The Port of Melbourne Corporation has requested the Australian Property Institute appoint an independent valuer to make a ruling, if a rent adjustment cannot be agreed between the port authority and stevedore DP World.
The impasse arose after the port announced a 750% rental increase for DP World’s Melbourne terminal. Rental costs were set to rise from $15 per sq metre to $120 per sq metre.
DP World was so incensed that it lodged Freedom of Information applications with the Victorian Government seeking access to documents relating to the proposal.
DPWA managing director and chief executive officer Paul Scurrah said the company was concerned about the downstream impacts the higher rents would have on the Victorian and Tasmanian economies. The cost of moving a container through Melbourne would significantly increase, with DPWA saying Melbourne would become the most expensive port in the world.
Fellow stevedore Asciano has threatened to “shrink our port footprint and move all of our non-container terminal activity inland” if the increases go ahead. The port authority has replied that an independent valuation “does not allow for PoMC to unilaterally decide what the quantum of any rent adjustment should be”.
