A suggestion that the delay on the Darkan tannery project was connected to negotiations over the proposed private coal-fired power station is wrong.
State Development Minister Ian Taylor said there was no connection between the two projects.
"The tannery is the result of a countertrade initiative by ABB after they were awarded the contract to supply the electrical rail cars for electrification of the Perth railways," Mr Taylor said.
"Work on the tannery has ceased while Deras Australia (the tannery proponents) re-negotiate a financing arrangement with ABB.
"These negotiations are being conducted in Zurich and my Department of State Development has been advised that these should be concluded before the end of November and that irrespective of the outcome, there is a strong commitment by both parties to complete the project."
Mr Taylor said it was ludicrous to suggest that a $3 million dollar project could be used as a bargaining tool for a $2 billion proposal.