Annual Report

Port Authority of 2018/19 Overview This Annual Report contains audited Financial Statements. If you experience difficulty accessing this content please contact David Kenny, General Manager, Corporate Planning and Reporting.

T 02 9296 4602 E [email protected]

Port Authority of New South Wales (Port Authority) is a state-owned corporation (SOC) ABN 50 825 884 846

T 02 9296 4999 F 02 9296 4742 E [email protected] W portauthoritynsw.com.au

Street address: Level 4, 20 Windmill Street, , NSW 2000 Postal address: PO Box 25, Millers Point, NSW 2000 Business hours: 9 am–5 pm, Monday to Friday Service hours: 24 hours a day, seven days a week

Front Cover: Hornby , . © structuresxx - stock.adobe.com Table of contents

Letter of submission 5 12 Port Kembla 64 12.1 Overview 64 1 Overview 6 12.2 Marine Operations 65 2 Highlights 7 12.3 Summary review of operations 65 2.1 Our people 7 12.4 Community engagement 2.2 Total vessel visits (cruise and trade) 9 and sponsorship 67 2.3 Cruise 9 12.5 The year ahead 67 2.4 Trade 12 13 Port of Eden 68 2.5 The Bays Precinct 13 13.1 Overview 68 2.6 Projects 13 13.2 Summary review of operations 69 2.7 The year ahead 14 13.3 Port development 70 3 Summary review of operations 17 13.4 Other highlights 71 3.1 Financial performance 17 13.5 Community engagement and sponsorship 71 3.2 Marine Operations 17 13.6 The year ahead 71 4 Port highlights 19 14 Port of Yamba 72 5 Chair’s report 22 14.1 Overview 72 6 Chief Executive Officer’s report 24 14.2 Pilotage and navigation services 72 14.3 Summary review of operations 73 7 Board of Directors 26 14.4 Port development 73 8 Executive team 30 15 Sustainability 74 9 Vision, objectives and values 32 15.1 Introduction 74 10 Sydney Harbour and 33 15.2 Management of port impacts 74 10.1 Port Botany 33 15.3 Penrhyn Estuary 76 10.2 Sydney Harbour 33 15.4 Vehicle and marine fleet 77 10.3 Trade vessel visits 34 15.5 Energy and waste 78 10.4 Marine Operations 35 15.6 Indigenous sponsorship 78 10.5 Emergency response 37 15.7 Environmental penalties 78 10.6 Cruise in Sydney Harbour 40 15.8 The year ahead 78 10.7 The Bays Precinct 45 10.8 Security 48 16 Heritage 79 16.1 Overview 79 10.9 Capital projects 49 16.3 The year ahead 79 10.10 Community engagement and sponsorship 52 17 Communications highlights 80 11 Newcastle 58 17.1 Overview 80 11.1 Overview 58 17.2 The year ahead 81 11.2 Marine Operations 59 11.3 Summary review of operations 59 11.4 Community engagement and sponsorship 63 11.5 The year ahead 63

Table of contents • 3 4 Port Authority of New South Wales Annual Report 2018/19 19 18 have beenusedto illustrate thisreport. Port Authority ofNew SouthWales thanksallemployees whoseimagesofourworking portsand waterways

19.15 19.14 19.13 19.12 19.11 19.10 19.9 19.8 19.7 19.6 19.5 19.4 19.3 19.2 19.1 Statement oflandholdings Notes to thefinancial statements Statement ofcashflows Statement ofchangesinequity Statement offinancialposition Statement ofcomprehensive income Independent auditor’s report Director’s declaration Statutory disclosures Financial stat

(Public Access) Act 2009 Government Information raised by the Auditor General period provisions Statement of Corporate Intent of operational objectives affecting achievement subordinate legislation Port Safety Operating License Insurance activities Risk management Code ofconduct Board committ Role oftheBoard Corporate governance Response to significantissues Exemptions for the reporting Performance relative to the Economic orotherfactors Changes inActs and Relevant legislation Guarantee of servic Charter, aimsand objectiv ements

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146 150 146 146 1 1 1 148 145 156 156 147 147 155 153 153 153 83 90 49 84 48 48 89 88 85 92 91 19.26 19.25 19.24 19.23 19.22 19.21 19.20 19.19 19.18 19.17 19.16 19.36 19.35 19.34 19.33 19.32 19.31 19.30 19.29 19.28 19.27

appointment and education meetings 2018/19 2018/19 independent professional advice consumer response community organisations non-government employees Authority of New South Wales Board performanc Director remuneration, Attendance at committee Attendance at Board meetings Board meetingsandtheirconduct Other board memberships of interest Conflict Access to information and Board independence Chief Executive Offic Board composition Public interestPublic disclosures Executive positions Land disposal Annual report cos Publications Community engagement/ Funds granted t Overseas travel by Port Work HealthandSafety Equity, diversity andinclusion

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160 160 160 164 164 164 164 164 164 165 1 1 163 1 1 1 1 162 157 157 157 59 59 58 58 58 58 Letter of submission

27 September 2019

The Hon. Dominic Perrottet MP The Hon. Damien Tudehope MLC Treasurer Minister for Finance and Small Business 52 Martin Place 52 Martin Place SYDNEY NSW 2000 SYDNEY NSW 2000

Dear Mr Perrottet and Mr Tudehope,

REPORT ON OPERATIONS FOR THE YEAR ENDING 30 JUNE 2019

We are pleased to submit Port Authority of New South Wales’ annual report detailing performance, operations and financial results for the year ending 30 June 2019. The report has been prepared in accordance with the Annual Reports (Statutory Bodies) Act 1984, and the applicable provisions of the Public Finance and Audit Act 1983 and the State Owned Corporations Act 1989, and is submitted for presentation to Parliament.

Yours sincerely,

Mr Robert Dunn Mr Grant Gilfillan Chair Chief Executive Officer and Director

Letter of submission • 5 6 Port Authority of New South Wales Annual Report 2018/19 business activitiesinclude: of Port Authority andassociated The primaryrole andresponsibilities business needsinto fullconsideration. aims to addvalue andtakes their a professional service that consistently We work to provide ourcustomers with and to protect portenvironments. for shipping andsecure for everyone, We operate to keep ourportssafe (See Section 19.3 for more information.) and MaritimeAdministration Act 1995. issued undersection12(2)ofthePorts the Port Safety Operating Licence Administration Act 1995 (NSW) and Act 1989 (NSW), Ports andMaritime of theState OwnedCorporations functions are derived from theprovisions Port Authority’s statutory objectives and of Newcastle, Eden andYamba. Port Botany, Port Kembla andtheports commercial shippinginSydney Harbour, security and operational safety needsof corporation that managesthenavigation, (Port Authority) isastate owned Port Authority ofNew SouthWales 1 • • • • • • •

and Safety Regulation 2011 and preserved by theWork Health Dangerous GoodsRegulation 1999, as contained inPart 11oftherepealed dangerous goodsadministration , in the marine environment including theclean-upofspills emergency response safety ofportoperations port security a shipinandoutofport pilotage (marinepilotsafely navigating channels andberthingboxes survey ofharbour/port approaches, within eachport safe navigation ofshippingmovements

