ALC eyes Port of Melbourne Lease Bill amendments

More competition oversight and efficiency focus needed, peak body says

ALC eyes Port of Melbourne Lease Bill amendments
Michael Kilgariff wants more rigour applied to assessing lease ramifications.


The Australian Logistics Council (ALC) wants amendments to the proposed Port of Melbourne lease to strengthen supply chain safeguards.

In a submission to the Victorian parliament’s Port of Melbourne Select Committee, which is looking into the lease, the ALC says the focus should be on two main issues:

  • whether the proposed sale will promote competition and efficiency
  • whether the asset should be regulated – and if so, how much – so as to permit the efficient use of the asset to the benefit of the Australian community as a whole.

"ALC generally supports asset recycling, including the long-term lease of the Port of Melbourne, but we would like to see the Port of Melbourne Lease Transaction Bill 2015 amended in a number of key areas to support supply chain efficiency and to deliver the best economic outcomes for Victorians," ALC managing director Michael Kilgariff says.

"In particular, ALC is seeking amendments to the economic regulation proposed in the Bill; the operation of the Victorian Transport Fund, and comprehensive reviews to analyse Australia’s future port needs."

Specifically, the ALC wants the Australian Competition and Consumer Commission (ACCC), which is presently barred from reviewing any ‘primary agreement’ on the deal, given power to examine all relevant documents to consider the competition ramifications of the proposed transaction.

It also wants the Bill amended to give the Victorian Essential Services Commission (VESC) power to scrutinise competition issues arising from leases offered by the port operator to stevedores.

On remaining asset recycling cash, the ALC believes Victoria should replicate the New South Wales approach and prioritise it to productivity-enhancing transport infrastructure projects, including rail and road infrastructure linked to the Port of Melbourne. 

"Importantly, we believe investments in infrastructure should also be made on the advice of Infrastructure Victoria, similar to the approach adopted in NSW where Infrastructure NSW provides advice on payments out of the Restart NSW Fund," Kilgariff says. 

"This will provide industry with the confidence that the funds locked up in mature assets will be used in the most economically efficient manner."

The Bill setting up Infrastructure Victoria was passed last Thursday.

Its priority functions include:

  • preparing a 30 year Infrastructure Strategy to identify Victoria's infrastructure needs and how they can be met
  • providing advice to the government on infrastructure matters
  • publishing research on infrastructure matters.

The state government is to develop a five-year Infrastructure Plan outlining priority projects and funding commitments. Infrastructure Victoria will assess the government’s progress against this plan.

On the vexed question of Melbourne’s proposed second port, the ALC advises caution on the speed of progress as "there appears no immediate need" for it due to the existing port’s "residual capacity".

It would like to see Infrastructure Victoria review the project and Infrastructure Australia establish Australia’s port needs over the next 30 years, "so long term planning over the period can be more robust and evidence-based".

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