Tasmanian backlash over a fast-tracked datacentre follows Firmus to its $7bn ASX float

Firmus moved quickly on its Launceston site. At the next ones, it has had to win residents over after the fact. Launceston's council approved the St Leonards facility without a public hearing in September last year ^[13]. Construction can now be seen from a resident's balcony and from a school classroom window ^[16]. The company's June consultation drive came about nine months after that approval ^[25]. Joe Zadravec, who lives near another proposed Firmus datacentre, said the company "did a bit of a mea culpa and said we handled that badly and we should have done something more" ^[17]. He added: "But they only did that after they were caught." ^[18]

Kayla Thompson, who joined a protest group that believes Tasmanians were kept in the dark ^[23], objects to the approval route itself. "The more we researched this company, the less appropriate it seemed that size of facility should be voted on by a local council with limited community awareness," she said ^[19]. When councillors approved the site, Firmus was worth just under $2bn in a private funding round ^[2]. The facility carries an estimated value of $2.1bn ^[12], more than the whole company proposing it was worth at the time ^[24]. Twelve months on, the Guardian says, that company is heading for the second-largest IPO on record, behind Telstra's $14bn share sale in 1997 ^[11].

The consultation problem becomes a valuation problem because of where the value sits. At the targeted $40bn-plus debut, Firmus would be priced at about eight times its $5bn earnings forecast ^[26]. At the $100bn some analysts have floated, the multiple is 20 ^[27]. Both figures assume the pipeline gets built ^[5]. The Guardian notes that Firmus relies on prompt construction of datacentres to justify its valuation ^[6]. The two sites where backlash surfaced in June are among those still to be built ^[15].

The sharpest skeptic in the record is an investment manager who viewed the draft prospectus. The manager told Guardian Australia the valuation "keeps randomly compounding when nothing has really changed" ^[7]. Plans did emerge, though, to build liquid-cooled datacentres across the Asia-Pacific with Nvidia, which is both an investor and a hardware supplier ^[8]. For now, Firmus operates two facilities, in Melbourne and Singapore ^[4]. The same manager called it "a capital-hungry business that needs to keep raising debt and/or equity to fund the losses" ^[9]. Firmus declined to comment on the feasibility of its earnings forecast and valuation ^[10].

The Tasmanian record stops short of a measured cost. The Guardian's account does not say whether either north-east site has been delayed. The nearest evidence is the stalled US offering ^[20]. The Guardian describes community resistance as part of the problem there, with Tulsa, New Orleans and Birmingham among US cities that have implemented temporary bans ^[21].

For boards, the trade-off is time saved at approval against risk carried into every later site. Firmus took the time in Launceston. It has since overhauled its community engagement program after strong feedback from locals ^[14]. "The feedback we receive will continue to help shape our approach," a spokesperson said ^[22]. In my view the sequencing matters more than the overhaul. The float prices the pipeline this month ^[1], and most of that pipeline will be built, or not, after the money is raised ^[4].