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Port deal could be financial noose for Victorians

Victorian taxpayers could foot an expensive compensation bill if port privatisation goes ahead and a second port container is built in the next 50 years, leading logistics expert Hermione Parsons has warned.

Speaking at Victoria University's Port Privatisation in Australia forum, Dr Parsons, Director of the University's Institute for Supply Chain and Logistics, said Victorians could face a hefty compensation payout that would affect generations to come.

"Container capacity at the Port of Melbourne will be reached in the next 20 years and an alternative container port will need to be built to support Victoria’s exporters and importers," she said.

"Currently the privatisation proposal exposes Victorians to a massive compensation payout if a second container port is developed in the next 50 years."

Dr Parsons joined key industry and government figures leading the national debate on the issue at the forum on Monday.

The Victorian Government’s plan to privatise the Port of Melbourne has attracted widespread concern. 

Last month the Victorian coalition blocked legislation in parliament to lease the Port of Melbourne, despite going to last year’s election with a commitment to privatise the port.

The 50-year lease for the port has been valued at up to $6 billion making it the most expensive Victorian asset ever privatised.

Dr Parsons pointed to New South Wales where potential compensation would be paid to the owners of Port Botany and Port Kembla when Newcastle needs to open a new container terminal.

Victoria University maritime logistics expert Peter van Duyn, from the Institute for Supply Chain and Logistics, told the forum significant rent increases are often introduced at privatised ports.

"Recently, the Port of Melbourne Corporation served a rent review notice on container stevedore DP World, a major lease holder in the port, asking for a rise in excess of 700 per cent in an apparent attempt to raise the sale price," he said.

In New South Wales, the Port of Newcastle pushed access prices up an average of 40 per cent after its recent privatisation, he said.

Mr van Duyn said the port deal needed to be carefully constructed to ensure the protection of future generations as well as exporters and importers relying on a competitive port.

Media contact

Julia Johnston
Phone: +61 401 136 114
Email: julia.johnston@vu.edu.au.

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