Shipowners join Asciano in criticism deflected by Port of Melbourne chairman
State governments have come under withering fire from Asciano CEO John Mullen over the effects of maximising profits from monetising port assets.
Following from a pointed speech on cost increases last year, Mullen took the Port of Melbourne Corporation and other government-owned monopolies to task for extraordinary proposed and recent rent hikes, and highlighted effects on the economy and the businesses that use and depend on ports.
“A cynic would say it’s a golden gravy train for state governments, investors, investment banks and consultants but I fear that the ordinary citizens of Australia will end up paying the bill,” Mullen says.
With Victorian Ports minister Luke Donnellan listening at the Australian Logistics Council forum in Melbourne, Mullen foreshadowed a broad industry push to have ports declared under national access provisions and charges overseen by the Australian Competition and Consumer Commission.
Asciano and other port users are coalescing to seek national competition council action, but Mullen admitted it would take time to bring the case together.
Asciano was not against privatisation if it boosted efficiency and productivity and Mullen points to the company’s experience in Sydney with approvals.
But a “vicious cycle” underway on rent pricing, driven by the acceptance of above-market bids and government policies designed to attract them, Mullen pointed to other consequence, particularly for the Port of Melbourne.
He reminded the audience that container line ANL has said publicly it will shift its operations out of Melbourne if rent hikes of the magnitude DP World revealed came about, saying others were considering the same.
In this he was supported by representative body Shipping Australia Limited’s Rod Nairn, who said he had polled container line members – some of which were looking at altering their sailing loops to call at the Port of Adelaide.
“This will still increase costs,” Nairn says, but such a move would cost a ship-owning firm less.
On the plus side, Mullen says talks with Victorian premier Daniel Andrews and Treasurer Tim Pallas have been positive.
“It is important that governments and private sector come together to address this issue, and it has been pleasing to see Premier Andrews’ recent comments about his commitment to increasing the competitiveness of Victorian ports over the long term,” he says.
However, the terms of the argument were given short shrift by Port of Melbourne Corporation chairman Mark Birrell who pointed out that bi-yearly rent reviews are undertaken by an independent valuer “irrespective of the state government’s views” and that Melbourne’s rents are presently lower than at Port Botany and Brisbane.
“Spirited input from duopolists – I’m used to it, I don’t fear it,” he says.