LONDON: The State Government is again under fire for fees at its monopoly export facilities, with an anchor tenant at Esperance threatening to quit the port over “un-commercial and unacceptable” new charges.
Merchant Shipping moves about 20,000 containers a year through Esperance, exporting mostly nickel and gold concentrate for WA miners, including Western Areas and the Kalgoorlie Super Pit. But Merchant is preparing to trek its containers to Fremantle Port after the Southern Ports Authority, created last year through the merger of the Esperance, Albany and Bunbury port authorities, introduced a charge that Merchant says will lift its monthly export costs by up to 70 per cent.
Last month, the SPA told Merchant it would charge $86.18 a day for containers stored at the port for longer than a week. Merchant ships on a monthly basis and says the new impost would add up to $350,000 to its monthly costs, which now sit about $500,000.
The new fee comes on top of a 5 per cent lift in other Esperance charges this year. In a scathing letter to Transport Minister Dean Nalder, Merchant boss Chris Dunphy said the decision was “un-commercial and unacceptable”. “Despite the fanfare, SPA has not provided the efficiency and commercial acumen that was promised from the integration of three ports. We now deal with a tiered management structure whose focus is on justifying their increased cost-base with higher charges,” Mr Dunphy said.
Losing Merchant’s business would cost SPA at least $6 million of its $110 million annual revenue. It comes on top of a decision by First Quantum Minerals Ravensthorpe operation to move nickel hydroxide exports from Esperance to Fremantle. It is likely to have an outsized impact on the financial performance of Esperance Port. The bulk of Esperance’s revenue comes through bulk exports of iron ore and grain under historic agreements that provide the port with only thin returns.
A Department of Transport spokeswoman said the SPA’s port access proposal includes a “generous” seven-day free container storage offer, compared to standard ports practice to charge storage fees after three days.
