Rent question tabled at VTA ports seminar

DP World and Port of Melbourne are reportedly close to a deal, but no one is saying much

Rent question tabled at VTA ports seminar
Victorian ports minister Luke Donnellan


Representatives of both sides of the Port of Melbourne rental hike stoush avoided comment on their ongoing negotiations at the Victorian Transport Association’s Port Outlook seminar yesterday.

DP World’s chief commercial officer Max Kruse used his presentation slot to focus on the stevedore’s behind-the-scenes work in building more responsive relationships with customers.

He says the company is working with its largest shipping customers to give them clear and transparent port access for high volume shipments, working around the natural booking process as required.

"It’s a win-win situation that gives them the ability to get high volumes through the port faster," he says.

Kruse did not comment on the negotiations with the Port of Melbourne, but it is understood the parties are close to an agreement.

Ports minister Luke Donnellan was also careful not to spill any beans on that front.

He closed the seminar by assuring delegates he was happy to allow the Port of Melbourne Corporation to conduct the negotiations on its own behalf.

"It’s an independent process," he says.

"There’s quite a lot of light and heat being generated, [but the outcome] won’t be influenced through public comment."

In spite of this, he did offer some thoughts on the process.

He reiterated that there had been no request for an "800 per cent" increase in DP World’s rent payments at the port, but acknowledged that an increase would be expected.

That was given the entry of a third stevedoring player, who had offered a premium rental above those currently being paid by Patrick and DP World.

"A range of parties offered bids that were quite attractive," Donnellan says, indicating a true market rate was significantly higher than what had been sought previously.

He says the lease agreement for the privatised Port of Melbourne would include guarantees that rents would increase only by the rate of inflation for the first 15 years.

"They will be the toughest protections in the industry," he says, adding that the private leaseholder will be "encouraged to maximise container throughput".

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