Private ownership of coal ports – owner wants to spend up, to boost shareholder returns, while the user wants to restrict spending to get the cheapest port charges

Leo Zussino, who ran the Port of Gladstone, and Peter Coates of Xstrata Coal would be working closely together in the next few years if Queensland’s Surat Basin coal province was opened up as a major source of exports – but they would have to agree to disagree on one thing, according to The Courier Mail (7/8/2007), p. 61).

Ownership tussle: Coates would like to see a consortium of coal users own the next big coal export facility in Gladstone, Wiggins Island. Zussino was more than happy for his port authority to have that honour, and said it had the track record to justify its claim. He told a Major Projects Conference at Brisbane’s Convention Centre that Gladstone, where a major expansion of its RG Tanna coal terminal was nearly complete, was the only major coal port in Queensland or NSW to be increasing exports.

Private ownership of ports unacceptable: Coates would be able to live with Government ownership, but he was scathing about “private owners of non-contestable assets”. “There are only two sorts of viable owners of non-contestable assets, the users or the Government”, he said after his conference presentation. “Private ownership gives a regulator an impossible task. It must determine an appropriate return on equity. And even if that is agreed (between owner and users) the owner wants to spend up, to boost shareholder returns, while the user wants to restrict spending to get the cheapest port charges”. Arguments on these issues were a major deciding factor in delaying expansion of the Dalrymple Bay Coal Terminal, he argued.

The Courier Mail, 7/8/2007, p. 61