A $1 billion joint venture to move Melbourne's Wholesale Fruit and Vegetable Market from Footscray to Epping is on the brink of collapse and may require a government bail-out.
Developer Mirvac has refused to sign a contract with Victoria Fresh Markets after agreeing in February to build a $300 million wholesale market in Melbourne's outer north.
Victoria Fresh Markets was established in January to represent the wholesale market's tenants and has an agreement with the State Government over the relocation and redevelopment of the Epping site.
Mirvac also has plans for a $700 million industrial park next to the new market, but has been crippled by the global economic meltdown — it's share price has fallen 65pc this year.
Uncertainty over the market's future comes after The Age revealed yesterday that the credit crisis had also put in doubt the redevelopment of St Kilda's prized triangle site.
Mirvac's Victorian chief executive Greg Collins yesterday refused to discuss the status of either project.
He did not return several calls from The Age after initially saying: "I'll make some inquiries and get back to you."
When selected as the preferred bidder in February, Mr Collins said the listed developer had agreed to a joint venture with Victoria Fresh Markets.
"We are committed to fast tracking the project for the benefit of the market community, the state and our shareholders," Mr Collins said.
The State Government allocated $300 million in the 2005 budget for the relocation and redevelopment, with work expected to be completed by 2011.
Any delay to the massive project could jeopardise Victoria's agricultural industry, which is worth more than $8 billion a year.
The State Government's 2007-08 financial report, released this week, said it had expected a development contract to be signed last financial year.
"However, this project is not currently proceeding as a Partnerships Victoria project and no contract has been signed," the report said.
But a spokesman for Agriculture Minister Joe Helper said last night that the project would go ahead on schedule.
"The commitment in our future estimates of $300 million remain the same," he said.
"The Government has no contract with Mirvac and Mirvac are a subsidiary element of the overall project."
Earlier, during question time in the upper house, the Opposition seized on the uncertainty.
Opposition spokesman for the scrutiny of government, David Davis, asked Treasurer John Lenders whether the State Government would allocate part or all of the $1 billion required to complete the project, given the public-private partnership would no longer proceed.
"Or is the project dead in the water?" he asked.
Mr Lenders said the Government had allocated money in the budget for the move, had bought the Epping site and found a new use for the Footscray Road site.
"Let's make it unequivocally clear — we have acquired land, allocated money and are keen to proceed with this project," he said.
But he said before Partnerships Victoria projects could be concluded they had to get "contracts to the table".
Mr Lenders said Mr Helper was working with numerous stakeholders.
"This is a very complex project in the process of negotiation," he said.
Partnerships Victoria referred to the Melbourne Wholesale Market as a public-private partnership in a press release as recently as February 13. But this was gone from the website yesterday.
Mr Davis said the livelihoods of hundreds of market traders were in limbo.
"The Government's got to come clean on why this project fell over — whether it's the partner pulling out, whether it's the failure of the project to stack up financially or whether it's a problem with the line of credit," he said.
"This is typical of Labor's incompetence in major projects. We have an unbudgeted project that could cost taxpayers hundreds of millions of dollars."
Traders have campaigned against the move from the Footscray Road site, but with more than 7000 people using it, the Government refused to budge. A Department of Primary Industries spokesman said yesterday storeholders might now be asked to build their own storage space.
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