The Port of Melbourne 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 nonconformances,
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.
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Press Release, November 14, 2012