Friday, July 24, 2015

Sam Wainwright: Don't privatise Fremantle Port

Fremantle port privatisation: lessons from the Wheatbelt

Farmers are worried that the proposed privatisation of Fremantle Port will lead to a dramatic escalation in their freight rates. The 800% increase in rents charged to stevedores by the newly privatised Port of Melbourne would be ringing some alarm bells.

Closer to home are the disastrous consequences of the privatisation of WA's freight rail network via a secret 49 year lease in 2000 when Premier Colin Barnett was Minister for Transport.

The lease is now owned by Canadian company Brookfield Asset Management, the same company that has the contract to build the new Perth stadium and has secured two sites in the state government's Elizabeth Quay waterfront project.

In 2010 it announced that it would close 720kms of so-called Tier 3 lines unless the state government tipped in $93.5 million of taxpayers money to carry out essential capital works. The government refused.

These rail lines carry 92% of grain to the port from the area they serve, between 1.5 and 2 million tonnes each season. This equates to 57,000 to 86,000 extra truck movements per year forced on to our roads. The cost in terms of road accident trauma, extra pollution and the destruction of lightly constructed rural roads that are not built to take road trains that have to be repaired by local councils has never been considered.

Bizarrely the state government refused Brookfield's request but announced an extra $100 million for Wheatbelt roads to enable them to take the extra truck traffic. But this amount doesn't even come close as Main Road's own report at the time indicated a maintenance backlog on Wheatbelt roads of over $800 million.

Meanwhile the state government has never called Brookfield to account for its failure to maintain the railway lines in proper order while still returning hundreds of millions of dollars in profits to its parent company.

In response the farmers' cooperatives CBH which by this time was running its own trains offered to take over the Tier 3 lines but was refused, and this is where the story gets really murky.

An October 2014 Legislative Assembly Economics and Industry Standing Committee report revealed that the Public Transport Authority, the entity that is supposed to manage the railway lease on behalf of the people of WA, agreed in a secret deal in 2010 to remove the "use it or lose it" clause in the lease in return for taking 15% for Brookfield's grain division profits. And some people think we live in a democracy! Brookfield is already touted as a possible buyer of the port.

The federal government is encouraging the states to "recycle assets" by selling existing ones to pay for new infrastructure. Why would we want to sell the port to pay for Perth Freight Link? In the case of the railways lines the value of an asset built up over decades by Western Australian farmers and taxpayers has been run down and recycled straight into the pockets of a multinational conglomerate.

Strategic monopoly assets like the port belong to the people of WA. If privatised they don't create "free enterprise", there's no competition. It just deprives us of income from that asset and with it the possibility of proper democratic planning.

[This article by Fremantle councillor and Socialist Alliance member Sam Wainwright was written for Green Left Weekly. The City of Fremantle was the first metropolitan council to join the Wheatbelt Railway Retention Alliance]