Andrews drawn into port rent hike furore

Victorian premier registers concern at size of likely impost but points to independent valuation

Andrews drawn into port rent hike furore
Daniel Andrews says the numbers are substantial.


Victorian premier Daniel Andrews has taken to the airwaves to accept there are concerns surrounding the potential impact of huge rent increases for stevedores at the port of Melbourne.

The Andrews intervention came as DP World Australia boss Paul Scurrah ramped up pressure with his own radio exchange, in which he will have confirmed container haulage company concerns that they would bear part of the burden.

On talkback host Neil Mitchell’s 3AW program, Scurrah says the hike will equate to and extra $80 per container cost: "That’s not the entire cost of bringing it in, Neil.

"So a lot of that falls on the trucking companies that bring goods in and out of Melbourne and a lot of that gets passed through to the end consumer.

"So when you’re talking about very marginal businesses who are struggling to make money at the cost that we have today, when you talk about that sort of cost, it is substantial."

At about the same time, Andrews was on ABC 774 compere John Faine’s program expressing his concern at the size of the increase flagged and denying it was part of a "fattening up" process for sale of the port’s lease.

"Those numbers are very those numbers are very, very significant numbers," he says.

"It's my expectation that the Port of Melbourne negotiates in good faith, this is... as I said an independent periodic rental review.

"I didn't do the valuation, neither did the Port of Melbourne.

"An independent valuer is brought in to do that.

"My expectation is that the Port of Melbourne negotiates in good faith with all of those stevedores, and what's more that they're always minded to the fact that I want us to remain the freight and logistics centre of our nation, and competitive pricing is a very important part of that."

DP World welcomes the Andrews intervention and freight and logistics pledge but says the Victorian Government must do more.

"We don’t see this issue being resolved without the involvement of the Victorian Government and again call on Premier Andrews to ensure this does not become an enduring, negative legacy for the State of Victoria," Scurrah says.

"There will be a lot fewer Melbourne based transport companies delivering and collecting containers to and from Port of Melbourne – and a lot more Sydney and Adelaide based trucking companies delivering containers across Victoria."

The company says Melbourne’s West Swanson Terminal would rise from $4 million per annum in 2014 to $31 million from 1 January 2015, and then to $60 million from 1 July 2016.

It claims companies such as Wakefield Transport, which exports primary produce from Mildura, says it will cease to trade through Melbourne in favour of other ports should the proposed rent hike take effect. 

This echoes a statement from Qube which says five of its trains a day are going to Sydney rather than Melbourne due to high charges.

"Producers from more southerly regions such as South Gippsland and the major importers based in Melbourne may have no option but to pay the higher charges," Scurrah says.

"We call on the new Victorian Labor government, who were elected on a platform of job creation, to intervene and prevent this long term economic risk to the consumers and businesses of Victoria."

You can also follow our updates by joining our LinkedIn group or liking us on Facebook