DP World locks into Adelaide following 30-year lease extension

An announcement today includes the go-ahead for its joint-venture arrangement with port operator Flinders Ports.

DP World will own 60% of the operation and Flinders Ports will control 40%.

The Australian Competition and Consumer Commission (ACCC) scrutinised the plan last year on the basis that it was unclear if the venture would substantially lessen competition, which is prohibited under the Trade Practices Act.

There were concerns that, with Flinders Ports a part of the stevedoring operation, the port operator could have let that influence future plans for third parties to set up a rival container terminal.

DP World is the only container terminal operator at the port and it was unclear if Flinders Ports would have a conflict of interest in future approaches by new operators.

But the competition watchdog relaxed its objections in September, determining that container throughput was unlikely to be sufficient to sustain a new entrant for some time.

The ACCC considered that a new player was, however, likely to be in demand before 2039, with Flinders Ports agreeing to keep the watchdog informed of any interest from third parties to enter the market.

DP World has operated the Adelaide terminal since 2005 and the current arrangement was due for renewal in 2014.

DP World chief operating officer Anil Wats said the stevedore was pleased that, with certainty until 2039, it could now investment in the facilities in what the group sees as a market of “considerable potential”.