Overview • • at Rozelle. Quay andWhite Bay CruiseTerminal Overseas Passenger Terminal at Circular Sydney Harbourcruisefacilities at the Port Authority owns andmanages adjacent to berthsat GlebeIsland. also provides landonlong-term lease Bay inSydney Harbour. Port Authority user berthsat GlebeIslandandWhite key NSW assets includingcommon Port Authority owns andmanages north, to Gerroa, southof Port Kembla. from FingalHead,Port Stephens inthe incidents in coastal waters stretching agency for responses to maritime areas’. Port Authority isalsothelead entry andexit ofvessels withinport to direct andcontrol themovement, be summarised ashaving ‘powers 87 oftheMarineSafety Act and can of a Harbour Master isoutlinedinsection Act 1998(NSW). The general function under section85oftheMarineSafety Each HarbourMaster isappointed Master inallcommercial portsinNSW. Port Authority hastherole ofHarbour Eden andYamba. ), Newcastle, Port Kembla, ports ofSydney (Port Jacksonand commercial shippingfunctionsinthe Port Authority isresponsible for all

Export Framework. governance ofHunter Coal • • • of: management

retail/commercial properties common userberthfacilities cruise facilities andterminal services 2 Highlights

Pilot cutter approaching a container ship off Sydney

2.1 Our people The preparedness of employees to challenge the way we have done things in the past has resulted in new ideas Work, Health and Safety and the initiation of safer design, safer Port Authority has recorded our lowest controls and safer outcomes for both injury rates and best safety performance employees and the public interface. We since the amalgamation of marine continually review protocols, particularly services in the Sydney, Newcastle and in regards to marine and pilot operations, Port Kembla Port businesses in 2014. to promote standardisation across all our ports. The ongoing challenge to continually improve operational safety, the Leadership and coaching value of incident review and a better understanding and application of A key aspect of Port Authority’s preventative and mitigating controls organisational goals is leadership and in risk management is supporting the the coaching of employees to develop safety improvement that has occurred. skills in leading others. Port Authority’s The leading indicators we measure Coaching for Success program supports include near miss reporting, safety these goals, with managers and conversations, audit inspections and employees engaging quarterly. WHS Committee meetings. Port Authority continues to invest in an annual program of managerial leadership training for senior managers and key roles within the organisation.

Highlights • 7 8 Port Authority of New South Wales Annual Report 2018/19 Day andNAIDOCWeek. Lunar New Year celebrations, Harmony events andactivitieseachyear, suchas cultural awareness through aseriesof Port Authority supportsdiversity and Industry Awards. Australian ShippingandMaritime receiving anaward at theannual industry onaninternational scale, to promoting women inthemaritime acknowledged for hercommitment & HarboursWomen’s Forum andwas the International Association ofPorts Master represents theorganisation on Port Authority’s Newcastle Harbour our industry. throughout theorganisation and to increase andsupportdiversity developing initiatives andideas Port Authority hasfocused on and inclusion Improving diversity as partofPort Authority’s cadetshipprogram Cadetship program: Matias (cadet) inAntarctica withthe Authority mentor. ships, backed withthesupportofaPort cadets placements onvarious merchant a number ofshippingcompanies to offer Port Authority haspartnered with professional seafarer qualifications. This isthefirst step towards attaining (AMSA) Watchkeeping Certificate. the Australian MaritimeSafety Authority of ‘at-sea’ experience required to obtain is helping participantsgainthe18-months The Sponsored DeckCadetProgram in the maritime industry. for seafarers starting theircareers launched acadetprogram In September 2018, Port Authority Launch ofcadetprogram RSV Aurora Australis Majestic Princess sails into Sydney Harbour on her maiden call, September 2018

2.2 Total vessel visits 2.3 Cruise

(cruise and trade) Cruise season is defined as 1 October During 2018/19, a total of 6040 to 30 April. ‘Peak cruise season’ commercial vessels visited the six ports is defined as 1 December to 30 March. in NSW administered by Port Authority. Sydney provides two world-class cruise This total includes both trade vessels facilities – the Overseas Passenger and cruise ships. The figure is down Terminal at Circular Quay and White from 6225 in 2017/18 (a three per cent Bay Cruise Terminal at Rozelle. These reduction). continue to accommodate some of The reduction is due to the reduced the world’s largest and newest cruise number of domestic cruise ship visits ships, some of which carry up to 5000 to Sydney Harbour in 2018/19, down passengers plus crew. to 323 (compared to 352 in 2017/18). The reporting year 2018/19 recorded This was a result of repositioning within the first year of negative growth for the cruise industry to achieve greater growth in future years, and a reduction Sydney cruise activity in more than in trade vessel visits to Eden and Yamba a decade, with 323 cruise ship visits, to 127, (compared to 155 in 2017/18) down from 352 in 2017/18 (an eight as a result of the completion of the per cent reduction). bridge work related to the local Pacific The reduction in ship visits in 2018/19 Highway upgrade. was also reflected in passenger numbers, Full occupation at the Overseas with 1.4 million passenger exchanges Passenger Terminal during the summer (including both debarked and embarked peak of the cruise season is restricting passengers) in Sydney, compared to growth opportunities for the mega almost 1.6 million in 2017/18. ship cruise sector. (See Section 10.6 for details).

Highlights • 9 10 Port Authority of New South Wales Annual Report 2018/19 Pacific Adventurer inOctober 2020, new andreplacement ships(P&O’s forecast levels withthearrival of is expected to return to previously In thelongerterm, cruise activity (a 21 percent reduction). 4 in 2018/19, compared to 121 in2017/18 Bay CruiseTerminal andWhite Bay berth A total of 95 cruise shipsvisited White Terminal, compared to 219in2017/18. ships visited theOverseas Passenger During thefinancial year, 214cruise into 2019/20. and this willcontinueberth 4in2018/19 White Bay CruiseTerminal andWhite Bay in a temporary declineinvisitsto in 2020 and2021. This hasresulted with newer orrefurbished larger ships occurring before theirreplacement during thefirst halfof2019, withdelays or saleofsmaller, domestic cruiseships There was someinterstate relocation in preparation for future growth. product to changingindustry conditions are adjusting andrepositioning their period where thelarger cruiselines two years willbeanunusual interim Port Authority anticipates that thenext The AIDAaura berthedat White Bay Cruiseterminal onhermaidencall,December 2018 and the MSC Magnifica inMarch. by the Le Laperouse inFebruary Muse inJanuary2019, followed Orion in December, andtheSilver 2018, the AIDAaura andViking the Majestic Princess inSeptember visits to Sydney. These included Six cruiseshipsmadetheirmaiden of 17 times throughout thecruiseseason. Overseas Passenger Terminal atotal 4905 passengers andvisited the Sydney, theOvation of theSeas,carries The largest ofthecruiseships to visit projections by the cruise industry. in passenger demandandgrowth This is inlinewithcontinuing strength and Royal Princess inlate 2021). Regal Princess inDecember 2020 • • • season visits in 2018/19 Regional ports–cruiseship in 2018/19, upfrom 28visitsin2017/18. continued to grow, withatotal of31visits Cruise shipvisitsto theregional ports

Eden –15 Port Kembla –1 Newcastle –15 Newcastle welcomed 15 cruise ships, up Resolving cruise capacity issues from 11 in 2017/18. These were day visits in Sydney has repeatedly been affording passengers the opportunity identified as a priority for the industry to undertake excursions to the Hunter and government, including through the Valley, Port Stephens or other local State Infrastructure Strategy 2018–2038, attractions. No home porting, involving Cruise Development Plan (CDP) and passenger exchanges, is currently Visitor Economy Industry Action Plan. conducted in Newcastle. During 2018/19, Port Authority, in Eden welcomed 15 cruise ships during conjunction with NSW Treasury, delivered the cruise season, the same number on Action 4 of the CDP and developed as for 2017/18. These included four a strategic business case, which tested maiden voyages by: the Caledonian Sky the feasibility of a new passenger in October 2018, the Silver Muse and cruise terminal at two potential sites Amadea in February and the Seabourn in Yarra Bay and Molineux Point. Encore in March 2019. Following NSW Government Port Kembla received one cruise ship consideration, the project is anticipated visit, the Explorer of the Seas, in February to progress to a detailed business case 2019, playing host to more than to investigate cruise capacity, industry 3000 passengers. demand and assess two potential sites at Yarra Bay and Molineux Point Cruise capacity strategic near Port Botany. business case Comprehensive community and The NSW Government has committed stakeholder consultation will also to investigating solutions to the take place. constraints being experienced by the cruise industry in accessing cruise terminal berths in Sydney.

