Victorian ESC to probe Port of Melbourne rent charging

By: Rob McKay


State port privatisation impacts on consumers to be probed

Victorian ESC to probe Port of Melbourne rent charging
Marcus Crudden

 

Victoria’s Essential Services Commission (ESC) is probing charging issues surrounding the privatisation of the Port of Melbourne.

The Victorian economic regulator’s move is the second in that state examining the upshot of what critics cast as a rush in several states to find cash windfalls worth billions to pay for infrastructure construction but which ultimately leaves taxpayers footing the bill.

Already, Deloitte Access Economics is undertaking Victoria’s Port Pricing and Access Review (PPAR) for Transport Victoria in response to complaints alleging unfair and unregulated stevedore infrastructure access charges that came in the wake of rent hikes after the port lease was sold in 2016 for $9.7 billion.

The extra cost on those charges to trade operators and container transporters is said to have mostly been passed on to importers and exporters and, ultimately Victorian businesses and consumers.

An ESC spokesperson explains to ATN that while there will be liaison between the ESC and the PPAR, the ESC inquiry is a legislatively mandated through the Port of Melbourne’s Port Management Act and is therefore separate a probe.

The ESC’s inquiry, starting on November 1, comes as the Australian Competition and Consumer Commission (ACCC) is battling the anti-competitive nature of New South Wales’ financial container cap on the Port of Newcastle.


Read about how the PPAR got underway, here


The ESC states that the inquiry – the first of a number, this one looking at the past three years – will assess how the Port of Melbourne sets and reviews rent for port tenants, and whether these are ultimately passed on to Victorian consumers. 

According to commission director of pricing Marcus Crudden, it’s important to check on the pricing and setting of rent for land users at the port.

"Unfair prices for renting port land could mean consumers end up paying more for everyday items that are moved through the port," Crudden adds.

"Our inquiry will be about ensuring that Australia’s largest port has set and reviewed rents fairly."

The port has 35 commercial berths, jetties and piers in nine separate port areas or precinct.

"If the regulator finds there has been a misuse of market power, it can make recommendations on possible economic regulation of the Port of Melbourne to the responsible minister, the Assistant Treasurer.

The commission is inviting feedback on a scoping paper outlining the rent inquiry process and key questions.

"The VTA understands that rent reviews must follow their process," Victorian Transport Association CEO Peter Anderson says.

"We are looking forward to the Victorian governments review of Port of Melbourne access charges.

"All port related cost increases must be linked to productivity improvements."

Advice on the outcome is to be provided to assistant treasurer Robin Scott by April 30 and released in Just.

The scope and process paper can be found here.

 

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