Exporters and maritime industries pledge to tackle issue federally is safeguards are missing
Local and international shipping companies, shippers and service providers have made a joint call to the Victorian Government to strengthen the proposed regulatory regime before proceeding with the privatisation of the Port of Melbourne.
Two groupings, Shipping Australia Limited (SAL) and the Australian Peak Shippers Association (APSA), say that if this does not happen at a state level, they will ask the Federal Government to intervene to establish an effective regulatory regime ahead of the sale of the Port of Melbourne.
The intervention is the latest in a string of negative responses to the state’s long-term lease plans and follow stevedore DP World’s vociferous response to the prospect of a 767 per cent land rent hike in the port.
The firms involved believe the Victorian Government appears too focused on generating maximum returns from a sale at the expense of trade in Victoria.
“The logistics industry has worked hard over the last few months to ensure the Government understands the need for effective regulation of all port charges,” SAL CEO Rod Nairn says.
“However, the draft legislation released on 27 May 2015 falls well short of effective regulation and avoids addressing the concerns we have raised about increases to port rents.
“Despite what has been suggested in the media, the draft legislation only provides regulatory protection for a limited range of the services and charges which will be levied by a privatised port.
“This will only encourage the privatised operator to seek to maximise its returns from the services which are not regulated, such as port leases.
“The reality is that the proposed terminal rent increases would make port rents in Melbourne five times the next most expensive port in Australia.
“These cost increases will be passed through to end users, creating uncertainty, undermining business confidence and competitiveness, and putting at risk future trade volumes at the Port of Melbourne.
“While the Victorian Government has indicated that it wishes to maintain the competiveness of the Port of Melbourne, this has not translated into reasonable rent increases being proposed by the Port of Melbourne Corporation.
“The draft legislation also appears to try to remove ACCC scrutiny for the transactions and deter competition from an alternative container port in Victoria in the future.”
While it would be preferable to see these issues addressed locally in Victoria, the coalition is now calling on the Federal Government to intervene, if needed, to ensure an effective regulatory regime is in place that covers Victoria and any future Australian port privatisation process.
“The draft legislation proposes a regime that is contrary to the recommendations of the Harper Review and falls short of the principles agreed by COAG in 2012 aimed at promoting competition through effective oversight of well-functioning markets,” Nairn says.
“We believe the Federal Government has a clear mandate to intervene given the Port of Melbourne is an important gateway for Australian trade.”
The logistics industry coalition includes: port operators Asciano, DP World and Qube; shipping lines and agents represented by SAL plus China Shipping Australia, the APSA and Australian Grain Link, a privately owned agribusiness.
SAL members:
AP Moller-Maersk, APL Lines (Australia), Asiaworld Shipping Services, Austral Asia Line, BBC Chartering Australia, CMA CGM, Evergreen Marine Australia, Five Star Shipping & Agency Co, Gulf Agency Company (Australia), Hamburg Sud Australia, Hapag-Lloyd Australia, Inchcape Shipping Services, K Line (Australia), LBH Australia, Mediterranean Shipping Co (Aust), Mitsui OSK Lines (Australia), Monson Agencies Australia, Neptune Pacific Line, NYK Line (Australia), OOCL (Australia), Pacific Asia Express, Seaway Agencies, Ship Agency Services, Smit Lamnalco, Sturrock Grindrod Maritime (Australia), Svitzer Australia, The China Navigation Company, Wallenius Wilhelmsen Logistics, Wilhelmsen Ships Service.
APSA members:
Anchor Logistics, Asaleo Care Limited, Ausfine Foods International, Australian Cotton Shippers Association, Australian International Movers Association, Australian Paper, Barrett Burston Malting, Bega Cheese, Cargill Australia Limited, Cycle Link Australia, Enirgi Metal Group, HW Greenham & Sons, Intermix Australia, Kotahi, Manildra Group, Messor Grain, Murray Goulburn Cooperative, Pro Kinetics (Aust), Sunrice, Tatura Milk Industries, Valley Pack, Visy Industries, Warranambool Cheese & Butter Factory.