ESC probe sees Victoria direct port lessor to work out pricing transparency
The Victorian government insists that it is already on the case of a transparency shortfall between the Port of Melbourne operator and its tenants.
The point follows an Essential Services Commission (ESC) report, dated August 14, detailing the lack of monopoly power protection there and how the Port of Melbourne brought that power to bear, criticism in which the state government appears to accept as accurate.
In a response to ATN on the ESC’s Port of Melbourne – Market Rent Inquiry 2020 public report, the state government says it will watch and review the state of affairs through to next October.
“The Victorian government welcomes the … report and has been working on steps that can be taken to improve transparency and deliver fairer outcomes for Port of Melbourne tenants,” a spokesperson says.
“We proactively built in checks and balances when establishing the Port of Melbourne lease in 2016, including charging the ESC with conducting regular and independent reviews of lease arrangements.
“The government, through the Melbourne Port Lessor [MPL], is already working with the Port of Melbourne on ways to improve pricing transparency through enhanced reporting, sharing of lease information and dispute resolution processes.
“We will review improvements in lease arrangements and progress in the development of an enhanced voluntary negotiation framework and monitor the effect over the next 12 months to protect the interests of all Victorians.”
Read about the ESC report’s port market rent inquiry findings, here
It is understood the MPL and the Port of Melbourne are discussing: enhanced reporting; sharing of lease information; conditions and dispute processes between the port and tenants.
The government argues that the ESC report also acknowledges that rental revenues continue to fund significant investment in the port and associated infrastructure for the benefit of Victorian consumers.
It points out that, in the past three years, the Port of Melbourne has invested more than $50 million on key port infrastructure, including:
- Major capital and maintenance dredging works to help accommodate larger ships
- Upgraded facilities within South Wharf to accommodate improvements in the import of cement
- Secured Mobil activities at the Gellibrand Pier and hundreds of jobs at the nearby Altona Refinery.
However, critics note the cost of the port operator gaining extra cash through unfair treatment of tenants has been passed on by stevedores to Victorian consumers and exporters through container access charges that burden container transporters as well.
The Port of Melbourne says it disagrees with the ESC’s findings.
“We hold the firm view that our activities in leasing port land have been undertaken in accordance with usual market practice and consistent with our obligations,” it says.
The ESC public report can be found here.