A WA coastal shipping company will axe its service to Broome and the North West after a funding dispute with the State Government.
Last week, Transport Minister Troy Buswell announced its decision to cut $8.5 million of funds to Jebsens Coastal Shipping which was contracted by the State Government in 2010 to provide a coastal shipping service for Broome, Port Hedland and Wyndham from Fremantle port.
The Government agreed to underwrite the service to March 2015 at $8 million a year with an option for a three-year extension to enable Jebsens to build clientele and provide a needed coastal shipping service to the region.
Maritime Union of Australia State secretary Christy Cain said the cut would result in the cancellation of shipping services to the North West and cost more than 25 ship workers their jobs.
MUA said the Government traditionally provided a subsidy for the North West Shipping Service to support ongoing sea freight between Perth and the North West, and recently around to Darwin.
However, Mr Buswell said Jebsens made the decision to withdraw its service after failing to secure extra funding from the Government in addition to the $8 million annual subsidy. “Jebsens advised the Government that despite the subsidy, the service had struggled to attract trade and was losing in excess of $50,000 per voyage, excluding overheads.
“They sought additional support from the State over and above the $154,000 provided each week through the subsidy.
“The State Government was not prepared to meet these requests and as result, Jebsens has made a commercial decision to cease the service because of ongoing losses.
“The contractual arrangement with Jebsens was funded through to 2015 and their decision to cancel the service was unrelated to any reduction or changes to the subsidy.”
The matter was raised at the Broome Shire Council ordinary meeting last week, with the council then requesting its chief executive write to Department of Transport, Kimberley Development Commission, Jebsens and all ports expressing its “concern and disappointment” at the decision while calling for the service be reinstated immediately.
Shire of Broome president Graeme Campbell said the decision to terminate the services was disappointing regardless of who made the call.
Mr Campbell said he expected
withdrawal of the service would result in transport and road maintenance cost blowouts.
Jebsens Australia general manager Grant Williams declined to comment.