Engineering, Freight Rail, Safety, Standards & Regulation

Port of Melbourne sale finalised

Melbourne. Photo: Port of Melbourne Corporation

Victorian treasurer Tim Pallas has announced the state has reached financial close on the $9.7 billion lease of the Port of Melbourne, which will help pay for Premier Daniel Andrews’ flagship level crossing removal program.

Pallas announced the deal had been finalised on Monday, October 31.

He called the long-term lease “an outstanding achievement that underlines the continued high performance of the Victorian economy”.

“We promised to lease the port, get rid of Victoria’s most deadly and congested level crossings and create thousands of jobs, and that’s exactly what we are doing.”

Along with funding level crossing removals, 10% of the proceeds from the port sale will go to regional and rural infrastructure projects. An additional $200 million is going towards the Government’s Agriculture Infrastructure and Jobs Fund.

The port has been acquired by the Lonsdale Consortium, which comprises of the Future Fund, QIC, GIP and OMERS.

The consortium has named former Transurban COO and Queensland Motorways CEO Brendan Bourke as the port’s new chief executive.

GIP Australian partner Russell Smith has indicated rail will be a key factor in the consortium’s push to make the port more competitive and efficient.

GIP was recently part of the breakup of Australian port and rail group Asciano – through which it acquired a 5.5% stake in the Patrick port terminals business, an 11% stake in Asciano’s bulk and automotive arm, and a 12% stake in the Pacific National rail business.

Consortium partner the Future Fund is the Australian Government’s sovereign wealth fund. OMERS is a Canadian pension fund with private and public interests in real estate and infrastructure around the world.

QIC adds its share of the Port of Brisbane to a portfolio which already includes a 26.7% stake in the Port of Brisbane, a 25% share of Brisbane Airport, 25% of motorway owner Northwestern Roads Group, and various other Australian and international investments.

Victorian ports minister Luke Donnellan said the consortium’s ongoing investment in the Port of Melbourne will consolidate its position as the biggest container and cargo port in the country.

“The ongoing development of the Port of Melbourne will enhance its reputation as the leading port in Australia,” Donnellan said. “The lease of the Port of Melbourne will deliver enduring economic benefits to all Victorians.”