Landbridge pledges expansion on Darwin port lease win

Giles insists port user protections are in place and certain powers retained

Landbridge pledges expansion on Darwin port lease win
New leaseholder says Port of Darwin will help foster trade with China.


Chinese port-owning conglomerate Landbridge has won an 80 per cent Port of Darwin lease for $506 million in cash, the Northern Territory government has revealed.

The government retains 20 per cent of the facility but says "Landbridge intends to transfer the Government’s interest to an Australian investor in time".

The 99-year lease to the Shandong-based firm, also known as Shandong Landbridge Group, includes Darwin Port land and facilities of East Arm Wharf, including the Darwin Marine Supply Base, and Fort Hill Wharf.

The deal includes a capital expenditure pledge of $200 million over the next 25 years and an initial $35 million of new growth investment expenditure over the first five years, with the first project to begin early next year.

The government will retain Stokes Hill Wharf, Fisherman’s and Hornibrook’s wharves and Frances Bay facilities, along with a range of oversight and regulatory functions.

These include the Regional Harbourmaster role, which will be transferred to the Department of Transport, and responsibility for price and access regulation, through the independent Utilities Commission.

The government also retains powers in relation to the licencing of stevedores and the prevention of localised monopolies or vertically integrated activities at the port.

It can correct breaches of key operating standards, while planning and environmental regulations remain unchanged.

The NT government says Landbridge intends to keep price rises for current port facility users in line with the consumer price index.

Safeguards were sought during the consultation process, with groups including the NT Road Transport Association (NTRTA) expressing concern.

"We have listened carefully to the concerns of the community and the Parliament," NT chief minister Adam Giles says.

"This is evident in the detail of the agreement where all of the Government’s desired safeguards have been delivered."

Chaired by billionaire Ye Cheng, 53, Landbridge is a privately owned Chinese company that operates a 30 million tonne per annum port in North Haizhou Bay in Shandong province, between Beijing and Shanghai.

Forbes magazine puts Ye Cheng at 131 on its list of 400 Chinese billionaires, with his wealth estimated at US$1.95 billion (A$2.7 billion).

Landbridge is in the process of expanding its port capacity to in excess of 200 million tonnes per annum – more than 65 times the current volume at the Port of Darwin.

It also has hotel and tourism, trade and manufacturing, real estate and petrochemical interests in mainland.

It is the company’s second Australian foray in as many years after last year’s takeover of Queensland based oil and gas producer WestSide Corporation, the headquarters of which now houses Landbridge Industry Australia.

It is also looking to buy WestSide rival Armour Energy, while Shandong’s Communist Party secretary Jiang Yikang told an Adelaide gathering in August, before the signing of the South Australia-Shandong Friendly Co-operation Action Plan 2015-2018,that wine was also on the company’s radar.

"Through our significant investment in the Port of Darwin, 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," Landbridge Infrastructure Australia director Mike Hughes says.

Landbridge will begin design and preparatory works to increase refrigerated container capacity.

In addition, Landbridge is exploring opportunities for improvement in Fort Hill and adjacent areas.

The news was welcomed by federal trade minister Andrew Robb.

"It’s a powerful sign of the enhanced commercial relationship between Australia and China flowing from the China-Australia Free Trade Agreement," Robb says.

"Landbridge’s commitment to the growth of the Port of Darwin will be a huge spur to the development of Australia’s north, serving as a catalyst for the entry of major investment right across the port’s upstream supply chain in agriculture, resources & energy and economic infrastructure."


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