The privatisation of the Port of Melbourne and its proposed rent hikes of around 700 per cent for the incumbent stevedoring companies may prove counter productive, according to Managing Director and CEO of Asciano, John Mullen.
Speaking at the recent Australian Logistics Council Forum in Melbourne, Mr Mullen said that his company was currently examining the cost and feasibility of diverting 500-600,000 containers per year into the port at Sydney rather than direct into Melbourne and then using a combination of trucking and rail to then transport the containers to Victoria.
Asciano owns Patrick Stevodores and the rail freight provider, Pacific National. Mr Mullen also said that the proposed rent increases were not initiated by the new owners but by the Victorian state government in its efforts to maximise the sale price of the port assets by providing a stronger income stream for potential owners. He said that this had been the case with the privatisation of ports in NSW and Queensland but that the quantum of the Melbourne increases was unsustainable compared to the other sites.
“The proposed increases for the Port of Melbourne take this to an all new level,” Mullen said. “With the cost increase in Melbourne of the magnitude being proposed our initial analysis would indicate that we can economically divert some 20-25 per cent of all of our existing Melbourne TEU haulage onto rail shuttles and truck movements from Sydney. We also imagine that this will happen with our competitors.”
