The Australian Logistics Council says the planned leasing of the Port of Melbourne could encourage the "recycling of mature assets" to unlock investment in productivity-enhancing infrastructure.

The ALC backed parts of the plan in its new discussion paper. 

But the body warned that the Victorian Government would have to dissuade a private lease-holder from exploiting a monopoly power over its customers in other parts of the supply cahin.

The ALC recommends that the present Port of Melbourne Lease Bill should undergo a bi-partisan examination process to ensure the sale promotes competition and efficiency.

“It is appropriate that a Legislative Council [Victoria’s lower house of parliament] committee considers the economic regulation of the port, including whether the proposed legislation adequately protects port users against a private entity extracting monopoly rents,” the ALC says.

It said such a committee would also be able to explore the role that the Essential Services Commission may take in monitoring changing rents and land values.

“So long as the economic regulation of the port is sufficiently rigorous to ensure access and pricing issues are dealt with in a way that permits the efficient use of the asset, the legislation should proceed,” the ALC paper states.

The logistics council is in favour of the proposed 50-year lease, but says a second container terminal would likely be necessary before that term expires.

The ALC questioned the value of an optional extension currently left available.

“The government is yet to make a case as to why it is necessary for the Bill to contain a power for regulations to extend the life of the lease by an additional 20 years,” it says.