16/05/2013 - 15:22

State won’t subsidise private port projects

16/05/2013 - 15:22


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Transport Minister Troy Buswell has laid out a welcome mat for private investment in the state’s ports, but has warned the government will not subsidise projects like the proposed iron ore facility at Esperance if they don’t stack up commercially.

Speaking at the Ports WA conference today, Mr Buswell welcomed recent initiatives that involve private sector development of new port infrastructure.

He said grain trader Bunge’s investment in export facilities at Bunbury was a small but very good example of private sector involvement.

Other proposals currently under assessment include private development of a $340 million general cargo facility at Lumsden Point at Port Hedland.

“In my view, this approach shouldn’t be limited to the provision of new infrastructure,” Mr Buswell said.

“We should also be actively considering how we can use the existing infrastructure, through new and innovative partnerships with the private sector, to free up capital and potentially deliver efficiencies.

“This is not, in my view, privatisation; it’s effectively transferring assets to the private sector within a state-run port.

Mr Buswell said the main message he wanted to leave was that “we need to, and we will look increasingly to the private sector, to facilitate capital expansions of our ports”.

“It is a very important strategy for us in government and it would be fair to say the days of taxpayer-funded capital investments, like Utah Point (at Port Hedland) are gone,” he said.

Mr Buswell cautioned the audience at today’s conference that private investment “may not always deliver the outcomes that certain people want”.

Government and port authorities have a role to play as a facilitator, but ultimately the investors made the decision, he said.

He referred specifically to a process being run by the Esperance port authority, to assess private sector development of a multi-user iron ore export facility, at an estimated cost of $200 million.

“There is a very interesting example at the moment at Esperance where we will engage with the market formally very soon," Mr Buswell said.

“There is no guarantee that process will lead to an outcome in terms of investment in infrastructure.

“I hope it does but there is no guarantee.

“The role of government will not be to step in to that process to try and subsidise or shore it up.”

Five private sector proponents have pre-qualified for the Esperance tender process, with three due to be selected for the ‘request for proposal’ stage.

Mr Buswell also told the conference he was working to give our port authority boards more autonomy around investment decisions.

“I think it’s ludicrous that people operating at Port Hedland or Dampier, some of the largest ports in the world, basically need me to sign off on things like a new car for the CEO," he said.

“Boards shouldn’t be as hamstrung as they have been, especially for small and medium-sized asset investment decisions.

“If we can’t trust the boards to make those decisions, then we shouldn’t have them.”

Mr Buswell used the conference to formally release the Western Australian Regional Freight Transport Network Plan, which provides a long-term infrastructure blueprint for the development of the state’s regional roads, rail lines and port authorities.

He said the plan articulated strategic planning, policy and capital investment priorities to meet the freight transport demands of the state to 2031.

“The plan emphasises the state government’s role in developing an efficient regional freight network, and its partnership with the private sector, particularly in relation to port and rail network development,” Mr Buswell said.












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