The latest trend in Australian port privatisation: drivers, processes and impacts

This paper presents the latest trend in Australian port privatisation, long-term leasehold sale, and discusses its impact on port governance structure and port management. Since 2010, Australia has been exercising port privatisation at major capital city ports, driven by the government's policy of recycling capital for funding other infrastructure projects and the budgetary goal of reducing State Governments' debts. Except for land, the State Government transfers major port assets and the port corporation to a state-owned holding company and then sells it to a private winning bidder. Of notice is that the privatisation involves private equity ownership and foreign ownership of Australian ports. Consequently, the governance structure at the privatised ports is a private/public model, with the private port company being the port authority and landlord managing the port. The regulatory function following the privatisation is the public sector's responsibility while operator functions are undertaken by stevedores. Although the Australian port privatisation has positive effects on State Governments' balance sheets in the short term, it may result in a risk of undervaluing port assets, increased port charges, impeded port competition, less port investment, and less concern for the public interest in the long term. In terms of these findings, this paper provides some thoughts for further port privatisation in Australia.