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Costa, Obeid and the water firm

Date December 15, 2012 60 reading now
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Linton Besser, Kate McClymont

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Happier times …Michael Costa and Eddie Obeid at the NSW ALP conference in 2008. Photo: Jon Reid

A WATER services company linked to the family of ALP kingpin Eddie Obeid gave shares worth as much as $3.75 million to the former treasurer Michael Costa three years after he stopped a public tender that threatened the company’s future.

The share package came with his appointment last year as chairman of the company, an appointment brokered by Mr Obeid and one of his sons.

A Herald investigation has also established that Mr Obeid lobbied his colleagues on behalf of the company, Australian Water Holdings, as it pushed for a billion-dollar privatisation of part of the state-owned Sydney Water Corporation.

The revelations come as an inquiry by the Independent Commission Against Corruption continues to unearth evidence to suggest the Obeids ran a vast but secret enterprise that capitalised on Mr Obeid’s political power.

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The family’s multimillion-dollar interests in coal leases, harbour-front cafes and even a health services company were all furthered by Mr Obeid, who used his influence as head of the ALP’s dominant parliamentary faction to lobby ministers.

As a cabinet minister, Mr Costa was lobbied by Mr Obeid in relation to two of these ventures – and now he has confirmed that Mr Obeid also approached him in relation to Australian Water Holdings, a private water company.

Since the mid-1990s, it has received about $580 million from Sydney Water to manage the installation of infrastructure in Sydney’s north-west growth centre. The Herald has learnt that the Obeid family has a close association with the company courtesy of its boss, Nick Di Girolamo, a former partner at the Obeids’ law firm of choice, Colin Biggers & Paisley.

Mr Di Girolamo is a close friend of Eddie Obeid jnr and has known the Obeid family since childhood when he went to school with Mr Obeid’s sons at St Patrick’s College in Strathfield.

He denied that any of the Obeids had any interest in Australian Water: ”I have never been involved in a transaction with the Obeids. I have never had anything to do with the Obeids.”

But Mr Di Girolamo conceded he had met Mr Obeid snr several times to discuss the company, that he had employed Eddie Obeid jnr for up to 18 months and at the end of 2010 had received a personal loan from Eddie jnr for an undisclosed sum.

He said that at first he saw Mr Obeid snr ”to say, mate, I have an issue with Sydney Water” but later said they discussed the potential for a public private partnership.

”I was running it past him [Eddie Obeid snr] in terms to say, from a policy perspective [a PPP] was something that your government would see favourably, you know,” Mr Di Girolamo said.

”He said, ‘I think it’s good

policy’.” Mr Obeid jnr had been employed ”helping us with some developers” because ”he has contacts up in Queensland”, Mr Di Girolamo said.

ICAC has heard evidence that before a coal tender was announced for the Bylong Valley (where the Obeids had bought a farm), the Obeids nominated Mr Di Girolamo at a meeting to act as a front for their stake in a company designated to win the tender.

Mr Di Girolamo said he had never been asked to act in this way by the family. In the end, it was another Colin Biggers & Paisley lawyer, Greg Skehan, who acted as a front for the family in a coal company that won an exploration licence.

Mr Skehan is also a shareholder in Australian Water Holdings, but says: ”As the public records show, I am a non-executive director and a very minor shareholder of Australian Water Holdings”.

Another shareholder is Joseph Georges, a Strathfield real estate agent who has elsewhere acted as a front for the Obeids, disguising the Obeids’ interest in the Elizabeth Bay Marina. Mr Georges declined to say whether his investment in Australian Water was on behalf of the Obeids: ”I will keep you guys guessing.”

In a recent book, the former planning minister Frank Sartor wrote that Mr Obeid’s son Moses ”had been a paid consultant to a company called Australian Water Holdings” and that ”Obeid and his son lobbied in support of AWH for some years”. Mr Di Girolamo said Moses Obeid had never been associated with the company.

From about 2006, a dispute erupted between Sydney Water and the company over the project management fees it was charging, and the company’s claim that its original 1992 agreement ensured the government could not award this work to anyone else.

Executives at Sydney Water became increasingly concerned at the enormous fees Australian Water was charging. For example, its management fees for the month of October 2008 accounted for about 87 per cent of the $750,000 Sydney Water paid the company. ”The real problem was that there was this ongoing obligation on Sydney Water to give this one company all the work in the north-west,” a source said.

”[The government] wanted to go to market. It was outrageous.”

