The Northern Territory government remains in the dark about potential moves by the federal government to scrap a Chinese company’s lease over the Port of Darwin amid national security concerns.
With the defence department edging closer to finishing a review ordered five months ago, Guardian Australia understands the federal government is considering options that go beyond the binary choice of keeping or scrapping the lease.
A third option is to keep the 99-year lease in force but impose additional requirements on the operator Landbridge Group.
Under critical infrastructure laws that passed the parliament in 2018, the federal government has the power to require a port operator to take specific actions based on security risks.
Any move to tear up the lease altogether would be sure to invite a furious reaction from China, which accuses the Australian government of becoming increasingly hostile to Chinese investment and of hampering the relationship.
The NT Labor government has previously argued that if the federal government were able to find $500m for the territory, it would be better off spending the money on creating jobs. That is the value of the 2015 agreement between the NT’s then-Country Liberal party government and the Landbridge Group.
A spokesperson for the NT chief minister, Michael Gunner, confirmed to Guardian Australia that the federal government had not yet engaged with it on what arrangements would need to be put in place if the lease were scrapped.
“Any talk of the current Landbridge Group lease of Darwin port being scrapped is speculative only at this time as we have been given no firm indication this will occur,” the spokesperson said on Tuesday evening.
“The review itself relates to matters of national security. The commonwealth has committed to briefing the NT government on the outcome at its earliest convenience.”
It is understood that Landbridge is also yet to be consulted on potential changes or asked to respond to specific concerns. In the meantime, the company is treating the port operations as business as usual.
The defence department confirmed it was seeking input from other Australian government agencies.
“The department of defence, along with relevant portfolios and agencies, is engaged in the review process to finalise advice about the Port of Darwin,” a spokesperson for the department said.
“Once the review is complete, it will be provided to government for consideration.”
The cabinet’s national security committee – chaired by the prime minister, Scott Morrison – sought new advice on the lease more than five months ago.
Morrison appears to have political cover to intervene, given that Labor has long been critical of the lease and has been calling for a rethink.
The defence minister, Peter Dutton has not ruled out forced divestment of the port. He told the Nine newspapers in May that the government would consider the advice and “look at options that are in our national interests”.
Since then, the Morrison government has unveiled plans to invite more US military personnel to Australia and to acquire nuclear-powered submarines, triggered by what officials say is a worsening strategic environment in the Indo-Pacific.
The original Port of Darwin deal prompted diplomatic ripples with the US, with Barack Obama raising it during a meeting with Malcolm Turnbull in Manila in late 2015.
The US – which rotates marines through the NT – was unhappy it was not kept in the loop, but Turnbull suggested that US officials “should invest in a subscription to the Northern Territory News because it was not a secret”.
Australia has since drawn even closer to the US, including through the Aukus security partnership that also includes the UK. After talks last month in Washington, Dutton indicated he would like to see an increase in the number of US troops coming on rotation through Darwin.
He announced that Australia and the US would be “significantly enhancing our force posture cooperation”, including “greater air cooperation through rotational deployments of all types of US military aircraft to Australia” including bombers.
Dutton said there would be more military exercises with the US, and greater combined exercises with other partners in the region. He was also open to the basing and storage of military supplies in Australia.
The US embassy in Canberra declined to comment when asked whether Washington had been consulted as part of the Port of Darwin review.
The Chinese embassy did not respond to multiple requests for comment on how it would view the scrapping of the lease.