Project Background
The project: The Magnetic Quay marina development got away in the heady development boom of the 1980's. The project involved the dynamiting of Bright Point, one of the headlands at Nelly Bay, to make space for a massive resort complex (a 239-room hotel and 16 home units), and to provide rock for the construction of two breakwalls.
As well, the developers planned to dredge the marina basin in the adjacent Great Barrier Reef Marine Park and use the spoil to reclaim a section of the State Marine Park located next to Bright Point.
Here more tourist accommodation and commercial facilities would be built - a tavern, condominiums, shops, parking facilities and barge and ferry terminals.
The access channel would be dredged through the Nelly Bay fringing reef, a reef of significant scientific, recreational and educational value.
The opposition: The project was vigorously opposed by residents and conservationist groups, who fought the project through the Local Government Court, but the appeal was dismissed.
An appeal was also lodged with the Administrative Appeals Tribunal, but the appeal was withdrawn after a year of hearings, when the conservationists could no longer afford the legal costs.
This was an extremely acrimonious period during which the small island community divided into two camps, with two island newsletters weekly trading blows over the issue. This project generated an incredible depth of feeling and passionate argument in the Magnetic Island community for over fifteen years.
Engineering problems: A blatant land-grab, the Magnetic Quay scheme was as destructive as it was impossible. When construction finally began in late 1989, the developers were already in financial difficulty.
Technical problems arose when the "sheet piling" installed within the main breakwall failed to seal the marina area from outside sea water, which made excavation and dredging impossible.
The inevitable cost blowouts (caused largely by the ongoing engineering problems, rising interest rates and catastrophic wet season flooding) finally caused the collapse of the project.
Bank refuses funding: The funding bank, Tricontinental, refused further loans after just one year of construction. More than $30M was lost on the project, which was not even half completed. When construction stopped in 1990, the breakwalls were nearly complete and the access channel partly dredged.
However the dredging of the reef flat to form the marina basin and the reclamation in the State Marine Park were never attempted, and the permits expired. In 1992 the lease was surrendered to the Queensland Government.
Federal inquiry into project: The Whitehouse Inquiry into the Great Barrier Reef Marine Park Authority's handling of the Magnetic Quay project found that the federal agency had failed to secure adequate insurance to restore damage to the World Heritage site. Consequently, the earthworks for North Queensland's biggest coastal excavation/reclamation project lay abandoned in Nelly Bay for ten years.
Expressions of Interest: In 1993 the Goss Government attempted to attract interest in the development once again. Expressions of interest were called, with the Government itself applying for the GBRMPA excavation permit. The chosen preferred developer, Nelly Bay Harbour Pty Ltd, proceeded to develop plans, based on the concept of a "safe harbour" ferry terminal with a canal estate, "residential island" and tourist accommodation (Nelly Bay Harbour – 1995).
Environmental Impact Statement required: An EIS was required by the Commonwealth Government and, in 1995, the plans were put out for public review. Of the 215 submissions received, nearly 200 were against the project. As a result, the development was scaled back, and because of perceived legal problems, the residential island was removed from the concept plan.
Government compensation to developers: The Queensland Government agreed to provide $6M to the developer for the provision of public facilities, including a ferry terminal, wharf, public boat ramp, barge and other facilities. The $6M was compensation to the developer for the loss of the residential island.
To complete the present Nelly Bay Harbour proposal (Magnetic Harbour – 1998), the developers dredged part of the reef flat within the Great Barrier Reef Marine Park in Nelly Bay to construct the harbour and canal waterways. This provided the fill needed to reclaim a section of the State Marine Park for the canal estate/tourism development. The reclaimed land was then freeholded in the developer's name, for private sale.
An alternative: In January 1997, Neville Bennett (a Magnetic Island businessman), circulated an alternative solution to the island's problem. Mr Bennett's proposal, A Win/Win Alternative, includes upgrading the Picnic Bay jetty's ferry landing to make it safer and partial restoration of Nelly Bay.
Copies of the proposal, with the survey attached, were delivered by post to 600 households, and 121 responses were received. The poll showed that 68.6% of islanders supported the solution and another 17.8% thought it had some merit.
Supplemental EIS: In November 1998, the residents of Magnetic Island examined a Supplementary Environmental Impact Statement (SEIS) during a period of "public comment". The Supplement to the EIS was produced to assess the latest design changes and answer the concerns raised in 1995 Draft EIS.
Final EIS: In March 1999 the Final EIS was released, with no formal period for public review allowed by the Commonwealth. In May 1999 an Environment Assessment Report was released by Environment Australia and the Queensland Enviromental Protection Agency.
Commonwealth permit: On 14 January 2000, the Great Barrier Reef Marine Park Authority again decided to grant a permit allowing the dredging in the Great Barrier Reef Marine Park to form the marina basin and provide sand/clay to construct reclaimed land in the State Marine Park.
Queensland permit: The other half of the Nelly Bay project – the reclamation works including internal revetment (retaining) walls, a high-density residential canal estate, ferry and barge terminal buildings, car parking area and a tavern and commercial complex – are located above the low water boundary within the Townsville-Whitsundays (Queensland) State Marine Park. This part of the project required a separate complementary permit from the Queensland Environment Protection Agency (EPA).
On 14 February 2000, the State permit was signed by Ian McPhail, Executive Director of the Queensland Parks and Wildlife Service. The permit was issued to the Department of Natural Resources on 1 March 2000.
On 3 March 2000, a spokesperson from the Department of State Development (facilitator for the project) verified that the permit would not be transferred to Nelly Bay Harbour Pty Ltd.
State of Queensland – Developer: The State took on the role of developer and, through a Deed of Agreement attached to the permit, was responsible for the necessary bonds and insurances.
However, the various construction licences, permits and approvals required by the Queensland Environmental Protection Agency were issued to Nelly Bay Harbour Pty Ltd.
Nelly Bay Harbour Pty Ltd entered into a Commercial Agreement to complete the works in the State Marine Park. As soon as the spoil rose above the mean high water mark in November 2000, the Queensland Government treated that section of the reef flat, beach and foreshore as if it were no longer in the State Marine Park, and leased it to Nelly Bay Harbour Pty Ltd for the construction of a canal estate development.
However, legal advice indicates that this practice of excising a section of the marine park, by reclamation, is actually illegal.
Conclusion: The Commonwealth and Queensland Governments were prepared to give World Heritage-listed marine parks to developers for private gain, at great on-going cost to the public.
In addition, the Queensland Government was willing to provide $6 million in funding to make the project viable for the developers. The developers were not required to pay to freehold this land, until blocks were sold from the development.
It is outrageous that the State persisted with this destructive, unnecessary development, when, with the same $6 million, the present jetty at Picnic Bay could have been made safe for a fraction of the cost of the public infrastructure built at Nelly Bay, with far less on-going cost to the community.