Port rent hike worry spreads

Port rent hike worry spreads

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A SECOND Port of Melbourne stevedoring company has cautioned against massive rent hikes.

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A SECOND Port of Melbourne stevedoring company has cautioned against massive rent hikes at the facility.

Asciano has joined DP World, which has claimed it is facing a rent hike of up to 750 per cent, as the port is prepared for privatisation.

Asciano's chief executive John Mullen called for the ACCC to be given an enhanced role in regulating the conduct of monopolyu port operators.

"We have already consulted fairly extensively with other port users, shipping lines, importers and exporters and other industry players to explore the grounds for taking this forward," Mr Mullen told the annual Australian Logistics Council forum, in Melbourne.

Mr Mullen called on the Victorian Government to resolve the issue to minimise the impact on local business and jobs."

DP World chief executive Paul Scurrah said Tasmania would be hardest hit by massive increases.

About 25 per cent of all Tasmanian exports come through the Port.

Agricultural groups have said their commodities, which make up five of the ten highest containerised exports through the port, would face higher charges.

"We intend to keep the pressure on the Port of Melbourne and the Victorian Government to ensure a justifiable and defendable approach to the port rental issue for Victorian businesses," Mr Scurrah said.

"At this point we are far from either of these things."

Mr Mullen said while ports appeared to be a "golden gravy train" for state governments, investment banks and consultants, it was local consumers who paid the bill.

“The frenetic race by governments to realise short-term financial gain by selling critical assets like their ports, irrespective of the harm that artificially ramping up value may cause to the state and the nation over the long term, is one of the key current issues facing Australia’s supply chain.

“While higher rents, longer committed lease periods and entrenched monopoly positions for port authorities help generate maximum value from port asset sales, the resulting flow through to costs become an additional tax on a state’s importers and exporters, pushing up prices for consumers and making it harder for struggling manufacturers and exporters to compete.

Mr Mullen said while he supports privatisation of the Port of Melbourne, the currently proposed port rent increases for port users need to be addressed to minimise impact on the Victorian economy.

“If the port rent increases currently proposed go ahead, they will have significant negative flow-on impacts to Victorian businesses and jobs.

"In addition to the macro impact of Victorian industry becoming less competitive, the increases will significantly alter the economics that currently make it impractical to divert material volumes from one port to another in Australia.

"We estimate up to 20 per cent of current container volumes through the Port of Melbourne could be lost."

Regulation might be required and the the public and private sector needed to work closely together to ensure Melbourne remained competitive.

“It is important the government and private sector come together to address this issue, and it has been pleasing to see Premier Andrews’ recent comments about his commitment to increasing the competitiveness of Victorian ports over the long-term.”

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