21 June 2017
In relation to recent articles in the media, which have referenced Port Botany stevedore rent increases, we feel that we need to provide factual information about this matter to correct inaccuracies and inferences.
Port Botany has been managed by NSW Ports since May 2013, following privatisation. Stevedore rental structures at Port Botany were in place prior to privatisation. NSW Ports had no involvement in the development or agreement of the stevedore rental arrangements for Port Botany. These agreements were negotiated between the stevedores and the state government. NSW Ports has been implementing the leases in accordance with the agreed arrangements.
The stevedoring leases at Port Botany are termed ‘performance leases’ as they provide rent incentives for productivity improvement. Where there is good performance as against a baseline, performance rent paid reduces. This was designed by the government to incentivise continued efficiencies and performance. The leases do not provide for market reviews as the land rent is determined by a fixed formula agreed at the time of signing the lease.
Specifically in respect of recent comments made by Patrick regarding rent increases, we note that in 2014 Patrick leased additional land area at Port Botany. Patrick's rent payments also vary depending on performance. In actual terms, Patrick’s total rent per square metre of occupied land area has dropped slightly between FY2017 and FY2013 (pre-privatisation).
Land tax and council rates, which are government charges, and electricity charges are not in NSW Ports’ control.