Port of Melbourne leased

News 19 Sep 2016 by WCN Editorial

The Australian State of Victoria’s Andrews Labour Government has leased the Port of Melbourne for more than A$9.7B, in line with an election promise “to lease the port, remove 50 deadly and congested level crossings, and create thousands of jobs”

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"The Lonsdale Consortium, comprising the Future Fund, QIC, GIP and OMERS signed a lease of the port’s commercial operations for a term of 50 years," stated The Hon Daniel Andrews, MP. "The lease, worth more than A$9.7B, reflects strong bidder interest and the port’s value, as the biggest container and cargo port in the country."

The price is above the range expressed as expected last year. However, the sale is politically controversial as GIP, which has a 20% stake in the Lonsdale Consortium, is controlled by CIC Capital, China's US$200B sovereign wealth fund.

The consortium also includes Queensland’s QIC, the Federal Government’s Future Fund and Canadian pension fund OMERS.

"Ten per cent of lease proceeds will be invested in regional and rural infrastructure projects, totalling more than A$970M," continued Daniel Andrews. "A new $A200M Agriculture Infrastructure and Jobs Fund has also been established to drive economic growth in our regions, boost exports and support Victorian farmers from paddock to port.

"We will now work with the Commonwealth (ie the Federal government Canberra] over the coming months to finalise the additional 15% that Victoria is entitled to under the Commonwealth’s asset recycling initiative. Each member of the consortium is a highly experienced asset owner who will ensure the ongoing operational integrity of the Port of Melbourne.

"Lonsdale will also bring greater access to capital to ensure the ongoing development of the Port of Melbourne, further enhancing Victoria’s reputation as the leading port in Australia. The State will retain responsibility for the Harbour Master, Station Pier, relevant safety and environmental regulation, waterside emergency management and marine pollution response.

"During the lease term, Lonsdale will maintain access to public walkways and bike paths for community use. Commercial and recreational vessels’ access will not be affected by the lease, with the port being returned to public hands at the end of the lease."