Explorer of the Seas visits Port Kembla, February 2019

Highlights • 11 12 Port Authority of New South Wales Annual Report 2018/19 season. (SeeSection13.3for details.) commencement ofthe2019/20 cruise commissioned aheadofthe The breakwater berthwillbe existing breakwater wharf. include renewing thepavement onthe to 300tonnes. Otherworks completed crane operations for amobilecrane up installation ofaheavy-lift zone to allow Port Authority. These works includethe supplementary works requested by during 2018/19, withsomeadditional The wharfextension was completed economic growth inthe region. multi Extension project isanimportant the $44 million Eden Breakwater Wharf and Council, Government, theNSW Government Jointly fundedby theAustralian Wharf Extension Eden Breakwater and Europe. that caters for bothSouth East Asia larger 9500 TEU vessels onaconsortia replace existing 6500TEUvessels with in 2019, anew combined service will unit) vessels for thefirst time. Later two 9500 TEU(twenty-foot equivalent In early 2019, Port Botany welcomed deployed into theAustralian market. overseas, andthenbeingsubsequently larger shipsbeingdeployed inkey trades size hascontinued to grow. This isdueto Over the past few years, container vessel service, whichbeganinMarch 2019. with the introduction ofanew Asian Container vessel visitsincreased, to the previous year. of 2.7 per cent compared in2018/19 from 5845 to 5686–areduction Total trade vessel visits were down 2.4

‑ government initiative to drive Trade season isalsoexpected to bedown. in NSW. The outlookfor thenext grain suffered inthe key growing locations year dueto thedrought conditions being down considerably compared to last Grain exports inPort Kembla were also previous year. by over 37 percent compared to the returned andcoal vessel callsincreased the port.However, thisvolume has outage whichreduced volume through one mineintheIllawarra hadasignificant designated carcarriervessels. In2017/18, by five per cent due to a reduction in Port Kembla vessel visits were down regions ofNSW. being experienced inthekey growing due to thecurrent drought conditions grain volumes were down considerably increase invessel calls.However, export this reporting year, whichhasdriven the In Newcastle, coal volumes increased marginally, withachangein vessel profile. carrier vessels to Port Botany was down The numberofvisitsbulkliquid and unloaded onto existing breakwater wharf Berthing Dolphinjust delivered from China 2.5 The Bays Precinct Key projects for 2018/19 are described below. Detailed planning and delivery processes for the Bays Precinct will be ongoing Multi-user facility for a number of years. Even so, Port at Authority has sufficient clarity on the NSW Government’s strategic objectives Following a period of extensive to plan and deliver port and working community consultation, Port Authority harbour outcomes through a period prepared a Review of Environmental of major infrastructure delivery, before Factors and a Response to Submissions ultimately integrating these outcomes (RtS) report on a multi-user facility into the future urban renewal. to receive sand and aggregates by sea. The RtS report will be released soon. The WestConnex project has licenced (See Section 10.7 for details.) an area of land on Glebe Island to stage construction works for the critical M4‑M5 New Seaport Passenger Link, which involves constructing twin Boarding Bridges – tunnels between the new M4 Western Motorway at Haberfield and the new Overseas Passenger Terminal M5 South-West Motorway at St Peters, A key element of the existing and the Rozelle Interchange and infrastructure at the Overseas Passenger Link. Terminal is the gangway, which Other major infrastructure projects, facilitates the safe and timely movement including the Western Harbour Tunnel of passengers between the ship and Sydney Metro West, also plan and the terminal. to licence land from Port Authority Two new, technologically advanced in The Bays Precinct for project delivery. Seaport Passenger Boarding Bridges The land will be used for construction (SPBBs) were constructed in Spain staging, truck marshalling and handling during 2018/19 to replace old technology dredged material. The main locations at the Overseas Passenger Terminal. include areas of White Bay (berths 1, 2 and 3), the White Bay Power Station, and Glebe Island berths 3 to 6. (See Section 10.7.)

2.6 Projects Port Authority manages and develops port facilities and services to cater for the existing and future commercial shipping needs of the State of NSW.

Carrier ship delivers new gangways to the Overseas Passenger Terminal, July 2019

Highlights • 13 14 Port Authority of New South Wales Annual Report 2018/19 (See Section10.9 for details.) carrying inexcess of3000passengers. a faster turnaround oflarge ships cruiseseason,facilitatingthe 2018/19 The project was completed intimefor the appearance oftheprecinct and repaving theentire area to enhance end ofCircular Quay West Road, the existing roundabout at thenorthern Authority landinvolved lowering The work undertaken onPort at Overseas Passenger Terminal. to trucksprovidoring cruiseships The Rocks andimproved accessibility to deliver enhanced publicaccess to and wideningtheforeshore promenade Cove publicdomain,includinglowering NSW to fundanupgrade ofCampbell’s Port Authority partnered withProperty Overseas Passenger Terminal Upgraded northernaccess – season. (SeeSection10.9 for details.) commencement ofthe2019/20 cruise in August 2019, intimefor the These gangways willbeoperational and debarkation for passengers. for quicker andeasierembarkation increasing capacityandallowing the terminal’s operational efficiency, 1200 peopleevery 30minutes, improving Together, thebridgeswillmove over that cancarryover 5000 passengers. ships, includingQuantum-class vessels to better supportvisitsfrom cruise The SPBBshave beencustom-built its function for years to come. strength to thewharfandpreserving piles andstructural elements,restoring timber pilesandcomponents withnew will involve replacement ofdeteriorated load capacityofthedeck.The works 100-year-old wharfto renew theworking Repairs are now required to the concrete supplychain. cement product for useinSydney’s by commercial vessels importingbulk Peninsula. The berthiscurrently utilised the western shore oftheGlebeIsland Glebe Islandberth8issituated on wharf renewal Glebe Islandberth8 described below. work will progress ontheprojects Over thecoming 12months, 2.7 of which includeanavigation light towers andmarker boards, most buoys, marker pilesandland-based AtoNs includelighthouses,floating boats inourportsandharbours. of commercial shipsandrecreational help supportthesafe navigation 120 Aidsto Navigation (AtoNs), which Port Authority isresponsible for over upgrade works Aids to Navigation