In April 2008, Sydney Water advertised a public tender for a contract that would traditionally have been awarded to Australian Water, posing a direct threat to the company.

Mr Di Girolamo immediately met Mr Costa, who as treasurer had ultimate responsibility for Sydney Water.

Sydney Water had advice from Clayton Utz that the work should be publicly contested. Mr Costa then sought another legal opinion from the solicitor-general.

It said a court was ”more likely” to find for AWH and, in line with its recommendations, Mr Costa ordered the parties attend mediation. The tender never proceeded.

Three years later, in November last year, Mr Costa was appointed chairman of AWH, replacing Liberal Party heavyweight Arthur Sinodinos, and issued with 6,250,000 shares, or 5 per cent of the company.

He said: ”This notion that there is some nexus between activity that occurred in 2008 and then subsequently [when I was approached] in 2011 is absurd,” and the Herald does not suggest otherwise.

Mr Costa said his appointment came about after Eddie Obeid jnr called him and asked him to meet him and Eddie Obeid snr to discuss the opportunity. They urged him to call Mr Di Girolamo and take the job, he said. ”Eddie junior was the one talking … obviously they think [sic] it is a good idea.”

Mr Costa paid only $1 for the shares but other investors, who had previously bought convertible notes, were issued shares a short time later valued at between 16¢ and $1.92 a share. But on Wednesday, Mr Di Girolamo told the Herald: ”The valuation that we always thought the company was fair was about $75 million”. This would value Mr Costa’s shares at $3.75 million.

Mr Costa and the company’s chief financial officer, Robert Groom, have since disputed their chairman’s valuation, claiming Mr Costa’s shares are worth only $500,000.

Mr Costa resigned from the company in early November.

Nathan Rees said that in 2008, when he was the water minister, Mr Obeid asked him to meet Mr Di Girolamo.

And his successor in the portfolio, Phillip Costa, said that during a Parliament House dinner in 2009, Mr Obeid ”told me that his son had an interest in it [Australian Water Holdings]”.

He said Mr Obeid’s comments led him to assume ”there was some moves afoot to try to avoid us going to tender.

”As a consequence I didn’t want to pursue it any further. I shut down the conversation. I didn’t want to go any further down that path. I knew at that stage there was some legal procedure [on foot] by Sydney Water.”

The real potential to earn serious money was AWH’s repeated attempts to persuade the government to privatise Sydney Water’s activities in the north-west of the city.

Do you know more? investigations@ smh.com.au

Read more: http://www.smh.com.au/opinion/political-news/costa-obeid-and-the-water-firm-20121214-2bf8e.html#ixzz2F4njbY1i

Fiji braces for strengthening Cyclone Evan

ABCUpdated December 15, 2012, 8:26 am

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Cyclone batters Samoa

A state of disaster has been declared in Samoa, lashed by a cyclone for the second time in two days.

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Evacuations have begun in Fiji ahead of the arrival of Tropical Cyclone Evan which has caused widespread damage in Samoa.

The cyclone expected to hit Fiji on Sunday is forecast to intensify into a category four or five storm as it approaches.

A state of disaster has been declared in Samoa after the storm left a trail of destruction and claimed at least two lives, with unconfirmed reports of many others missing.

Addressing the nation ahead of the storm, Fiji’s interim leader Commodore Frank Bainimarama said the cyclone would affect the entire country.

“It has winds up to 180 kilometres per hour which may intensify and, if the weather forecasters are correct, it will affect Fiji in a very damaging way bringing about destructive winds and flooding,” he said.

“Fellow Fijians I cannot stress how serious this is, every Fijian will be affected.”

Mr Bainimarama urged people to remain calm, look after the elderly and disabled, cancel social events, secure their properties and avoid travel and alcohol until the threat is over.

The country’s permanent secretary for information, Sharon Smith-Johns, says many people have fled to higher ground.

“There are people that have already taken precautions, that they know that they live in flood-prone areas and they’re moving to higher ground or moving in with relatives.

“There is quite a lot of movement around Suva especially today and around and in the rural areas.

“All we can do is be prepared here – lucky we’ve had a weeks notice of this all the agencies have been deployed, emergency services on standby, evacuation centres are open, rations have gone out now it’s just a matter of continuing to clean up our own backyards and putting cyclone shutters up and waiting.”

Ms Smith-Johns says the country is on high alert.

“Fiji is now on high alert we know that the cyclone is moving towards the Fiji group,” she said.

