A dispute over rent is turning operators away from the Port of Melbourne, Australia’s biggest general cargo port, a major container stevedore says.
DP World Australia is disputing a proposed 750 per cent hike in rent at the port, the site of the company’s biggest container terminal.
Other users may also face steep rent increases when their rents are due for review.
DP World says the proposed rent hike, tabled by the Port of Melbourne Corporation in December, would make the port the most costly in the world.
That could force shipping companies to shift cargo to other ports, potentially threatening the jobs of around 300 of DP World’s 600-plus employees, plus workers at other businesses.
It could also result in consumers paying more for their goods.
The Port of Melbourne has requested the President of the Australian Property Institute appoint an independent valuer to review the proposed rent increase.
But DP World Australia chief Paul Scurrah said the independent arbiter might still come back with a value that DP World would be unable to tolerate. The stevedore company last week made a confidential counter offer on the rent increase to the Port of Melbourne.
DP World is also putting together an application to the National Competition Council that could result in the Australian Competition and Consumer Commission regulating rents at the port.
“The uncertainty is creating a circumstance where people are looking at alternatives (to using the port of Melbourne),” Mr Scurrah said on Friday.
“At the moment there is still the fear that there is going to be a significant rent charge.”
A spokesperson for the Port of Melbourne said it was proceeding with the appointment of an independent expert and was in talks with DP World.
The dispute comes as the Victorian Government considers a $5 billion privatisation of the Port of Melbourne.
The port’s operator has said a review of rents is routine and would have been undertaken irrespective of the Government’s plans to seek a lease for the port.
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