THE Federal Government's pledge to co-fund the $4 billion Oakajee port has sealed the long-awaited infrastructure project, according to WA Premier Colin Barnett.
"The Oakajee project is now secure," Mr Barnett said after the announcement.
"The development of the deep sea port and industrial estate north of Geraldton will now go ahead."
The commitment of $39 million from Infrastructure Australia, as part of the Federal Government's 2009 Budget this week, ended three decades of waiting for confirmation that the often controversial port would go ahead.
The annoncement is good news for the State Government's own budget, as Mr Barnett said previously the State would foot the entire $700 million pledged government contribution for Oakajee if it was not included in the Federal Budget.
Mr Barnett came under strong critism from the State Opposition last year when he announced Oakajee would be one of five government submissions to Infrastructure Australia last October, as private company Oakajee Port and Rail had already said it would foot the entire cost of the $4 billion project.
"The development of a deep sea port and rail line is the most important project for the State that I have been pushing for the entire time I have been Premier," he said.
"We wanted to make sure Oakajee was an Australian port and not an overseas port and the Federal Government has now backed that 50-50.
"This is a major development and without that (contribution) it may not have happened."
There are still many detailed designs that need to be completed for the project, as well as the bankable feasibility study that Oakajee Port and Rail hopes to have completed by March next year, but Mr Barnett said he hoped work on Oakajee would begin by the end of the year.
Oakajee Port and Rail chief executive Chris Eves said the magnitude of the project meant securing the remainder of the funding for the project would be relatively easy and Chinese banks were likely to play a major part.
"The project is capable of attracting Exim funding and we are looking for participation from Chinese banks. There will be a greater emphasis on syndication and the opportunity for us to secure debt is very strong," he said.
Mr Eves said the combined Federal and State Government funds gave the Oakajee project unprecedented support for a major Australian infrastructure development.
Geraldton Iron Ore Alliance chief executive Rob Jefferies said the project could not be viable without its three major customers - miners Gindalbie Metals, Murchison Metals and Midwest Corporation.
Mr Eves said the company was confident these mines would play a large part in the supply chain to Oakajee but the port would be sized according to the demand for its service by however many mines there were in the region.
Gindalbie was secured as a foundation customer for Oakajee last week after the Foreign Investment Review Board approved its transaction with its Chinese joint venture partner AnSteel for a $162 million share placement.