Vic Govt, Opposition finalise Port of Melbourne lease agreement


The government agrees to a 15-year compensation guarantee, subject to competitive neutrality pricing guidelines

Vic Govt, Opposition finalise Port of Melbourne lease agreement
The Port lease agreement has been a matter of ongoing dispute between the two sides for months.

 

In a move that the industry is calling 'breakthrough', the Victorian Government and the Opposition have finalised an agreement for the lease of Port of Melbourne.

The amendments to the Delivering Victorian Infrastructure (Port of Melbourne Lease Transaction) Bill 2015 is expected to pass when the parliament resumes session on March 8.

The Andrews government succumbed to the opposition’s demand for a compensation guarantee to expire after 15 years.

"The Government has agreed to this, subject to competitive neutrality pricing guidelines applying to a state sponsored second port," a government statement says.

"The outcome is a good result for the State of Victoria."

The proceeds from the estimated $6 billion sale will go towards funding the government’s much-publicised level-crossing removal project, with at least 10 per cent of the money to be invested in non-metropolitan Victoria – a demand put forth by the opposition.

Details regarding the investment promise for regional Victoria are yet to be announced.

The industry has welcomed the news about the lease agreement, with the Victorian Transport Association (VTA) calling it "good news for Victoria".

"The legislated lease of the Port of Melbourne will extract a much better return for Victorian taxpayers in the form of funding that will go to the government’s level crossing removal program and other vital transport infrastructure works," VTA CEO Peter Anderson says.

"We commend both parties for reaching a consensus on amendments to the legislation which should see the Bill passed when Parliament next sits on the 8th of March, providing the Opposition plenty of time to review the legislation."

The sale of the Port of Melbourne, Australia’s busiest container terminal, has direct implications on many stakeholders, including the local farming community, which had voiced its opinion in favour of a parliamentary approval to the deal.

"The UDV welcomes a sensible outcome from a strong parliamentary process," United Dairyfarmers of Victoria president Adam Jenkins says.

The Port lease agreement has been a matter of ongoing dispute between the two sides for months.

Earlier this week, the government had threatened to bypass parliament if the opposition did not finalise the Port lease agreement by Thursday.

The government’s compensation proposal included a 50-year guarantee which would have seen 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 opposition had claimed that, based on the current revenue standard, this payout could be up to $60 million annually.

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