No answers on contaminated Defence site being remediated before hand-back

The federal government has been unable to say whether it will remediate heavy fuels and PFAS chemicals from a former Navy fuel storage base in Darwin city centre before it returns the land to Larrakia custodians.

The defence and finance ministers announced on Monday the government would give the former Stokes Hill Navy fuel storage site to the Larrakia people as part of its national divestment of more than 60 Defence sites to both raise and save money.

The 3.8 hectare site behind Stokes Hill Wharf was the Navy's main fuel storage base for its ships in Darwin from 1920, until seven of the 11 fuel tanks were destroyed by the Japanese bombing of Darwin in 1942.

The defence department stopped using the site in 2014 and declared it surplus to its requirements the following year.

The ABC understands the federal government has offered to return the site to the Larrakia Nation Aboriginal corporation.

Some Larrakia custodians, including Lorraine Williams, welcomed the offer to return the land, which contains a registered tawny frogmouth sacred site.

"For a long time, that defence force area of land, we've fought for it, our old people have fought for those lands,"

she said.

But in 2017 Defence studies found PFAS — a chemical from firefighting foam now banned on Defence facilities — in the groundwater at the site, as well as fuel contamination from the old tanks.

Ms Williams said the federal government needed to clean both up before handing the site back.

"Hopefully the area will be remediated, as with the other areas Defence have handed back to Larrakia over on the Cox Peninsula," she said.

In 2015, before the Kenbi Cox Peninsula hand back, the federal government spent $30 million cleaning up asbestos and heavy metals from its former communications sites there.

Asked by the ABC if it would remediate the Stokes Hill land, the defence department said "the management of any site contamination and remediation requirements will be considered through the divestment process".

It also said it "will engage with Northern Territory authorities and traditional owners" about that.

Former communications base earmarked for housing

The federal government also announced a much bigger site, its 362 hectare former Kowandi North communications base at Howard Springs, south of Darwin, will be developed for housing.

NT Chamber of Commerce CEO Glen Hingley said while Darwin's business community welcomed the plan, they still had questions.

"If they do divest this land it's important they sit down with the Northern Territory government, traditional owners and communities around this block to make sure that we have an agreed pathway, if we are going to go ahead with it, to make sure it's done in the best interests of the local area, the local environment and the broader community," Mr Hingley said.

Northern Territory Housing Minister Steve Edgington also requested more information about the proposed housing site.

"We're uncertain of the detail, whether that land will be handed to the Northern Territory government," he said.

Some Larrakia custodians have asked the government to move the 800-house development planned for Darwin's Lee Point to Kowandi North.

But the Commonwealth said both sites will host housing estates.

Asked by the ABC whether the federal government or a private company will build the Kowandi North housing, a Finance Department spokeswoman said: "The divestment pathway for Kowandi North is still being considered by government, with the future use of the site to support increased housing supply in Darwin.

"The final disposal arrangements remain subject to government consideration."