A $5 billion body set up to finance major projects in northern Australia has been forced to defend itself after being likened to something only seen in third-world countries rife with corruption.
Corporate governance expert Thomas Clarke says he's searched far and wide for bad practice akin to the Northern Australia Infrastructure Facility, but cannot find any examples in advanced industrial countries.
The NAIF is considering dozens of potential projects, including a controversial application by Indian resources giant Adani for a billion-dollar loan to build a rail line linking the proposed Carmichael mine to port.
Professor Clarke believes the corporate manoeuvres behind the proposal and overall governance of the NAIF "resemble a third-world country struggling to develop where corruption is apparent."
His concerns stretch beyond fears the Carmichael project may prove a waste of taxpayer money and an energy disaster - "a government-funded billion dollar ghost train."
"It will also announce to the world the poor standards of public governance that allowed this disaster to occur, and utilised taxpayer's money to fund it," Prof Clarke told a Senate inquiry on Friday.
The inquiry is investigating the governance and transparency of NAIF and processes behind appointing its board.
NAIF has been plagued by allegations of conflicts of interest among its board members, with Labor calling for one director, Karla Way-McPhail, to be sacked.
Prof Clarke said it was unheard of for a publicly-funded body to operate in such conditions of "absolute secrecy".
This claim was flatly rejected by NAIF chief executive Laurie Walker, who told senators the facility was highly transparent and its protocols were best practice.
Ms Walker said the facility's role as a "gap lender" stopped it from releasing some documents, including information on its dealings with project proponents, for commercial reasons.
The facility must partner to at least 50 per cent with other lenders - unlike bodies such as the Clean Energy Finance Corporation - and put the minimum amount of debt and concessions possible into a project.
"Other lenders will game us, proponents will game us, they will game the public sector," Ms Walker said.
The NAIF also defended as "standard practice" its refusal to disclose the conflicts of interests of board members and their recusals from deliberations.
Greens leader Richard Di Natale seized on the facility's "gap lender" mandate, which stipulates it must not provide finance to a project unless it is satisfied the money would not come from other sources.
Senator Di Natale repeatedly asked why the Adani proposal wasn't immediately disqualified in December, when the company said the government loan was "not critical" for the project.
"It'll be a matter for the board at the time they are assessing a project," Ms Walker said.
Senator Di Natale was not satisfied by the response, vowing to haul every NAIF director before the committee.
"Today's hearing shows that the board has advanced the Adani project against their own investment rules," he said.
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