Draft 30 Year Infrastructure Strategy

26 February 2021

Infrastructure Level 34, 121 Exhibition Street VIC 3000

Draft 30 Year Infrastructure Strategy‐ Port of Melbourne Submission

Thank you for the opportunity to comment on the Infrastructure Victoria (IV) – Draft 30 Year Infrastructure Strategy. PoM have previously made submissions to the 2016 release of IV’s 30 Year Infrastructure Strategy, IV’s Advice on securing Victoria's ports capacity ‐ May 2017, as well as IV’s Options Paper – All Things Considered and IV’s foundation document, Laying the Foundations, Discussion Paper. These previous submissions outlined the significant port and freight sector infrastructure issues and opportunities which are at the forefront of PoM’s interests and are relevant to the development of a Victorian infrastructure strategy, specifically: • Economic importance of ports – Ports are critical economic assets and need to be recognised as being integral to the strategic land use and transport planning undertaken within Victoria • Port interface and transport route protection is required – Protection is required both at the port interface and along key transport routes to ensure that the critical economic activities undertaken within ports (both current and future) are able to continue • Appropriate industrial land allocation and transport connections are required – Ports, land transport networks (road and rail) and industrial land in combination, form an integrated port related logistics system and need to be considered together to ensure that the system as a whole is not constrained • Further investment in the road and rail network is essential – Melbourne metropolitan transport congestion will continue to grow and as a result continued investment in the arterial road and rail network is important for the delivery of productive and efficient freight transport • Public transport investment also supports freight activities – Investment in public transport can also support freight activities through freeing up road network capacity for port and other freight users. As ’s largest port, the Port of Melbourne is a vital trading hub for south‐eastern Australia, facilitating more than one‐third of the nation’s container trade and playing a critical role as a key driver of economic activity. Following the state of Victoria’s $9.7 billion dividend from the lease of the Port, PoM has additionally invested more than $280 million to support trade growth and the Victorian economy. We are focused on providing world‐class port facilities and services and committed to investing in Australia’s supply chain infrastructure to drive efficiencies and productivity that support our economic future and respond to trade needs for the short and long‐term. We have been working closely with port users and the entire supply chain to ensure goods moved with minimal disruption during the COVID crisis. And, as we move forward and seek to rebuild our economy, PoM has a vital role to play. Central to this role is our 30‐year Port Development Strategy, which provides a clear plan to meet and enable sustainable trade growth over the long term by driving investment and innovation across PoM’s operations and into the broader supply chain, with ultimate benefits for the economy and community at large. Crucial to Victoria’s economic recovery is ensuring supply chain infrastructure planning is a priority in Victoria’s 30 year Infrastructure Strategy, facilitating a strategic investment environment that supports PoM’s contribution to Victoria’s economic and social prosperity.

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Draft 30 Year Infrastructure Strategy

CONTENTS EXECUTIVE SUMMARY ...... 5 Recommended Inclusions ...... 6 PoM Response to IV Recommendations ...... 6 Section 1 Recommended Inclusions ...... 7 A. Victorian Ports Strategy ...... 7 B. Rail Link (WDRL) ...... 8 C. Port of Melbourne Rail Connectivity Project ...... 9 D. Land Use Reform ...... 9 E. Principal Freight Network ...... 11 Section 2 Response to IV draft recommendations ...... 12

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Victoria’s Draft 30 Year Infrastructure Strategy

