Costs Increase for Port to Take Larger Ships

The new generation of giant container ships will be able to access Melbourne's port within three years under plans released yesterday by the Bracks Government to deepen the channels leading to the city's docks, the Australian reported. But figures released along with an environmental effects statement reveal the cost of the dredging project has blown out from $545 million to at least $763 million.

And Treasurer John Brumby refused to say how much of the burden would be borne by taxpayers and how much by cargo exporters through a proposed increase in the container levy. Shallow areas in the mouth of Port Phillip Bay, the mouth of the Yarra River and the shipping channel between the two prevent about 25per cent of container ships using the port or loading to full capacity.

Modern ships are much larger and importers and exporters are keen to benefit from the economies of scale these vessels offer. Many of the bigger ships delivering cargo bound for Melbourne now dock at Singapore and their loads are placed on several smaller vessels for the final leg, generating extra costs. The project is poised to proceed with the statement released yesterday saying that although the dredging will reduce fish stocks and kill 5 per cent of Port Phillip Bay's sea grass beds, the damage will be short-lived and outweighed by the benefits.

Business has welcomed the project as essential to keep Melbourne's port - which handles almost 40 per cent of Australia's container trade - competitive.

The Australian Industry Group, the Victorian Trades Hall Council and Victorian Employers Chamber of Commerce and Industry welcomed the progress on the project, with VECCI chief Neil Coulson saying taxpayers should provide $200 million towards it. Source: The Australian