Darwin Port Operations Pty Ltd is the appointed Port Operator for the purposes of a 99 year lease of the Port of Darwin. The Northern Territory Utilities Commission is the regulator in regards port access and pricing in accordance with the Ports Management Act and regulates services prescribed in the regulations by Darwin Port. To further understand the Commission's role, click here.
The Ports Management Act
provides a framework for the private port operator to prepare and
submit an access policy to the Northern Territory Utilities Commission
for approval. As the private port operator, Darwin Port is required to
comply with its access policy.
To this end, the Draft Access Policy, in accordance with the Act, is now available for review by interested stakeholders via the Northern Territory Utilities Commission website and the attachment link below. The consultation period is open, with a closing date for submissions by Thursday 7 April 2016, with submissions to be directed to: Chinese company Landbridge to operate Darwin port under $506m 99-year lease deal
No jobs loss guarantee until 2018
Landbridge's Mike Hughes said the company planned on making a "considerable financial investment" in the port.A Chinese company has won the bid to operate the Port
of Darwin under a 99-year lease deal worth $506 million, NT Chief
Minister Adam Giles has announced.
Mr Giles announced the Port of
Darwin will have a new operator under an agreement signed today with the
Landbridge Group worth $506 million, in a deal he described as "a
fantastic outcome for the Territory".Under the terms of the agreement, Mr Giles said the Territory would lease the Darwin Port land and facilities of East Arm Wharf, including the Darwin Marine Supply Base, and Fort Hill Wharf to the Chinese-owned Landbridge Group for 99 years.
The Territory will retain Stokes Hill Wharf, Fisherman's and Hornibrook's Wharves and Frances Bay facilities.
As part of the deal Landbridge have paid the full price for the lease, but only taken an 80 per cent ownership stake, Mr Giles said.
Within five years the Chinese company must find an Australian investor to purchase the other 20 per cent, and until that time that stake will remain with the NT Government.
Mr Giles said this kept a promise he had made for a large element of the port to remain in Australian hands.
He said in Landbridge, the NT had "a partner that has demonstrated an outstanding track record of investment and innovation that has underpinned remarkable growth, and with it new trade and jobs".
"The lease process has delivered on many levels and we have ensured that employees, port users and the Government's interests are well protected. This is a fantastic outcome for the Territory," he said.
Before the deal's announcement the NT Government attempted to address environmental concerns about an expansion of operations in the area, which included Aboriginal cultural sites and World War II historic sites.
"We understand the need to protect our natural environment. Any lease of the port, and ongoing operation by a private investor, would need to comply with NT and Federal environment regulations," the Government said on a department website.
In a statement, the Government said it would continue to maintain safety standards at the port:
The Government has implemented safeguards to retain full oversight of safety regulation and operations, including the role of Regional Harbourmaster transferring to the Department of Transport."Landbridge intends to grow two-way trade between Australia and Asia, leveraging Landbridge's existing port and logistics businesses and firmly putting Darwin on the map for Chinese business," he said.
The Government retains powers in relation to the licensing of stevedores and the prevention of localised monopolies or vertically integrated activities at the port.
The Territory has step-in rights to correct breaches of key operating standards. The planning and environmental regulations remain unchanged.
"We plan on making considerable financial investment in the Port of Darwin.
"In addition to committing an initial $35 million of new growth investment expenditure over the first five years, we anticipate in excess of $200 million of capital expenditure over the next 25 years. Given the scope of development opportunities in the Territory, we hope to invest a lot more."
Landbridge said it intends to "maintain the established workforce at the Port of Darwin" at least until 2018.
"There will be no forced redundancies during the term of the current enterprise agreement (which terminates in June 2018)," Mr Hughes said in a statement.
"Landbridge also intends to implement a stable and competitive pricing regime for port services with no more than CPI indexed pricing adjustments for the use of current port facilities.
Landbridge Group is owned by Chinese billionaire Ye Cheng.
Forbes lists 53-year-old Mr Cheng as chair of the privately-held Shandong Landbridge Group, which it said is "active in petrochemicals, logistics, real estate and international trade" as well as port operations.
Forbes lists Mr Cheng as having a 2015 net worth of $1.37 billion
Growing Darwin Port through a lease
Growing Darwin Port through a lease Darwin port What it means The Northern Territory Government has entered into a 99 year lease of the Darwin Port to the Landbridge Group. This means a private company would help pay for the infrastructure that's needed to grow and develop the port. The government will then have more money for other infrastructure such as schools and health facilities. The port will not be sold. The government will still own the port. It will still belong to Territorians.
What it means
The Northern Territory Government has entered into a 99 year lease of the Darwin Port to the Landbridge Group.
This means a private company would help pay for the infrastructure that's needed to grow and develop the port.
The government will then have more money for other infrastructure such as schools and health facilities.
The port will not be sold. The government will still own the port. It will still belong to Territorians.
DARWIN, Australia — The port in this remote northern Australian outpost is little more than a graying old wharf jutting into crocodile-infested waters. On a recent day, there was stifling heat but not a ship in sight. “Our pissy little port,” as John Robinson, a flamboyant local tycoon, calls it.
The lease to the Chinese company, a shipping and energy conglomerate called Landbridge Group,Landbridge, which is based in Rizhao, Shandong Province, has worked with state-owned companies like China National Petroleum Corporation, which supplies oil to Landbridge and allows it to sell fuel at retail gasoline pumps under the corporation’s name.
"There is no need for the Australian public to have such concerns over the lease of the Darwin port to a Chinese company," Mr Hong told a daily news briefing in China on Wednesday.
The financially hurting government of the Northern Territory was happy to lease it to a Chinese company in October for the bargain price of $361 million, raising money for local infrastructure projects.
