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Published: 14 July 2013
NSW Ports in for long haul
The new owners of Port Botany and Port Kembla have moved quickly to assure investors and users that they will provide the industry with policy certainty and long-term stability.
As reported in April 2013 issue of WorldCargo News (p4), NSW Ports Consortium, led by Australian superannuation fund, Industry Funds Management (IFM), paid the New South Wales Government A$5.07B for a 99-year lease of two ports. Also included are the Enfield and Cooks River intermodal terminals in suburban Sydney.
The consortium has appointed ports and shipping veteran Tim Blood as managing director and 59 of a targeted 60 personnel have moved across from the Sydney Ports Corporation (SPC) and Port Kembla Port Corporation (PKPC), including the latter’s CEO, Dom Figliomeni. SPC chief Grant Gilfillan has elected to remain with the government-owned body that will continue to administer marine operations, safety and security for the two ports.
Blood, a former chief executive and chairman of P&O Australia (until the 2007 acquisition by DP World) and manager of P&O Ports’ West Swanson Dock, said he will remain managing director “as long as the board wants me”, having previously been involved behind the scenes as an advisor to IFM’s bid. He also sat on the board of the privatised Port of Brisbane but has relinquished that role.
An early priority will be the appointment of a CEO for NSW Ports, after which Blood may step back into a purely directorial role, but he expects to remain involved for the long-term.
And it is the long-term that the consortium is stressing, with Blood noting it planned to “be here in 98 years and 11 months’ time” and thus offer greater stability and certainty across both ports, which have been subjected to a range of policy positions through changes of government and ports ministers.
“People have been very positive about our involvement, although naturally there is a little apprehension from customers and tenants,” Blood said. “We are fortunate to have been able to retain a skilled team with great knowledge and we will build on that with detailed consultation with all stakeholders.”
A number of industry bodies, including Shipping Australia (representing shipping lines) and the Customs Brokers and Forwarders Council of Australia, have expressed concerns that NSW Ports has overpaid for its investment and will be forced to raise rents and charges substantially to service debt. However, IFM CEO Brett Himbury said, “Our investors are not interested in making short-term gains, they have a long-term liability - it is superannuation.”
Blood said NSW Ports has not considered the possibility of bidding for Newcastle - recently placed on the market by the New South Wales Government (see below) - nor other Australian ports or terminals “at this point”.
“But you can see the way these things are going [state governments privatising port leases] and so I don’t rule anything out for the future,” he said.