Local steel firms have missed out on work on the massive expansion of Webb Dock, in a move expected to lead to job losses at a major manufacturer in Premier Denis Napthine's electorate in Portland.

Unions and steel industry groups have attacked the Napthine government's lack of local content requirements as part of the $1.6 billion expansion of Webb Dock by the government-owned Port of Melbourne Corporation. It comes as thousands of jobs have been lost in manufacturing in recent months.

Among the bidders for 25,000 tones of steel work was a group of local steel fabricators including Portland-based Keppel Prince, which has more than 300 workers. The local firms were, in turn, to be supplied by Australian-based BlueScope Steel.

Keppel Prince general manager Steve Garner said they were told they had missed out on the work. ''It's going offshore, they are going to import it.''

Mr Garner said he was ''bitterly disappointed'' by the decision and said it would likely cost jobs. He said he had spoken to Dr Napthine before the tender started. ''He (Dr Napthine) did make a point of contacting the Port.''

Despite Dr Napthine's intervention, the work, which was tendered through multinational McConnell Dowell, is expected to go to China or Korea, steel industry executives said.

Mr Garner said there were ''sad times ahead'' and was surprised the Victorian government's usual procurement rules for major projects did not apply to the dock expansion.

''It's a government project and yet they buy all these jobs from overseas and for us it's certainly disappointing,'' he said.

Australian Workers Union assistant state secretary Liam O'Brien said thousands of jobs had been lost in manufacturing and its members were ''looking to the government to stand up for local manufacturing''. ''If Denis Napthine can't stand up for jobs in his own electorate what hope has the rest of Victoria got.''

Massive job losses have been announced in manufacturing in recent months including the closure of the car-making industry and Alcoa's Point Henry smelter.

Mr Garner conceded Chinese steel was cheaper. Last week Keppel Prince won an anti-dumping case after it was found wind towers from China and Korea were being imported below cost.

''We know we're more expensive here in Australia. At the end of the day you'd want them to make some contribution to Australian jobs, at least give us 20 or 30 per cent of the project, that would have been very handy.''

The Steel Institute's Ian Cairns said three local fabricators including Keppel Prince had bid for the work and he expected it to now go to China or Korea. ''This is work that's really sorely needed in the steel industry and fabrication industry,'' he said. ''We are just looking for some better support for local content.''

He said the work on 25,000 tonnes of steel would support 50 to 100 jobs. ''If we continue to lose work like this, we'd be losing an industry.''

A spokesman for Dr Napthine did not respond to a request for comment.