Efficiency measures needed for successful Port of Melbourne sale

A committee  investigating the privatisation of the Port of Melbourne says road and rail efficiencies are critical to the success of the port and its future stakeholders.

The committee report Inquiry into the proposed lease of the Port of Melbourne was presented to the state’s Parliament on Tuesday.

Two key issues raised concerned enhancing the port’s competitiveness and efficiency.

“Maintaining and enhancing the Port of Melbourne’s competitiveness and efficiency is a high priority particularly given the critical role that the Port plays in Victorian import and export markets,” the report said.

“However, the Port of Melbourne’s competitive position and standing as Australia’s largest container port is under challenge. Recent port privatisations in New South Wales and Queensland and improvements in interstate road and rail links are improving the competitiveness of other ports.”

According to the report, “there is already evidence that some of Port Botany’s growth may be occurring at the expense of the Port of Melbourne”.

While the committee indicated privatisation would help improve the port’s competitiveness, it recommended significant action by the government – as soon as possible – to improve both road and rail access.

The Port Rail Shuttle project should go to an Expressions of Interest process immediately , the committee said.

“The Port Rail Shuttle is a project that has been contemplated for nearly two decades,” the report outlined. “It involves moving containers from the port by rail (rather than road) to a series of metropolitan intermodal terminals.”

The committee said the project, which has the support of several key logistics and intermodal players, would significantly reduce truck traffic around the port precinct.

Given $58 million of funding was included in the 2014/15 State Budget for the project, the committee said it sees no reason why the state should not commit to the project immediately.

The report’s second “urgent priority” concerning port efficiency is to improve transport and logistics planning to manage the projected growth in port capacity.

With the state projecting port’s container capacity to grow to 8 million twenty-foot equivalent units (teus) per annum (it is currently just over 2 million teu per annum), the report said more needs to be done to forward-plan road and rail planning.

“The committee considers that there has been inadequate planning in relation to the road and rail upgrades required to accommodate the port expanding to the 8 million teu capacity envisaged by the government.

“The committee recommends that the government develop a comprehensive plan setting out the transport and logistics to support further port expansion, including a rail line to [the new container terminal at] Webb Dock,” it added.

In all, the paper presented 15 recommended alterations to the Delivering Victorian Infrastructure (Port of Melbourne Lease Transaction) Bill 2015, which was presented by treasurer Tim Pallas in May this year.