projects The year ahead– Bradley’s Head Lighthouse in Mosman has been lighting the way for ships in Sydney Harbour since 1905 to provide a visual indicator for safe Welcome Centre and navigation channel limits, and a warning Precinct Activation, Eden for obstacles to navigation, such as a headland or shallow water. AtoNs To fully realise the value of the Port require regular maintenance to ensure of Eden as a critical maritime hub they remain functional at all times for the economy and the surrounding despite harsh conditions. The proposed community, three infrastructure projects upgrade works will include rejuvenation are planned by the NSW Government of paint systems, replacement of to revitalise Eden Harbour. The piles and structural components program would establish a clear plan and upgrade of lights to the newest for government investment and enable technology, ensuring our AtoNs remain private sector investment. a guiding light in the harbour. The program will bring together the delivery of the Safe Harbour Project Macquarie Pier in Snug Cove, a Cruise Welcome revitalisation works Centre and the Eden Harbourside activation project. As well as being a prominent and iconic local attraction in Newcastle, Macquarie If approved, Port Authority will lead Pier is also an access route for the the delivery of the new Welcome signal station and lighthouse at the top Centre for the Port of Eden, to be of Nobby’s Headland (maintained by located in an existing building adjacent Australian Maritime Safety Authority to the Eden Cruise Wharf. (AMSA)), and the breakwater The facility will provide facilities (maintained by Port of Newcastle). for cruise customers, opportunities Port Authority is planning to undertake for local employment and a new home revitalisation works to the pier, generally for port administration and operations. involving upgrade of the pathway It is planned to have the Welcome to increase the amenity of the iconic Centre operational in time for the start location, and create a seamless link of the 2020/21 cruise season. to the adjacent six-kilometre Bathers Way walk.

Highlights • 15 16 Port Authority of New South Wales Annual Report 2018/19 and Botany Bay. ships across Sydney () the safe movement oflarge commercial and software to monitor andcoordinate Services (VTS) installed new hardware Port Authority’s Vessel Traffic upgrade Vessel Traffic Services (See Section10.4 for details.) decision makingby commercial shipping. fast andaccurate information to support movements, allowing themto provide clear visibilityandplayback ofallvessel This allows theVTS operators to have movement oflarge commercial ships. Bay to monitor andcoordinate thesafe Harbour (Port Jackson)andBotany at several locations across Sydney identification system (AIS),installed cameras, radars, radios andautomatic software to combine aseriesof VTS operators inBotany usePC to monitor andcoordinate thesafe movement ofships Vessel Traffic Services installed new hardware andsoftware ‑ based and environmental benefits. achievement oftangiblesocial initiatives, withafocus ontheproactive and target specificsustainability provide asuitableframework to assess Authority’s sustainability visionand strategy. This willoutlinePort the development ofasustainability Port Authority willfocus on Sustainability 3 Summary review of operations

3.1 Financial Marine Operations carried out a number of process improvements this year, performance including: In 2018/19, Port Authority exceeded • bedding down a new rostering system its financial targets and can report called Emp Live earnings before interest, taxes, • integrating the port officers into depreciation and amortisation (EBITDA) the Computerised Maintenance of $43.2 million – up $3.6 million on Management System (CMMS) that has the previous year. This is predominantly been used in asset management for driven by: revenue from the increase some time to allow Marine Operations in total gross tonnage of container to complete more preventative vessels at Port Botany; additional rental maintenance on its vessels income at Glebe Island associated with the staging of major infrastructure • investing heavily in the move to works; and a full year of leased tenancies the Port Marine Management System at the Overseas Passenger Terminal. (PMMS) by ensuring all procedures, forms and checklists are up-to-date in the Marine Operating Procedures 3.2 Marine operations (MOP) section. Marine Operations continued its high standard of operations in 2018/19, promoting the safe and efficient movement of commercial vessels operating through our ports.

Sydney Harbour and Botany Bay During the reporting year, Marine Operations in Sydney Harbour and Botany Bay: • completed 4282 pilot movements (for movements into, out of, and within Pilot cutter, Port Botany the ports requiring a pilot on board) – an average of 12 per day • provided 935 ship escorts in Sydney Looking forward to 2019/20, Marine Harbour and 2063 in Botany Bay Operations will focus on the major task • issued 1229 bulk dangerous goods of relocating its emergency response transfer checks base in Glebe to a smaller footprint in White Bay. It will be improving its • undertook 555 audits of work permits competency assessment processes • issued 4868 bunker permit notifications and continuing a heavy focus on • responded to 206 reports of pollution training staff. Furthermore, the team or fire, boom operations or vessels will be looking to build even stronger needing assistance or towage relationships with other agencies • conducted five fire-tug water displays and stakeholders around the port. • completed multiple daily navigation, security and environmental patrols in both ports.

Summary review of operations • 17 18 Port Authority of New South Wales Annual Report 2018/19 • Operations inPort Kembla: During thereporting year, Marine Port Kembla • • • • • • Operations inNewcastle Harbour: During thereporting year, Marine Newcastle Harbour • • • • •

an average offive perday the portsrequiring apilotonboard) – (for movements into, outof, andwithin completed 1647 pilotmovements environmental patrols. carried outnavigation and pollution responded to 10callsreporting issued 338bunker permitnotifications undertook 493 auditsofwork permits transfer checks issued 307 bulkdangerous goods an average of12.6perday the portsrequiring apilotonboard) – (for movements into, outof, andwithin completed 4619 pilotmovements and environmental patrols. carried outnavigation, security and audited 81vessels issued 88bunker permitnotifications undertook 116auditsofwork permits checks andcompleted 53 audits issued 81dangerous goodstransfer boxes for allofitsportchannelsandberthing undertook annualhydrographic surveys • • • responsible for: Master andpilotageservice andisalso The porthasadedicated Harbour in 2017/18. of 89 shipvisits,down from 101 visits of Eden in2018/19. There were atotal Shipping numbersdeclinedat thePort Port ofEden . and emergency response andsecurity. is alsoresponsible for PSOLfunctions, has adedicated pilotageservice and or repairs at theshipyard. The port ships callto Goodwood Islandfor layup While theporthasnoregular trade, is now complete.) on thePacific Highway upgrade that and cranes utilisedinconstruction works in 2017/18 were related to thebarges upgrade. (Additional shipmovements work related to thelocalPacific Highway a result ofthecompletion ofthebridge down (from 54visitsin2017/18) as Port ofYamba. Shippingnumberswere In 2018/19, there were 38shipvisitsto Port ofYamba

multi the Royal Australian Navy’s (RAN) management ofSnugCove and emergency response andsecurity functions Port Safety Operating Licence (PSOL) ‑ purpose berth. 4 Port highlights

Total vessel visits (trade vessel and cruise ship visits), all ports, 2018/19

TOTAL TOTAL 2018– 2017– JULY AUG. SEPT. OCT. NOV. DEC. JAN. FEB. MAR. APR. MAY JUNE 19 18 Port Botany/ 133 135 127 143 141 140 147 131 144 151 134 134 1,660 1,678 Kurnell Sydney Harbour/ 68 76 87 112 123 133 102 103 110 82 71 63 1,130 1,256 Gove Cove* Newcastle 210 197 181 207 170 213 208 180 199 191 168 188 2,312 2,283 Port Kembla 59 72 71 64 64 67 63 64 73 64 67 68 796 838 Eden/Yamba 9 8 7 10 11 14 12 18 21 11 14 7 142 170 TOTAL 479 488 473 536 509 567 532 496 547 499 454 460 6,040 6,225 Note: Includes visits at both Port Authority’s berths and privately owned terminals. *Includes commercial and service provider vessels (such as bunker vessels ICS Reliance).

