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Perth Freight Link Business Case Executive Summary

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Perth Freight Link Business Case Executive Summary Perth Freight Link Business Case Executive Summary December 2014 The Perth Freight Link project will provide a dedicated, high productivity, east-west freight connection. It will solve the ‘missing link’ in the Perth Urban Transport Corridor and facilitate linkages between Perth’s strategic industrial areas and Fremantle 1.0 Project Overview Port. 1.0 Project Overview The Perth Freight Link Funding Benefits (cont’d) The Commonwealth Government has committed The Perth Freight Link is economically viable with a Project comprises two $925 million with the State Government committing base Benefit Cost Ratio of 2.8. $650 million towards the Perth Freight Link. The Construction of the Perth Freight Link will see a State Government’s contribution comprises $591 components. 9 ½ minute travel time saving and a $8.15 saving million in new funding, plus $59 million which is The Perth Freight Link Road Works which already committed for upgrades on High Street, per trip for freight vehicles (Kwinana Freeway to Fremantle). include an extension of Roe Highway (and a Fremantle. 1km section of pinch-point widening between Part of the State Government’s contribution will be In tangible terms the purpose built freight route will: Tonkin Highway and Welshpool Road), recouped from the Heavy Vehicle User Charge upgrades to Stock Road and Leach Highway, an extension of Leach Highway (parallel to collections. • Bypass 14 traffic lights resulting in less delay and frustration for heavy vehicles; High Street) and upgrades to Stirling Highway Benefits – a package of works called the Perth Freight • Benefit the community by having 500 fewer Link. The capital cost of these proposed works The project completion in 2018/19 will deliver trucks per day on sections of Leach Highway by is $1,507.9 million. critical improvements to the Perth Urban Transport Corridor (PUTC) – which remains a key economic 2031, reducing noise and increasing mobility by The introduction of a Heavy Vehicle User enabler of the State’s $250 billion economy. The removing slower vehicles from the road; and Charge to be applied between Muchea and Perth Freight Link will facilitate freight movements Fremantle. between Perth’s key industrial precincts, interstate • Improve access to the Murdoch Activity Centre gateways and the Fremantle Port. and Fiona Stanley Hospital. The PUTC plays a critical role for the State’s resources sector, facilitating the movement of essential industry supplies for mining and resource processing sites in the State’s North West. This is a massive logistics task that is expected to triple to 14 million tonnes by 2030. 3 Perth Freight Link Executive Summary 1.0 Perth Freight Link Road Works Project Overview 4 Perth Freight Link Executive Summary 2.0 Strategic Alignment The project delivers on Figure 1: Strategic alignment of project objectives with policy Commonwealth and State priorities and policies to support growth, improve productivity and liveability in the State. The provision of a purpose-built east–west freight corridor is consistent with the Australian Government’s significant road and rail investment programs, as well as both Commonwealth and State government policies that seek to improve freight efficiency, port access and connectivity to metropolitan industrial centres. The separation of freight and local traffic will enhance the road network’s safety and social amenity, achieving several State and national priorities for improved safety and ensuring consistency with metropolitan planning directions. The introduction of a user charge is consistent with Commonwealth policy agendas that recommend charges to facilitate more effective and efficient use of the road infrastructure. 5 Perth Freight Link Executive Summary The strategic urban transport corridor has a ‘missing link’ between Fremantle Port and Roe Highway at Kwinana Freeway. Currently freight vehicles are using fragmented and inefficient sections of the network (e.g. Leach Highway, Kwinana Freeway and High Street). They are mixing with commuter, arterial and local traffic contributing to an already acute congestion problem at peak 3.0 Current Challenges periods while diminishing community amenity and road safety. 3.0 Current Challenges The State’s rapid Figure 2: Gross State Product – annual % change economic and population growth over the last few years has exacerbated the problems. Western Australia has experienced significant economic growth and development in the 18 years to 2012-13. Long-run growth in Gross State Product has averaged 4.5%, outstripping the national rate in all but 4 of the past 18 years (Figure 2). Overall business investment in Western Australia peaked in 2012-13 at $74.7 billion. While there has been a softening in the prices paid for Western Australia’s natural resources the outlook for production is positive. The resource sector is Figure 3: Business Investment in WA (real terms) moving from the construction phase to production phase. The shift from construction to operations will curb some growth in business investment. The projections for business investment is for a tapering off at a relatively orderly rate by 2017/18 (Figure 3). However overall real level of business investment is still expected to remain high relative to previous years. 