Europe's largest port is seeking to shake-up Australian port ownership, with an audacious bid for Western Australia's $2.5 billion Fremantle Port.
While WA politicians debate whether or not to push ahead with its two port privatisations, Street Talk can reveal that the Port of Rotterdam has hired local advisers and is doing preliminary work on a bid for the Fremantle port. Rotterdam's pitch is expected to revolve around the strategic benefits it could bring to Australia.
As owner of Europe's largest port - and until not that long ago the world's biggest port - it reckons it has a pretty good view of global shipping movements and a good grasp on how to utilise Fremantle to capture a bigger share of the market. Street Talk understands Rotterdam overlooked participating in Port of Melbourne's underway auction to focus solely on Fremantle.
The company's international arm is increasingly active in a number of regions including the Middle East, Brazil and Indonesia.
Port of Rotterdam typically seeks to be a port landlord, where port authorities lease plots of land on a long-term lease basis and container stevedores such as Hutchison Whampoa operate the actual terminals. Fremantle's sale, should it be approved by the politicians, is shaping up to be such a deal.
Rotterdam is expected to come up against the usual list of Australian port tyrekickers who are presently focused on the $6 billion-plus Port of Melbourne. That list include's Macquarie Group's Macquarie Infrastructure and Real Assets, IFM Investors, QIC Ltd, Hastings Funds Management and United States-based Global Infrastructure Partners, and their respective financial co-investors.
Street Talk understands Rotterdam has hired Melbourne-based corporate adviser Lighthouse Infrastructure to help with its bid. Should it make it to the auction, Rotterdam would be expected to consider teaming up with a financial or other investor.
Rotterdam port is owned by the Dutch government and the Municipality of Rotterdam and turns over about €600 million annually. Fremantle makes about $100 million earnings a year. It's expected to be worth as much as $2.5 billion.
Of course Fremantle's sale - and the sale of Utah Point Bulk Handling Facility at Port Hedland - requires a green-light from WA's politicians. Fremantle Port's sale hit a major stumbling block last month when the WA Nationals, which govern in an alliance with Colin Barnett's Liberal government, decided they would not support sale.
A frustrated West Australian treasurer Mike Nahan, under pressure to sell state assets and hammer down ballooning debt, is attempting to revive the sale by travelling to the regions to personally impress on rural voters the importance of the sale.Nahan said blocking the sale put in jeopardy a live export facility at Kwinana, which was to be funded from the sale proceeds.
The government plans to introduce legislation for the sale when parliament resumes in May. It wants to sell the port before the election in March.The Labor opposition, which is ahead in the opinion polls, does not support the sale.