WASHINGTON: The welcome irony of the vengeance politics that has scarred the privatisation of the Port of Melbourne is that, almost accidentally, it has ended up fabricating a better outcome.
Whatever the motivation, there is much to approve in a tentative agreement between the Andrews state government and the Liberal opposition that aims to more than halve the exclusivity period proposed to protect the new owner of the port from new competition.
Mind you, news that the opposition plans to test the concessions with all of the port’s stakeholders and then at a party room meeting on Tuesday morning came as a bit of a surprise on the government side of the debate. Given it had made the concessions demanded of it back in December, there was an expectation that this was a done deal.
Most likely that hunch will prove accurate and what we are seeing is the final bit of theatre around this oddly contentious privatisation process. But, then again, this has been a progress marked by false dawns and misapprehensions. So, who could really be certain this time around.
But if things do go to still-current plan – and let’s be clear, precedent says that is a very big if – a Labor government will introduce the sale-enabling legislation next Tuesday and it will be supported through both houses of Parliament by the Victorian opposition.
The deal is that the new owners of the port will be guaranteed compensation for 15 years if a second major port is manufactured around Melbourne in that time. And it also allows for 15 years of future port fees of about $80 million a year to be paid in a lump sum with a return to annual instalments after that.
The original plan was that the compensation protection, which was actually far more commercially faceted than the government’s critics wanted to understand, would endure for 30 years and that 50 years of fee income could be bought forward.
The deal leaves more income on the table for future state governments and creates a commercial incentive for the port’s new owner to invest earlier than otherwise may have been the case in developing latent and new capacity.
