VTA voices port rent concerns as Scurrah plays Tasmania card

By: Rob McKay


Macquarie sees lower final hike figure as likely, while DP World raises throughput loss scenarios

VTA voices port rent concerns as Scurrah plays Tasmania card
Peter Anderson fears lost cargo.

 

Victorian premier Daniel Andrews has more work to do to hose down industry concerns about where transport and logistics might be heading in the state.

Victorian Transport Association CEO Peter Anderson is the latest to speak out as the Port of Melbourne Corporation (POMC) rent furore rumbles on.

"Melbourne has been Australia’s logistics capital for over 150 years, but if the recently announced rent increase for tenants within the Port of Melbourne is anything to be considered, that title will soon be lost," Anderson says.

"The astronomical rent increase of almost 770 per cent will make the Port of Melbourne one of the most expensive ports in Australia and completely uncompetitive on a global scale. 

"The Port of Melbourne has traditionally been referred to as ‘the funnel’ for south-east Australian imports and export activities.

"Following the enormous rent increase, what we’ll see is a shift in freight activity with neighbouring states benefiting from these changes in cost structure and potentially reducing Victoria’s long-term economic viability.

"The impact of the rent increase will be further reaching than just the port precinct. Jobs, not just within the logistics industry, will be threatened, driving the price of goods and services upwards and directly impacting all Victorians.

The transport and logistics industry is a major economic enabler accounting for up to 12 per cent of the State’s economy as well as being a major employer.

"The VTA questions why the Port of Melbourne Corporation along with the government of the day would sacrifice potentially thousands of Victorian jobs to increase rent by such a large scale."

Anderson’s statement came as CMA CGM-owned Austalian container shipping line ANL flagged it would move out of the city if costs rose by such and amount.

Andrews gained some shelter from the arrows from Macquarie Private Wealth analyst James Rosenberg, who cast the 767 per cent rent rise figure for DP World’s lease as "a bit of an ambit claim".

Rosenberg suggested to Sky News that the likely rise was 250 per cent to $45 a square metre, rather than the mooted $120 a square metre.

Meanwhile, DP World has kept the pressure up, with CEO Paul Scurrah opening up another front, noting that a 767 per cent rent rise would have a clear impact on the Tasmanian economy.

"We don’t want what we think is an unnecessary burden placed on Tasmanian businesses," Scurrah says.

"It is in effect a tax being placed on Tasmanian businesses by the Victorian Government."

Reports from Tasmania quote State infrastructure minister Rene Hidding as saying he will meet with Victorian ports minister Luke Donnellan and seeking a meeting between Tasmanian premier Will Hodgman and Andrews to discuss the matter

DP World argues that the POMC will extend any rent increase to other stevedores, as it has done in the past to ensure equity.

Such a hike could therefore see would see 200,000 twenty equivalent units (TEU) the port’s present total of 305,000 Tasmanian-linked throughput lost to Melbourne, due to international direct calls and volume shifted to other ports.

This would include DP World’s 59,000 TEU of international containers that it says would be shifted immediately to Sydney or Adelaide or even Brisbane.

Though not impossible, a strong shift to direct international calls will need to consider Bell Bay’s draught, length and time constraints.

Its approaches have a maximum tide-related draught of 11.5m and planning must occur to handle ships exceeding 250m length and/or 45m beam with draught more than 9m.

At present, the only such call is made by the Mediterranean Shipping Company-controlled Hohebank geared containership of 1,298 TEU capacity, 8.8m draught and 139m in length.

Most containerships calling at Australian ports are bigger than that, with the average at about 4,000 TEU and a draught, according to Clarkson Research, at an average of 12.5m but a range between 8m and 14m.

The biggest ship to call there so far was the vehicle carrier Parsifal last year with a cargo of Tasrail locomotives – it is 265m long with a 9m draught.

Bell Bay may also need wharf and landside equipment and infrastructure upgrades to handle the increased load.

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