EXECUTIVE SUMMARY

The Port of Melbourne, as a major Victorian trade gateway, is an economic asset of State significance and is an important contributor to Victoria’s economic prosperity. It is therefore essential that both the current and future operations of the Port is both sustained and enhanced. This enhancement needs to consider a wide range of issues including landside transport efficiency and capacity, ability to handle high productivity freight vehicles, investment in freight infrastructure as a network rather than in isolation, integration with industrial land uses, and the separation of passenger and freight rail networks. Our observations on the Infrastructure Victoria (IV) – Draft 30 Year Infrastructure Strategy are based on the port’s role in underpinning economic growth and our knowledge of the port supply chain including: . The Port of Melbourne is committed to servicing the Victoria economy in the current city location to at least 2067 . The Port directly contributes 19,600 jobs and $6billion to the Victorian economy each year . Whilst great progress is being made to deliver the right infrastructure and operating environment to encourage mode shift to rail, road will continue to play a critical role in servicing the future freight needs of Victoria. . The vast majority of containers (87%) collected from the port are delivered to destinations within metropolitan Melbourne – generally within 50km of the port. . The port is centrally located to service greater Melbourne with: . 26% of import containers delivered to the outer west such as Laverton North and Altona . 25% of import containers delivered to outer south‐eastern suburbs such as Dandenong . 19% of import containers delivered to northern suburbs such as Somerton and Tullamarine In 2016, over 11,000 trucks visited the port each weekday. Our forecasts suggest over the next 30 years we can expect: . Over 10,500 trucks per day to visit . Over 9,300 trucks per day to visit Webb Dock Based on these forecasts, the IV Draft 30 Year Infrastructure Strategy can play a significant role in: . Recognising the economic importance of ports and the connected supply chains – Ports are critical economic assets and need to be recognised as being integral to the strategic land use and transport planning undertaken within Victoria . Promoting protection for the port interface and transport routes through stronger strategic and integrated land use planning – Protection is required both at the port interface and along key transport routes to ensure that the critical economic activities undertaken within ports (both current and future) are able to continue . Ensuring appropriate industrial land allocation and transport connections – Ports, land transport networks (road and rail) and industrial land in combination, form an integrated port related logistics system and need to be considered together to ensure that the system as a whole is not constrained . Advocating for further investment in road and rail networks to support freight – Melbourne metropolitan transport congestion will continue to grow and as a result continued investment in the arterial road and rail network is important for the delivery of productive and efficient freight transport . Ensuring public transport investment recognise and support freight activities – Investment in public transport can also support freight activities through freeing up road network capacity for port and other freight users. . Promoting the need for rail to play an increased role in the port freight task ‐ All of the existing port rail freight is associated with regional exports however, with the current investment program in rail, consistent with Government policy, there are significant efforts to improve rail mode share. International container volumes are expected to grow from 3 million TEU in 2019 to around 8.9 million TEU by 2050. If we are going to achieve any significant rail mode share for this growing freight task, the Principal Freight Network must ensure appropriate rail network capacity is preserved for freight.

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Draft 30 Year Infrastructure Strategy

Recommended Inclusions In reviewing the IV Draft Strategy, PoM has identified a number of recommended inclusions outlined in Section 1. These recommendations include: . Recommendation A ‐ Infrastructure Victoria include the Victorian Ports Strategy as a priority recommendation to Government. . Recommendation B ‐ Infrastructure Victoria include the Webb Dock Rail Link as a priority recommendation to Government. . Recommendation C ‐ Infrastructure Victoria include the Federal Government’s Port of Melbourne Rail Connectivity Project as a priority recommendation to Government. . Recommendation D ‐ Infrastructure Victoria recommend regulatory reform to remove uncertainty from infrastructure investment . Recommendation E ‐ Infrastructure Victoria recognise the importance of the Victorian Government’s identification of the Principal Freight Network in the 30 year Infrastructure Strategy

PoM Response to IV Recommendations PoM has reviewed all of the IV recommendations and provided specific comments in relation to these recommendations. Our observations and suggestions are provided in Section 2 of this submission.

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Draft 30 Year Infrastructure Strategy

Section 1 Recommended Inclusions

A. Victorian Ports Strategy In addition to promoting the need for Victoria’s transport plan to be published, there is also an urgent need for a “Victorian Ports Strategy”.

Recommendation A – Infrastructure Victoria include as a Priority Recommendation to Government the preparation of a Victorian Ports Strategy.

