Want to buy a bridge?
Thursday, October 15, 2015 - 14:00
Headlines shout sale of Darwin Port to Chinese.
Chinese energy and infrastructure group Landbridge, a privately owned Chinese company has obtained a 99 year lease of the Port of Darwin for $506 million after it was privatized by the Northern Territory government. Under most country legislation this in effect amounts to a sale. The lease includes the East Arm Wharf and the Darwin Marine supply base. The company as a hotel developer will consider opportunities to build hotels in the area and believe this acquisition will create more Australian jobs. Landbridge will retain 80% ownership and find a 20% Australian investor. The control of course rests with the Chinese and its owner, billionaire Ye Cheng. Landbridge state that they will invest $200 million in the port over the next 25 years to boost trade and tourism links with Asia, including improving cruise ship facilities which is an expanding market.
Investment is great but there have been serious concerns raised. The first of these worries would be how a Territorial government, not a National government can hive off strategic assets, a concern echoed by the Navy which considers the port a strategic facility as gateway to their border control operations. The Unions complain that the agreements went through in secrecy and condemn this as no more than another “cash grab”.
Wider community concerns surround the recent major purchases of Australian pastoral and dairy land by Chinese interests. The Australian Financial Review reported last month that Chinese investors spent $120 million in the last two months snapping up rural property. Since 2012 they say the Chinese have been spending $40 million a month on average buying farms. Purchases have also included Australia's largest cotton irrigator Cubbie station for $232. The purchases continue.
The picture painted is that Australia will finish up with Chinese owned Australian land which will be producing food, by Chinese workers, to be shipped thorough Chinese ports, on Chinese ships, to feed the population in China. Working on a long term plan such a scenario along these lines does not seem far fetched. Remember Australia’s population as of 14 October 2015 is just short of 24 million, while China’s is around 1,357 million. And that’s the rub, with Australia having only 1.7% of China’s population, divide $506 million by 99 years you get $5 million a year for a major port facility, which to a Chinese investor would be pocket change. And that is at 2015 prices. With $12 billion poured into Australia on residential property last year one could speculate where all of this money comes from given there are no checks on origin and it would be a simple way to launder money. So if anything is up for grabs, and Chinese interests now own 2% of all residential property in Australia, and the purchases continue, how about the Sydney Harbor Bridge?
Strange as that might sound, a Czechoslovakian born con man named Victor Lustig managed to sell the Eiffel Tower, not once but twice. Having read in the press that the government complained repairs were costly and how it was discussed whether it was better to tear it down, Lustig (German for funny) appointed himself to an artificial senior government position and stressing secrecy, convinced scrap iron dealers to bid for the job of demolition. Lustig picked a winner and as the stroke of genius when he could have had the cash in hand supposedly on behalf of government, he asked for a bribe which convinced the unlucky buyer that he was genuine.
With all the money flying around after Australian property investments, the old con man's saying “Have I got a bridge for you?” might go into effect. After the bridge could be thrown in an Opera House to complete the transition from the north…