Posted December 08, 2015 18:35:00

A strategy to privatise the Port of Melbourne seems practically particular to be rejected by Parliament, unless the Victorian Government agrees to a raft of changes such as abandoning a controversial compensation clause.

Essential points:

  • Port of Melbourne privatisation bill unlikely to pass in existing type
  • Committee recommends 15 changes
  • Alterations incorporate limiting lease and removing compensation if second port built

A select committee has advisable 15 modifications to the Government’s program to reap up to $ 7 billion by leasing the port for 50 years, with an alternative to extend the lease for an additional 20 years.

They consist of capping the lease at 50 years and removing a clause that would compensate the leaseholder if a rival port was created at Hastings or Bay West in the subsequent 50 years.

The report said the lease period need to be limited, leaving a future government to legislate for any extension, given the consensus that a second container port would be required nicely just before the end of the proposed 50-year lease.

It stated the compensation clause have to go simply because there was risk the Government would delay creating yet another port in order to stay away from paying out the leaseholder.

The committee also urged the Government to start work immediately on the port-rail shuttle, develop a far better transport strategy to cater for the Port of Melbourne’s development, and perform on a rail hyperlink to Webb Dock.

“The onus is now on the Government to think about the committee’s suggestions and bring forward amendments or appropriate alternatives,” chairman Gordon Wealthy-Phillips mentioned.

Government MPs filed a minority report rejecting four of the committee’s recommendations, which includes abandoning the compensation clause.

They argued that if the suggestions have been adopted the transaction would not be commercially sound and would not reflect value for cash for the Victorian taxpayer or the neighborhood more broadly.

Opposition will not be rushed on Port of Melbourne privatisation

The Coalition and the Greens do not assistance the legislation in its present kind simply because of issues about the length of the lease and the potential to grant the leaseholder a monopoly.

The Andrews Government has been negotiating with the Opposition in a bid to get the sale legislation through the Parliament by the finish of the year, amid fears a delay could blow a multi-billion-dollar hole in the state price range.

Victorian Treasurer Tim Pallas mentioned the Government could not afford to have the legislation stalled in the Upper Property.

“We’re prepared to walk that extra mile in order to get a negotiated settlement, but we do want the legislation to pass this year,” he said.

We’ve constantly said we would help a lease of the Port of Melbourne, but we’re not going to sign up to a dud deal for the subsequent 50 to 70 years.

David Hodgett, the Opposition’s ports spokesman

“[If not] it will have a deleterious effect upon the capacity to extract value.”

But Opposition spokesman David Hodgett mentioned the Coalition would not be rushed into passing the legislation since there had been as well many unanswered queries.

“We’ve usually said we would assistance a lease of the Port of Melbourne, but we’re not going to sign up to a dud deal for the subsequent 50 to 70 years,” he said.

“We want the best outcome for Victoria, but not at any price.

“The ball is effectively and really in the Government’s court.”

Labor hopes to use the proceeds of the sale, which have already been factored into the budget’s bottom line, to fund the removal of 50 railway level crossings over eight years.

The Government has not ruled out bypassing the Parliament in the hope of promoting the port in the 1st 3 months of 2016.

To do so, the Treasurer would have to use his powers under the State Owned Enterprises Act, but that could have an effect on the sale price.

A lot more on this story:

Subjects: government-and-politics, state-parliament, parliament, privatisation-and-deregulation, port-melbourne-3207

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