During 2018/19, a total of 6040 commercial vessels visited the six ports in NSW administered by Port Authority. This total includes both trade vessels and cruise ships and is down by three per cent on the same period last year. This downturn is predominantly due to: fewer domestic cruise ship visits to Sydney Harbour; a reduction in ship visits to Yamba due to the completion of the recent local Pacific Highway upgrade; a reduction in bulk ships exporting wheat in Newcastle and Port Kembla due to the drought; and a reduction in car carrier vessels in Port Kembla due to reduced demand for imported cars in NSW over the past 12 months.

Trade vessel visits, all ports, 2018/19

TOTAL TOTAL 2018– 2017– JULY AUG. SEPT. OCT. NOV. DEC. JAN. FEB. MAR. APR. MAY JUNE 19 18 Port Botany/ 133 135 127 143 141 140 147 131 144 151 134 134 1,660 1,678 Kurnell Sydney Harbour/ 54 65 71 85 90 85 59 61 66 58 61 52 807 904 Gove Cove* Newcastle 210 197 181 205 170 212 205 175 197 189 168 188 2,297 2,272 Port Kembla 59 72 71 64 64 67 63 63 73 64 67 68 795 836 Eden/Yamba 9 8 7 9 10 12 9 14 18 10 14 7 127 155 TOTAL 465 477 457 506 475 516 483 444 498 472 444 449 5,686 5,845 Note: Includes visits at both Port Authority’s berths and privately owned terminals. * Includes commercial and service provider vessels (such as bunker vessels ICS Reliance).

Trade vessel visits were down 2.7 per cent in 2018/19 compared to the previous year; however container visits increased, with the introduction of a new Asian service, which began in March 2019. The number of visits of bulk liquid carrier vessels to Port Botany was down marginally, with a change in vessel profile. In Newcastle, coal volumes increased this reporting year, which has driven the increase in vessel calls. However, export grain volumes were down considerably due to the current drought conditions being experienced in the key growing regions of NSW. Port Kembla vessel calls were down by five per cent due to a reduction in designated car carrier vessels.

Port highlights • 19 20 Port Authority of New South Wales Annual Report 2018/19 2020 andlate 2021. Cruise Terminal. Larger, replacement shipswillcome into service inSydney inOctober the Sydney market inearly2019. This resulted insignificantcancellations at White Bay of shipspreviously home-portingat White Bay CruiseTerminal –removing themfrom compared to thesameperiodlast year. This was asaresult of thesaleand/or relocation thereIn 2018/19 was adownturn incruisevessel visitsinNSW of6.8percent, Cruise shipvisits,allports,2018/19 *Includes visitsat bothWhite Bay CruiseTerminal andWhite Bay 4. Terminal Passenger Overseas Sydney Bay* Sydney White Sydney other Harbour Newcastle Port Kembla Eden Total JULY 10 14 0 0 0 2 2 AUG. 0 0 11 0 8 2 1 SEPT. 16 13 0 0 0 0 3 OCT. 30 21 0 0 6 2 1 NOV. 34 26 0 0 0 7 1 DEC. 26 51 21 0 2 1 1 JAN. 49 26 15 0 3 3 2 FEB. 22 52 52 14 4 6 5 1 MAR. 49 49 27 27 15 0 3 2 2 APR. 27 27 17 0 0 7 2 1 MAY 10 0 0 0 0 8 2 JUNE 10 0 0 0 11 0 1 TOTAL 2018– 19 354 214 95 95 14 15 15

1

TOTAL 2017– 18 380 219 121 15 12 11 2

Pilot cutter and container ship in Port Botany Port highlights • 21 22 Port Authority of New South Wales Annual Report 2018/19 5 and critical marinesupply-chain It currently provides portcapacity for Sydney Harbourandfor NSW. and White Bay isacriticalasset The portprecinct at GlebeIsland The Bays Precinct for includethefollowing: 2018/19 and a strong safety record, key highlights In additionto strong financial growth a culture of safety. our ongoingcommitment to creating cent from theprevious year, reflecting workplace inspectionsincreased 32per Injuries, we aimfor zero. Inaddition, Injuries andfour MedicalTreatment year. While we hadtwo Lost Time 45 per cent compared to theprevious and hazards reported reduced by report that thetotal numberofincidents for Port Authority. We are proud to As always, safety remains astrong focus reduction initiatives. infrastructure works and targeted cost associated withthestaging ofmajor additional rental income at GlebeIsland of container vessels at Port Botany; due to increased total gross tonnage services charges beingabove target result were: revenue from navigation The maindrivers ofthepositive

Chair’s reportChair’s with a budget of$36.2million. (EBITDA) for theyear were $43.2million,compared before interest, taxes, depreciation, and amortisation Statementin our 2018/19 ofCorporate Intent. Earnings period was favourable compared to thekey targets set Port Authority’s financialperformance for the reporting focus on maintaining ourstrong safety record. marked by solidfinancialgrowth anda continued me great pleasure to report onasuccessful year of Port Authority ofNew SouthWales, anditgives The financial markedyear 2018/19 my first asChair released soon. report, whichisexpected to be has prepared aResponse to Submissions sources are depleted. Port Authority construction industry, aslocalsand supply for concrete for Sydney’s to meet increasing demandfor sand of a multi-userfacility at GlebeIsland the reporting year was theprogression A focus for Port Authority during Metro West. Western HarbourTunnel andSydney Metro City&SouthWest, WestConnex, transport projects, includingSydney provides staging areas for major growth. Amongst otheruses,italso materials for Sydney’s infrastructure capability for essential construction demand usingexisting infrastructure. investigate optionsto accommodate this The NSW Government hasworked to as has thetrend toward larger shipsizes. increased significantlyin recent years, berthing inSydney Harbourhas The numberoflarger cruiseships and supporting almost 10,000 jobs. $2.75 billion for theNSW economy sector inAustralia, generating Cruise isthefastest growing tourism Addressing cruisecapacity During the peak cruise season, which changes during his time. In particular, runs from December to March each Grant led the Port Botany Expansion year, the Overseas Passenger Terminal project and the Port Botany Landside is nearing capacity. This means Sydney Improvement Strategy and steered us is missing cruise ship calls, as the cruise through the long-term leasing of Port lines seeking to deploy large ships Botany, Port Kembla and Newcastle, to Sydney cannot obtain berthing slots and the subsequent amalgamation at the Overseas Passenger Terminal over of the three port corporations. In this, the summer months. Grant has led us to re-position Port Authority as a strong, profitable Without investment in additional organisation delivering reliable and infrastructure, Sydney will not be able professional services to its customers. to service this demand and address We thank Grant for his strong leadership capacity constraints. The cruise capacity and commitment as he transitions strategic business case is a key step in from the organisation. helping to ensure Sydney can capitalise on its iconic harbour status, and the A recruitment process to select a new growing demand for cruising. The arrival Chief Executive Officer and Director of two new custom-built gangways for the organisation is underway and an to the Overseas Passenger Terminal appointment will be made in due course. in July 2019 marked a key commitment to supporting cruise infrastructure, Focus for 2019/20 making disembarking and embarking Our immediate focus is advancing much more efficient. the strategic projects, continuing to deliver excellence in customer service Governance and management and continuously improving our safety Over the last 12 months, the composition culture. Beyond our strategic projects of the Board has changed following my a focus area will be ensuring we appointment to Chair on 1 August 2018 continue to apply sustainability to our and that of Matthew Irwin as a Director decision making on planning, operations on 13 February 2019. Patricia Forsythe and expenditure that supports our resigned on 21 February 2019, following stakeholders into the future. her appointment as ’s High Commissioner to New Zealand. We are currently going through a recruitment process to fill the vacancy left by Patricia. Patricia sat on the Port Authority Board for four years and we are grateful for the invaluable contribution she has made and Robert Dunn wish her all the best in her new challenge. Chair In May 2019, Port Authority Chief Port Authority of New South Wales Executive Officer Grant Gilfillan advised 30 September 2019 the Board that he would not be renewing his tenure beyond September this year. Grant has been with the business for 12 years and has overseen significant

