SEA Electric president Tony Fairweather said the company had handed back the money because it wanted its agreement with the state government to be redrawn. But he did not confirm the amount.
Mr Fairweather, who is now based in the US, said the deal had limited his company’s ability to manufacture other products that were not contained in the initial agreement.
Mr Fairweather said SEA Electrics representatives had found it “so frustrating” to reach an outcome with the state government over the agreement.
He said the company, which has an existing site in Dandenong, would soon look to establish a manufacturing facility in another location.
“If we don’t do it in the Latrobe Valley soon we have to do it elsewhere in Australia,” he said.
When the deal was announced the Victorian government said SEA Electric would be able to assemble 2400 vehicles a year with plans to double production.
But Mr Fairweather said little progress had been made on establishing a site in the Latrobe Valley. “There’s nothing set up there.”
However, he still hoped to establish a site in the Latrobe Valley but insisted the government needed to be more flexible in its deal.
A spokesman for the state government said it stopped providing financial support to SEA Electric in May 2019.
“While we are disappointed that the company has not yet been able to meet its commitment, our support for their project is contingent on the company meeting milestones set out in the agreement,” he said.
The spokesman said future “milestone payments” hinged upon the company hiring additional workers from the Latrobe Valley, finalising a site and entering a contract for the construction of a new facility.
He said the contract’s terms were confidential.
The Latrobe Valley has weathered successive waves of economic pain in recent years, including the 2017 closure of the Hazelwood coal mine and power plant with 750 workers losing their jobs.
Leader of the opposition in the upper house, David Davis, said the Latrobe Valley could ill afford to lose hundreds of jobs through “state government incompetence and rigidity”.
“The SEA firm handed back $2 million of government money because they were tearing their hair out with the obstruction they faced,” he said.
Mr Davis accused the Andrews government of failing to work with the company to secure the promised jobs.
“Surely what is needed is government flexibility with a focus on working with employers to grow real jobs locally,” he said.
Independent MP for Morwell, Russell Northe, said the government’s election-eve announcement had community support but there had been no confirmation of any progress.
“We’ve heard little since other than the project is in jeopardy,” he said. “That’s not good enough.”
Latrobe City Council mayor Sharon Gibson said SEA Electric was intended to be the lead tenant at the Gippsland logistics precinct, which is yet to be completed.
She said the government should find another tenant if the deal cannot come to fruition.
“If you’re going to make an announcement, follow through,” she said.
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Benjamin is The Age’s regional editor. He was previously state rounds reporter and has also covered education for The Age.