“We
are the last frontier; you take what you can get,” said Mr. Robinson,
who is known as Foxy. “The Northern Territory doesn’t have the money for
development. Australia doesn’t have it. We need the major players like China.”
But the decision has catapulted the port of Darwin into a geopolitical tussle pulling in the United States, China and Australia.
This month, the United States said
it was concerned that China’s “port access could facilitate
intelligence collection on U.S. and Australian military forces stationed
nearby.”
It
may not look like much, but the scruffy port is a strategic gateway to
the South China Sea, where China is challenging the United States, and
it serves as a host base for the United States Marines, who train here six months a year.
Critics contend that the Chinese bought a front-row seat to spy on American and Australian naval operations.
“There
is a deep Chinese interest, driving interest, in understanding how
Western military forces operate, right down to the fine details
associated with how a ship operates, how it is loaded and unloaded, the
types of signals a ship will emit through a variety of sensors and
systems,” Peter Jennings, a former Australian defense official who is
now the executive director of the Australian Strategic Policy Institute,
told a parliamentary inquiry.
China has invested in more than two dozen foreign ports around the world, including a port in Djibouti
adjacent to an American military base. But the 99-year Darwin lease was
the first time the Chinese had bought into a port of a close American
ally hosting American troops.
The
Australian government did not consult with Washington, and the
parliamentary inquiry showed that the corruption-plagued and unpopular
government of the Northern Territory, of which Darwin is the capital,
had rushed to lease the port to raise money for new projects before an
election.
Australia’s
defense secretary, Dennis Richardson, rejected the criticism, saying
the Chinese could find out what they wanted by “sitting on a stool at
the fish-and-chip shop on the wharf” and noting the vessels that entered
the harbor.
The
lease to the Chinese company, a shipping and energy conglomerate called
Landbridge Group, highlighted the competing pressures in Australia
between its more than 70-year alliance with the United States and its
flourishing trade ties with China.
Australia’s
attitude to China swings between greed and fear, people here say. On
one hand, huge sales of minerals, property and food to China have kept
the country recession proof, and have proved lucrative for the powerful
Australian business community and the government.
On
the other, the government relies on its deep defense ties with
Washington, including close intelligence cooperation, to keep the
sparsely populated country safe.
Despite its unimpressive real estate, the port here, which was hit with more Japanese bombs in 1942 than Pearl Harbor, has long had strategic value.
Australia
is considering running freedom-of-navigation patrols of the South China
Sea from here, according to the American State Department. And this
month, the Pentagon asked the national government to base B-1 bombers in
the Northern Territory.
American
officials say they believe the lease by Landbridge was a strategic
deal, not a commercial one. They cited the length of the lease and the
fact that Landbridge paid 20 percent more than the two closest bidders.
Among
the specific worries, Mr. Jennings said, is that fuel storage tanks
used by the American military are inside the area leased to Landbridge.
Future construction by the Australian navy for new facilities would be
limited to parts of the harbor not under the company’s management, he
said.
Australians appear to be worried as well. In an illustration of its pique, the United States commissioned a poll of Australians
that found nearly half believed the lease posed “a lot of risk” to
national security, and nine in 10 said it involved at least some risk.
The
lease was reviewed by midlevel Defense Department officials, who found
no problem, the department said. But the review is less stringent for
private companies like Landbridge than for state-owned companies, a
distinction that means little in China, where private companies often
work hand in glove with the government.
The
Australian government changed that policy on Friday, saying that from
now on, the Federal Investment Review Board would assess all sales of
state-owned critical infrastructure to private companies.
The
Landbridge website cites the company’s close ties to the government.
Its chairman and founder, Ye Cheng, was honored as one of the top “10
individuals caring about the development of national defense” by the
Shandong provincial government in 2013.
Landbridge,
which is based in Rizhao, Shandong Province, has worked with
state-owned companies like China National Petroleum Corporation, which
supplies oil to Landbridge and allows it to sell fuel at retail gasoline
pumps under the corporation’s name.
“A
strong enterprise does not forget to repay the country, while a
profitable enterprise does not forget national defense,” the company
says on its website.
In
an interview in Beijing, Mr. Ye said the investment fit into the
company’s strategy to expand its shipping and energy interests and
served China’s foreign policy goal known as One Belt, One Road.
That
policy is President Xi Jinping’s signature measure to encourage Chinese
investment across Asia into Europe. Participating companies are honored
as doing the right thing for China.
“Australia
needs China, China needs Australia,” said Mr. Ye, who was in Beijing as
a delegate to the annual Chinese People’s Political Consultative
Conference, an advisory body to the government.
He dismissed security concerns about his company’s running the port as “paranoia.”
“You Americans think too much,” he said. “You can think what you want, but this is about port-to-port business.”
The
port manager, Terry O’Connor, said Australians would continue to run
the port. He said there were no plans to bring in Chinese employees.
Mr.
O’Connor said shipping movements in and out of the harbor, including of
the 100 or so naval vessels each year, mostly Australian and American,
would be kept in the company’s Australian computer systems, which are
not linked to the Chinese headquarters.
Despite
these assurances, American officials say they are keeping a close eye
on Darwin. They are also watching to see if Chinese companies buy other
important infrastructure in Australia.
A strategic port in Fremantle, Western Australia, where United States warships frequently tie up has been put out for bids.
When
President Obama met the Australian prime minister, Malcolm Turnbull, in
Manila in November, he registered his displeasure at not being informed
about the Darwin lease.
According to a senior American official, Mr. Obama said, “Next time, please let us know ahead of time.”
Yufan Huang contributed research from Beijing.
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