PoM supports the importance of prioritising the development of a Victorian Ports Strategy. Such a strategy should cover the 30 year planning horizons required by the private ports and extend beyond the respective port boundaries to consider the total port freight supply chain, freight corridors and port buffers. In this regard it is critical that the Victorian Ports Strategy provides certainty for:  A shared vision for demand growth and industry requirements  Transport network connections and Industrial land use and availability  Statutory planning controls to support and ensure certainty of operations – not only for the port but also for the road and rail connections to the ports and the communities that these connections travel through  Provide certainty that PoM will remain as a container port for the next 50 years (consistent with the Port Lease) as it has the capacity to accommodate the forecast container growth as outlined in our 2050 Port Development Strategy as well as IV’s Independent Advice on Securing Victoria’s Ports Capacity (March 2017)  Provide for Inland Rail connections (and Western Intermodal Freight Terminal /Beveridge Intermodal Freight Terminal)  Protect industrial land and freight and logistics growth areas including their connecting transport corridors (including bthe Web Dock Rail Link). PoM considers a rail connection to the Webb Dock precinct in particular is going to play an essential part in the long‐term efficient container capacity for Victoria  Address the need to maintain and strengthen the safeguarding of the 24/7 Port of Melbourne operations and associated road and rail connections. The Victorian Ports Strategy should complement the regular preparation of the port development strategies by ports (every five years) and would provide a basis for collaboration as mandated by the Transport Integration Act 2010 (Vic). PoM encourages the State to be more engaged in the discussion for road and rail connections to ports as ports can be constrained by a lack of landside transport connectivity and at the moment there is no detailed collaboration or integration between the port managers and the State’s transport planners. There should be clarity from the State on where long term additional capacity (especially for containers) will be provided for Victoria from the 2060s and on to compliment the Port of Melbourne. In addition to transport connections, the other key area of consideration for the State is in regard to urban encroachment around ports which is a risk for the continued operations and future development of existing ports, their connecting transport corridors and associated supply chains (including intermodal terminals, warehousing and distribution centres). Safeguarding measures within the statutory planning framework to offer protections and strategic transport planning certainty must be put in place to support the port freight supply chain which underpins the Victorian economy. The strategy should provide the State with the understanding of what transport investments are needed to maximise container capacity at the Port of Melbourne to best utilise existing assets rather than the need for a costly second additional container port. PoM’s central location provides savings to supply chains given the ability to service all parts of Metropolitan Melbourne and the State.

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Draft 30 Year Infrastructure Strategy

B. Webb Dock Rail Link (WDRL) Consistent with the February 2021 Infrastructure Australia Priority List, PoM recommends that “Rail access to Webb Dock” be included in the Infrastructure Victoria 30 year infrastructure Strategy as a stand‐alone priority initiative.

Recommendation B – Infrastructure Victoria include as a Priority Recommendation to government the Webb Dock Rail Link.

The Webb Dock Rail Link is required to support container growth, maintain freight efficiency and reduce congestion on the surrounding road network in support of growth in container trade at Webb Dock. This complements the existing IA Priority Initiative for Melbourne container terminal capacity and land transport access, which recognises them longer‐ter need to plan for and construct additional container terminal capacity in Melbourne. The number of containers handled by the Port of Melbourne is forecast to grow from 3 million TEU in 2019 to 12 million TEU by 2066. The 2019 Australian Infrastructure Audit found that freight transport in our fast‐growing cities is impacted by congestion, leading to increased costs. Without a conscious effort to address this issue, delays in our urban supply chains will become more common and costs will increase as our cities grow. In order to address this PoM has already invested $1 million in early planning works in consultation with the State government to:  Confirm alignment preference and deliverability  Refine early cost estimates  Achieve agreement on the preferred alignment across relevant agencies and the process to embed the preferred alignment in State Government transport and planning policy. PoM worked collaboratively with Freight dVictoria an the Fishermans Bend Taskforce with the early planning works to date and jointly assessed the alignment options for a WDRL. The joint assessment confirmed that the preferred alignment through the Fishermans Bend Employment Precinct is along the existing rail reservation along Lorimer Street. The link would largely occur on PoM land linking Swanson Dock and Webb Dock with the State rail network and developing intermodal terminals (as illustrated by Attachment 1 WDRL map and Animation) and include a new elevated crossing, as well as an elevated and at grade freight rail, with the potential to also facilitate a shared user path crossing of the Yarra River. The project is a key component in the overall supply chain efficiency and competitive position of Australian exporters and the Victorian economy and will leverage a number of complimentary investments, including:  $125 million Port Rail Transformation Project ‐ PoM investment  $58t million Por Rail Shuttle Network ‐ Joint State and Commonwealth Government  Approx. $10 billion Inland Rail ‐ Commonwealth Government  Approx. $200 million Murray Basin Rail ‐ Commonwealth Government