“We know that it’s going to be upgraded to a category four cyclone with winds gusting probably about 200 kilometres per hour, so we’re very much just waiting for the arrival.”

GALLERY: People stand on a destroyed bridge in Samoa’s capital Apia, Friday, after cyclone Evan ripped through the South Pacific island nation. Photo: AAP

‘State of disaster’

The Samoan Government has declared a state of disaster after Evan made landfall on Thursday, causing widespread damage, cutting power, causing flooding and ripping trees out of the ground.

Locals say it is the worst storm to hit the region in recent years.

Muli Pola from Samoa’s Meteorology Division says the storm warning remains in effect with concerns it may turn back toward and make landfall on the islands.

Greg Grimsich, from the United Nations, says with damage much worse than expected international aid groups are ready to help if required.

“There’s a number of power lines down, roads damaged, we’re having a lot of difficulty communicating by mobile phones because the lines are actually quite jammed at the moment,” he said.

“We had a large number of people displaced from their homes near the coast and near the river, there were still up to 2000 people in evacuation centres and there was a need for food and water that they’re running low on.”

Australia’s Department of Foreign Affairs travel advice said the cyclone had damaged Faleolo International Airport and the Australian High Commission in Apia would be closed until further notice due to storm damage.”
Many places in Samoa have only just rebuilt after being devastated by a tsunami in 2009.

Plans to rebuild Darling Harbour, return trams to the CBD and build more motorways have divided the city, writes Jacob Saulwick.

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Transformation … Barry O’Farrell announcing plans to give Darling Harbour a billion-dollar facelift. Photo: Louise Kennerley

Barry O’Farrell and Gladys Berejiklian are nothing if not cautious. So before the Premier and his Transport Minister faced the media at the north-west rail link’s Castle Hill information office on Thursday morning to release the state’s transport plan – the plan they say will guide what happens in Sydney and NSW in the next 20 years – their staff prepared a list of questions likely to be asked and some potential responses.

The document, displayed on the screen of the office’s reception computer to the side of where the press conference would be held, ran through information that would soon be repeated almost verbatim.

Why had they rejected the advice of Infrastructure NSW? Why had they dismissed the idea of an underground bus tunnel? And with all the focus on the CBD, what was being done for the bulk of greater Sydney and the rest of NSW?

Illustration: michaelmucci.com

But first, it is worth running over what happened this week.

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Six hundred and thirty days after he won an overwhelming mandate to govern, O’Farrell has started to expand on what he will do with that mandate, the big things he will strive to achieve and, perhaps, what the man who gave himself the job of Minister for Western Sydney might be remembered by.

On Tuesday, he announced plans to tear down most of the major buildings in Darling Harbour and undertake a massive works program building larger ones.

And on Thursday, he committed his government to ripping up the CBD’s main street for a tram line running to Randwick and Kingsford, potentially the biggest change in the way the centre of the city’s transport will operate since the installation of the Eastern Suburbs railway line in the 1970s.

Thursday’s plan included other initiatives. There is the WestConnex motorway to run from Auburn, under the inner west, to the airport and the M5. There is the north-west rail link from Rouse Hill to Epping. And, some time in about a decade, the government says it will begin building another heavy rail link though the centre of the city to allow more trains to run into town from the outer suburbs.

But an important question hanging over Thursday’s plan was if the government would have the gumption to fulfil its election pledge to return trams to the city and the eastern suburbs.

On the estimate of the lord mayor, Clover Moore, who has long championed the revival of CBD light rail, returning trams to the city has been parsed through as many as 50 studies in the past 20-odd years.

”George Street is the civic spine of the city,” said Elizabeth Farrelly in endorsing a tram and pedestrian boulevard through the heart of the city. Farrelly, now an opinion columnist for the Herald, said those words in 1993 when she was a councillor with the City of Sydney.

”It sounds like a good idea but it would be wrong to make a premature statement before … feasibility studies are completed.” This was said in 1995 by the then transport minister Brian Langton, Bob Carr’s first man in the job, when commissioning studies into a tram line from Central Station to Circular Quay.

O’Farrell recalled the history of Sydney’s aborted tram dream at his announcement on Thursday. ”I was there at the opening by Bob Carr of the existing light rail into the inner west,” he said, referring to the start of Sydney’s sole light rail line from Central to Lilyfield in 1997.

”At that opening, Bob Carr said that project would be the renaissance of light rail across the city. And nothing was done by Labor.”

One main reason nothing was done was the risk involved. Putting trams in the CBD necessitates disrupting one of the most densely used and economically important corridors of the city, state and country.

