Unlike Queensland Premier Anna Bligh, financial analysts are casting doubt on the economic and sovereign risk factors involved in the proposed Purari river project.

UBS analyst David Leitch said, “ You are going to need a very good price to justify the cost... “I don't believe it's going to be cheaper than wind.”

The multi-billion-dollar hydroelectric project is being packaged to bring inexpensive power to Australia from Papua New Guinea's Purari River region. Leitch said, however, there were few signs Queensland electricity prices were going to shoot up in the near future.

Credit Suisse analyst Sandra McCullagh went down to specifics. She said, “Some key issues to be addressed include cost and viability, landowner issues in PNG and North Queensland, and sovereign risk concerns about such a large portion of the region's energy being imported.”

McCullagh pointed at the similarity between the issues the proposed project will be facing and those “issues faced 10 years ago when Oil Search considered building the PNG to Queensland gas pipeline.”

In 2007, Papua New Guinea's oil and gas producer Oil Search Limited and project operator Exxon Mobil Corporation abandoned the pipeline. The move was due to inflation and the prospect of getting higher prices for the gas if it was converted into liquefied natural gas (LNG).

However, Oil Search managing director Peter Botten said the decision to abandon the pipeline was strictly economic. “I do know that the potential of the Purari is very good,” Botten said.