Port of Melbourne sale: short-sighted stupidity
The Treasurer of the People's Socialist Republic of Victoria has just done a $10 billion deal. But in so doing has really stuffed up a golden long-term opportunity.
He has just sold a 50-year lease (effectively the privatisation) of the Port of Melbourne to a consortium of local and international investors for almost $10 billion.
Nice work, if you can get it.
Especially as the lads were predicting about a $7 billion price.
But to W&D's mind it is nothing more than short-sighted stupidity from a government hungry to win the 2018 election (as any political party would be). Victorians should be prepared for a spending spree, not only on Victoria's infrastructure, but also on enhanced compensation and benefits for government sector employees.
This decision is a matter for deep regret. Even worse than...
Work with W&D on this.
Certainly, the Port of Melbourne is an attractive investment: it is Australia's largest container, automotive and general cargo port, handling just over one-third of Australia's container trade.
Its central location allows it to handle goods from NSW, Tasmania and South Australia as well as Victoria.
And the spin doctors point to potential to expand the port, which covers 515 hectares.
But that is the very issue. That's 515 hectares of prime real estate, close to the heart of Melbourne.
Why use prime real estate as a parking and unloading bay for ships? Good grief.
Now consider what the government of Singapore has done with its port.
In 2013 it announced that in 2027, the container port will move from the doorstep of the commercial heart of the city to the other side of the island. The first development of the new port site (at Tuas) commenced earlier this year.
Some 1,000 hectares of prime Singapore waterfront land will be freed up to build 'Southern Waterfront City'. Planning is well underway to develop this site.
Now let's consider the opportunity ignored by the Government of Victoria. That is:
- use the current prime real estate for residential and commercial development
- relocate the port to, and further develop, the Port of Hastings, on Westernport Bay
The development opportunity for 515 hectares of waterfront land close to the CBD would be amazing. W&D doesn't mean a labyrinth of high-rise apartments. But a new suburb of homes, schools, offices, etc.
And at Hastings lies a world class deep-water harbour site, that doesn't have the problem that the Port of Melbourne is going to have with larger container ships - which will require further dredging of Port Phillip Bay.
Some Melbourne readers will remember the dredge, the Queen of the Netherlands, and the damage it did to the Bay's ecosystem.
Hastings has land already reserved for rail and road access. It is just 70 kilometres from the CBD.
A port development there would be a massive boost to development and employment in, quite frankly, what is now a bleak area.
But, you cannot put the toothpaste back in the tube. You cannot undo this deal anymore than you can undo the NBN. A matter for deep regret.
Singapore may be as exciting as watching paint dry. But it does a great job in planning for the future of its citizens.