The government and the opposition continue to debate over the compensation clause
The deadline to approve a 50-year lease of the Port of Melbourne is likely to be pushed back further as the Victorian government struggles to garner enough support in the Upper House to pass the bill.
Treasurer Tim Pallas announced today that the legislation would be passed later this month as the government and the opposition have yet to agree on the compensation clause.
“That is the issue of adequate compensation if government undermines the value of the port itself,” Pallas says.
The proposed sale of the port, which is currently a public asset, is expected to bring in $6 billion to the treasury.
The government had planned to put the lease on the market by the end of March this year, but owing to disagreement with the opposition on issues relating to the compensation clause and the port licence fee the legislation has been stalled.
The proposed compensation clause states that the winning bidder will receive compensation if a second container terminal is built in Victoria before the Port of Melbourne reaches its capacity.
The state opposition argues against the clause and says future government for the next 50 years should not be subject to decision made by the current government “if they’re not in the interest of Victoria.”
“What is important is that we don’t today stop any future government for the next 50 years being able to make a decision to invest in a new port, a second port, when it’s the right time for Victoria,” opposition spokesman Michael O’Brien says.
However, the treasurer says the government had already made concessions to the negotiations but the compensation clause would remain the same as it had a “very big price tag” attached to it.
“I hope that we’re not going through a process of simply devaluing the asset for politically motivated purposes, that would concern me,” Pallas says.
“We cannot lease an asset without warranting its value, and no investor would see that as being a sensible course of action,” he says.
Earlier, the Greens had accused the government of price gouging saying it was looking at securing a “big number” for the port sale at the cost of port users.
“The bigger the sale price they get, the more the private operator has to get back,” spokesman Greg Barber says.
“That comes at the expense of farmers, export managers and anyone who is a port customer.”
The government plans to invest the money raised from the port sale to fund its infrastructure projects such as its suburban level-crossing removal project.