In 2016, the Victorian Parliament passed legislation that allowed the leasing of the Port of Melbourne’s commercial operations to a private operator. The government awarded the fifty-year lease to the Lonsdale Consortium (comprising Future Fund, Queensland Investment Corporation, Global Infrastructure Partners and OMERS (a Canadian pension fund).
The new leaseholder has chosen to retain the Port of Melbourne name and took over operations at the port on 1 November 2016. The Victorian Government retains responsibility for port navigation controls (as harbour master) and other safety and environmental functions through the newly established statutory authority, the Victorian Ports Corporation Melbourne.
The Commission’s regulatory roles
The Commission has six new economic regulatory roles established by legislation:
- conducting five-yearly reviews of the Port of Melbourne’s compliance with a Pricing Order
- conducting regular inquiries into the Port of Melbourne’s process for setting tenant rent
- investigating complaints submitted by port users in relation to the Port of Melbourne’s compliance with a Pricing Order
- the power to develop and monitor standards of service and supply
- certifying port capacity expansion proposals as the least-cost means of expanding Victorian port capacity
- conducting inquiries into whether a second international container port is providing services below a competitively neutral price.
The Commission’s roles in administering the new regulatory regime are established in three key pieces of Victorian legislation: the Port Management Act 1995, Delivering Victorian Infrastructure (Port of Melbourne Lease Transaction) Act 2016 and the Essential Services Commission Act 2001.
Download a PDF summary of the Port of Melbourne legislative framework.
About the Port of Melbourne
The Port of Melbourne is Australia’s largest container, automotive and general cargo port. It handles around 36 per cent of national container trade and is one of the top 60 container ports in the world (based on 2015 figures). It is visited by over 3,000 ships each year and handles over 2.6 million containers annually.
Two main entities are responsible for the overall operation of the port, namely:
- the leaseholder, which is responsible for commercial operations
- the Victorian Ports Corporation Melbourne, which maintains the marine safety and regulatory functions, and the operation of Station Pier (a wharf).
What has been leased?
The lease includes:
- management of approximately 500 hectares of land (mainly used for commercial purposes)
- operation of wharves and berths (excluding Station Pier and West Finger Pier)
- maintenance and operation of shipping channels.