Fruit market plan in chaos

Legal challenge: Fresh State chief executive John Roach. Photo: Meredith O’SheaTHE $670 million relocation of Melbourne’s fruit and vegetable market to Epping is in disarray, with a legal challenge from furious wholesalers and a rival plan to build a private market in Dandenong.

Fresh State, which represents 120 wholesalers based at the West Melbourne market, launched Supreme Court action against the Baillieu government on Friday.

The powerful industry group claims successive state governments have bungled one of Victoria’s largest infrastructure projects, which is already $370 million over budget and more than four years behind schedule.

The class action will focus on the government’s failure to recognise the equity of businesses that would move to Epping in 2014 and supply about $2 billion worth of fruit, vegetables and flowers to Victorian retailers each year.

The wholesalers have also not been provided with rent estimates for new stands under construction at Epping and are now threatening to support a rival bid for a distribution centre in Melbourne’s south-east.

The private consortium, which has the financial backing of several large wholesalers, growers and retailers, has seized on uncertainty surrounding the Epping model, and met VicUrban last week to discuss the acquisition of a Dandenong site.

It is also involved in negotiations on another Dandenong site and has access to up to $150 million in private funding.

Amid growing disquiet among market participants, Major Projects Minister Denis Napthine recently announced an overhaul of the advisory committee that provides guidance to the government on the embattled Epping project.

Fresh State chief executive John Roach said the Epping market loomed as ”a massive white elephant” that could push Victoria’s fragile budget into the red.

”We had to take legal action, we had no other option,” Mr Roach said. ”More than seven years after this project was announced and the government still hasn’t told our members what rents they will be expected to pay at Epping. How can they possibly plan for the future of their businesses?”

He said many of the wholesalers had paid up to $650,000 for stores at the Footscray Road site or had established valuable leasehold businesses over the past 40 years.

”We believe they should be given identical leases if they move to Epping, which is looking increasingly unlikely,” Mr Roach said.

He confirmed that his members would consider joining the Dandenong bid or build their own private facility on land that adjoins the current Epping site on Coopers Street.

Rod Kerley, a spokesman for the consortium behind the Dandenong proposal, said wholesalers, growers and retailers wanted to own and operate their own distribution centre, similar to private models used in Sydney and Brisbane.

He said the Dandenong centre would initially target about 30 per cent of market participants, but conceded that it could eventually incorporate Melbourne’s entire wholesale market.

A spokesman for Dr Napthine said the government had broad support from the market community and would continue to negotiate on rental options with all wholesalers in good faith.

”Individual rents to apply at the new market in 2014-15 are subject to a variety of factors including the location, size and type of the market floor lease,” the spokesman said.

Allan Crosthwaite, the chief executive of the Melbourne Market Authority, which is handling the Epping relocation on behalf of the government, declined to comment yesterday.

The Baillieu government had serious doubts about the Epping plan and only affirmed its commitment to the project in July 2011, after a six-month review by the Department of Treasury and Finance.

The review uncovered a $370 million blowout from 2005-6, which Mr Napthine blamed on bungling by the former Labor government.

Before the 2006 election, Ted Baillieu had promised traders the relocation would not proceed if he won government.

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