The federal government yesterday halted the approval process for GVK's Alpha project amid a dispute over environmental assessments affecting the Great Barrier Reef.
In a sharply worded letter sent to Queensland Premier Campbell Newman, Gillard also accused him of threatening the Great Barrier Reef by cutting corners on the proposed Galilee Basin development in the coal-rich state.
The Alpha project which is expected to generate 4,000 jobs at peak is being run by Hancock Coal in which 79 per cent owned by Indian infrastructure giant GVK and 21 per cent owned by Gina Rinehart, the world's richest woman.
"Queensland's decision has immediately put at risk community and business confidence," she wrote to Newman.
"I am surprised at the inadequacy of Queensland's assessment of this project. Outside observers may well question the state's commitment to robust environmental protection as a result of this decision," Gillard was quoted as saying by The Courier-Mail newspaper.
Gillard upped the ante by writing to every other state and territory leader last night, warning Queensland's actions were "inconsistent with Australia's national and international environmental obligations" and would threaten national plans to cut approval times.
"Rather than fast-track and streamline environmental approvals, Queensland's current approach will only serve to undermine confidence, delay approvals and increase uncertainty for project proponents," she said.
"The Commonwealth will, as a result, work directly with Alpha Coal to complete the assessment process and resolve any remaining uncertainties for the project," she wrote. "I would urge you to reconsider the approach taken to the Alpha Coal project."
She said the assessment by Queensland's Co-ordinator General Barry Broe was "unacceptable" and contained errors about the impact on green turtles, dugongs and dolphins.
But in a letter to Deputy Premier Jeff Seeney, Broe said the assessment was developed after thorough on-ground surveys, analysis of aerial photography and expert advice.
But federal Environment Minister Tony Burke said he had "stopped the clock" and would now work directly with Hancock Coal.
He also warned the State Government could be suspended from involvement in all major projects and has given it a 10-day deadline to persuade him against this step.
GVK, according to The Courier-Mail, said Burke's comments did not mean the project would not proceed and it was in discussions with the Federal Government on "additional information and clarification of existing information".
Last year, GVK had paid USD 1.26 billion to buy the coal assets and related logistics infrastructure in Australia from Hancock through a group company GVK Coal Developers (Singapore).
