China-Australia relations: ripping up Chinese firm’s Darwin Port lease could cost Canberra
- A revocation of the 99-year deal on national security grounds could have serious financial and commercial ramifications
- Lease by Landbridge Group began in 2015 and triggered a sharp reply from Washington over not being consulted about the deal
The Australian government may have to pay taxpayer-funded compensation to a Chinese company if its lease contract of Darwin Port is overturned on national security grounds, but experts say the government has no “immediate imperative” to terminate the deal.
Such a move could also jeopardise Australia’s sovereign risk rating – the level of interest a country has to pay for loans and credits – and would surely serve to further strain relations between Beijing and Canberra that have gradually worsened over the past year.
As Canberra’s concerns over Beijing’s impact on Australia’s national security continue to mount, former prime minister Kevin Rudd also weighed in last week, saying Canberra should conduct a cost-benefit analysis to determine whether the lease to Landbridge was justified.
But unlike the axing of a non-binding Belt and Road Initiative memorandum of understanding (MOU) two weeks ago, the revocation of this deal could have financial and commercial ramifications, as it is a commercial contract, and would not be a simple tear-up like the MOU, experts say.
