Deepwater Ports an Australian Infrastructure Priority

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Published Feb 27, 2020 7:21 PM by The Maritime Executive

Infrastructure Australia has announced its Priority List for 2020 which includes the development of deepwater container port facilities.

Australia’s independent infrastructure adviser noted the need for “a network of deep water ports” along the East Coast to accommodate large ships that are currently unable to visit due to port constraints, as a “priority initiative.”

Infrastructure Australia is set to examine the issue, including understanding the challenge of channel deepening at existing ports, development of new port locations and enhanced landside access infrastructure at ports. It has also flagged the need to examine the option of developing “a container port facility that can accommodate the largest ships as a transhipment port for other destinations within Australia.”

The Infrastructure Australia announcement follows detailed analysis by Houston Kemp Economists in 2019.

The inclusion of container port facilities on the list should come as music to the ears of internationally-trading businesses across the country, says Port of Newcastle CEO Craig Carmody. He says Infrastructure Australia has correctly identified a major deficiency in the nation’s preparedness for ever-larger ships, noting problems on both the wharfside and the landside.

“The data is clear – shipping lines around the world have stopped building the ships that Australia’s ports are designed to accommodate,” Carmody said. “While Infrastructure Austraila correctly notes that no Australian port can accommodate the larger, more energy-efficient ships carrying more than 14,000 TEUs, it is also critical to examine the constraints to existing road and rail infrastructure in handling the nation’s current and future trade volumes.

“Ports overseas are now handling ships of more than 20,000 TEU at a time when Australia’s ports celebrate inefficiently accommodating a ship less than half that size, in some cases having to turn the ship around at the berth to reach containers stacked on the opposite side.

“For a nation that moves 98 percent of its international trade by sea, being unresponsive to these global trends leaves Australia’s competitiveness and consumers disproportionately exposed.”

Carmody said Port of Newcastle is ready to build a new two million TEUs container terminal, subject to the removal of a $100 per TEU penalty that currently applies. Newcastle is approximately 200 kilometers north of Sydney and has plans for a fully automated, electric terminal capable of handling ultra-large container vessels that could be operational by 2023. 

However, the NSW Government privatized Port Botany and Port Kembla in May 2013, and Port Commitment Deeds signed at the time, for a term of 50 years, oblige the State of NSW to compensate the operators of Port Botany and Port Kembla if container traffic at the Port of Newcastle is above a minimal specified cap. Another 50-year deed, signed in May 2014 requires the Port of Newcastle to reimburse the State of NSW for any compensation paid to operators of Port Botany and Port Kembla under the Botany and Kembla Port Commitment Deeds. This essentially makes the development of a new container terminal at Newcastle uneconomic.

“We continue to pursue productive discussions with all levels of government to achieve an outcome that unlocks $2 billion of private investment in NSW and spawns the significant associated economic benefits for our state,” Carmody said. “This is about Australia’s international competitiveness and the future of the Hunter and NSW – it is too important to be politicized or caught in endless rounds of legal argy bargy. We need to get on with building this infrastructure to ensure Australia does not remain caught in an international competitiveness time-warp.”

Infrastructure Australia has also listed a number of other port projects as a priority including: 

Port Botany Freight Rail Duplication

The proposed initiative aims to upgrade the capacity of the Port Botany Rail Line by duplicating 2.9 kilometers of the line. The proposed initiative originally formed part of a broader strategy designed to drive growth in rail mode share for freight to and from the port.

Port Botany is one of Australia’s most significant import/export terminals for containerized freight. The NSW Ports Master Plan (2015) estimated that container movements through the port would grow from 2.3 million TEUs in 2015 to between 7.5 million and 8.4 million TEUs by 2045. Part of the Port Botany Rail Line has only a single track. Additional demand arising from growth in import/export freight (in particular from the development of the Moorebank Intermodal Terminal) has the potential to create a bottleneck along this line. 

Port of Brisbane dedicated freight rail connection

The 2015 Australian Infrastructure Audit identified that growth at the Port of Brisbane is likely to become constrained by the lack of a dedicated freight rail connection. The construction of a dedicated freight rail corridor would allow more freight movements to be removed from the road network, which
would help alleviate congestion.

Freight rail access to Port Kembla

The 2015 Australian Infrastructure Audit identified that Port Kembla would face capacity constraints in the absence of any additional rail network improvements. Maintaining efficient movement of freight to and from the port is a nationally significant challenge, states the report. Additionally, there is a need to improve the efficiency and reliability of freight rail movements between the Illawarra and Greater Sydney, particularly between Port Kembla and the intermodal terminals in Western Sydney.

Melbourne container terminal capacity and land transport access

The Port of Melbourne is Victoria’s busiest port and the largest container and general cargo port in Australia. Container traffic at the port is projected to grow by 2.6 percent per year, from 2.9 million TEUs in 2018 to around nine million TEUs in 2050. The 2015 Australian Infrastructure Audit identified that, even with planned expansions, additional container terminal capacity will be required before 2031.

The development of additional container terminal capacity in Melbourne – with dedicated connections to the port, proposed metropolitan terminals, regional hubs and the national rail system – will help to alleviate congestion caused by road freight movements. Currently, only around 10 percent of the Port of Melbourne’s container trade is moved by rail to and from importers and exporters.

Perth container terminal capacity and land transport access

Fremantle Port Inner Harbour handles most of Western Australia’s container trade. Throughput at the current container terminal will be limited by urban development that constrains the road and rail connections into the port. In 2017–18, the port handled approximately 750,000 containers. This trade is expected to grow on average by 2.8 percent each year between 2017–18 and 2067–68. This growth could result in the current facility reaching capacity in around 15 years.

Additional container terminal facilities, located at either the current port site or at a new Outer Harbour site south of Fremantle at Kwinana, will need to be served by road and rail connections that provide capacity for growth over the economic life of the facilities.