Perth (Platts)--3Aug2011/534 am EDT/934 GMT

A new coal terminal proposed for Gladstone port's Wiggins Island in Queensland has met with delays for the third time this year, as the project's 16 coal company shareholders including Cockatoo Coal, Yancoal and Xstrata have still to raise all of the capital for the project.

Costs for the first stage of the Wiggins Island coal terminal have escalated to A$3.7 billion ($3.9 billion) from A$2 billion in October 2010, a spokesman for the coal industry consortium that is backing the terminal said Wednesday.

Financing for the terminal's first stage with an export capacity of 27 million mt/year was supposed to have been in place by the end of June, but now this deadline has been extended to the end of September, the spokesman said.

"Wiggins Island coal export terminal [WICET] is in the process of finalizing financing documentation with a group of domestic and international banks and investors," the consortium of coal producers said in a statement Tuesday.

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Eight coal companies are participating in the first stage of the Wiggins Island terminal which is scheduled to open in 2014. They include, Aquila Resources, Bandanna Energy and Wesfarmers.

Preliminary work on preparing the terminal site has started and negotiations with contractors for the earthworks and construction contracts valued at A$400 million are expected to be completed later in August, WICET said in its statement.

A 600-room accommodation village to house construction workers is being built at the Wiggins Island site and the first 240 rooms will become available in September.

"At this stage, all elements of the project are progressing towards starting substantial construction on site in September 2011," WICET project director Mark West said.

It is not the first time that the project has suffered a setback.

A report Wednesday from analysts at Australia's Commonwealth Bank it is the third time that finalization of investment funding for WICET has been delayed following "two revisions earlier this year."

Also, Queensland's competition regulator raised questions in March about QR National's willingness to finance new rail infrastructure for WICET.

The Queensland Competition Authority wrote to QR National in a March 18 letter published on the QCA's website that it believed the Australian rail company was "unwilling to fund all or part of the WICET expansion on the grounds that it believes there is not a genuine prospect that negotiations regarding it funding the expansion will prove fruitful."

WICET is currently considering expressions of interest from coal producers wanting to participate in its second stage expansion due for completion in 2015 or 2016.

QR National wanted WICET's coal producer customers to agree to a 15% rate of return on its investment in new railways for the coal terminal in the form of user charges.

QR National has declined to comment on its negotiations with WICET.

--Mike Cooper, michael_cooper@platts.com