12:00a.m. 4th July 2008

| By Gordon Clark

Biocane chairman Scott Grimley stands in front of the Cow Candy factory at Bli Bli. Construction of the factory has been forced to halt due to a lack of funding. Photo: Barry Leddicoat/175836

A five-year battle to secure a future for Sunshine Coast cane growers could be over with construction of the $5 million ‘Cow Candy’ stock feed factory at Bli Bli stopped, forcing 31 people out of work.

Scott Grimley, chairman of the company behind the project, Biocane Ltd, said construction had stopped as a direct result of the Department of Agriculture, Fisheries and Forestry not paying funds it had agreed to last year as part of a $2.5 million commitment.

“As of Wednesday we’ve had to stand everyone down. We’re up to date with all our creditors, but unless we get the remaining government funding through, or funding from another source, we can’t proceed,” he said.

That would spell disaster for growers like Troy Apps who said he had 8000 tonnes of cane in the ground on his Maroochy River farm.

“We could have already sold it for mulch, or sent it to the Maryborough mill, but we decided to sell it for Cow Candy because that’s our only real hope for the future,” he said.

“I never would have believed the government would pull the funding at the last minute ... it’s a real kick in the guts.”

“You get a Prime Minister and Treasurer from the Sunshine Coast and this how they repay you.”

To compound the situation, Mr Grimley said the department had forced Biocane to sign a $1.5m contract to export the Cow Candy to Korea, and with construction halted, failure to deliver by September could lead to a law suit.

A spokesperson for the department yesterday said the grant had been “terminated” because it was clear the project “was not going to be completed before the sugar package ended on June 30, 2008”.

“The department has provided $1.2 million of the grant already ... while the company may consider the department’s decision unfair, the department must comply with its legal obligations relating to the expenditure of taxpayer’s money and the need to satisfy all accountability requirements,” the spokesperson said.

“The matter is now with lawyers and it would be inappropriate for further comment,” the spokesperson said.

Mr Grimley said the problem had started in February this year when officers from the department raised concerns about some of the plant and equipment purchased with the government’s funds.

“They sent some auditors up, which they’re quite entitled to do, but we were basically refused the right to put our case,” he said.

“Then in April they said we had to repay $269,000 of the funding we had received before they would give us any more money.”

Mr Grimley also said the department demanded Biocane negotiate a firm contract with a buyer, resulting in the Korean deal.

“The board didn’t feel that was appropriate because the funding delays meant we didn’t know when the factory would be completed,” he said.

On top of those issues, Mr Grimley said the department had subsequently reduced the amount of funding it would pay to $700,000.

“Unfortunately we were in no position to argue. The problem is they haven’t paid any of that so we’ve had no choice but to stop construction,” he said.

“We’ve appealed to the Minister to intervene but we’ve had no commitment from him at this stage.”