Towage in limbo

NATIONAL and international companies bidding for the Fremantle Port’s highly lucrative towage business are anxiously awaiting a directive from the Gallop Government on licensing arrangements for port services.

Planning and Infrastructure Minister Alannah MacTiernan spent more than an hour and a half discussing towage with the port’s board and its chief executive Kerry Sanderson on February 23, but is yet to provide a clear directive to companies seeking towage busi-ness.

Her meeting followed a pre-election pledge to review Fremantle’s plans for towage and place a moratorium on all new exclusive licences for port services because she suspected the Court Government endorsed them to achieve an industrial relations agenda.

Submissions for Fremantle’s towage business were invited in December when the Fremantle Port Authority (FPA) indicated it may follow Bunbury in offering exclusive licences to extract efficiencies and target reductions in towage fees which represent 30 per cent of ship visit costs.

This paved the way for industry newcomers and overseas interests to lodge expressions of interest for the towage business which is understood to be worth $20 million annually.

Since October 1 towage prices for entry and departure at Bunbury have dropped by 7 per cent and efficiencies gained include guaranteed continuity of labour, a two-hour response for towage services and 24-hour availability of service.

Riverwijs managing director Hume Campbell, who is awaiting a meeting with Ms MacTiernan, said his company was in a state of limbo with regard to Fremantle.

“There is no real ministerial direction here,” Mr Campbell said.

“Banning exclusive licenses will upset attempts for efficiencies in the logistical chain and WA as an exporting State really needs this.”

Mr Campbell claimed the MUA, which described Riverwijs as a rogue operator, had lobbied hard against exclusive licences because of a perceived threat to its power base.

The Bunbury contract put WA at the forefront of changing the commercial culture of towage services in Australia, while a decision to ban exclusive licences would reverse this.

Industry sources say Singaporean companies contending with a crowded local market may have also joined Adsteam and Riverwijs in the expression of interest process.

Adsteam managing director David Ryan declined to comment on Fremantle, but emphasised opposition to exclusive licences.

Suspending exclusive licences would be welcomed by incumbent operator Adsteam-Howard-Smith company Stirling Harbour Serv-ices, but newcomers facing the prospect of a price war may be reluctant to invest in entry costs conservatively beginning at $12 million.

When Business News contacted Ms MacTiernan’s office to ask if she intended to oppose exclusive licence proposals a spokesperson said the Minister considered it inappropriate to respond to questions while negotiations were still under way.

An FPA representative said an outcome for the towage process would be known in about three weeks when submissions had been evaluated.

Riverwijs, the joint venture between Riverside Marine of Brisbane and Dutch towage giant Wijsmuller now operating at Bunbury, claims it can offer users of Western Australia’s main general cargo port big savings if it gains an exclusive licence.

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