The Port of Melbourne Corporation (the
corporation) successfully delivered the Channel Deepening Project
(CDP) ahead of time, under budget and in compliance with the
environmental approval conditions, except for three minor
However, the achievement of CDP’s benefits to
date has been affected by the 2008 global financial crisis (GFC),
which has reduced demand for global trade and resulted in an
oversupply of shipping capacity.
As it is only three years into CDP’s 25-year
life, its full benefits cannot yet be determined. However, early
performance data indicates: slower than originally projected growth
in trade volume and visits by larger vessels; less than expected
use of the extra draught capacity of these vessels; adverse market
conditions for shipowners and operators that are precluding any
practical realisation of cost savings as result of CDP.
These developments are beyond the corporation’s direct control
and could not have been reasonably envisaged at the time it
developed the CDP business case. While these results do not
preclude achievement of CDP’s long-term objectives, their
significance warrants a review of the assumptions underpinning
current projections of the CDP’s long-term economic benefits.