Landbridge committed to developing Darwin Port

CEO says lease contributes to Australia as Canberra presses for 'security concerns' review

Chinese company Shandong Landbridge Group remains committed to developing and managing Darwin Port of Australia, said its senior manager, and its lease not only complies with Australia's laws but also is based on a "business practice that generates mutual benefits".

On behalf of the group, Vincent Lai, CEO of Landbridge Infrastructure Holdings Ltd, told a news conference amid reports the Australian government is about to review the possibility of scrapping Landbridge's 99-year-lease on Darwin Port on the back of national security concerns despite various inspections in recent years.

Shandong Landbridge Group is a private corporation focusing on port construction and energy industries, and Landbridge Infrastructure Holdings is a Hong Kong-based company for the investment project for Darwin Port in Australia.

Australia's Northern Territory government in October 2015 leased Darwin Port to Landbridge for 99 years. Lai said the company completed its payment of A$506 million ($393 million) to secure the lease. The port is considered as the gateway to Australia-Asia trade since it is Australia's nearest port to Asia.

Landbridge Group's acquisition of Darwin Port's operation "was conducted under the premise of following international market norms and local laws", Lai said in a media briefing in Hong Kong on May 26. It only won the port's bidding in 2015 out of about 60 bidders from around the world which submitted initial letters of intent and 39 actual bidders which indicated their intentions.

"It is a business practice that generates mutual benefits. It is a normal business exchange and cooperation, which does not involve any security issues," he said.

Lai said the port now provides about 100 full-time jobs directly to the local community, and 200 other jobs indirectly. Data from the port show that Landbridge's investment in the port has increased its handling capacity, with average annual growth at 20 percent. By 2020, the total tonnage of ships arriving at the port reached 30 million tons. Most of the exports and imports are related to Chinese destinations.

As Australia's current administration sees a sour relation with China, however, Australia's Defence Minister Peter Dutton said his department had been asked to "come back with some advice" about the 2015 deal in an interview with national broadsheet Sydney Morning Herald early this month.

A Reuters report quoted an unnamed source that said officials from Australia's Ministry of Defence are looking into whether Landbridge should be forced to give up its lease of Darwin Port on national security grounds.

Lai said since Landbridge Group inking the deal of Darwin Port operations, it has undergone inspections by the Northern Territory government and Australia's Ministry of Defence, as well as a series of legal inspections such as the foreign investment act, all finding it comply with Australia's laws.

The 99-year lease agreement signed between the Northern Territory government and Landbridge is a legally-binding document. As such, the rights and obligations of the lease agreement should be respected and implemented by both parties as they have to abide by the contract and follow the basic principle of mutual trust.

Lai said some related statements made by relevant parties and people in Australia have violated the basic contract spirit and the business principle of mutual trust.

Such behavior "has severely damaged the legitimate rights and interests of Shandong Landbridge Group under the port lease agreement", caused negative impact on the group's normal business activities, and affected its international cooperation and reputation," he said.

Lai said the company is monitoring the development of the case and will consider relevant "legal advice or other appropriate ways to protect its lawful rights and interests".

He noted that the Australian government should see the contribution by Landbridge group to Darwin Port, care for the development of the Northern Territory and benefits to the Australian people. "The rapid development of the Darwin Port will generate more positive impact to the Northern Territory and parts of Australia (and) make a bigger contribution to global trade and economic development," he said.

He said Landbridge plans to further invest millions of Australian dollars in the construction of berths for bulk cargo, crude oil, LNG, and containers, as well as port industrial parks and associated facilities.

So far the group has upgraded the port's three main functional port areas. The East Arm Wharf has four commodity berths, an offshore supply base has three berths for oil and gas, and Port Hill Wharf has two more berths capable of receiving the largest cruise ships of the world.