The sale of the Port of Melbourne could reap up to $7 billion as Treasurer Tim Pallas reveals expectations for the final price are “appreciably larger” than initial estimates.However, Mr Pallas on Thursday also conceded there had been some “slippage” in the timing of the sale.
It has been pushed back to next year as the government prepares the necessary legislation.
The long-term lease of the port, which is broadly supported by the state opposition, was due to happen at the end of 2015 and the proceeds earmarked to fund Labor’s pledge to eliminate 50 level crossings over two terms.
After a business breakfast to spruik his first budget, Mr Pallas on Thursday said he expected the sale would happen in the first quarter of 2016, giving the opposition time to scrutinise the plan.However, he said he did not expect this to affect the 2015-16 bottom line or Labor’s ability to fund its level crossing removal program.
The state government has been accused of lifting rental charges at the port by as much as 650 per cent to fatten the asset ahead of the sale.
One stevedore, DP World, is being hit with a new rental rate of $120 per square metre, up from $16, and others are bracing for similar increases.
Australian Competition and Consumer Commission chairman Rod Sims has warned the decision by the port to increase its rental charges could lead to an “upwards spiral” of port charges around the country, which could damage the economy.
Mr Pallas said the state government expected to get much more from the port sale than the original $5 billion estimate.“The original estimates on the port sale started at about $5 billion,” Mr Pallas said. “Those figures are appreciably larger now.
“There is very substantial private sector interest in this port; it is, after all, the jewel in the crown of the freight and logistics system; it is the largest container port in the nation and there is very substantial interest in the port.”
The former Napthine government also put the sale of the port on the agenda. The opposition is broadly supportive of the idea. With the Greens opposed, Labor hopes it will be able to rely on that support to pass the legislation needed through the upper house, where it does not control the numbers.Shadow Treasurer Michael O’Brien said the Coalition wanted to see the legislation before making a firm commitment.
