Victoria promotes Melbourne expansion

Expansion is preferred to a second port option because the costs are expected to be materially lower than new port infrastructure and any landside connections for a second container port.

The existing port is seen as being strategically important to the existing supply chain. Existing land supply and development opportunities mean it is unlikely that port land would have a better alternative use.

Also the overland transport costs to another city port would be greater than using the existing sea port. The significant capital costs for a second container port and associated landside infrastructure capital should only be incurred when required.

The Delivering Victorian Infrastructure (Port of Melbourne Lease Transaction) Bill 2015 provides for a 50-year lease, and under regulation, the ability to grant an additional term of up to 20 years to a leaseholder.

On the flipside, the Opposition party in Victoria is continuing to argue the case to develop a second container terminal at the Port of Hastings, as an alternative to the state government’s principal focus on privatising the existing Port of Melbourne. Opposition leader Matthew Guy has reiterated that the state needs a second container port and there is a need to plan for it. “We are going to need a second port … cities of our size around the world have two or three container ports. It certainly is not dead and buried,” he said.