land release is expected to attract more interest than the last big parcels taken to market.
KAI, an arm of private Chinese company Shanghai Zhongfu, was named preferred proponent to develop Goomig and Knox Plains late in 2012 based on plans to develop a major sugar industry.
The others to show interest were Indian sandalwood grower TFS and AACo, which floated a plan to grow cotton and run cattle feedlots. TFS remains interested in acquiring more land on the Ord where it has just completed a first commercial harvest.
The Galati Group is also seeking more land on the Ord for fruit and vegetable growing.
KAI's interest in the next land release will be influenced by the lack of progress on opening up land for irrigated farms on the Northern Territory side of the border. It needs more land to justify a billion-dollar investment in growing sugar, including building a state-of-the-art mill.
There are significant access issues with Mantinea, which is black clay and levee soils, and some with West Bank, which has about 300ha on black clay soil.
It is understood the Government hopes to name a preferred proponent to develop the land by May next year. About 400ha on Ord stage one was released by expression of interest earlier this month. The land is being offered under development leases with the option to covert to freehold once development milestones are achieved.