And one of the benefits of light rail, removing buses from the street, will also require some passengers to hop off buses to change to trams.

”Public transport users would be discriminated against by the plan,” Allan Miles, from the advocacy group Action for Public Transport, said in 1993, responding to Farrelly and the City of Sydney’s proposal.

”Whereas car owners would just drive their cars into a car park station, public transport users would be forced to change.”

Miles said this week he still had those concerns.

However, O’Farrell and Berejiklian say the light rail plan makes sense because it is set against an unsustainable status quo.

”Simply adding more cars and buses to existing routes would only make Sydney’s roads more congested – particularly in the CBD, where the Harbour Bridge, York Street, George Street and Elizabeth Street are often clogged in the peak,” Berejiklian says.

The congestion means buses rarely run on time.

Transport for NSW says between 19 per cent and 34 per cent of buses run within two to three minutes of their scheduled arrival time in the CBD and along Anzac Parade, where the line will extend to. The department expects 97 per cent of trams to arrive on time when the line opens in either 2019 or 2020.

There is a reasonable amount of detail about how the trams will work. Between Circular Quay and Central, trams will run every two to three minutes during peak hours. But it is unclear how often they will run outside these hours, though the government says they will be frequent enough to allow users to ”turn up and go”.

The trams will be large, capable of carrying about 300 people. That has become the international standard for light rail vehicles that bear more of a resemblance to futuristic metro trains than the old tram to Bondi Beach with its rails for hopping on and swinging off.

There will be nine stops in the city, bookended by those at Circular Quay and on the Chalmers Street side of Central Station. There will be a 1-kilometre pedestrian zone on George Street between Bathurst and Hunter Street, but emergency vehicles, property owners and small delivery trucks will still be able to use this stretch.

At Chalmers Street and Central, east-bound trams will be able to pick up students for the University of NSW, Sydney Boys and Sydney Girls High schools, and day-trippers to the Sydney Cricket Ground, Sydney Football Stadium and Randwick Racecourse.

From Chalmers Street, the line will turn left into Devonshire Street, past the Gaelic Theatre and the Shakespeare Hotel with a stop placed near the corner of Riley Street.

Devonshire Street, however, finishes at Bourke Street. This means the government will have to buy out the properties of some homeowners before the line can nudge its way across the Eastern Distributor, Moore Park and into a separate bus lane on Anzac Parade.

On Anzac Parade, the stops will become further apart to try to increase the speed on the route. Even so, the journey times do not appear very short. It will take 20 minutes to get from Randwick to Central, and another 15 minutes to get to Circular Quay.

Berejiklian believes journey times are just one thing to consider – light rail will be more comfortable than the existing buses, and it will offer greater reliability.

Potentially the greatest risk, however, in the government’s determination to revamp the CBD and introduce light rail in the eastern suburbs, lies in highlighting what it will not do.

After he released Infrastructure NSW’s state infrastructure strategy in October, its chairman, Nick Greiner, told a briefing of senior officials the most glaring weakness in the strategy was what it did for the broad arc of Sydney’s west.

WestConnex, the proposal to carve a motorway under Parramatta Road and then a tunnel to the airport, will make it easier for people in Parramatta to drive to south-east Sydney.

But it will offer little to anyone getting from Liverpool to Campbelltown, from Bankstown to Penrith, from Parramatta to Blacktown.

The O’Farrell government is building the massive north-west rail link to Rouse Hill. And the south-west rail link, started under Labor, should be finished by 2016. It is also talking about bus improvements in the west.

But there will be plenty of criticism that its transport priorities do little for much of greater Sydney. The Opposition Leader, John Robertson, is already questioning whether western Sydney train commuters will be asked to subsidise eastern suburbs tram users.

”The plan shows the continued neglect of western Sydney, which is incomprehensible, both from a political point of view and from a planning point of view,” Professor Phillip O’Neill, the foundation director of the Urban Research Centre at the University of Western Sydney, says.

”The plan seems blind to the City of Cities planning philosophy for Sydney over the last decade,” he says, referring to the logic of developing Newcastle, Wollongong, Parramatta, Penrith and Liverpool as powerful centres in their own right.

”The transport plan … offers nothing to support the growth of these regional cities. We must remember that the number one problem for transport in Sydney is the car dependency in greater western Sydney.”

