Concessional loan of $4M made to Orbital Engine Corporation

The State Government has ensured that the Orbital Engine Corporation will keep a major development program in Western Australia by approving a $4 million concessional loan.

Premier Carmen Lawrence said today that the company planned to upgrade its research and development operations, which included improving on its achievement in meeting stringent United States emission control standards.

Dr Lawrence said that a condition of the loan was that this work had to be carried out in Western Australia.

Fifty permanent jobs would be added to the 300 already provided by OEC. The high level of engineering skills developed at OEC's Balcatta plant would be retained in Western Australia.

Funding for the concessional loan would be provided from the incentives fund established as part of the 'WA Advantage', the Government's economic package.

The concessional loan would be secured by a floating charge over the company's assets.

"OEC is a world leader in the development of engine technology," the Premier said.

"Western Australia's international reputation for innovative technology will benefit enormously from retaining this pioneering work here."

The concessional loan would be part of the company's $10 million expansion program.

It would help Orbital finish off key technical programs for the commercialisation of the Orbital Combustion Process (OCP) technology.

Orbital's Chairman and Chief Executive Officer, Mr Ralph Sarich, said the State Government's support for Orbital over many years had helped to create an engineering business of world renown to complement the company's technology and licensing business.

He said: "The $10 million program represents a 50 per cent increase in funding for the Balcatta-based company and will help in the completion of:

*"The development of a high horsepower engine for a prestige automotive producer.

*"Demonstrating a vehicle that meets the stringent ULEV (ultra low emissions vehicle) criteria at high mileages (50,000 miles). The high mileage results already achieved on the engines calibrated for the 1994 US Clean Air Act are a promising indicator of the potential for the technology to meet ULEV levels at 50,000 miles.

*"Further refinement of technology in an effort to demonstrate near zero-emission levels, which are the levels being specified in California for electric vehicles. Orbital intends to demonstrate a vehicle that is significantly more viable than the electric vehicles proposed for this standard.

*"Incorporating the latest advanced small two-cylinder, high fuel-economy engine into an existing lightweight low-drag production vehicle to achieve more than 120 mpg at 80 km/h with exciting acceleration performance.

*"Demonstrating an intermediate-size US vehicle with best-in-class fuel consumption and ULEV emissions.

"Orbital is on target to produce engines late next year from its Michigan facility."