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Australia's competition regulator has allowed the consortia led by IFM Investors, the country's biggest pension fund investor, and QIC Private Capital, the investment arm of the Queensland state government, to participate in the bidding process for a 50-year lease at the Port of Melbourne, Australia’s biggest container terminal and general cargo port.

The Department of Treasury and Finance of the state of Victoria expects to fetch about AUD5.3 billion (US$4.1 billion) through the sale of the container port. Part of a AUD100 billion privatization programme, the state and federal governments are trying to cut debt and bankroll capital works by selling "mature" infrastructure.

The IFM Consortium comprises IFM Investors, Rotterdam-based pension fund manager APG Asset Management, and Macquarie Group's, Macquarie Infrastructure and Real Assets.

The QIC Consortium is made up of QIC, Global Infrastructure Partners (GIP) and Borealis Infrastructure Management Inc. on behalf of the Canada’s Ontario Municipal Employees Retirement System.

The decision follows the attack of Australian Competition and Consumer Commission (ACCC) Chairman Rod Sims on port privatizations and the price increases they generate for users. This position is also shared by the industry lobby Shipping Australia Limited.

Both lead investors needed antitrust clearance since they own port assets in the country: IFM has major stakes in Sydney's two ports and Port of Brisbane city, and QIC has also interest in Port of Brisbane.

The Port of Melbourne accounts for up to 35 per cent of Australia's container trade. It is located in Melbourne, Victoria, and covers an area at the mouth of the Yarra River, downstream of Bolte Bridge, which is at the head of Port Phillip, as well as several piers on the bay itself.

Since 1 July 2003, the Port of Melbourne has been managed by the Port of Melbourne Corporation, a statutory corporation created by the State of Victoria.

The port hands almost 2.6 million containers annually with 1000 new motor vehicles per day on average. It counts with 36 commercial berths and 7 kilometers of quay line. Around 3000 ships visits annually the port, which total covers 100,000 hectares waters.

ACCC chairman Rod Sims said:

“The ACCC conducted extensive inquiries with a large number of port users and stakeholders at various levels of the supply chain. The ACCC has formed the view that neither acquisition would result in a substantial lessening of competition.”

“While there are a small group of exporters in southern NSW, particularly in the Riverina region, who have the option of using Port Botany or the Port of Melbourne, the vast majority of port users have no choice, for them the Port of Melbourne is a monopoly asset.”