THE Victorian Government last week introduced the Delivering Victorian Infrastructure (Port of Melbourne Lease Transaction) Bill 2015 to State Parliament, which will allow for the lease of the Port of Melbourne.
The lease proceeds, to be paid up front, will go into the Victorian Transport Fund (VTF), which will support the removal of 50 level crossings and the construction of Melbourne Metro, the West Gate Distributor and other important transport initiatives.
Only the port's commercial operations will be leased, with the Victorian and Commonwealth governments to retain responsibility for regulating the port's safety, security and environmental functions.
The leaseholder will be responsible for maintaining and improving the port's operations, delivering efficiencies, boosting competitiveness and ensuring future port development is not compromised. It will also maintain access to public walkways and bike paths for community use.
The lease will also make Victoria eligible for a 15 per cent payment from the Commonwealth Government to be invested in new infrastructure projects such as Melbourne Metro, as part of the Commonwealth's Asset Recycling initiative.
Victoria's independent economic regulator, the Essential Services Commission, will oversee an enhanced pricing structure for port users. Annual tariff increases will be capped at CPI to protect Victorian producers, manufacturers, other exporters and importers, and consumers.
Once legislation has passed, the lease transaction's Joint Financial Advisers, Morgan Stanley and Flagstaff, will call for expressions of interest on behalf of the State.
Infrastructure Partnerships Australia (IPA) welcomed the introduction of the new legislation, describing it as welcome news that will help fund essential infrastructure projects for Victoria.
"This is a win-win-win for Victoria. It means a better port, it releases funds needed to help remove 50 of Melbourne's worst level crossings and it means more money from Canberra," said IPA Chief Executive, Brendan Lyon.
"The Port of Melbourne is very valuable and now is the right time for a lease, given the massive global interest and record prices being achieved for Australia sea ports.
"A strong precedent was set by New South Wales, with the proceeds from port sales recycled into new infrastructure. NSW raised more than $5 billion through the Sydney ports sale and a further $1.7 billion for the Port of Newcastle.
"The Port of Melbourne is the jewel in the crown in terms of ports, because it is the largest and most valuable sea port in Australia.
"While Victoria's long-term lease will be shorter than the NSW sales, Victorians can expect an excellent return that can then fund projects that are sitting on the shelf for want of funding.
"When governments sell public assets, it's very important that they're invested in the sorts of projects that will grow the economy and make it easier for the community.
"The removal of Melbourne's 50 worst level crossings will deliver excellent dividends to business and the community by tackling traffic congestion, creating jobs and improving safety.
"The money Victoria can expect from the Federal Government's Asset Recycling Initiative will give the Melbourne Metro Rail Project a kick-start.
"The lease of the Port of Melbourne to fund level crossing removals and the Metro project is an excellent example of what can be achieved for the community.
"The infrastructure sector hopes this legislation is passed by Parliament without delay in the interests of taxpayers, commuters and the economy," Mr Lyon said.