Nelly Bay | Magnetic Island

Marine Parks given to Magnetic Harbour Developers

Location of Nelly Bay: Magnetic Island lies 8 km off Townsville, North Queensland, Australia. This unique continental island is part of the Great Barrier Reef World Heritage Region. It is surrounded by the Townsville-Whitsunday State Marine Park, which in turn is surrounded by the World Heritage-listed Great Barrier Reef Marine Park.

The Magnetic Harbour project: The Queensland Government facilitated and partly funded this residential/tourist accommodation development in the Townsville-Whitsundays State Marine Park at Nelly Bay on Magnetic Island. The Magnetic Harbour project includes a high-density residential canal estate, a ferry and barge terminal building, a carparking area, and a tavern and commercial complex. The Commonwealth government allowed the construction of two breakwalls and the dredging of a marina basin in the adjacent Great Barrier Reef Marine Park.

Consequences: Construction of Magnetic Harbour has destroyed one-third of Nelly Bay's Great Barrier Reef Marine Park and Townsville-Whitsunday State Marine Park, and will continue to degrade and pollute adjacent marine parks into the future.

The socio-economic impacts of the Magnetic Harbour: Increased demands on schools, the Nelly Bay hospital, council services and subsequently higher rates; loss of public open space, beach foreshore and marine park; a visually unappealing entry point to Magnetic Island; increased traffic and ferry noise near the Nelly Bay Primary School. The greater distance from town to Magnetic Harbour has resulted in higher ferry fares, which have adversely affected island residents and businesses.

Queensland Government support for Magnetic Harbour: The Queensland Government spent millions of dollars facilitating the Magnetic Harbour project. It financed the Expression of Interest and EIS processes, paid permit application fees, and provided funding for materials and management plans.

The government also committed $10 million to pay for the public infrastructure – compensation to the Magnetic Harbour developers for a residential island that they were not allowed to build in the Great Barrier Reef Marine Park.

As well, the government committed millions to the construction of a sewage treatment plant in adjacent Picnic Bay. The privately-owned residential component of the Magnetic Harbour project could not have proceeded without the treatment plant.

Super profit for the Magnetic Harbour developers: An audit conducted by Arthur Anderson and Associates, commissioned by the State Government in 1997, determined that the Magnetic Harbour project "could produce a developer's profit of $4 to $5 million or 40 to 50% on risk capital". Clearly the project involved excessive taxpayer-funded profiteering. The audit also outlined the considerable ongoing infrastructure maintenance costs that would be borne by ratepayer revenue.

The term lease issued to the Magnetic Harbour developers also required the State to convert most of the reclaimed State Marine Park to freehold property, which the Magnetic Harbour developers sold privately.

The facilitating of the Magnetic Harbour project (especially through the illegal reclamation of the public state marine park) was not an acceptable use of the Queensland taxpayers' money – particularly since the projected ongoing costs of maintaining the Nelly Bay harbour are expected to extend to many millions over the coming years.