O’Neill cites recent figures from the Bureau of Transport Statistics showing that greater western Sydney will need 383,000 additional jobs in the next 20 years. ”The transport plan takes no account of this regional jobs growth. In other words it says to people in western Sydney and the regions that your lives of daily car dependence and congestion are to remain as they are at present.”

David Borger, a former Labor roads minister and mayor of Parramatta, concedes failures of his own side of politics on this score. ”I think that our government lacked vision for employment in western Sydney in its later years,” Borger, now the western Sydney director of the Sydney Business Chamber, says.

But he is also concerned the 20-year plan offers little to redress this. ”It is an excellent vision for central Sydney, but we will have a very unbalanced society if we don’t create jobs in western Sydney,” he says.

”I think WestConnex will certainly provide some assistance for the Parramatta area. It will mean it is a lot closer to drive there. But it probably won’t have a huge impact on the Penrith or Liverpool town centres in terms of employment.

”We do need more vision for how we can grow places like Parramatta.”

The Parramatta council, for instance, has proposed its own light rail line that will connect Castle Hill, Parramatta and Bankstown. In Thursday’s plan, the government said it would work with the council to refine this proposal and complete a study into it.

If one goes by the history of George Street’s light rail proposals, Parramatta’s light rail is only 49 studies away from getting someone to say they will build it.

Read more: http://www.smh.com.au/nsw/the-vision-thing-20121214-2bf42.html#ixzz2F4KeucFk

Disaster declared after deadly Samoan cyclone

By NZ correspondent Dominique Schwartz and wires

Updated 10 minutes ago

Video: Samoa battered by cyclone (ABC News)

Related Story: Samoa braces for second hit from Cyclone Evan

Related Story: Cyclone’s path worries Pacific nations

Map: Samoa
The Samoan government has declared a state of disaster after Cyclone Evan ravaged the South Pacific nation, destroying buildings and causing flash floods.

Police in Samoa say a number of children are presumed to have drowned after being swept away in a flooded river after the cyclone hit.

Evan made landfall yesterday and caused widespread damage across the country, killing at least two people, cutting power, causing flooding and ripping trees out of the ground.

Locals say it is the worst storm to hit the region in recent years and a state of disaster has been declared.

There are now fears the storm could intensify to a category five cyclone as it tracks across the north of Tonga and then moves onto Fiji.

New Zealand’s high commissioner to Samoa, Nick Hurley, says police have told him a number of children went missing near the main river in Samoa’s capital Apia.

“This is the biggest one I’ve been through and I’ve been through difficult situations in the Pacific (before),” Mr Hurley told Radio New Zealand.

“The unpredictable nature of this one has made it quite different. The forecast winds did not give any indication of how strong the impact was going to be.”

Many places in Samoa have only just rebuilt after being devastated by a tsunami in 2009.

“Power is off for the whole country… Tanugamanono power plant is completely destroyed and we might not have power for at least two weeks,” the Disaster Management Office (DMO) said in a statement.

It said hospitals and other essential services were using standby generators, with water supplies also out and most roads cut off by fallen trees and power poles as hundreds of people languished in evacuation centres.

In travel advice, Australia’s Department of Foreign Affairs said the cyclone had caused “damage to local services and infrastructure, including communications and electricity services and Faleolo International Airport”.

“The Australian High Commission in Apia has closed until further notice due to storm damage,” it said.

The United Nations says international aid groups are ready to help if needed, with damage from the cyclone worse than expected.

Cyclone track

Evan continues to move north west away from Apia, but its progress has slowed to just under 10 kilometres per hour.

It was around 70 kilometres off the coast and is forecast to reverse its course later this evening, although it is not known if it will again cross Samoa.

The Fiji Meteorological Service has warned the cyclone could threaten northern parts of Tonga on Saturday and reach Fiji by Sunday.

Authorities in Fiji have gone into emergency preparation as the cyclone threatens to head towards the country.

Fiji’s weather bureau says the storm could eventually become a category five cyclone – packing winds at its core of 360 kilometres per hour – and on its current path would hit both of the nation’s main islands.

Gallery: In Pictures: Cyclone Evan hits Samoa

ABC/AFP

Expletive-laden phone calls played at corruption probe

Date December 14, 2012 – 1:52PM 99 reading now
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Kate McClymont

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‘You guys are paranoid idiots’

Investment banker Greg Jones relays to secret Cascade Coal shareholder Richard Poole what he had said to Moses Obeid in an intercepted ICAC phone tap from 5 May 2011.
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“It’s tough in there,” said investment banker Richard Poole as he got into the lift. Mr Poole was referring to the discomfort of being in the witness box, accused of lying, at a corruption inquiry.

