CENTRAL Victoria Livestock Exchange (CVLX) managing agent Regional Infrastructure (RIPL) has sliced $11 million off the budget of the proposed new Ballarat saleyards - one third of the investment that won them the lucrative contract.
Pallisade Investments have been managing the current regional Latrobe Street saleyards under operating agent RIPL's control since 2010.
The company was awarded the development contract by City of Ballarat after committing to a new, purpose-built $30m regional livestock selling centre in the municipality.
Mayor Joshua Morris disclosed the heavily reduced $19m investment figure at the Victorian Farmers Federation meeting in Ballarat last week, which was attended by council chief executive officer Anthony Schinck, Ballarat Stock and Station Agents Association (BSSA) and livestock producers.
"We would love to see a $30m facility, but at this point we have a commercial business that has said, with the current throughput, it can only commit to $19, $20 to $21m, as a result of the response it has had from users of the centre," Mr Morris said.
It was a further slap in the face for producers, whose requests for council to reject RIPL's latest concept, which pushes for more livestock sales a month, were declined by Mr Morris.
The latest concept design proposes a sheep yard of about 30,000 square meters, while the current site covers 55,000sqm.
Farmer Robert Grieve asked council to reject the planning submissions for the CVLX if it did not support current throughput and capacity for sheep and cattle sales.
Mr Morris responded by saying council would play no role in influencing the size of the yards in which "market forces" would determine.
"… it is about having viable saleyards in terms of making sure everyone has an opportunity to make some money out of what they are doing," Mr Morris said.
"If we go along the line and say 'it is not big enough', the opportunity for the company to go to VCAT and win will be the way it will go."
The meeting was sparked from producers and agents becoming disgruntled about the five-year development - which has been under Pallisade Investments operating agent RIPL's control since 2010 - after the latest concept plans show a significant infrastructure and land reduction at the proposed Miners Rest site.
The latest concept design proposes a site about one-third less than the current capacity, which last financial year had a cattle throughput of 50,590 and 1,311,399 sheep and lambs.
"Ballarat's big livestock numbers attract big galleries of volume buyers," BSSA vice-president Tom Madden said.
"Running the sales more regularly will be detrimental because it will reduce the buying support - the strength of the market is from the size of the offering on a regular basis."
In response to another question on whether the profits of the saleyards since 2010 been directed to the new site or to RIPL's balance sheet, Mr Morris said the "arrangements with RIPL is in commercial confidence".
"Why would RIPL want to build it when they are making $1m a year where they are now?" said an attendee.
In response, Mr Morris shed light on the agreement which council had previously been tight-lipped about and said there was a penalty clause in the agreement "so that the longer it takes, the less financially attractive running the saleyards is".
"Within the contract there is a termination clause to use within the month, but what we have heard is that (RIPL) expects to lodge [a planning submission] within 12 weeks," he said.
"There is nothing from stopping anybody else who wants to build a saleyard in Ballarat to come along and submit a planning application.
"We have a business that is willing to invest upwards of $20m in a facility in Ballarat - we now don't have someone who is going to invest $30m … financial arrangements do change."