WA tables Fremantle Port privatisation Bill


Government says the legislation will help reduce debt and fund future infrastructure projects

WA tables Fremantle Port privatisation Bill
The state government has a tough road ahead with both Labor and the Nationals still opposed to the privatisation of the port.

 

The Western Australia government has introduced legislation proposing the lease of the state’s largest container and general cargo port for a period of 99 years.

Despite opposition from both Labor and the Nationals, treasurer Mike Nahan remains hopeful that the government will be able to pass the Fremantle Port Assets (Disposal) Bill 2016 to privatise the port.

The state government has spent months trying to convince the opposition parties and other industry stakeholders to support the move.

Nahan says the long-term lease of the port will allow the state government to invest in other infrastructure projects and allow the movement of livestock facilities from the Inner Harbour of the port to the Outer Harbour.

He says the deal would be structured to unlock investment in the Passenger Terminal, and up to $200 million of the sale proceeds would be spent on new live export facility at Kwinana.

The move follows the Port of Melbourne lease legislation, Delivering Victorian Infrastructure (Port of Melbourne Lease Transaction) Bill 2015, which was passed by the Victorian Parliament in March after months of negotiations between the state government and the opposition.

The Economic Regulation Authority will handle the access and pricing regime, which includes a number of protections designed to ensure continued fair access to relevant port facilities and services and to reduce the risk of potential abuse of market power and unfair pricing.  

Nahan says the legislation will allow government to retain oversight of any new port lessee through a restructured Fremantle Port Authority (FPA).

"The Harbour Master function will be maintained by the FPA, allowing effective oversight over marine safety and access for users to the waterways," Nahan says.

"The government will also be responsible for approving the port lessee's master plan for development and have an ongoing supervisory role for any future development proposals."

The introduction of the legislation follows extensive consultation with key stakeholders, including the Chamber of Commerce and Industry of WA, WA Livestock Exporters Association, the Pastoralists and Graziers Association of WA, the WAFarmers and CBH Group.

"Recognising the importance of maximising the taxpayers' return on investment from the existing infrastructure, the government is committed to the continuation of the Fremantle Inner Harbour as a container and general cargo port for the longer term," Nahan says.

"Analysis of capacity and trade growth has confirmed the Outer Harbour, which would be additional to the Inner Harbour operations, will not be required for at least 15 years and probably much longer. 

"Allowing the Inner Harbour to reach its natural capacity means port prices will remain lower for all users, with the benefits passed on to the community.

"Importantly, this creates the framework for the Outer Harbour development to be undertaken by the new lessee of Fremantle Port as and when the expanded capacity is required. 

"Should the new lessee choose not to take up the development opportunity, the Government may elect for this to be undertaken by another party.

"The Bill also provides a number of protections designed to ensure continued fair access to relevant port facilities and services."

The legislation comes after the consideration of key policy issues and supporting analysis by financial advisers Rothschild and Deloitte, which included infrastructure needs to support trade growth and modelling of the Inner Harbour's capacity to determine the timing for the proposed Outer Harbour development.

Premier Colin Barnett says the legislation was part of the government's plan to reduce debt and fund future infrastructure projects.

"The long-term lease of Fremantle Port will be a cornerstone of the government's fiscal management plan, aimed at reducing government debt and unlocking the potential for private sector capital investment to develop economic infrastructure to support and grow the Western Australian economy," Barnett says.

"Together with the proceeds of other transactions under the government's asset sales program, the Fremantle Port divestment is an important enabler of the funding future infrastructure initiative announced by the treasurer when he delivered the 2016-17 State Budget last week."

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