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Coalition yet to pay $3.3m grant for Collinsville coal power station as negotiations with company stall

The federal government has not yet paid a $3.3m grant for a feasibility study on the proposed Collinsville coal-fired power station in north Queensland – more than a year after the study was first announced – because negotiations to establish a formal funding agreement with the proponent have stalled.

The federal Department of Industry, Science, Energy and Resources told Guardian Australia it had not reached a funding agreement or provided any money to the tiny company Shine Energy for the study on the power station proposal, which was announced in March 2019 as a concession to pro-coal Queensland Nationals.

A second announcement confirming the $4m feasibility study was made in February. The amount has since been reduced to $3.3m on the recommendation of the department.

Shine’s chief executive, Ashley Dodd, is understood to have written to the government seeking additional money – the full $4m amount promised in February – in order to cover additional staffing costs. The Australian first reported Dodd’s letter, and that some Queensland MPs had begun lobbying for the study to be allocated additional funding.

Related: Indigenous-run firm behind Collinsville coal-fired plant says Coalition used it 'as a pawn'

Last month, Dodd, a Birriah traditional owner, accused the Morrison government of using the company as a pawn to win support at the federal election, and of attempting to “white clad” the company by pressuring him to step aside.

The government denies this. However, Guardian Australia understands that some MPs have expressed concern that money has been promised to a company that has never completed a project of any kind, has no apparent source of income, no office, and no in-house energy expertise.

Dodd did not respond to a series of questions, including how existing Shine staff – who are also the shareholders in its parent company – were being paid, or whether any work on the feasibility study had been completed before the grant was paid.

In a statement the department said key details about the study, including a funding agreement that would define outcomes required by the government, had not been agreed with Shine.

The department did not directly state that discussions had become fraught, but the Guardian understands that is the case.

Related: Collinsville: the Queensland town on the frontline of the coal wars

“The department is engaging with Shine Energy to establish the funding agreement, which will include appropriate milestones, deliverables and reporting,” the department said.

“Funds have not yet been paid to Shine Energy.”

In 2018, the Canadian engineering and services firm WSP completed a business case for the power plant proposal.

The company declined to comment or answer questions about whether it still had a relationship with Shine or Dodd, whether it was involved in the feasibility study process, and whether it assessed contracts against potential climate change impacts.

After questions from the Guardian, WSP deleted a page from its website, published in 2018, detailing its work for Shine Energy.

The page quoted WSP’s executive for power and energy, Peter Skindberg, saying the company was working with Shine and Indigenous communities “to design and deliver an energy mix solution that enables reliable, affordable electricity with lower emissions that will sustainably shape their future communities”.