The CEO of Melbourne’s Victoria International Container Terminal (VICT), which is currently being built and will be operated by a consortium led by ICTSI, has strongly criticised decisions taken by the Port of Melbourne Corporation (POMC).
Anders Dømmestrup said: “The circumstances in which VICT won the right to construct and operate a third terminal at the Port of Melbourne have changed significantly due to decisions taken by POMC and the government [of the State of Victoria].”
Dømmestrup continued: “The settlement of the very public rent dispute between DP World and POMC has increased DP World’s competitiveness and entrenched it for a lengthy period of time.
This has skewed the level playing field on which the three stevedores [ICTSI, DP World and Patrick Stevedores] were expected to compete.”
In March 2015, POMC proposed increasing the rent of VICT’s Melbourne competitor, DP World-run West Swanson Dock, by 750%. After threats of legal action and public debate on the issue though, the POMC backed down in August 2015 and offered DP World a 50-year tenure with known fixed rent escalations for the next 13 years, angering VICT which is thought to have agreed a much higher rent than its rivals.
“The government’s latest transport infrastructure planning also increases the competitiveness of the other terminal operators” Dømmestrup said, “fully-laden high productivity freight vehicles (HPFVs) will be able to access our competitors’ facilities via the Western Distributor but fully laden HPFVs will not be able to access VICT’s Webb Dock facilities.”
In a statement, VICT said that the PoMC had rejected its proposals to improve its competitiveness by using automated design and storage capacity which would allow containers to move directly in and out of VICT, rather than requiring double handling via an empty container park.
VICT is also unhappy that the POMC said that its request to build berths for larger ships would take two years to review, with no guarantee of approval. VICT wants a four to six week review.
Furthermore, VICT wants to demolish a decommissioned berth concrete outcrop and allow two large vessels to berth alongside VICT simultaneously. It argues that to do this now would minimise disruption in the future, when the terminal will be up and running and the port will be busy.
“This opens future potential to further improve the port’s capacity by 20-25% as demand requires. The upfront cost to PoMC is minimal, whilst the upside to PoMC and the Victorian economy is substantial,” Dømmestrup said.
“We have been told to comply with our obligations to build our terminal and, in effect, stay out of sight and out of mind,” Dømmestrup continued, “the approach we have encountered from PoMC suggests the aim of leasing the port is to maximise returns to the state’s revenue at the expense of consumers, businesses and VICT.”
VICT also said that “sensible operational planning and progress at the port has been paralysed for over 18 months” while Sydney’s Port Botany builds the logistics capability to outcompete Melbourne.
The terminal operator has written to the state government’s treasurer, Tim Pallas to urge him to intervene. Pallas has been asked to permit VICT to hand back the rights to the empty container park, allow VICT to handle larger vessels (8,000 teu initially), demolish the concrete outcrop and ensure fully laden HPFVs have access to Webb Dock.
Source: Container Management
Source: Container Management