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Draft 30 Year Infrastructure Strategy

C. Port of Melbourne Rail Connectivity Project Inclusion of the Port of Melbourne Rail Connectivity Project in the 30 year Infrastructure Strategy, to provide improvements to Melbourne’s rail infrastructure and operational arrangements to achieve increased Port of Melbourne rail connectivity and capacity with a particular focus on the delivery of import / export intermodal capacity at, and connectivity to, the proposed Western Intermodal Freight Terminal (WIFT) and the Inland Rail Project.

Recommendation C – Infrastructure Victoria include as a Priority Recommendation to Government the Port of Melbourne Rail Connectivity Project.

The Commonwealth has committed $7.5million towards delivery of the Port of Melbourne (PoM) Rail Connectivity Project (the Project), which is proposed to be a joint project between the Victorian and Commonwealth Governments. The Project has been divided up into three separate but linked components in order ensure that the project ish bot deliverable and that sufficient focus has been given to the key considerations which ultimately are required to ensure that the rail network and operations into and out of PoM work and are efficient. These components are:  Component 1 – Port of Melbourne and Freight Rail Forecasts (Metro, Regional and Interstate)  Component 2 – Western Intermodal Freight Terminal (WIFT) import export Terminal and Port Rail Connection Assessment and Business Case  Component 3 – Metropolitan Port and Freight Rail Operational and Infrastructure Improvement Assessments, Recommendations and Business Case

D. Land Use Reform The 30 year Infrastructure Strategy, as well as other initiatives, demonstrate the need for land use regulatory reform of ports specifically, and freight and logistics more generally. It is essential for government to understand the complexities of freight and logistics and its importance to the economy. It is also essential for government to appreciate the challenges that face the freight and logistics industry and to put in place the necessary planning protections to maintain the efficiency of current operations and enable future capacity expansion and investment.

Recommendation D – Infrastructure Victoria Recommend: Regulatory Reform to Remove Uncertainty from Infrastructure Investment

PoM agrees with the observations made on page 100 of the Draft Strategy in which IV suggests integrated land use and infrastructure planning can better manage change in communities and unlock greater benefits, and reflects on the fact that in the past, governments have been reluctant to publish plans which commit them to infrastructure projects. Victoria’s regulatory environment needs to be internationally competitive to continue to attract capital to invest in Victoria to ensure a sustainable and competitive freight and logistics industry. This in turn facilitates Victoria’s improved productivity, housing affordability and lower infrastructure costs. Addressing the current uncertainty and challenges experienced through the existing buffer controls in and around commercial trading ports and associated transport connections is a key part of ensuring this competitiveness and continued investment.

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Draft 30 Year Infrastructure Strategy

