Project Sea Dragon’s appeal rejected by the Federal Court, the company will be liquidated

The company behind a $1.5 billion plan to build the world’s largest shrimp farm on a remote Northern Territory cattle station is to be wound up following an unsuccessful appeal in the Federal Court.

In February, the court found that Seafarms subsidiary Project Sea Dragon had been insolvent since at least June 2020, and the judge ordered the appointment of liquidators to liquidate the company.

Construction company Canstruct filed a lawsuit against Project Sea Dragon after its $13.9 million contract was terminated in April 2022.

On Friday, the Federal Court dismissed Project Sea Dragon’s appeal against the February ruling and ordered the company to pay Canstruct’s legal costs.

The ABC understands that a number of local Kimberley companies have been subcontracted by Canstruct to carry out work related to the shrimp farm and associated workers’ accommodation.

Shire of Wyndham East Kimberley chairman David Menzel did not expect the money from the liquidation of Project Sea Dragon to come back to local contractors.

“I guess we’ll have to wait and see, but I’m sure no one is holding their breath.”

Project Sea Dragon’s long-term plans

For more than a decade, Seafarms had been working to deliver the Sea Dragon Project, a 10,000ha shrimp farm built at Legune Station, one of Australia’s most remote cattle properties.

The breeding facility, located northeast of Kununurra on the NT/WA border, was supposed to produce 100,000 tonnes of tiger prawns a year.

The project was granted major project status by the NT government in 2015 to accelerate its development and create 1,600 jobs.

A change in Seafarms’ CEO in late 2021 led to the entire project being subjected to serious scrutiny; In March 2022, the project was found to be “not feasible in its current form” and to pose “unacceptable” risks due to its remoteness and biosecurity threats. environmental conditions.

Then-CEO Mick McMahon said he was “shocked” by what he found when he took the job and said the company’s plans were based on breeding ponds that were “unproven in Australia”.

Mr McMahon stepped down as CEO in May 2022 after major shareholder Ian Trahar and his successor Rod Dyer pledged to continue development of the project.

The Sea Dragon Project was placed into voluntary administration in February 2023 after the Royal Institution of Chartered Surveyors ordered Seafarms to pay Canstruct $13.9 million over a contractual dispute.

Seafarms reported a net loss after tax of $19.6 million in the 2023/24 financial year and sold two farms in north Queensland for $13.5 million in August.

The NT and WA governments have both spent millions of dollars supporting the Sea Dragon Project’s infrastructure.

The federal government contributed $63 million to road infrastructure, the NT government contributed $56 million and the WA government contributed $15 million.

Look ahead

Following the Federal Court decision, the regional president, David Menzel, hoped that the negative outcome of the ambitious shrimp farm would not prevent further investment in the region.

“I think the value of this road will increase over time, and it’s probably really helped facilitate some development opportunities along the way,” he said.

“There is a large parcel of land on the NT side of the border that is ripe for development as both a dryland and irrigated farming operation, so I think we will see real returns on this investment soon.”

Seafarms and Canstruct have been contacted for comment.