7 Perth Freight Link Executive Summary . 3.0 Current Challenges WA’s recent economic Figure 4: Residential population – annual % change 4.50% Australia performance has brought 4.00% Southern LGAs with it strong population 3.50% 3.00% Western Australia growth and increased 2.50% Greater Perth 2.00% road congestion. 1.50% 1.00% Western Australia’s population growth has 0.50% considerably outpaced the national rate over the 0.00% past decade. State population growth averaged 2004 2005 2006 2007 2008 2009 2010 2011 2012r 2013p 2.6% per annum to June 2013 compared to the national average of just 1.6% (Figure 4). Figure 5: Motor Vehicle Registrations – % change, census years 2009 and 2014 Perth’s southern Local Governments, in particular, have experienced solid population growth, averaging 18.20% above 2% per annum over the past decade and 19.00% 17.20% collectively representing over 17.4% of the 17.00% population of the greater metropolitan region as at 15.00% 14.00% June 2013. 13.10% Australian National 13.00% 11.90% 12.00% Average = 12.9% Road congestion, measured using motor vehicle 11.00% registrations has increased by over 17% between 11.00% 9.70% 2009 and 2014 (Figure 5). This represents the 9.00% second highest rate of growth in the country. 7.00% Given the nature of the State’s growth profile, the 5.00% transport and logistics sector has had to expand NSW Vic Qld SA WA Tas NT ACT significantly to support these economic drivers. NSW Vic Qld SA WA Tas NT ACT 8 Perth Freight Link Executive Summary 3.0 Current Challenges The State’s rapid growth has Figure 6: Fremantle Port Inner Harbour – road and rail based freight movements (TEUs) placed pressure on the transport system. Increasing demand for goods and services has seen the volume of containers imported and exported through Fremantle grow. Overall, the volume of container traffic has seen throughput increase by almost 70% between 2003-04 and 2013-14 (Figure 6). Rail is currently handling 14.2% of the freight transport task from the port. Even if rail continues to grow its market share and reaches the State Government’s target of ’30% allocation of the freight task’ it is evident that a sharp increase in the road freight task is required to meet the projected trade volumes. As an overall solution to this challenge rail is not well Figure 7: Projected growth in trade throughput at Fremantle Port Inner Harbour (TEU) suited to the short haul distances that are required between Fremantle and Kewdale. Rail is most effective over long haul or with bulk commodities where the impost of the double handling for the ‘last mile’ delivery by road transport does not represent as higher proportion of the overall transport costs. The projections of the freight task show a rapid rise in volumes (Figure 7). For rail to be effective requires the co- ordinated investment of Government, rail operators and terminal operators. Experience in other jurisdictions where investment has been made to lift rail productivity and capacity have unfortunately not delivered the results that are required to address the freight problems in Perth. 9 Perth Freight Link Executive Summary 3.0 Current Challenges The State Government’s Figure 8: Indicative scenario for the Inner and Outer Harbour transitioning arrangements strategic direction is to maintain the inner harbour and optimise its capacity. While the location of the port presents challenges for the facilitation of freight movements it will continue as a working port to support the State’s development. The State continues to invest in the development of the inner harbour to increase and optimise the inner harbour’s capacity (Figure 8). As with many major cities, the community has ‘grown up’ around the port, leading to conflicting priorities between community amenity and freight and industrial efficiency considerations. There is a need to develop a solution that ensures efficient port access while at the same time managing the community amenity issues. As the Inner Harbour reaches capacity the new container port facilities in the outer harbour in Cockburn Sound will be developed as the second location for container handling facilities. The transport challenge is to ensure that: • The continued investment and growth in Inner Harbour is supported for the short, medium and long term; and • The new container port facilities in the outer harbour in Cockburn Sound have efficient transport linkages. Perth Freight Link fully addresses the first challenge. The Roe Highway extension section will be required to service the outer harbour in the longer term. 10 Perth Freight Link Executive Summary 3.0 Current Challenges The Perth Freight Link Project and Heavy Vehicle User Charge will resolve three fundamental problems that currently face the freight industry, the local community and Government.
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