DP World less than impressed with WA government move
Western Australia’s open tender for Fremantle Port terminal leases appears to be causing angst at the quay side.
The state government has announced that government-owned operator Fremantle Ports is going to the market for the re-leasing of its two container shipping terminals on North Quay.
The current leases, held by DP World Australia and Patrick, have been in place since 1996 and are due to expire in June 2019.
Transport minister Rita Saffioti says the opportunity was being offered in an open market expression of interest process.
The intention is to grant new seven-year leases with options for extensions for two further periods of up to seven years, at the discretion of Fremantle Ports and dependant on the outcome of the Westport: Port and Environs Strategy.
A new management agreement for the operation of the North Quay Rail Terminal will also be put in place through a parallel Request for Proposals process.
The government says container trade is of significant importance to Western Australia and it is essential that it continues to be serviced efficiently.
The initial seven-year lease term for the container terminals is considered appropriate and supportive of the Westport process.
The Westport taskforce will make recommendations on the timing and triggers of additional container port facilities by the end of next year.
Such a strategy appears at variance to the lease arrangements New South Wales entered into, which sought to cement an anti-competitive container handling situation in favour of Port Botany and against the Port of Newcastle in return for a high valuation from buyers.
Meanwhile, DP World is unhappy with the WA government’s move, the stevedore critical of government inertia leading to lack of planning for further investment on top of what has already been spent.
“DP World Australia was informed of the intention of the Western Australian State Government to go to market for the re-lease of the two Fremantle container terminals on Friday 5 May 2018,” the stevedore tells ATN.
“We recognise that this is a State Government decision. However, as one of the incumbent operators at Fremantle Terminal we are incredibly disappointed they have decided to go straight to market with an expression of interest rather than negotiating a new lease agreement directly with us.
“As a business we need to consider our position with both our board and our executive and review the tender documents when released. We are in discussion with the State Government regarding the next steps.
“The impact of this decision has the potential to hold back investment — and create significant uncertainty in the industry, in the supply chain, for our workforce and our shipping line customers.”
Earlier, the West Australian newspaper quotes the firm’s Fremantle operations general manager Stefan Reynolds as telling staff it contradicts indications of future stability for its workforce.
“The approach being taken provides a level of certainty for industry and flexibility to allow the Government to implement future Westport recommendations,” transport minister Rita Saffioti says if the plan.
“As part of the process, we will be looking for proposals that will improve the efficiency of land transport movements of containers to and from the port that will benefit the community.
“We have already achieved some success in increasing the percentage of freight on rail to Fremantle Port, and will continue to drive to achieve more.”
ATN has sought comments from DP World Australia HQ and Saffioti’s office