PORT OF MELBOURNE LEASE - TECHNICAL DUE DILIGENCE

The brief. The State of Victoria's lease of the Port of Melbourne was one of the largest port transactions ever undertaken. Black Quay was engaged as port planners and maritime experts to one of the two shortlisted consortia bidding for it.

The challenge. The port includes the largest international container terminal in Australia, then rated at 2.8 million TEU, the largest automotive terminal in the southern hemisphere, several general cargo terminals and substantial liquid and dry bulk operations.
Pricing a fifty-year lease meant forming a view on whether the port could still meet Victoria's trade task in 2050 and, critically, on how the incumbent terminal operators would behave competitively under each development scenario. The capacity question and the competition question could not be answered separately.

What we did. We delivered advanced long-term strategic port planning covering how the port would need to operate across short, medium and long terms to meet its trade obligations without losing market share.
Operationally we produced capacity and productivity analysis of every international container terminal, the general cargo terminals, the automotive and high-and-heavy terminal and the liquid and dry bulk operations, including determination of the ultimate potential of the fully automated Webb Dock facility.
We integrated trade forecasting and scenario testing including contestable trade testing for regional Victorian and interstate freight, and delivered channel capacity analysis, infrastructure needs studies with technology feasibility assessment, desktop asset condition assessment waterside and terminal-side, infrastructure risk calculation, and senior management governance and quality control review.
We developed and assessed expansion options across every precinct, including trade relocation strategies for Appleton Dock and Victoria Dock, operational terminal plans with orientation optimised for capacity and return, cost estimates, asset valuations and commercial evaluation of each option, alongside competition analysis of the terminal operators under each scenario.
The outcome. The lease was awarded in 2016 for AUD $9.7 billion over fifty years, the highest price paid for an Australian port.

 

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