The Government of the State of Victoria in Australia has released details of the plan to privatise the Port of Melbourne, which will be voted on by the state parliament.
The bill specifies that the port will be leased to private interests for 50 years and that the government expects to raise AU$5bn (US$3.85bn) to AU$6bn (US$4.63bn).
Under the proposals, if the government then decided to build a second container terminal in the area, at Hastings or Bay West for example, before the Port of Melbourne reached capacity, it would have to pay compensation to the port’s operator.
Labour Party treasurer Tim Pallas said that annual tariff increases would be capped at inflation levels for at least 15 years to protect shippers.
To get the bill through the upper house of the State parliament, the Labour government will need the support of either the main opposition coalition or the Green Party.
The main opposition coalition of the Liberal and National parties favours a 30 to 40 year lease, whereas the Greens oppose the principle of a private-sector monopoly.
Opposition treasurer Michael O’Brien criticised the Labour Party state government and said that this stipulation effectively “kills off” hopes for a second container terminal in the next half-century.
He also tweeted a photograph of the board game Monopoly with the caption: “I know that Labour socialists love monopolies. Doesn’t mean the public does.”
He added: “This is really about Labour potentially sacrificing the interests of Victorians for the next fifty years in order to make a quick buck.”
However, the leader of the Green Party in the Victorian Parliament Greg Barber told CM that, while his party is opposed to the legislation, the opposition coalition are “on the fence at the moment”.
Labour Party treasurer Tim Pallas said that a second terminal would not be needed before the Port of Melbourne reached capacity, given the amount of time building and establishing a terminal would take.
The state-owned Port of Melbourne Corporation is currently in dispute with DP World, which already operates a terminal at the port, over a more than 750% rent hike.
This rent hike has been widely interpreted as an attempt to increase the value of the port before its sale.
The Deputy Prime Minister of Australia, and leader of the National Party, Warren Truss yesterday told the International Transport Forum that the port will be sold off and he expects a “big price”.