Will taxpayers foot the bill for the Port of Darwin?

As tensions between China and Australia continue to escalate, Australian taxpayers could be the latest victims of the deteriorating bilateral relationship between the two nations.

The Australian government is launching a review into the Port of Darwin, in the country’s north, which is currently owned by Chinese company, Landbridge.

If the review finds that ownership of the Port needs to be given up, taxpayers could be forced to foot the multimillion-dollar compensation bill that follows.

The Chinese company, owned by billionaire Ye Cheng, may have to give up the port if it’s found to be in breach of the so-called critical infrastructure laws which were enacted in 2018.

But experts fear the costs associated with this takeover could soar beyond $500 million dollars, if the 99-year lease is torn up.

“Landbridge acquired the lease to Darwin Port in good faith following a transparent process in 2015,” says Landbridge vice-president Mike Hughes.

“Our involvement was reviewed by both the Foreign Investment Review Board and the Department of Defence at the time and it has been subject to a Senate inquiry.”

Australia’s leader Scott Morrison says:

“If there is advice from the Defence Department or our security agencies that change their view about the national security implications of any piece of critical infrastructure, we have legislation now which is dealing with critical infrastructure.”

For a long time, Darwin has been seen as a “strategic frontline for Australia”, and the handing over of such a vital infrastructure lease to a Chinese-backed company in 2015 has baffled many politicians.

As tensions between China and Australia continue to grow, it will be interesting to see how the federal government responds.

Accordingly, if the lease is broken, one would expect a fairly animated response from Beijing in response.