Kilgariff calls for deeper consultation with industry on infrastructure decisions
The Australian Logistics Council (ALC) has added its voice to concerns over costs being injected into the supply chain centred on the port of Melbourne.
DP World’s complaints about huge proposed rent increases have opened a post-Victorian election vent for transport and logistics industry unease about government policy related to the industry that appears to have built on worries about the tenor of the election campaign.
But the ALC’s intervention links the port of Melbourne storm to worries about a softening of resolve in other states towards infrastructure recycling, particularly centred on Queensland.
“If Melbourne is to maintain its claim of being Australia’s freight and logistics capital, then the focus needs to be on the efficiency of the entire supply chain,” ALC managing director Michael Kilgariff says.
“ALC is generally supportive of the Port’s long term lease as a way of unlocking much needed funds for logistics infrastructure in Victoria.
“As ALC said in its submission to the Senate inquiry into asset recycling, the need for a published business case in relation to proposed infrastructure projects is paramount to building community support for them.
“Any proposed rental increase, particularly of this magnitude must be visible and transparent, and we are concerned that proposed new rents at the Port of Melbourne appear to be linked to rents allegedly paid by new entrants to the stevedore market.
“The reported price paid by Melbourne’s third stevedore to secure port space should not directly impact on the price asked of legacy stevedores to operate at the port.
“This issue has been raised repeatedly by senior members of the logistics industry.”
The matter underlines the need for the logistics industry to be engaged in all consultations with government on the future lease of the Port of Melbourne, including arrangements for pricing, lease structure and proposed regulatory frameworks, Kilgariff adds.
He notes that government has approached the issue with a narrow focus which has weakened its position.
“Too often in the past when these processes have commenced, the logistics industry has been locked out of discussions on the grounds of ‘probity’,” Kilgariff says.
“This undermines supply chain efficiency as it affects the ability of industry to make long-term commercial decisions about their operations at the port.
“The Victorian Government has committed to involving the logistics industry in this process and this matter reinforces how important it is for that to occur,” he said.
The issue will feature at the upcoming ALC Forum 2015, where senior logistics executives will discuss regulatory and investment issues relating to the port, rail and intermodal sectors of the industry.
Details for the March 11-12 event at the Melbourne Cricket Ground can be found here.