Australian taxpayers could fork out more than $500million to buy back a port leased to a Chinese-owned company for 99 years.
Landbridge, which is based in the Shandong province of China, won the bid to operate the Port of Darwin in 2015 under a 99-year lease deal worth $506million.
In the controversial deal, which drew concerns from then US president Barack Obama due to the port’s strategic location, the NT government retained a 20 per cent stake in the port.
Meanwhile, Landbridge was given an 80 per cent share and 100 per cent operational control under the 99-year lease.
Prime Minister Anthony Albanese announced plans during last year’s election campaign to return Darwin Port to Australian ownership but experts have since warned the move could prove costly.
‘They (the government) have the right to acquire land under the so-called Lands Acquisition Act,’ University of Technology Sydney Associate Professor Colin Hawes told Yahoo News Australia.
‘But if they want to do that, they have to give fair compensation, which is interpreted as meaning market value. It’s quite likely it would be higher than what Landbridge paid for it.
‘The Australian government will have to offer a better price if they’re going to persuade them to sell.’
During last year’s election campaign, Prime Minister Anthony Albanese (pictured) pledged to return the port to Australian ownership
Associate Professor Hawes said the proposal would likely cost more than the original $506million purchase price and could also result in significant legal costs.
Landbridge’s billionaire owner Ye Cheng brought the dispute to the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) where the tribunal overseeing the case was appointed in August.
Emergency temporary legal protections, the contents of which have not been made public, were ordered in September.
‘That could take a year or even two years before the actual hearing is held,’ Associate Professor Hawes said.
‘It can be millions of dollars of legal fees by the time the process has concluded.’
If the tribunal were to rule in Landbridge’s favour, the Australian government could be ordered to pay compensation.
‘When a government acts towards a private corporation in a way that takes away some of its rights, that corporation can get compensation for it through arbitration,’ Associate Professor Hawes added.
In July, Albanese said the port was a strategically important military asset and claimed the sale was not in Australia’s national interests.
Chinese-owned company Landbridge won the bid to operate Port of Darwin (pictured) under a 99-year lease in a $506million deal made in 2015
‘I believe it should be back in Australian hands. That’s what we’re doing,’ he said.
‘I opposed the sale of Darwin Port. I opposed the Commonwealth government giving an incentive to the NT government to sell the Darwin Port through its asset recycling program.
‘I think that was a mistake, and I’m determined that it will come back into Australian hands, and we’re negotiating those issues through.’
The Albanese government said it would consider both private and public options to return the port to Australian ownership, but the Commonwealth would step in if a private Australian buyer could not be found.
Two government reviews, one commissioned by the Coalition and one by Labor, found there were no national security grounds to terminate the lease.
There are still 88 years left on the agreement, with the government yet to announce a timeline for the proposed sale.
Opposition Leader Angus Taylor slammed Albanese on Tuesday, accusing the Prime Minister of failing to deliver on his promise.
‘There’s been no moves to fix this problem. This should not be in Chinese (possession). The Port of Darwin is a strategic asset, obviously strong military interest in getting it right,’ he told News24.
Opposition Leader Angus Taylor slammed Albanese on Tuesday, accusing the Prime Minister of failing to deliver on his promise to take the port back
‘He needs to get on with it and do exactly what he said he was going to do.’
The Port of Darwin is Australia’s northernmost port and sits near major Australian and US military facilities.
China’s outgoing ambassador to Australia, Xiao Qian, opposed the proposed plan, claiming his government had an ‘obligation to protect’ the interests of Chinese companies overseas.
‘When you’re losing money, you lease it to a foreign company, and when it has started making money, you want to take it back. That’s not a way to do business,’ Mr Qian said earlier this year.
‘If anything happens, like the port [being taken] back by force or forceful measures, then we have an obligation to take measures to protect the Chinese company’s interests.
‘Should Landbridge be forced to leave that port, I think it might also affect the substantive investment, cooperation and trade between Chinese companies and that part of Australia. That is not in the interest of Australia either.’
