NT gives secret green light for Chinese to sell share of Darwin port

The Giles government is understood to have secretly ticked off on the sale of its remaining 20 per cent stake in the Darwin port.

The Giles government is understood to have secretly agreed to the sale of its remaining 20 per cent stake in the Darwin ­Port before going into caretaker mode and promising Northern Territory voters “no unplanned surprises” in relation to asset sales if the Country Liberals win another term.

The sale on behalf of Chinese firm Landbridge, which bought control of the port for $506 million last year, is understood to have been negotiated by Melbourne banker David Potaznik, who also acted in the original transaction on behalf of the government.

The price Landbridge paid, in a deal that upset the US over fears of Chinese spying, was for 100 per cent of a package comprising outright purchase of the port operator and a 99-year lease over the land.

The terms of the agreement stipulated that 20 per cent had to remain in Australian hands.

Because no local buyer could be found at that time, the Territory government retained the 20 per cent stake and spruiked it as an ­opportunity for a seat at the table, with the Chinese company hoping to help develop Darwin.

Mr Potaznik was a managing partner at Flagstaff Partners when it managed the deal with Landbridge. He was later hired by Landbridge to on-sell the 20 per cent stake it did not control. In business, joining a company after awarding it a contract is often frowned upon.

Flagstaff received about $13m for its services out of a total of $27m in fees billed to the taxpayer in relation to the port privatisation, according to official figures.

Sources confirmed that a preferred bidder for the 20 per cent stake had been selected and that the Territory government had been invited to do due diligence. The sources said all necessary ­approvals had been granted and a deal was close to being signed.

The Australian has been told the preferred bidder is Ironstone Capital, although it was unclear yesterday whether Ironstone was the intended final owner.

A spokesman for Chief Minister Adam Giles said: “As far as we’re aware, no sale has occurred.”

Landbridge director Mike ­Hughes did not dispute inform­ation provided to The Australian but said it would be inappropriate to comment on specific commercial details. A representative of Ironstone Capital understood to be involved did not return calls.

Landbridge has also agreed to buy 34ha of land outside the footprint of the port from the Land ­Development Corporation, a government agency. Mr Hughes said the deal with the corporation was part of Landbridge’s “overall plans to invest in and grow trade through the Territory”.

A corporation spokesman said it had acted independently and in a commercial manner, according to legislative requirement, and without direction from the responsible minister, Mr Giles.

Speaking at his party’s ­campaign launch at the weekend, Mr Giles said poor consultation around the ­privatisation of ­Darwin Port had angered voters. “We’ve made mistakes,’’ he said. “Our processes have been messy at times. We haven’t always been as effective as we should’ve been.

“ I commit a re-elected CLP to being a government that will ­listen. There will be no unplanned surprises.”