Port privatisations hurt economy: Asciano

THE head of ports and rail operator Asciano fears the high-priced privatisation of Australia's ports is damaging the economy.

The short-term benefits to public coffers of realising massive prices by selling public assets could ultimately hurt people more, chief executive John Mullen says.

That happened when the consortiums that bought ports ensured returns by charging high rents to port operators such as Asciano, whose rental costs had jumped 350 per cent at one port.

Asciano and its competitors then pass costs on to importer and exporter customers.

But Mr Mullen says that then risks damaging competitiveness and causing higher costs to consumers.

"It starts to become a tax on trade," he told an American Chamber of Commerce lunch in Melbourne on Wednesday.

"Governments just want to get a fantastic price for it and use those funds to develop other things in the state and there is nothing wrong with that.

"But if the owner has to put prices up to try get a return, ultimately the consumer or manufacturers or exporters are paying that bill and it is probably not good for Australia in the long run."

Mr Mullen said he supported privatising freight and infrastructure assets but only if it improved Australia's productivity and way of life.

Control mechanisms on pricing should be inserted in the sales process, he said.

The NSW government received $5.07 billion for the sale of Port Botany and Port Kembla last year.

It will also reap more than $1 billion for Newcastle port's sale, while the Victorian government plans to private the Port of Melbourne.

There would always be a need for visionary, nation building investment from government even when it took years for the economic returns to come, Mr Mullen said.

Mr Mullen also called for a greater investment in rail infrastructure including a "nation building" inland rail track between Melbourne and Brisbane.

More than 95 per cent of total freight moved between Melbourne and Sydney was by road - the most intensive in the world - but rail could achieve the most economically efficient movement of goods, reduced congestion and helped the environment, he said.

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