Victoria is launching on Tuesday the $1.2-billion Webb Dock container port project. The new port is the Australian state's first major venture under the administration of Premier Ted Baillieu.

The sea gateway project will create about 2,500 jobs and alter the city's landscape. Besides the 15,700 jobs presently supported by the port, another 1,900 jobs would be created indirectly by the new port.

It will be built at the top of Port Phillip Bay and is expected to boost handling capacity to about $100 billion worth of trade annually.

About 2.5 million containers pass yearly through Victoria's port and the volume is expected to rise to 5.5 million by 2025 and 8 million by 2035.

The Victoria state government said survey work starts April 24 and civil works will commence within 12 months. The new container port is targeted for completion in 2016. No taxpayer money would be spent on the venture since it will be financed by the Port of Melbourne Corporation and the private sector.

The new port aims to keep import prices down by limiting transport cost, said Victoria Ports Minister Denis Napthine, who added that the facility expected to cope with medium-term demand prior to the construction of another new container port at Hastings sometime in the 2020s.

"If this doesn't go ahead, we will be chock-a-block in the Port of Melbourne within a few years.... This is absolutely essential to ensure we have the capacity to deal with the trade coming through our port," Mr Napthine was quoted by The Herald Sun.

Unless the Webb Dock container port is built, shipped items would have to come via the port of Brisbane and then trucked to Melbourne. The new container port is in response for calls by Victoria business groups for a third container port.

Ahead of the project's finish, Hutchison Port Holdings (HPH) has expressed an interest to be the new container port's stevedore. Raymond Law, managing director for Australasia and North Asia of HPH agreed that Webb Dock is the best site for container operations.