Chair’s report • 23 24 Port Authority of New South Wales Annual Report 2018/19 6 to 1.4 million passengers. This reduction cent ontheprevious financial year, passenger numbersby over 10per and translates to areduction intotal 121 visitsin 2017/18 to 95 in 2018/19) White Bay berth4 (declining from to White Bay CruiseTerminal and This istheresult ofadeclineincalls 352 in2017/18 to 323visitsin2018/19. visits to Sydney Harbour decreasing from growth, withthenumberofcruise ship cruise recorded itsfirst year ofnegative For thefirst timeinmore thanadecade, for both SouthEast AsiaandEurope. TEU vessels onaconsortia that caters 6500 TEUvessels withlarger 9500 combined service willreplace existing for thefirst time. Later in2019, anew Botany welcomed two 9500 TEUvessels continued to grow. Inearly2019, Port few years container vessel sizes have calling into Port Botany. Over thepast to this increase islarger container ships the reporting period.The key driver revenue; theseservices increased during majority ofPort Authority’s total trade services charges accounted for the In 2018/19, pilotageandnavigation cruise passengers to ourshores. depend onandbringingover amillion each year, delivering thegoodswe all perform over 10,500 pilotmovements marine pilotsandcutter vessel crews commercial vessels, Port Authority’s To ensure thesafe arrival ofthese

report Chief Executive Officer’s ships –visited ourports,compared to 6225in2017/18. a total of6040commercial vessels –bothtrade andcruise representing over $100billionintrade. During2018/19, million tonnes ofcargo pass thoughNSW’s portseachyear, economically significantportsin Australia. Around 212 New SouthWales ishometo someofthemost of our economic gateways to theworld. and leave by sea,ourwork iscriticalto theprotection where 99percent ofimportsandexports arrive ports safe, secure andopento theworld. Inacountry Port Authority ofNew SouthWales works to keep our in time for the 2019/20 cruiseseason. the new gangways willbeoperational a periodoftesting andcommissioning, embarking and disembarking. Following people every 30 minutes, speedingup passenger bridgeswill move over 1200 carry over 5000passengers. These new from larger cruiseships,some ofwhich are designedto better supportvisits in July 2019. The custom to theOverseas Passenger Terminal delivery oftwo new giantgangways significantly, thishasincludedthe cruise destination inAustralia. Most ensure Sydney remains theleading in our cruiseinfrastructure to Port Authority continues to invest released in July2018. Cruise Development Plan,which was resulted from theNSW Government’s Yarra Bay andMolineuxPoint. This action cruise terminal at two potential sites: to test thefeasibility ofanew passenger to develop astrategic business case Authority worked withNSW Treasury continues. Throughout theyear, Port cruise capacityconstraints inSydney Despite thisfluctuation, work to address with thearrival of replacement ships. forecast levels within two to three years is expected to return to previously larger shipsinfuture years. Cruiseactivity home have eithersoldorrepositioned smaller is onlytemporary as somecruiselines ‑ port shipsfor replacement with ‑ built walkways Outside Sydney, cruise continues to grow Port Authority partnered with a number steadily. Newcastle Harbour welcomed of shipping companies to offer two 15 cruise ships, including four maiden cadets placements on various merchant voyages; Port Kembla one ship; and Eden ships, backed by the support of a Port 15 ships – a total of 31 in 2018/19, up Authority mentor. Already one of our on 28 the year before. With the opening cadets has gone on to gain permanent of Eden Breakwater Wharf Extension employment with a cruise line. and the arrival of the first ship marked As I leave this organisation after for 15 September 2019, we are expecting 12 years as Chief Executive Officer, Eden to experience further growth. I would like to recognise and thank Each year, our ports and harbours employees of Port Authority who work become busier and one of our primary 24/7 to keep our working ports and concerns is ensuring the safety of all who harbours safe and secure. I am both use them. Our Marine Operations teams honoured and inspired to have led such responded to more than 3000 incidents a dedicated and motivated workforce. across our ports in 2018/19, from oil spills I would also like to acknowledge the and pollution, to firefighting, emergency steadfast guidance of the Board during towage and vessel assists. my tenure and the Chair Robert Dunn for his support over the last year as To support young, aspiring seafarers I have worked towards stepping down. achieve marine qualifications and I will look with great interest on the support quality entrants to the maritime activity of Port Authority and wish the industry, we were proud to launch a new organisation the best in future years. cadet program in September 2018. The Sponsored Deck Cadet Program consists of a two-year placement to help aspiring young seafarers gain 18-months of ‘at-sea’ experience to qualify for the Australian Maritime Safety Authority Watchkeeping Certificate. Grant Gilfillan Chief Executive Officer and Director Port Authority of New South Wales 30 September 2019

Chief Executive Officer’s report • 25 26 Port Authority of New South Wales Annual Report 2018/19 a recruitment process isunderway to fillthe remaining position. 21 February 2019. Matthew Irwinhasfilled one vacancy and on 1August 2018 andtheresignation ofPatricia Forsythe on changed following theappointmentofRobert DunnasChair Over thepast 12months,thecomposition oftheBoard has 7 from 1August 2018. Robert was appointed ChairoftheBoard Corporation from 2012. been aDirector ofSydney Ports of New SouthWales. Hehadpreviously became aDirector ofPort Authority corporations inJuly2014, Robert Dunn Newcastle andPort Kembla port With theamalgamation ofSydney, Chair, Nominations Committee Resources Committee Member, Remuneration andHuman Member, Audit andRiskCommittee Chair B.A. (Hons) Macquarie University, GAICD ROBERT DUNN Robert Dunn(Chair), Matthew Irwin. Left to right:Gerard Sutton (AO), Zorana Bull,Grant Gilfillan (Chief Executive Officer), Penny Bingham-Hall,

