Port privatisation makes sense to ALC

New position paper from the Australian Logistics Council is broadly in favour of the lease proposal and legislation for the Port of Melbourne’s privatisation


The Australian Logistics Council has released a position paper on the planned leasing of the Port of Melbourne, and the proposed legislation authorising it.

It says it encourages the "recycling of mature assets" as a strategy for unlocking investment in new, productivity-enhancing infrastructure. 

In addition to that general principle however, the ALC hopes the government will dissuade its private leaser from leveraging its monopoly power over shipping and landside customers.

It says the present Port of Melbourne Lease Bill should subject to a bi-partisan examination that ensures the privatisation will promote competition and efficiency.

"It is appropriate that a Legislative Council [Victoria’s lower house of parliament] committee considers the economic regulation of the port, including whether the proposed legislation adequately protects port users against a private entity extracting monopoly rents," the ALC says.

It wants the committee to also explore the potential role the Essential Services Commission could take in monitoring movements in rents and land values.

"So long as the economic regulation of the port is sufficiently rigorous to ensure access and pricing issues are dealt with in a way that permits the efficient use of the asset, the legislation should proceed."

The ALC remains in favour of the 50-year lease proposed, despite the likely need for a second container terminal before that term expires. But it has questioned the value of the optional extension that is currently being left available.

"The government is yet to make a case as to why it is necessary for the Bill to contain a power for regulations to extend the life of the lease by an additional 20 years," it says.

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