“Yeah, and it’s tough being a taxpayer,” said an unsympathetic member of the public gallery who had been listening to Mr Poole’s glib responses at the Independent Commission Against Corruption.

Mr Poole had to listen while a number of embarrassing, expletive-laden intercepted phone calls were played to the commission, which is inquiring into the role Mr Poole played in an allegedly corrupt coal exploration licence which was granted to his company Cascade Coal in 2009 by then NSW mining minister Ian Macdonald.

Probed … investment banker Richard Poole. Photo: Nic Walker

Mr Macdonald’s good friend Greg Jones had a secret shareholding in Cascade Coal. On one intercepted phone call from April last year, Mr Poole is heard saying to Mr Jones: “I’ve made some wild assumptions but we want money (laughs) and we don’t give a f— how we get there (more laughter).”

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Other calls were played between Mr Jones and Moses Obeid, the son of controversial former Labor Upper House member Eddie Obeid. The pair are heard arguing about the failure of the Cascade syndicate to pay the Obeid family the second half of the $60 million the Obeids had been promised.

The inquiry has heard the Obeid family was provided inside information from Mr Macdonald which allowed them to buy up key properties in the Bylong area where Mr Macdonald was about to announce a tender for a mining licence. The family then obtained a 25 per cent stake in the winning bidder, Cascade Coal.

Greg Jones … had a secret shareholding in Cascade Coal.

Despite meeting in the Obeids’ Birkenhead office and dealing directly with three of Mr Obeid’s sons, Mr Poole told the commission he wasn’t sure whether it was the Obeids who were going to be the recipients of the first $30 million payment.

“I didn’t know whether it had gone to an uncle in Lebanon,” Mr Poole told the inquiry

The covertly recorded calls were made in the wake of the collapse of the proposed $500 million purchase of Cascade Coal by White Energy in April, 2011.

A fortnight later Moses Obeid is heard having a heated conversation with Greg Jones about the failure of the deal. “Whatever he’s told you is bullshit, Jonesy,” said Mr Obeid, who also said: “The guy’s put us in a position where we have to f—in’ move.”

Mr Jones then rang Mr Poole and told him he had said to Moses: “F—, you guys are paranoid idiots.”

The inquiry has heard that the Obeids are still agitating for their second $30 million.

Read more: http://www.smh.com.au/nsw/expletiveladen-phone-calls-played-at-corruption-probe-20121214-2be93.html#ixzz2F0gvU4H7

Fracking campaigners fear government will give go-ahead to shale exploration

Decision is due on whether Cuadrilla can continue exploration in Lancashire after two earthquakes
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guardian.co.uk, Thursday 13 December 2012 07.37 GMT

Anti-fracking protesters in London this month. Photograph: Justin Tallis/AFP/Getty Images

Campaigners fear the government is poised to give the green light to shale gas exploration in the UK in a decision due on Thursday.

Moves by the gas company Cuadrilla to exploit the unconventional gas in Lancashire were put on hold 18 months ago after the process of “fracking”, which uses high-pressure liquid to split rock and extract gas, caused two small earthquakes.

The company believes it could supply a quarter of the UK’s gas needs from the resource in Lancashire, leaving the country less reliant on foreign imports from Qatar or Russia.

The Treasury has already signalled its support for the budding industry, proposing tax relief for shale gas, and unveiling a gas generation strategy that potentially paves the way for a new “dash for gas”.

But environmentalists warn that a continued reliance on gas would prevent the UK meeting targets to cut emissions and tackle climate change, and that shale has no place in the move to a low-carbon economy.

Concerns have also been raised, following widespread exploitation of shale resources in the US, that it can cause local environmental problems including polluting water supplies and damaging development.

The Friends of the Earth senior energy campaigner, Tony Bosworth, said: “A green light to fracking would spell bad news for local communities and their environment, jeopardise UK climate change targets and help keep the nation hooked on dirty gas for decades.

“Gambling on shale gas is a risk we don’t need to take – developing our huge clean power potential and cutting energy waste will create jobs, reduce our fossil fuel dependency and keep the lights on.”

Both the industry and activists are waiting for a decision on Thursday by the Department of Energy and Climate Change on shale gas operations.

A decision on whether Cuadrilla can resume fracking and testing flows of gas, which will allow it to produce data on the extent of the resource in Lancashire, will have consequences for other firms keen to potentially exploit the resource elsewhere in the UK.