Port of Melbourne leased for massive $9.7 billion

A MAJOR new road or rail project is set to be built in Victoria after a $4.5-$5 billion Budget jackpot provided by the 50-year lease of the Port of Melbourne.

The $9.7 billion lease is well above price expectations. Picture: Aaron Francis

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A MAJOR new road or rail project is set to be built in Victoria after a $4.5-$5 billion Budget jackpot provided by the 50-year lease of the Port of Melbourne.

The long-awaited North East Link between the Eastern Freeway and Metropolitan Ring Road, an airport rail link, and faster regional trains are among options to be considered by the Andrews Government in light of a higher-than-expected lease price of $9.7 billion.

But the government will not make any decision before an Infrastructure Victoria report prioritises the state’s road and rail needs over the next three decades.

Premier Daniel Andrews committed all the money to job-creating transport projects.

An extra $1.4 billion should also flow from the Turnbull Government under its asset recycling program.

However, federal Treasurer Scott Morrison said because the scheme had closed, only $877 million would be handed over.

Depending on how much money comes from Canberra, Victoria will have $4.5-$5 billion more than it expected.

Premier Daniel Andrews said the deal would let the government do “even more” than it had forecast. Picture: Ellen Smith

The deal has been approved by federal regulators. Photo Greg Scullin

Victorian Treasurer Tim Pallas immediately accused Prime Minister Malcolm Turnbull of “yet again breaking his commitments and short-changing Victoria”.

Projects in regional Victoria will receive $970 million of the lease proceeds.

Mr Pallas said the North East Link and a larger suite of level crossing removals would be options considered.

The North East Link, described as the missing link for motorists in Melbourne’s northeast, is the top road priority for the RACV and the Victorian Chamber of Commerce and Industry.

RACV public policy manager Brian Negus said an immediate commitment was needed to begin planning and building the corridor.

Victorian Chamber of Commerce and Industry chief executive Mark Stone said the $9.7 billion deal would allow the government to invest in projects for a “legacy (that) will last for decades”.

The extra cash will also renew the debate on the East West Link, which is being considered by Infrastructure Victoria after it was scrapped at a cost of $1.1 billion.

The 50-year lease was awarded to the Lonsdale Consortium, including the Future Fund, Queensland Investment Corporation, Canadian pension fund OMERS and Global Infrastructure Partners, which took a 20 per cent stake for Chinese sovereign wealth fund CIC Capital.

Initial forecasts put the value of the lease at $5 billion but Mr Pallas said Victoria “couldn’t have picked a better time to go to the market”.

Mr Andrews said all of the money would “go towards the vital transport projects that will create jobs and protect and enhance all the things we love about Melbourne and every community”. Opposition Leader Matthew Guy said the Premier had no more excuses to “do things on the cheap”.

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