Kwinana leaseholders keen for clarity on port process

29 May, 2015 01:00 AM
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EXISTING leaseholders at Kwinana are hoping to retain their place at the port as a State Government announcement throws the nearing capacity Fremantle Port into its latest round of asset sales.

The Barnett government's attempt to unbridle itself from a mounting $1.3 billion debt leaves a lot of unknowns for major leaseholder CBH.

The grain exporter owns the land on which its receivals and storage facility is located, but leases a 15-metre buffer of seabed around its jetty.

It hopes to retain this lease beyond 2020 when the Fremantle Port reaches capacity and Kwinana becomes the new focus for port development.

CBH government and industry relations manager Brianna Peake said CBH looked forward to further information being communicated to Kwinana leaseholders off the back of the government's budget announcements.

"Given the current lease arrangements in place for key WA grain supply chain infrastructure, CBH will be very keen to understand how the State will manage the process of privatisation of the Fremantle Port and also what mechanisms will be put in place to protect the interests of on-going State development and growth," Ms Peake said.

Treasurer Mike Nahan announced the State-owned TAB would also be sold-off, under government plans to address an increasing deficit problem which is set to grow from $1.3b this financial year, to $2.7b in 2016-2017 and $3.6b by 2018-19.

"The ports of Darwin and Melbourne are up for sale by their respective governments and if we do not sell the port of Fremantle, that would be the last urban container port owned by government," Mr Nahan said.

"The port of Fremantle will run into congestion - this lease will look at recycling assets from the port of Fremantle to an asset investment program, but also look to solve the issue of how you fund and build the overflow replacement port (at Kwinana).''

Mr Nahan said as the privatisation went ahead, most likely with a lease of 49 years, there would be discussions with the Fremantle Port Authority which manages both the Fremantle and Kwinana or outer harbour site.

He said the Kwinana site would bring a "great deal" of land to the mix which would be open to construction and development as Kwinana took the load from Fremantle.

About 95 per cent of grain produced in WA is exported to international customers and CBH ships on average 4.5-5 million tonnes of grain from its ports in WA.

Ms Peake said this equates to about 150 shipments from the Kwinana terminal every year.

"The CBH Kwinana terminal is unequivocally the most significant asset in the WA growers' grain supply chain," she said.

"It is therefore crucial that growers have access to efficient and cost effective port terminal arrangements to ensure their grain product can be exported into these international markets at a rate that is competitive with alternative exporting nations."

Fellow Kwinana port leaseholder Louis Dreyfus expects to be offered a similar lease when its agreement with the Fremantle Port Authority expires in 2020.

Louis Dreyfus regional sales manager Chris Puckridge said he had regular meetings with the port authority and the most recent had left him with no doubts over the fertiliser and chemical company's future at Kwinana.

"We have a good relationship with them and work closely with the port authority," Mr Puckridge said.

"We understand any new owners would have to honour those existing leases until they expire and it would be open to negotiation.

"They're very good to work with, very open and we've had positive support from them so far.

"Export is growing out of Australia and there will be pressure on every port and you would expect WA will need to grow to remain competitive."

WAFarmers president Dale Park said he was dismayed that agriculture would have to pay for the State Government's efforts to address debt.

Mr Park said the Fremantle Port sale was the sector's biggest concern and the situation could potentially turn sour.

"The more we look into it, the more we get worried," he said.

"Imagine if we had the same situation (with the port) that we have with grain on rail at the moment - it would be a disaster.

"With live shipping we are already having problems at Fremantle, but we could have the same dramas in Kwinana.

"The question is, where do you put it?

"We should be looking at a long-term plan, because there are too many quick fixes."

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