State owned, but passing the hat

Ore ships are driving port development in Australia Ore ships are driving port development in Australia
Industry Database

With government ownership dominant in Western Australia, the dredging funds question is a considerable one for the state's mid-sized ports.

Here, ports are dominated by the export of bulk materials, both solids and liquids rather than container trades which means that many larger ports are looking at accommodating the wider, deeper Valemax vessels as competition with Brazil hots up for the lucrative Chinese ore trade.

“The decision on this is driven at the moment by the iron ore price, availability of finance to undertake the works and the ability to stay competitive with the current capesize vessels,” says Tim Green of BMT JFA. 

However, the mid-sized ports, although focused around using smaller panamax vessels to export grain and minerals as well as iron ore, are also affected by the same dynamics while facing the complication that they are not private concerns. The issue is that while the state government owns them, it also wants to keep its ‘Triple A’ credit rating, so it is pushing back financial responsibility on to the private sector. It’s also often expensive: many of the ports have already reached their 'easy' depth increases and further deepening involves reaching into harder material.

The result is an intensely negotiated strategic plan from both the private industry and the port authority side, explains Mr Green, and very often it involves a lot of juggling of interests. “In some cases it requires a common long term strategy from a group of private developers – mid-tier miners for example - and the port in order to develop a common facility with a share capital cost. No mean feat.”

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