Federal review clears security concerns over 99-year Port of Darwin Landbridge Group lease

The federal government has cleared a controversial $506m lease of the Port of Darwin to a Chinese-owned company.

A 99-year lease on the Port of Darwin held by a Chinese company won’t be scrapped after a federal government review found it was “not necessary” to do so.

On Friday the Department of the Prime Minister and Cabinet announced it had finalised its review into the circumstances of the lease, eight years after Chinese-owned Landbridge Group won the bid from the Northern Territory government.

The review found it was not necessary to vary or cancel the lease as monitoring mechanisms were “sufficient” and “robust” regulatory systems existed to manage any risks to critical infrastructure.

“Australians can have confidence that their safety will not be compromised, while ensuring that Australia remains a competitive destination for foreign investment,” a government spokesman said.

The $506m lease was settled by the 2015 CLP government, and sparked major national security concerns given Darwin’s role as a major defence town.

A Defence Department submission to the federal review did not raise national security grounds sufficient enough to recommend a government intervention, while warning any decision to overturn the lease would be politically challenging.

The federal government review highlighted that the lease agreement guaranteed Defence access to the port, including to fuel naval vessels and berth ships for mounting operations or exercises.

However a 2016 Senate Inquiry said there was a “significant disparity” between the access agreeement — which only lasts 25 years — and lease which lasts until 2114.

The Economics References Committee Inquiry said the Darwin port raised concerns about the “transparency, adequacy, comprehensiveness and timeliness” of the foreign investment review process.

State and territory assets with national interest significance were previously exempted from foreign investment review scrutiny, however following the controversial port lease the federal government closed this loophole.

Both the Federal and Territory Labor governments have previously opposed the sale of the national security asset in 2015, but neither have gone as far as to call for the lease to be overturned.

Chief Minister Natasha Fyles acknowledged the findings of the report, while still condemning the eight-year-old decision by the then-CLP Government.

“The CLP sold the Port, sold TIO and spent the lot, leaving Territorians worse off,” Ms Fyles said.

“This is now a decision that we have to live with and one our government will continue to manage.”

Solomon MP Luke Gosling said the decision to lease the port “in such uncertain times was short-sighted”, but accepted the conclusion of the federal review.

“The government has accepted that advice and must continue to ensure all security and contractual requirements regarding the safe operation of the port are met,” Mr Gosling said.

Landbridge has consistently refuted claims about the security risks posed by the lease, and said the debate was scaring off investors and derailing its plans to invest $155 million over the next 20 years.

“The outcomes reaffirm our position that there is no basis for security concerns given the Port is operated as a commercial enterprise in accordance with Australian Law and the Port transaction documents,” a spokeswoman said.