Urban growth and development is increasingly placing pressure on inner city industrial land in general, and the PoM Lease area specifically. Changing social and environmental expectations of neighbouring communities has the potential to affect port operations and future development plans and the desirability of waterfront land for residential and office uses is intensifying. Land use challenges around the Port have become evident over the last decade in Yarraville and Footscray, Fishermans Bend, Garden City, Docklands, E‐Gate and Williamstown. A buffer overlay, or similar planning control ensures that any new use or development takes into account the potential effect of current and future port operations on the land and does not introduce incompatible activities that would prejudice the undertaking of efficient and effective PoM operations, based on both current and forecast future trade levels. The State has made the commitment that the Port of Melbourne will remain in its current location by entering into the Port Lease until 2066 so in turn must strengthen the planning framework that surrounds the port (and its connecting transport links) to safeguard the current 24 hour, 365 day operations as well as achieving State policy certainty in providing the capacity needed to accommodate the growth in trade. Strengthening the planning framework around the Port of Melbourne will also serve to protect the objectives and commercial outcomes agreed to with the Port Lease Transaction and the Delivering Victorian Infrastructure (Port of Melbourne Lease Transaction) Act 2016 (Vic). There should always be strong links between the State and industry in the freight sector to allow for optimised planning. The State provides the majority of road and rail links but private industry provides all the equipment that moves freight and operates all the terminals. Nationally the three biggest ports are privately managed so if Victoria is to retain its competitive advantage in supply chain operations, there needs to be strong collaboration between the State and industry. A Ministerial advisory body or similar group is one way to create these connections. The key challenges to overcome in relation to the current planning framework are:  Greater certainty is required on planning protections afforded to Victorian ports and protection from residential (including other sensitive land uses) encroachment  Key transport connections to ports that support the end‐to‐end supply chain need appropriate statutory planning protections to offer certainty to industry, local government and the community  Greater emphasis and commitment is required eat th highest level to ensure the recognition of the role of ports and freight supply chains to the economy and to ensure that relevant operations are not compromised by individual and discrete planning decisions  The statutory planning framework and supporting documents like Planning Advisory Note 56 and Ministerial Direction 14 should be urgently expanded to protect future growth and development opportunities for the long term strategic benefit of the State of Victoria and all of its community. This includes for example; industrial land growth areas, transport connections and future development sites such as Bay West, Truginina and Beveridge. The draft 30 year Infrastructure Plan should be updated to highlight the critically important nexus between land use planning and infrastructure. This will allow for a more efficient and effective utilisation of our existing infrastructure assets allowing them to deliver their intended benefits to the community and the State. On the other hand, it will ensure that conflicts between land uses and infrastructure is addressed before it even becomes an issue. A key recommendation should be that the planning framework, as the tool utilised to implement policy and strategies, is changed to reflect the outcomes that the policies and strategies set. Without this change, the realisation of the policy and strategy will not be able to be delivered, leaving sub optimal outcomes.

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Draft 30 Year Infrastructure Strategy

E. Principal Freight Network Freight requires a network of road, rail, sea, pipeline and air in order to work effectively. Victoria has not had a recognised Principal Freight Network since it was last updated in 2013.

Recommendation E ‐ Infrastructure Victoria Recognise the Importance of the Victorian Government’s Identification of the Principal Freight Network in the 30 Year Infrastructure Strategy

Freight movements are essential to business and the economy which has been demonstrated clearly through the recent COVID‐19 pandemic environment where freight played a critical role in supporting the economy. Ensuring that commercial ships have easy access to the Port, that cargo is efficiently handled at the Port and that freight is easily transported on land helps to reduce the costs of doing business in Victoria. The building, manufacturing, retail, food, agriculture and petroleum industries rely heavily on the Port and its transport connections – and as a result, our day‐to‐day lives depend on the Port and associated freight supply chains running efficiently. Simply put, the better the Port and associated supply chain works, the better Victoria works. As our population grows and interstate and international trade increases, the demand for access to Melbourne’s Port will continue to grow. Each day, the Port handles around 8,000 TEU of containers carrying a range of consumer goods including textiles, medical supplies, clothing, toys, furniture and household appliances. It also handles significant volumes of other goods such as building materials used to construct our homes and infrastructure as well as petroleum products which fuel industry and passenger and freight vehicles. The port also is the gateway for agricultural based export products. A recognised and protected principal freight network that secures the essential transport connections to ports is critical to our long term strategic development of the State.

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Section 2 Response to IV draft recommendations

The following table provides observations and suggestions in response to the specific recommendations of relevance and interest to PoM.

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