Global port operator DP World has won an ongoing leasing battle with the Port of Melbourne after it was asked to pay around US$60 million annually to the Victorian government as part of the port’s $6 billion privatisation shift, according to the Australian Financial Review.
It was previously reported that DP World would be expected to pay the equivalent of a 750% increase in rental costs.
The terminal operator will now only have to pay a fraction of this amount, totalling $20 per square-metre, in comparison to the $16-18 per square that it was previously paying.
Rod Sims, Chair of the Australian Competition and Consumer Commission, said: “Negotiated outcomes are always better than regulation but sometimes you need the threat of regulation to get a good outcome and sometimes also a bit of helpful public opinion.
“Wouldn't you rather have an efficient port giving us the best, cheapest possible service we can get? Isn't that more important for the future of the Victorian economy than a once-off payment?”
Paul Scurrah, CEO of DP World, said: “With a longer period between rental reviews, the new lease takes uncertainty out of the container market.”
The terminal operator has recently begun work on its $1.6 billion T4 container terminal expansion project and currently holds the global ranking of world’s most productive port at its flagship port in Jebel Ali.