A row is brewing between the shipping industry and the state government over who should be responsible for financing Port Hedland's voluntary buy-back scheme.
The chief of the nation’s peak shipping body has criticised the state government’s plan to use iron ore vessels to fund its voluntary buy-back scheme in Port Hedland, labelling the move “breathtakingly outrageous”.
From March 1, iron ore vessels utilising the inner harbour at the Port of Port Hedland will be expected to pay anywhere from $1,250 to $6,725 upon entry and exit, depending on the size of the vessel.
The charge is designed to fund the state government’s $150 million plan to purchase nearby homes affected by excessive dust from iron ore stockpiles in the port’s West End.
According to Shipping Australia, the vast majority of iron ore carriers will fall into the highest bracket - meaning it would likely cost each iron-ore ship about $13,450 to enter and exit the port.
With more than 6,300 vessel movements recorded at the port last financial year, the charge is expected to draw about $85 million in additional revenue annually.
Shipping Australia has argued that the state government-owned port should finance the scheme, as it is responsible for the iron ore stockpiles, and that the industry is an innocent third party unlikely to be able to pass on the costs.
The industry body also raised concerns about the fact that there had been no end date placed on the charge, described by Shipping Australia chief executive officer Melwyn Noronha as “greedy, unfair and unjust”.
But Ports Minister Alannah MacTiernan hit back, saying the state government had always been clear about the scheme being industry-funded and that it was a small cost to pay for an industry earning billions of dollars through the port.
As with other charges introduced for port improvement projects, including the construction of a new marine operations control tower, Mrs MacTiernan said the charge would cease when the project was completed.
“The PHVBS Port Charge is being managed no differently to any other port charges under the Port Authorities Act, where the charge is levied on ships via their shipping agents - and we expect costs will be distributed across the supply chain,” she said.
“Given the billions of dollars the industry is earning through Port Hedland, this is a small impost and one industry has long known was coming.”
Business News understands the charge will last as long as is required to finance the scheme.