Port of Melbourne to be sold regardless of who wins next state election

Herald Sun: Port of Melbourne to be sold regardless of who wins next state election. James Campbell. State Politics Editor. 5 March 2014

Melbourne’s port will be sold by the Napthine Government, delivering a multi-billion-dollar bonanza to bankroll huge road and rail projects.

With Labor already committed to the sale of Australia’s busiest port, Treasurer Michael O’Brien told the Herald Sun that within months the Government would start the sale process.

The sale, to be confirmed in the May Budget, would be tied to plans to develop the Port of Hastings as a second container port for Victoria.

“We’re not just kicking the tyres. This is the road map to privatisation,” Mr O’Brien said yesterday.

The Government’s privatisation green light means that Victoria’s economic gateway will be sold no matter who wins the state election in 269 days.

Both sides of politics offer rival plans for how the sale’s billionswill be spent. In November Labor pledged a $6 billion price, to be used to remove Melbourne’s 50 worst level crossings.

Opposition Leader Daniel Andrews said today Dr Napthine had copied the Port of Melbourne sale plan he had criticised for months.

“Denis Napthine may be the Premier but he’s not a leader,” Mr Andrews said.

“The best people to deliver Labor policy is a Labor Government.

“Only Labor will use very dollar from the sale of the Port of Melbourne to remove 50 of the most dangerous and congested level crossings.”

Dr Napthine said the government would undertake a study to assess the value of a medium-term lease for the port.

“We are undertaking a scoping study to look at how we can involve the private sector in both the operation of the Port of Melbourne through the sale of a medium term lease and also integrated into that is the opportunity for those people to be involved in the development of the Port of Hastings,” he said.

“We want a situation where Victoria remains the freight and logistic capital of Australia.”

Dr Napthine denied claims his government had backflipped on the plan to sell the port, saying the Opposition didn’t have an “integrated plan about future port development”

“These are not things that should be rushed, these are not things you can do in a fire sale situation,” he said.

“That is why we were critical of the Opposition. What we are doing is protecting the long-term interest of Melbourne and Victoria by ensuring the future of our freight and logistic industries.”

The scoping study will be finished before the release of the 2014-15 state Budget and will look at future ownership options of the two ports, including the economic and commercial value of each option.

Ports Minister David Hodgett said any decision the government makes on the future of the ports network will be “carefully considered, factually based, and will be in the best interests of supporting the state’s continued growth”.

Mr O’Brien said the government could reap an even greater windfall for the port by tying its sale plans to developing the Port of Hastings.

“I think there’s a way you can add value because by giving rights or options to develop Hastings, you are effectively conferring almost a monopoly,” he said.

“But there’s nothing wrong with that because port charges are actually regulated by the Essential Services Commission,” Mr O’Brien said.

The Treasurer said money from the sale “will largely go into transport infrastructure”.

This would be likely to include the second stage of the East West Link and the Metro Rail Capacity Project, including a rail link to Melbourne Airport.

But Mr O’Brien refused to be drawn on exactly how the money would be divvied up in the next Budget.

The Treasurer also poured cold water on recent talk that the second stage of the East West Link might be built simultaneously with the first.

“We’ve got a lot of things we are looking at the costings of … in terms of when you can realistically start them and when you can realistically afford them without blowing our debt out,” he said.

“Even on things like East West, for example, you can have some overlap between Stage One and Stage Two.

“But if you’ve got too much overlap between them, then you jack up the cost of the projects, because you’ve got labour shortages and all that sort of stuff,” Mr O’Brien said.

“So I’m air traffic control. I’ve got all these planes — these big bloody planes in the air at the moment — and I’ve got to bring them down in the right order, so that they all land safely and we can afford them,” he said.

Mr O’Brien hinted the port sale could even be completed within 18 months.

“If you look at the Port of Sydney it only took about 18 months to do theirs,” he said.

“You don’t need to do it in 18 months, as long as you’ve made the decision. Then you know the deal will be done over the forward estimates.”

An analysis of the sale plans is being prepared by consultants KPMG.


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