Port Sale A Nightmare For Victorian Manufacturers

By admin - February 22, 2016

Victoria risks becoming disconnected from global markets if its port infrastructure is unable to cope with the volume of demand.

Pitcher Partners’ David Knowles today warned that the Victorian Government’s plans to push ahead with the sale of the Port of Melbourne in the absence of specific legislation would create even more problems for Victorian manufacturers, consumers, and the economy at large.

“Selling the Port of Melbourne in the absence of specific legislation will create a bureaucratic nightmare and necessarily decrease the sale value of the Port,” said Mr Knowles.

“The key here is that the absence of specific legislation will create additional risks which will be priced in by any potential buyer of the Port of Melbourne.

“To avoid losing out on expected levels of funding earmarked for critical Victorian infrastructure, the Government will be forced to increase the compensation payable to any potential purchaser – currently the key sticking point between the Victorian Government and the Opposition. This would allow the bidders to offer more for the combined Port and compensation package.

“For Victorian manufacturers and consumers however, this is an even worse deal.

“Tighter compensation for the buyer of the Port of Melbourne effectively kills off any plans for an alternative Port.” 

David Knowles said that our Port had long provided Victoria with a key competitive advantage but it was ridiculous to assume that the Port of Melbourne could continue to absorb import and export capacity over the next 50 years, and also said that Victoria’s consumers and producers would find it harder to participate in the global economy.

“If we’re talking about paying compensation over a 50 year horizon, it’s very short-sighted to assume that the Port of Melbourne can continue to absorb all freight capacity over that time.

“Mooted second ports at Hastings or Bay West have no chance of moving ahead under an increased compensation scenario. In particular, both sides of Victorian politics have spent millions of dollars assessing the feasibility of a port at Hastings which will now be for nought.

“That would be a disaster for businesses in Melbourne’s southeast in particular. 

“Manufacturing and distribution activity is decentralising away from traditional locations in Melbourne’s west, with southeast Melbourne, the traditional home of manufacturing, and now also one of the fastest-growing distribution and logistics hubs.

“Victoria risks becoming disconnected from global markets if its port infrastructure is unable to cope with the volume of demand.

“The Andrews Government needs to fully consider the strain on existing infrastructure and the resulting economic effects of its plan to move ahead with the Port sale in an increased compensation scenario.

“Pitcher Partners calls on the Andrews Government to separate the value of the Port sale from its sweeteners, and return to the negotiation table in good faith.”

For further information please contact:

David Knowles, Partner, Pitcher Partners, 03 8610 5146
Sabine Wolff, Media and Communications Advisor, Pitcher Partners, 0419 529 577

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