Victorian govt sets Thursday deadline over port sale


The Victorian Government is ready to bypass parliament if the opposition does not pass the bill

Victorian govt sets Thursday deadline over port sale
The opposition says lack of legislation will undermine the value of the port.

 

After months of disagreement over the Port of Melbourne sale legislation, the state government has asked the Opposition to clear the Bill by Thursday, or it will go ahead with the sale without legislation.

Treasurer Tim Pallas says the "process of engagement has to come to an end" and the government is ready to bypass the parliament after months of "frustrating" talks with the opposition.

It is believed that the Port of Melbourne sales operation has already started gauging market interest under the current administrative power allowing the government to sell business – a special power introduced by the previous government.

The lack of a bipartisan legislative agreement, in case a settlement is not reached by Thursday, will add a level of uncertainty to the deal and potentially affect the sale price.

Additionally, it could mean that the deal is unlikely to go through this year, which puts a huge budget scare over the Andrews government.

The government’s proposed compensation clause, the core issue of dispute, will see the winning bidder receive estimated $2 billion in compensation if a second container terminal is built in Victoria before the Port of Melbourne reaches its capacity.

The annual cap on the compensation payout would be equivalent to 20 per cent of the port’s revenue for the full service period of 50 years.

However, the opposition claims that, based on the current revenue standard, this payout could be up to $60 million annually.

It therefore suggests that the compensation guarantee must expire after 15 years, which is the estimated date the current port will reach its capacity.

Pallas says a 15-year guarantee would be a "meaningless concession" because it is highly unlikely that the government would be able to build a port in that period.

"The value of the asset would be undermined. All it would do is short-change Victorians," he says.

"We're not going to see value stripped away for no good reason, so we will proceed by administrative course.

"And any concessions we otherwise would have had to have made to the Opposition are are now back on the table, and we can put value back into the lease transaction, not take it away."

The opposition says going ahead with the sale without legislation will in turn undermine the value of the business.

"Daniel Andrews wants to hand over a 50-year monopoly on the Port of Melbourne to a private owner, using taxpayers' money as compensation to guarantee profits," shadow treasurer Michael O'Brien says.

"To prevent any future state government for the next half a century from establishing a new port when Victoria needs it ... is not in the public interest."

The sale of the Port of Melbourne, Australia’s busiest container terminal, is an important issue for the government and it hopes the Thursday deadline would put pressure on the opposition to negotiate a deal that would help finance future infrastructure projects.

The proceeds from the sale will go towards funding the government’s promised level-crossing removal project.

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