FIFO lease doubt threatens revenue
Summary: Millions of dollars of revenue for the Town of Port Hedland and planned airport upgrades are in jeopardy if the lease for Port Haven fly-in, fly-out accommodation is not extended, according to Port Hedland International Airport.....
Airport managers said without a renewal of BHP Billiton’s Port Haven lease, the Town could face a 5 per cent slash in rates income, stretched FIFO accommodation and no terminal upgrades.
A decision over the renewal of the lease for 10 years with an option for another 10 years is expected to be made at the December 13 Town of Port Hedland council meeting.
PHIA director John Clarke said refusing the lease would mean relocating the temporary accommodation site, withholding about $1 million in rates payable to the Town from March, 2019 and a hit to airport funding.
“A decision not to renew will not decrease FIFO and will have a material detrimental impact on the town and every single one of its residents for decades to come,” he said. “The accommodation at Port Haven is a vital facility for BHP’s iron ore export operations — it is not possible to house these employees anywhere else in Port Hedland.
“The accommodation assets will simply be moved by BHP to another location and both the town and PHIA will suffer large revenue losses.” PHIA has announced it will invest more than the $40 million it is required to spend on upgrades to reseal the main runway, costing $20 million, and take on a $35 million terminal redevelopment if the renewal is approved or take legal action to recover damages if it is not. Mayor Camilo Blanco said if the lease extension was declined the town would be significantly affected.
If a renewal is not granted at the council meeting, BHP will be forced to remove all the buildings at Port Haven at the end of the fixed term in March, 2019.