Privatisation of ports to finance WA government bailout

The WA government will sell off the Kwinana Bulk Terminal and Utah Point bulk handling facility in order to reduce debt and recover their AAA credit rating.

The first round of asset sales could raise up to $2 billion, according to treasurer Mike Nahan and Premier Colin Barnett.

Barnett said the assets would be better placed, and more likely to be better run in the private sector.

Kwinana Bulk Terminal, which is owned by Fremantle Ports, handles coal, iron ore, petroleum gas, gypsum, coke and slag, and earned $61.6 million with expenditure of $36 million in FY13.

Utah Point at Port Hedland is owned by the Pilbara Ports Authority, and earned $86.5 million in revenue with $44.1 million worth of expenditures in FY13.

The WA Chamber of Minerals and Energy also welcomed the State Government’s decision to begin asset sales, with CEO Reg Howard-Smith saying the announcement was a step in the right direction.

“CME has been urging the Government to articulate a clear path to regain WA’s AAA credit rating,” Howard-Smith said.

However, Howard-Smith also said existing rights at the two ports should be protected and should remain a commercial facility into the future.

“The Government should work with port-users to ensure that no users face additional costs or disadvantage during the sale process,” he said.

The Government will now call for expressions of interest in the assets, followed by a request for proposals from shortlisted bidders.

WA Chamber of Commerce chief executive Deidre Willmott said the task to regain the triple-A credit rating would also require focus on controlling government spending, which had grown on average 8.8 per cent over the past six years, greater than population and inflation growth.

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.