New review planned for dredging

THE AGE Peter Ker February 28, 2008

DREDGING in Port Phillip Bay will come under fresh scrutiny after State Parliament resolved to examine the economic case for the $1 billion project.

Responding to growing concerns that the benefits of the project may be overstated or waning, the upper house last night moved for a powerful Opposition-controlled finance committee to examine the Port of Melbourne's business case for channel deepening.

The motion, by Greens MP Sue Pennicuik, means senior Port and Government officials could be forced to attend hearings, and contracts between the Port and Royal Boskalis Westminster — the Dutch company entrusted with dredging the bay — would face public examination by the parliamentary Standing Committee on Finance and Public Administration.

Ms Pennicuik said there was an increasing need for a full investigation of the economic benefits of the project, which is estimated by the Port to cost $969 million.

"The cost of dredging has more than quadrupled since it was first announced, and is likely to blow out to over one billion before long," she said.

"Hopefully this inquiry will be able to uncover once and for all what the full costs are … every time the cost increases, the benefit decreases."

An economic analysis published by the Port of Melbourne and PriceWaterhouseCoopers last March found the benefits of the channel deepening project would outweigh the costs by a ratio of 3.3 to 1. But concerns have since emerged that costs were spiralling as a result of delays in starting the project.

A recent study by the Economists At Large group — sponsored by the Australian Conservation Foundation — suggested the economic case for dredging had waned significantly, while National Institute of Economic and Industry Research director Peter Brain also warned that the benefits of the project were now slimmer than when the project was first mooted.

Ms Pennicuik's motion required support from lone DLP member Peter Kavanagh, as well as the new coalition of Liberals and the National Party, who have been long-time supporters of the dredging project.

It was the second time yesterday the non-government parties in the chamber had combined to defeat Labor on a dredging issue.

Earlier, the upper house moved a bill — originally floated by Opposition Leader Ted Baillieu as a private member's bill — which sought to increase the transparency of environmental monitoring across the dredging project.

The bill called for all monitoring to be published daily on the internet within 24 hours of receipt by the Port of Melbourne, and would make it easier to halt dredging immediately in the case of environmental concerns.

But the bill is unlikely to have any effect, as it must be approved by the Government-dominated lower house before having any impact.