According to the AFR’s StreetTalk column, potential bidders for the Port of Darwin have been absorbing the contents of a 220-page information memorandum and have until June 29 to submit first round bids.
Sale documents indicate that the NT Government is not running a traditional auction where the best heeled bidder with the cheapest cost of funds and lowest hurdle rate wins, says the AFR.
Instead, the documents ask participants to consider other criteria. One is to structure a bid that looks through current weakness in the port’s earnings.
The Port of Darwin’s earnings are down, with NT iron ore exports, care of Sherwin Iron and Territory Iron, grinding to a halt.
Terry O’Connor, from the Darwin Port Corporation, told the ABC earlier this year that the collapse of the NT’s iron ore sector was a big blow for the port.
“The iron ore trade was our biggest customer in terms of return to the port and its [collapse, has left] a significant hole in our budget,” he said.
However, things look brighter down the track with earnings expected to lift in 2017/2018 when LNG carriers start arriving at the port to service projects such as Ichthys, expected to come on stream in late 2016.
Another imperative for the winning bid is to suggest a structure which recognises the facility as a driver of the NT’s economy.
In the frame for the Port of Darwin are: Asciano, Qube, Port of Brisbane, Flinders Ports of South Australia, Morrison & Co of New Zealand and infrastructure investor Palisade Investment Partners.