PORT OF MELBOURNE
Overview: Port of Melbourne is Australia’s leading trade gateway and largest container, automotive and general cargo port with 36 berths handling 2.64 million TEUs and 3,000 annual ship arrivals.
Infrastructure Operating Company (IOC): QIC and Global Infrastructure Partners (GIP)
Activities: Operations and Maintenance (O&M), investment and growth of Port of Melbourne into the future through implementing a long-term development plan for the Port under a well-defined regulatory regime. Increase capacity and efficiency of the Port through transformational change in the road and rail mix of freight moving through the Port to benefit stakeholders.
Key terms: 50-year lease
Concessionaire: Lonsdale Consortium, comprising the Australian Government Future Fund, Queensland Investment
Corporation (QIC), Global Infrastructure Partners (GIP) and OMERS.
• QIC is a diversified multi-asset Investment Management Company active in infrastructure, real estate, private equity and alternative investments, and is one of Australia’s largest institutional Investment Managers with over USD 75bn in total Assets Under Management, including USD 7bn in Infrastructure assets across ten direct investments |
in transport, utilities and PPPs. QIC offers Investment Management services to Institutional Investors in Australia and globally, and is responsible for managing Australia Future Fund’s investment in Port of Melbourne.
• Global Infrastructure Partners (GIP) is a leading Infrastructure Investment Manager with USD 35bn invested in infrastructure assets across the energy, transport, water, port and rail sectors.
• Borealis Infrastructure is one of the world’s largest Infrastructure Investors and is the core Infrastructure Investment Fund of Ontario Municipal Employees Retirement System (OMERS), with over USD 18bn invested in a portfolio of more than 20 Infrastructure assets. Borealis Infrastructure was formed in 1998 to originate, structure, finance and manage Infrastructure and Private Equity assets on behalf of OMERS. Borealis is a direct equity investor and exercises active management over its investments in ports, transport, electricity, water and gas transmission and distribution, which are typically mature, operational Infrastructure assets.
• OMERS, founded in 1962, is one of Canada’s largest Defined Benefit (DB) Pension Funds, with more than CAD 77bn in AUM (2015) and 461,000 members from municipalities, school boards, emergency services and local agencies across Ontario.
• Global Strategic Investment Alliance (GSIA): GSIA is the unlisted co-investment infrastructure vehicle set up by Ontario Municipal Employees Retirement System (OMERS) and a consortium of Japanese pension funds. The vehicle held a first close of USD 7.5bn in April 2012 and has sealed its maiden investment in 2013, buying a 33% stake in US power plant Midland Co-generation Venture (MCV). In Q1 2014, the GSIA received additional capital from the Government Pension Investment Fund (GPIF) and Development Bank of Japan (DBJ), which brought the size of GSIA to USD 11.25bn – more than halfway towards its USD 25bn target.
Key lessons for IIPPs in emerging markets: A conducive regulatory and economic environment allowed the Lonsdale Consortium, funded by Institutional Investors, to become the private leaseholder and strategic manager of the Port of Melbourne’s commercial operations and assets in September 2016. This brought world class, safe, responsible and reliable port facilities and services to the region, whilst delivering attractive returns to long-term savers. Regional integration was also boosted with the delivery of an efficient freight supply chain to support Victoria’s growing economy, including the efficient movement of goods within Melbourne and regional Victoria, together with a workable metro rail freight solution.