Port privatisations may hurt importers, exporters

The privatisation of ports around Australia may force importers and exporters to pay more to use them, according to a Victorian academic.

Maritime Logistics Expert, Peter van Duyn from Victoria University’s Institute for Supply Chain and Logistics said recent plans to privatise many Australian ports have become very messy.

The planned privatisation of the Port of Melbourne Corporation (PoMC) is a case in point.

If the privatisation goes ahead it will earn the Victorian Government $5b – $6b, plus millions more through the Federal Government's asset recycling scheme.

The Victorian Government has said it would use the windfall to fund other transport projects, such as the removal of level crossings on the state’s rail network.

“In Victoria, despite previous bipartisan support for privatising the Port of Melbourne Corporation, (PoMC) the Opposition is now blocking the current form of legislation to authorise a 50 year lease,” Mr van Duyn said.

“That could potentially leave a multi-billion dollar hole in the state budget.”

Mr van Duyn explained that in a bid to raise the sale price the PoMC has served a rent review notice on one major lease holder in the port, container stevedore DP World, allegedly asking for a rise in excess of 700%.

“That’s caused a howl of protests from other lease holders and numerous importers and exporters,” he said.

He pointed out that, in New South Wales, the Port of Newcastle pushed access prices up an average of 40% after its recent privatisation.

In addition, he said that the Western Australia government has announced its attention to privatise the port of Fremantle and suggested price increases may well follow.

Mr van Duyn acknowledged that new ports are necessary to cope with increased freight flows but says they would compete directly with existing ports.

“That will make it extra hard for the sellers and bidders to determine a fair price for these attractive infrastructure assets, under what conditions a competing port may be established and whether potential compensation should be paid to the incumbents,” he said

“Overall this is a messy picture.”

Image: Port of Melbourne