Massive Rent Hike at Port of Melbourne
The Port of Melbourne Corporation has told DP World Australia that it wants to increase rent at the terminal by up by 800 per cent of the current amount, reports local media. It also comes as the Victorian government prepares the Port of Melbourne for sale.
The move by the Victorian Government has sparked warnings of job cuts as well as economic damage to the state. The trucking industry fears it may have to carry much of the weight of the possible hefty rent hike.
The port currently charges about $40 million dollars a year in rent to DP World and Asciano. It is understood that DP World has previously paid about $16 per square metre and the increase will take it to $120 per square metre.
DP World has reacted strongly to the proposal and would challenge the rent move in court, says media reports. “We are extremely concerned about the long-term viability of the Port of Melbourne and the related supply chain,” DP World chief executive Paul Scurrah reportedly said.
Australia's largest container shipping group, ANL, has warned it will switch business to the Port of Adelaide or Tasmania's Port of Bell Bay if the Port of Melbourne pushes up stevedore rents.
If the increase goes ahead, rents at the port would be five times more expensive than the Port of Brisbane – which has been privatized – making it by far the most expensive port in Australia.
Victoria’s Ports Minister Luke Donnellan said that rent was reviewed by an independent valuer every two years, as specified in the conditions of the lease.
In a statement, DP World said it did not see the issue being resolved without the involvement of the Victorian government. Donnellan said that it was a matter for the Port of Melbourne Corporation but the Premier of the Victorian Government, Daniel Andrews, reportedly told local press he would seek an urgent meeting with the Corporation.
The terminal operator said that this rent increase would make Melbourne the most expensive of its 65 terminals worldwide, more than twice as expensive as the next most pricey terminal.
