A powerful consortium of wholesalers and growers has launched a private bid to build a new wholesale fruit and vegetable market in Dandenong, which could force the State Government to abandon its $1 billion market relocation plan.
The Age revealed yesterday that a joint venture to move the Wholesale Fruit and Vegetable Market from Footscray to Epping had collapsed, after developer Mirvac backed away from the project amid global economic turmoil.
The failure of the deal has raised serious doubts over the future of similar funding arrangements, including private-public partnerships, which have been championed by the Brumby Government and would be used to finance Victoria's $3.1 billion desalination project.
A source involved in the private bid for a market in Dandenong said more than $500 million had been raised, with three sites under consideration.
"There are large chunks of disaffected people who are frustrated by the delays created by the State Government, Mirvac and the Victorian Fresh Markets, which has forced them to take matters into their own hands," the source said.
The insider said the proposal was never intended to undermine the Government's plans for a new market in Epping.
"It was not designed to derail the Epping project but they can't wait while the Government messes around."
A spokesman for Greater Dandenong Council confirmed private sector interest to build a market and distribution centre.
Premier John Brumby said he expected Mirvac to pull out of the massive redevelopment, despite assurances from the company that it was still committed to the project.
Despite the uncertainty, Mr Brumby said the Epping move would proceed, with $300 million already allocated.
But Opposition scrutiny of government spokesman David Davis raised concerns about the source of additional funding for the $1 billion project.
"The Treasurer still cannot say who would pick up the $700 million that a PPP partner would have provided. Now we have Government MPs saying the Melbourne Wholesale Fish Market is also going to move to Epping," Mr Davis said.
Treasurer John Lenders was forced to defend the Government's ability to attract private investment following doubts over the Wholesale Fruit and Vegetable market and the St Kilda triangle redevelopment, which he blamed on the global slowdown.
"The world is going through difficult economic times and it will be a judgement that the Victorian community will make as to … how this state is positioned versus the others."
Mr Lenders refused to respond to whether the desalination project would proceed as a public-private partnership.
But Department of Sustainability and Environment spokesman Greg Meyer yesterday said the two bidders for the contract to build and operate the desalination plant at Wonthaggi were in a strong position.
"Bidders have demonstrated that they have more than adequate funding sources to deliver the project," he said.
Former premier Jeff Kennett, who introduced the public-private model to Victoria, weighed into the debate yesterday.
Mr Kennett said PPPs locked up public resources for years, leaving governments with less money to spend during difficult times.
"It is my view that they are being overly utilised as a method of funding projects," he told a Municipal Association of Victoria conference.
"The more you can do yourself from your own resources will leave future councils better able to deal with the challenges they face."
He said there was "genuine reason and need" to use PPPs when he introduced them in 1992 because Victoria was carrying a $32 billion debt and needed activity.
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