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The future of Darwin Port’s controversial lease with Chinese-owned firm Landbridge is under a cloud after an audit revealed significant financial concerns within the company.
The port was leased to Landbridge for 99 years by the Northern Territory government in 2015 for $506 million, and it has since then been a magnet for national security debate.
Landbridge Infrastructure Australia’s latest annual report, lodged this month, has now revealed the Darwin Port made a net loss in the 2023-24 financial year of more than $34 million.
“There is a material uncertainty that may cast significant doubt on the Landbridge Group Co’s ability to continue as a going concern,” the PricewaterhouseCoopers audit found.
In response, the NT government said it had been alerted to “concerns surrounding the financial status” of Landbridge and was “reviewing our rights” in relation to the lease.
NT Treasurer Bill Yan said he had a meeting to discuss the issue with federal Infrastructure Minister Catherine King in Canberra on Thursday.
“Our immediate focus is to ensure the port remains operational while its longer-term future is confirmed,” he said in a statement.
Mr Yan said the government had requested more information from Landbridge about how the company would stabilise its finances, but wouldn’t confirm if the lease could be terminated.
“That’ll be a matter for us to determine once we get that further information,” he said.
The Department of Prime Minister and Cabinet said last year it "was not necessary to vary or cancel the lease" over Darwin Port. (ABC News: Michael Franchi)
Landbridge has pledged that the terms of the lease will continue to be met, as its Chinese parent company works to “finalise an organisational restructure package”.
The company's non-executive director in Australia, Terry O'Connor, said while the company was "obviously concerned by the wording" in the audit, it wouldn't be offloading the port.
"The word from China, from [Landbridge owner] Mr Ye [Cheng], is that Darwin Port is a valuable asset which will remain inside Landbridge Group, and it is not considered that Darwin Port would be one of the assets that might be sold to meet the debt," Mr O'Connor said.
"There's nothing that will change our current position – it's a 99-year lease, and we've got 89 years to go."
Terry O'Connor says Darwin Port will remain part of Landbridge Group and will not be sold. (ABC News: Michael Donnelly)
The Albanese Labor government has long been critical of the former NT Country Liberal Party (CLP) government’s decision to grant the Darwin Port lease to Landbridge, which it says was supported by the Coalition government of the day.
Federal Infrastructure Minister Catherine King said in a statement she was aware of the reports of Landbridge's financial situation.
"In the short term, there is clearly work for the Northern Territory government to do on its lease arrangements," Ms King said.
"The Commonwealth will receive updates on this as information becomes available."
A report commissioned by the Commonwealth last year recommended against stripping Landbridge of its lease over the port, finding a “robust regulatory system is in place to manage [security] risks”.
Raelene Lockhorst says Darwin's Port should be back in Australian hands. (ABC News: Michael Barnett)
However, the Australian Strategic Policy Institute’s deputy director of national security programs Raelene Lockhorst said that risk could become more pronounced in the future.
“When the lease was executed it was a different geo-political environment to what we're seeing today,” Ms Lockhorst said.
“The world is rapidly changing.
"This is an opportunity for government to reassess, re-establish and perhaps get the lease back into Australian-controlled hands."