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You can find the current article at its original source at https://www.theguardian.com/australia-news/2017/jun/09/refinancing-of-port-of-darwin-raises-fresh-concerns-over-chinese-lease
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| Refinancing of Port of Darwin raises fresh concerns over Chinese lease | Refinancing of Port of Darwin raises fresh concerns over Chinese lease |
| (11 days later) | |
| Moves to refinance the Port of Darwin by Chinese company Landbridge raise further concerns about the wisdom of the 99-year lease struck between the company and the NT government, a national security expert has said. | Moves to refinance the Port of Darwin by Chinese company Landbridge raise further concerns about the wisdom of the 99-year lease struck between the company and the NT government, a national security expert has said. |
| On Wednesday Fairfax reported Landbridge was seeking a loan of up to $500m from the Chinese government-owned Export-Import bank (Exim), and was putting up the port as security. | On Wednesday Fairfax reported Landbridge was seeking a loan of up to $500m from the Chinese government-owned Export-Import bank (Exim), and was putting up the port as security. |
| Peter Jennings, director of the Australian Strategic Policy Institute, said the use of the port as security for the loan should prompt a new assessment of the lease by the foreign investment review board (Firb), because a default could see the lease end up in the control of the Chinese government. | Peter Jennings, director of the Australian Strategic Policy Institute, said the use of the port as security for the loan should prompt a new assessment of the lease by the foreign investment review board (Firb), because a default could see the lease end up in the control of the Chinese government. |
| The NT government confirmed to the Guardian that Landbridge was considering third-party finance options “including approaches to a number of Australian and Chinese banks, including Exim”. | The NT government confirmed to the Guardian that Landbridge was considering third-party finance options “including approaches to a number of Australian and Chinese banks, including Exim”. |
| According to reports Landbridge is seeking the loan to develop the port as well as other Darwin-based investments including a luxury waterfront hotel. | According to reports Landbridge is seeking the loan to develop the port as well as other Darwin-based investments including a luxury waterfront hotel. |
| However the NT government said the terms of the port lease ensure the NT owns the land and infrastructure and that Landbridge had no right to sell or mortgage the port land. | However the NT government said the terms of the port lease ensure the NT owns the land and infrastructure and that Landbridge had no right to sell or mortgage the port land. |
| Citing clauses in the lease agreement, a spokesman for the chief minister said that Landbridge was “limited” in its rights to grant security over the port, and must make a new agreement with the NT government to do so. | Citing clauses in the lease agreement, a spokesman for the chief minister said that Landbridge was “limited” in its rights to grant security over the port, and must make a new agreement with the NT government to do so. |
| Landbridge could not be reached for comment, but in a statement to News Corp, the company said it was standard practice to explore funding options with different banks. | Landbridge could not be reached for comment, but in a statement to News Corp, the company said it was standard practice to explore funding options with different banks. |
| “The group is looking at its funding options and has a range of investments it has made public,” it said. | “The group is looking at its funding options and has a range of investments it has made public,” it said. |
| Jennings suggested if Landbridge couldn’t get Firb or NT government approval it may have to sell the assets. But the NT government has said protections in place would mean the port would return to territory ownership or be resold if Landbridge defaulted. | Jennings suggested if Landbridge couldn’t get Firb or NT government approval it may have to sell the assets. But the NT government has said protections in place would mean the port would return to territory ownership or be resold if Landbridge defaulted. |
| If resold the new buyer would have to satisfy requirements of the NT government or – if foreign – the Firb, he said. | If resold the new buyer would have to satisfy requirements of the NT government or – if foreign – the Firb, he said. |
| Currently a 20% stake in the port – originally stipulated to be held by the government until Landbridge finds an Australian buyer – remains unsold almost two years later. | Currently a 20% stake in the port – originally stipulated to be held by the government until Landbridge finds an Australian buyer – remains unsold almost two years later. |
| Jennings also said if Landbridge’s refinancing less than two years into its lease is a sign of financial difficulty “then more broadly you’d have to ask the question about whether they did their own due diligence”. | Jennings also said if Landbridge’s refinancing less than two years into its lease is a sign of financial difficulty “then more broadly you’d have to ask the question about whether they did their own due diligence”. |
| “I’m pretty sure the NT government did not do due diligence on this. It was a rush job, a farcical four-week NT assembly review of lease arrangements done with unbelievable haste.” | “I’m pretty sure the NT government did not do due diligence on this. It was a rush job, a farcical four-week NT assembly review of lease arrangements done with unbelievable haste.” |
| The deal with Landbridge has been at the centre of several controversies since it was announced in October 2015. | The deal with Landbridge has been at the centre of several controversies since it was announced in October 2015. |
| At the time, the $506m lease of the port by the-then CLP-led NT government sparked a major rethink of Australia foreign investment rules, after then US president Barack Obama complained they were not made aware of the transaction. | At the time, the $506m lease of the port by the-then CLP-led NT government sparked a major rethink of Australia foreign investment rules, after then US president Barack Obama complained they were not made aware of the transaction. |
| The department of defence secretary, Dennis Richardson, at the time conceded the US should have been informed, but dismissed concerns - including from Jennings - of negative security implications relating to alleged ties between Landbridge and the Chinese government and military. | The department of defence secretary, Dennis Richardson, at the time conceded the US should have been informed, but dismissed concerns - including from Jennings - of negative security implications relating to alleged ties between Landbridge and the Chinese government and military. |
| On Wednesday the former director of US intelligence services, James Clapper, reiterated US concerns about foreign ownership of national infrastructure. | On Wednesday the former director of US intelligence services, James Clapper, reiterated US concerns about foreign ownership of national infrastructure. |
| His comments followed revelations on Monday that former trade minister Andrew Robb, who praised the deal at the time, accepted a job with Landbridge the day before last year’s federal election, which he did not contest. | His comments followed revelations on Monday that former trade minister Andrew Robb, who praised the deal at the time, accepted a job with Landbridge the day before last year’s federal election, which he did not contest. |
| While many Coalition members defended Robb, deputy prime minister, Barnaby Joyce, said it was reasonable for people to have questions about his role in the company. | While many Coalition members defended Robb, deputy prime minister, Barnaby Joyce, said it was reasonable for people to have questions about his role in the company. |
| At the time of the announcement, the NT Labor opposition said the lease was shortsighted and not in the interest of Territorians. Now in government, it has spoken more positively about it. | At the time of the announcement, the NT Labor opposition said the lease was shortsighted and not in the interest of Territorians. Now in government, it has spoken more positively about it. |
| “While strong interest in the port from potential investors resulted in an upfront payment of $506 million for the lease, the real and ongoing benefit of this partnership is Landbridge’s commitment to continue to invest in the Port, grow trade and make other investments in the NT,” the spokesman said on Friday. | “While strong interest in the port from potential investors resulted in an upfront payment of $506 million for the lease, the real and ongoing benefit of this partnership is Landbridge’s commitment to continue to invest in the Port, grow trade and make other investments in the NT,” the spokesman said on Friday. |
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