Australian officials have said they will build a new port to support US Marines on the country’s northern coast, a move that will assist mounting US efforts to counter China’s rising influence over the contested South China Sea and western Pacific.

The “secret plan” was revealed on Monday by the government’s Australian Broadcasting Corporation, which quoted defense and state officials confirming that a commercial port facility would be built for American use at Glyde Point, a site with relatively deep-water about 40 kilometers northeast of Darwin, the capital of the Northern Territory.

Australia and the US announced an agreement in late 2011 for US Marines to be based in northern Australia, with then-president Barack Obama flying in to make a joint announcement with then-prime minister Julia Gillard.

The US president described the deployment as a response to the wishes of democratic allies in the region, including Japan to India, who feared that Washington was ceding power in the Asia-Pacific to China.

More than 2,000 US Marines regularly rotate through Darwin as part of close military cooperation between the two long-time allies. An extra battalion – the Hawaii-based 3rd Battalion, 3rd Marine Regiment – is due to join the so-called Marine Rotational Force in Darwin next month.

US Marines from the 1st Battalion, 1st Marines arrive in Darwin as part of the Marine Rotational Force in 2016. Photo: Twitter.

The move comes in apparent response to China’s rise in nearby waters and the fact that the Asia-Pacific is in “a state of strategic flux”, as one Australian defense analyst said. Nathan Church said the Australian public welcomed the deployment of US Marines to Darwin, but noted that there was uncertainty relating to financing and risks of expanding strategic collaboration with the US.

China is Australia’s biggest trading partner, but Canberra has expressed concerns over its increased militarization of the South China Sea. Prime Minister Scott Morrison has said his country would prefer to play the role of a “cool head” amid superpower rivalry in the region.

At the same time, Australia and the US have been building up their military presence across the western Pacific to counter moves by China to gain influence across the strategically vital region. Indeed, Washington and Canberra announced a plan late last year to build a joint military base on Papua New Guinea’s Manus Island, after news that China was looking to develop a deepwater port there.

Controversial port deal

The latest news follows a controversial decision in 2015 by the North Territory government to enter into a 99-year lease agreement for parts of Darwin’s port to Landbridge Infrastructure Australia, a subsidiary of Chinese port logistics, land and petrochemicals conglomerate Shandong Landbridge.

The A$506-million (US$351.7 million) deal stemmed from frustration by leaders in the Northern Territory to get their federal counterparts to help develop the port independently. Heavyweights in Canberra decided the facility should be partly privatized, opening the door for the privately-held Landbridge to take a stake in the strategic facility.

The deal was reportedly approved by Australia’s Foreign Investments Review Board as well as the Defense Department and Australia’s Security Intelligence Organization.

But it reportedly dumbfounded Obama and senior US officials, given that the Darwin port has significant strategic facilities and often hosts visiting US naval ships. Critics in Australia have claimed that local authorities opened the door to Chinese surveillance of a key defense facility.

Darwin was an important staging post for US troops fighting in the Pacific in the 1940s, when it was subjected to aerial attacks by Japanese fighter planes. But it remains a small town with a population of just 154,000 on the southern flank of US operations in the Pacific and the South China Sea.

Aerial view of Darwin’s main port. Photo: Northern Territory government

Given widespread concern about Chinese espionage, some have described the latest news as a “logical” development.

No details have been announced about the cost of the new port at Glyde Point or who will pay for it. Morrison’s government and the US Embassy in Australia have yet to comment officially to the news, but an announcement could come when the Talisman Sabre US-Australian military exercise, a biannual event, is held in upcoming weeks.

The ABC said today that the new port would offer large amphibious warships a more discreet and less busy base of operations. A A$40 million road was recently built close to the site where the port will be built, it noted.

“It’s clear the Americans intend to stay in the region to reinforce their presence, to reinforce the alliance, and so a facility like this would be quite a logical development I think,” Rory Medcalf, a security analyst from the Australian National University in Canberra, was quoted by ABC as saying.

Meanwhile, questions have been raised about the long-term financial viability of the Darwin port deal given that Landbridge Australia reported a A$31 million loss in 2017. Earnings before interest, depreciation and amortization were just A$10 million while the project’s financing costs jumped to almost A$26 million, reports said.