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New battle looms over Port Phillip dredging -

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HEATHER EWART: It's six storeys high, weighs more than twenty two thousand tonnes and for now it's
sitting idle at a Melbourne dock, at a cost of a quarter of a million dollars a day.

The dredging vessel 'Queen of the Netherlands' is waiting on Federal Government approval to start
digging out the bottom of Port Philip Bay.

And after protesters took their case to the Federal Court this afternoon, it could be delayed for
three more weeks, at a cost of up to five million dollars.

But the Victorian Government is still confident the project will go ahead, saying it's vital to
make Australia's largest port deep enough to handle a new generation of container ships.

Mary Gearin reports.

MARY GEARIN: This is the hard sell.

SECURITY GUARD: Is anyone carries any items or weapons that we should know about before we go in?

MARY GEARIN: A media pack invited to inspect the dredging colossus 'Queen of the Netherlands' as
the latest part of the public relations campaign to help ease the way for Port Philip Bay's channel
deepening project. And right now it could do with some good publicity.

An optimistic State Government might have hoped the Queen's arrival would herald the start of the
project. No such luck. The dredger must wait until the Federal Government ticks off on the
environmental management plan and opponents of the project have secured a hearing in the Federal
Court next month as well as the right to delay the project at a cost to port authorities of
$250,000 a day.

STEPHEN BRADFORT, PORT OF MELBOURNE CORPORATION: The potential cost of delays to this project
really depends on the number of days we're held up but it could be up to $5 million but then again
we await the consideration of the environmental management plan and we will abide by the judge's
decision to give 24 hours notice.

JENNY WARFE, BLUE WEDGES COALITION: There's a lot of commentary now about this project and the
serious risks attracted to it and we now have time to have a proper look at this.

MARY GEARIN: Today's developments are just the latest hurdle for the Government, which has been
trying hard to sell the benefits that will flow from deeper bay.

TIM PALLAS, VIC PORTS MINISTER: PricewaterhouseCoopers has done a study which we've made available
and it identifies about a $2.2 billion economic return for the State, and ultimately for the
nation. Principally around direct port users and what that tells us is that $2.2 billion over 2,000
jobs directly created as a consequence for an investment of $969 million. So in terms of a return
on investment, it stacks up.

MARY GEARIN: But that estimate doesn't include the cost of maintenance or the cost to bay
businesses and tourism. Meanwhile exporters are crying foul about how much of the bill will be
passed on to them from this April, well before the two-year dredging has finished.

point of view, we see no advantage in terms of enhancing our exports. We believe our costs will go
up. We don't believe there will be an improvement in scheduling and service from the shipping

LINDSAY FOX, TRUCKING MAGNATE: The dredging is part and parcel of a short-term fix. The real
long-term has to go into a deep water port and the nearest deep water port is Western Port.

MARY GEARIN: It was trucking magnate Lindsay Fox who rekindled doubts about the dredging just as it
was set to start. He said he'd prefer the Government speed up development of the Port of Hastings
on Western Port Bay, 70km south-east of Melbourne.

LINDSAY FOX: Henry Bolte, who was premier 40-odd years ago, was the one that instigated that
Hastings should be at Western Port, the port that Melbourne operate from, but we've had eight
premiers since then and we've had Labor and Liberal governments in that period of time and nothing
has been done.

STEPHEN BRADFORD: I think the views expressed by Mr Fox are untimely. They're incorrect, and
they're diverting discussion on the reasonable issues on the future of the State.

MARY GEARIN: But Lindsay Fox is not alone. He's been joined by other business and shipping industry
figures who have suggested that dredging up toxic sludge from the mouth of the Yarra might have
been avoided if Hastings were developed.

The notion puts the project managers and State Government in a bind.

They don't want to talk up the potentially explosive issue of a large scale development of the Port
of Hastings, yet they concede not only is it on the drawing board, it's a vital part of the
long-term plan.

STEPHEN BRADFORD: In the decades ahead, I would suggest the 2030s and 2040s, Hastings will be the
next port of Melbourne. That will be the future.

TIM PALLAS: I think that there's no doubt that Lindsay's views are that the Port of Hastings needs
to be developed. As a Government, we accept and agree with that. Where we disagree is about the
desirability or the appropriateness of deepening Port Philip Bay.

MARY GEARIN: While the Port of Hastings is currently deeper than Port Philip Bay would be after
dredging, it's already known any further dredging there would pose environmental concerns and a new
freight rail link into Melbourne would be needed.

TIM PALLAS: The people of Hastings would have every right to expect that the substantial
environmental issues that need to be dealt with there, the land site infrastructure, the road, the
rail, the port facilities, they all need to be worked through. We know it will cost something in
the order of about $10 billion to upgrade that facility. Something like 10 times the costs that
we're encountering here.

obsessed by talking around the dredging issue and to some extent they're allowing the Hastings
issue to go on the back-burner.

MARY GEARIN: Professor Bill Russell wrote the report recommending a 30-year development plan for
the Port of Hastings. He now says that's not quick enough and the Government isn't even keeping
pace with the original time frame.

BILL RUSSELL: I think some of the Minister's statements tend to emphasise the length of the project
and the cost of it but actually the cost of not doing it in terms of new freeways and new traffic
congestion is something that equally needs to be stressed.

MARY GEARIN: He says traffic through suburbs around the docks is already bad, and with the increase
in container trade it will become untenable by 2020.

TIM PALLAS: The fact is there are about 9,000 truck movements in and around the port area every
day. Only about 30 per cent of those truck movements are directly related to port activity.

DAVID MINNIS: We need quick voyages. We need speedy ships and we need ships that don't take too
long to discharge. I believe that some of these larger container vessels with their large number of
containers will obviously spend longer in each port, discharging and taking on cargo.

MARY GEARIN: David Minnis says smaller exporters didn't want the dredging and importers should bear
the cost. He says fresh food suppliers, like himself, will suffer from the almost doubling of the
$35 per 20 foot unit fees to pay for the project.

DAVID MINNIS: Given the way the cost of the project has blown out, it might be several hundred
dollars by the time everything is finished and any increase of costs is of concern to horticultural
exporters because we face a global market where there's a lot of competition.

TIM PALLAS: There's been no doubt that exporters as a group have said that they believe that this
is an essential part of the capacity for them to get their goods to market.

FRANK BEAUFORT,AUSTRALIAN PEAK SHIPPERS ASSOCIATION: It is not exporters crying for the deepening
of the heads.

MARY GEARIN: Frank Beaufort's association represents exporters and he says they aren't against the
channel deepening project but they have long been frustrated by delays of the Hastings development.

FRANK BEAUFORT: Mirror on the wall, you know, we'll look into. Nothing has been done and I think
that probably the Port of Melbourne has persuaded the State Government not to do anything about it.

MIKE SHEAHAN: For now, the Queen must wait for a green light. Its crew, port authorities and
protesters alike are preparing themselves for a bumpy ride.

HEATHER EWART: That report from Mary Gearin.