Board ofDirectors for 14years. of Patrick Corporation, apositionheheld Robert isaformer Finance Director Accountants Australia andNew Zealand. Robert isamemberof theChartered of BaptistCare NSW andACT. Dia Vikas CapitalandisDeputyChair International Australia’s Indiansubsidiary, He isalsoadirector ofOpportunity Director ofOpportunityInternational. holds thepositionofglobalExecutive development programs. Hecurrently through microfinance and community opportunity to transform their lives people livinginpoverty with the profit organisation that provides International Australia, anot-for- Executive Officer ofOpportunity Until April2018, Robert was theChief GRANT GILFILLAN ZORANA BULL B.A.Sc., University of South Australia, A (Hons) Oxford, MA (Eng. Econ. MAICD & Mgmt) University of Oxford, FAICD Chief Executive Officer Director Director Member, Audit and Risk Committee Member, Remuneration and Human With the amalgamation of Sydney, Resources Committee Newcastle and Port Kembla port corporations in July 2014, Grant Gilfillan Member, Nominations Committee became Chief Executive Officer and Zorana Bull was appointed as a Director a Director of Port Authority of New of Port Authority of New South Wales South Wales. He had previously been in March 2016. Chief Executive Officer of Sydney Ports Corporation (from 2008) and Newcastle Zorana is a Non-Executive Director Port Corporation (from 2013). of AirRoad Pty Ltd, Guide Dogs NSW/ ACT and Healthshare NSW. She is also Before joining Sydney Ports Corporation the Managing Director of strategy in 2008, Grant worked in Africa, the and management consulting firm Altura Middle East and Europe (Romania) Partners Pty Ltd and an Executive as a Senior Vice President, Managing Director of engineering consulting firm Director and General Manager for DP In Total Control (Aust.) Pty Ltd. World. Prior to this he served as Director of Operations for P&O Ports, Australia She was previously a Partner with and New Zealand and as Managing international consulting firm PA Director of CSX World Terminals Consulting Group, with postings in Australia. in Europe and Asia-Pacific, and Chief Operating Officer of the Australian Prior to that Grant was a mining business. During this time, she specialised engineer and mine manager in the in strategy development, restructuring NSW Hunter Valley and the north-west and performance turnaround. of Western Australia. Prior board appointments have included Grant served as President of the Moorebank Intermodal Company Ltd International Association of Ports and Australian Centre for Eye Health. and Harbours (IAPH) from April 2013 to June 2015. Grant was appointed as the Chair of the Australian Cruise Association in September 2017 and Chair of Ports Australia in October 2018 and is currently serving as a Director on the Board of Lyttelton Port Company in Christchurch, New Zealand.

Board of Directors • 27 28 Port Authority of New South Wales Annual Report 2018/19 Global Foundation. Partnerships Australia and the Forum, andaDirector ofInfrastructure Chair oftheTourism andTransport Advocacy Services Australia, Deputy organisations includingChairof positions withindustry andcommunity a director ofAustralia Post andheld end of 2009. Shehaspreviously been to retiring from thecompany at the Holdings (now CIMICGroup) prior a variety ofexecutive roles withLeighton Penny spentmore than20years in is a memberofChiefExecutive Women. Australia andCrescent Foundation. She Group Ltd, Taronga Conservation Society Asset Management,Fortescue Metals Property Group), Macquarie Specialised (responsible entityfor theDexus Steel, Dexus FundsManagementLimited Penny isalsoaDirector ofBlueScope Ports Corporation from 2012. previously beenaDirector ofSydney Authority ofNew SouthWales. Shehad Bingham-Hall becameaDirector ofPort corporations inJuly2014, Penny Newcastle andPort Kembla port With theamalgamation ofSydney, Member, Nominations Committee Member, Audit andRiskCommittee Resources Committee Chair, Remuneration andHuman Director Sydney, FAICD, SF(Fin.) B.A. (Ind.Des) University ofTechnology PENNY BINGHAM-HALL Water and Yan Yean Water. Services Infrastructure Fund,Macarthur Board appointmentsincludeTransfield Incubator Advisory Committee. Prior of New England SmartRegional Spares andisChairofUniversity Matthew isaDirector ofExpressway in Sydney, Johannesburg andLondon. in Australia andAsia,DeutscheBank (now Broadspectrum), Leighton Group positions withTransfield Services held seniorexecutive andleadership business, upto 2018. Matthew has the NSW electricitytransmission of ChiefFinancialOfficer at TransGrid, the Board, Matthew heldthe position major project delivery. Priorto joining involved ininfrastructure, utilitiesand Matthew hasspentover 20years in February 2019. of Port Authority ofNew SouthWales Matthew was appointed asaDirector Member, Nominations Committee Chair, Audit andRiskCommittee Director of New SouthWales, GAICD England, MComm (Finance) University B Ag Ec (HonsI)University ofNew MATTHEW IRWIN GERARD SUTTON AO THE HONOURABLE B.E. (Hons) University of New South PATRICIA FORSYTHE Wales, M.Eng.Sc. University of New BA (Hons) Oxford, MA (Eng. Econ. South Wales, PhD Catholic University & Mgmt) University of Oxford, FAICD of America Director Director Member, Audit and Risk Committee Member, Remuneration and Human Member, Nominations Committee Resources Committee Patricia Forsythe was a Director Member, Nominations Committee of Port Authority of New South Wales With the amalgamation of Sydney, from February 2015 to February 2019. Newcastle and Port Kembla port During her time on the Port Authority corporations in July 2014, Professor Board, Patricia was the Executive Director Gerard Sutton became a Director of the Sydney Business Chamber from of Port Authority of New South Wales. 2006. She represented the Chamber on a He had previously been a Director number of NSW Government committees. of Port Kembla Port Corporation She also represented the Chamber from 2012. on the City of Sydney Retail Advisory Panel and the Planning Gerard is a former Vice-Chancellor Coordination Forum. of the University of Wollongong and a former Chair of Universities Australia. In addition to her role at the Sydney Business Chamber, Patricia served on Gerard is currently the Chair of the a number of boards in the government AARNet Board (Australian universities’ and not-for-profit sectors: Business telecommunications company), Events Sydney; Destination NSW; a Director of Think Pty Ltd and Illawarra Council of Macquarie University; NSW Shoalhaven Local Health District International Education Advisory Board Board, and a member of University (Chair); and Cricket NSW. of Sunshine Coast Council. Gerard was previously a director of the Board of Prior board appointments included Regional Development Australia Illawarra the Hunter Development Corporation and a member of Illawarra TAFE Institute and Hunter Medical Research Institute. Advisory Council. She was also previously a member of the Advisory Board of the University . of Technology Sydney (UTS) Business School; a director of the Board of Studies, Teaching and Educational Standards NSW; and an Honorary Associate of the Graduate School of Government at Sydney University. Patricia served as a Member of the NSW Legislative Council from 1991 to 2006. From 1995 to 2005 she served on the Opposition frontbench, in a number of shadow portfolios. Ms Forsythe resigned from Port Authority’s Board of Directors effective 21 February 2019. One Director’s position remains to be filled at the time of reporting.

Board of Directors • 29 30 Port Authority of New South Wales Annual Report 2018/19 8

Executive team • • • • • Chief Operating Officer andHarbourMaster, Sydney B.Sc. (Hons) University ofTeesside, GAICD Philip Holliday • • • Chief FinancialOfficer andChiefRiskOfficer School of Management),MAICD B.Ec. (Accounting) University ofSydney, FCPA, MBA(Macquarie Graduate Lawrence Ho • • • Chief Operating Officer Newcastle and Yamba MBA (AGSM), B.Bus.Newcastle University, GAICD Emma Fensom (See Board biography on page27) Chief Executive Officer andDirector B.A.Sc. University ofSouthAustralia, MAIDC Grant Gilfillan

Corporate services Company secretary Corporate planningandreporting Regional portsandadministration Pilotage Marine operations Cruise Survey services Planning Pilotage Marine operations Ralph Keats Executive General Manager, Human Resources and Work Health and Safety • Work, health and safety strategy • Human resources • Industrial relations strategy

Brad Milner B.Eng. University of Technology, Sydney Executive General Manager, Commercial, Technical and Legal • Property and commercial • Projects and sustainability • Asset management • Legal counsel

Garry Voutos Executive General Manager, Information Technology • IT strategy and operations • Cyber security

Edward Martin B. Marketing & Public Relations (University of Notre Dame), M. International Business & Law (University of Sydney), FCCPA Executive General Manager Communications and External Relations • Internal and external communications

Edward Martin was appointed on 27 May 2019

Also on our Executive team during the year were: Mr Kell Dillon, Chief Operating Officer Port Kembla and Eden, and Harbour Master Port Kembla resigned effective 16 November 2018. Mr Tony Cousins, Executive General Manager Strategy and Innovation resigned effective 1 February 2019.

