Following productive discussions with the ACCC, Treasurer Tim Pallas and Minister for Ports Luke Donnellan today announced that the Andrews Labor Government will include additional economic safeguards in the Port of Melbourne lease transaction documents.
The ACCC has acknowledged that these strengthened safeguards constitute significant progress regarding the Port of Melbourne lease and resolve a number of concerns raised by the ACCC regarding the transaction.
The refinements to the transaction, which will further strengthen the regulatory framework, include:
- a periodical review by the Essential Services Commission (ESC) on whether there has been misuse of any market power by the Port Leaseholder in the setting of rents at the Port
- the public release of capacity levels and trigger points in relation to the Port Growth Regime after the lease transaction is completed
- requiring the Port Leaseholder to offer a market standard rent review mechanism with dispute resolution by an independent property market expert to any new tenants or renewing tenants that wish to apply this mechanism.
The ACCC submission to the Select Committee states that ‘privatisation can facilitate innovative management and improve the efficiency of infrastructure in the interests of users and the general community’.
The Government agrees with this, and is working to provide a framework around the lease that ensures strong competition and better outcomes. These measures are on top of those already announced, which include:
- precluding stevedores from bidding for the Port of Melbourne Lease
- the lease not including any rights to develop a second port
- retaining the ESC as the economic regulator with a substantially strengthened economic regulatory regime
- applying a CPI price cap for a minimum of 15 years
- introducing non-discriminatory pricing rules for the shared channel to the Port of Geelong
- requiring the continuation of the export container price discount initiative recently announced by the Port of Melbourne Corporation.
The ACCC acknowledges that the Labor Government’s proposed regulatory regime for the Port, including the new additional safeguards, will provide for stronger oversight than applies to any other privately operated port in Australia.
The proceeds from the lease of the Port will be used to remove 50 of our most dangerous and congested level crossings, a commitment the Government took to the last election.
Attributable to Treasurer Tim Pallas
“We have listened to and sought to positively address the matters discussed with the ACCC, and the measures announced will provide even more protection for competitive outcomes.”
“This Government believes that maximizing the use of the Port of Melbourne is the best way to keep port costs down over time, which will be good news for the Victorian economy.”
Attributable to Minister for Ports Luke Donnellan
“We promised before the election a Labor Government would lease the Port of Melbourne, and use the proceeds to remove our 50 worst level crossings. We’re keeping our word and getting on with it.”