Executive team • 31 32 Port Authority of New South Wales Annual Report 2018/19 strategic goalsoftheNSW Government. port assets to deliver thefinancialand whilst retaining andoptimisingour world-class portandmarineservices To provide safe, efficient,sustainable, Our purpose and innovative portmarineservices. in theprovision ofefficient,integrated We are internationally recognised leaders Our vision 9

Vision, objectives andvalues • • • Our values • • • Our objectives

we do. We willstrive for excellence inallthat We willactwithcourage andintegrity. and accountable. We willbehonest, open,caring A culture whichstrives for excellence. A robust andsustainable portbusiness. corporation inNew SouthWales. and best-governed state owned A reputation asthebest-managed Marine operations meetingat Moores Wharf 10 Sydney Harbour and Port Botany

A tanker navigating though Sydney Harbour

10.1 Port Botany Sydney Harbour receives imported refined oil at Viva Energy Australia’s Port Botany is a deep-water seaport private facilities at Gore Cove and imports located in Botany Bay, Sydney. It is cement, gypsum, salt, sugar and refined Australia’s largest container port and oil products and exports tallow through specialises in trade in manufactured common user berths at Glebe Island products and bulk liquid imports, and White Bay. including petroleum and natural gas. Importantly, Sydney Harbour serves as a working port for a wide variety of maritime functions and services, 10.2 Sydney Harbour and in this capacity is visited by a large Sydney Harbour is Australia’s cruise number of vessels that do not trade major gateway and one of the world’s most commodities. The trade vessel visits beautiful ports of call. Sydney Harbour in the next section include bunkering is the only port in Australia with two and vessel refuelling operations, marine dedicated cruise passenger terminals construction, infrastructure and special – the Overseas Passenger Terminal events staging, naval and special purpose at Circular Quay and White Bay Cruise shipping, and various other working Terminal, west of the Harbour Bridge harbour activities. at Rozelle.

Sydney Harbour and Port Botany • 33 34 Port Authority of New South Wales Annual Report 2018/19 Trade vessel visitsto Sydney HarbourandPort Botany, 2018/19 Port Botany andSydney Harbour. Last year’s figures are provided for comparison. The tablebelow presents amonthlybreakdown offigures and totals acrossfor 2018/19 10.3 that commenced inMarch 2019. increased with new services Container shipvisitsto Port Botany berth andat Kurnell. the one voyage at boththeBulkLiquids calling anddischarging cargo from Larger bulkliquidsvessels are now that previously called onlyto Kurnell. in visits by smaller, bulkliquidsvessels down marginally. There was adecrease Total vessel visitsto Port Botany were * Includescommercial andservice provider vessels (such asbunker vessels ICS Note: Includesvisitsat both Port Authority’s berthsandprivately owned terminals. Kurnell Port Botany/ Gore Cove* Harbour/ Sydney TOTAL

Trade vessel visits JULY 187 133 54 AUG. 200 135 65 SEPT. 198 127 71 71 OCT. 228 143 85 NOV. 231 90 141 DEC. 225 140 85 JAN. 206 147 59 59 year for building construction inSydney. compared to 2017/18, whichwas arecord and gypsum carriershave also declined repairs. Vessel visits by cement construction projects orother vessels’ activity by smallvessels working on the bunkering services andto reduced This relates primarilyto changesin when compared to theprevious year. visits reduce by 97 (or 11percent) Sydney Harboursaw trade vessel FEB. 192 131 61 61 Port Authority’s MAR. 210 144 66 APR. 209 151 58 Reliance). MAY 134 195 Ted Noffs at Port Botany 61 61 JUNE 186 134 52 52 TOTAL 2,467 2018– 1,660 19 807

TOTAL 2017– 2,582 1,678 18 904

10.4 Marine Operations • provided 935 ship escorts in Sydney and 2063 in Port Botany Under the guidance and direction • issued 1229 bulk dangerous goods of the Chief Operating Officer Sydney, transfer checks Port Kembla, Eden and Harbour Master – Sydney, Marine Operations continues • undertook 555 audits of work permits to provide services to the maritime • issued 4868 bunker permit notifications community in Port Botany and Sydney • responded to 206 reports of pollution Harbour and meet the division’s or fire, boom operations or vessels obligations as mandated by the Port needing assistance or towage Safety Operating Licence (PSOL). • conducted five fire-tug water displays These services and obligations include: • carried out multiple daily navigation, • channel and berth box depths security and environmental patrols. – including the promulgation of information regarding depths Vessel Traffic Services in different areas of the port – Sydney Harbour and • dangerous goods (DG) – notifications Port Botany regarding DG, bunkering (refuelling vessels) and hot work (any work Sydney VTS provides a high level of service that could result in fire or any works and facilitates the safe operation and in a combustible environment) movement of vessels in the port of Sydney and Botany. It maintains this function • navigation aids – maintenance utilising state‑of-the-art navigational of navigation aids equipment, with all operators trained • emergency response – to incidents to the highest standards in accordance including: with the International Associations of • pollution Lighthouse Authorities (IALA) standards. • fire Sydney VTS adopted new technologies • ship assists throughout 2018/19, incorporating a state-of-the-art navigational package • pilotage services and exemptions from (STYRIS) from Airbus France. This new pilotage – including the administration, system will enable Sydney VTS to further approval and issuance of certificates expand and give greater flexibility of local knowledge to interface with future innovations • port security – including regular as they become available. on ‑water security patrols and patrols During the period of 2018/19, on land encompassing Port Authority’s Sydney VTS: landside assets • facilitated the safe and efficient • port communications – through Sydney transit of 4282 vessels within Sydney Vessel Traffic Services (VTS). and Port Botany During the reporting year, Marine • coordinated a response to Operations in Sydney Harbour and 46 emergencies within Sydney Botany Bay: and Port Botany • completed 4282 pilot movements • coordinated the response (for movements into, out of, and within of 16 medical emergencies within the ports requiring a pilot on board) – Sydney and Port Botany an average of 12 per day • introduced a duty manager’s workshop

Sydney Harbour and Port Botany • 35 36 Port Authority of New South Wales Annual Report 2018/19 in preparation for thenext cruiseseason. update into electronic chartingproducts sent to the Hydrographic Office for in April 2019. Survey information was was completed inthePort of Eden for the Eden Breakwater Wharf Extension The finalpost-construction survey and Northern BeachesCouncil. Waterway Constructions; Cardno NSW Ports; Clarence Valley Council; Royal Haskoning DHV; Caltex Australia; This includedwork for: Viva Energy; and non surveys for anumberofgovernment of Eden, and22contract hydrographic Port Kembla, Port ofYamba, andPort PSOL in Port Jackson,Port Botany, 55 surveys asrequired underits hydrographic survey team completed Over thereporting year 2018/19, the External contract surveys •

support to rostering capabilities. Operations staff, whilegivinggreater which willfurtherdevelop theMarine Training secondment program, implemented aMarineOperations ‑ government agencies. feed into under-keel clearance systems. managing effective portoperations and anemometers, whichare essential for wave riders,current meters andwind This equipment includestidegauges, to assist pilotageinbothports. equipment inbothEden andYamba and ocean monitoring (met-ocean) The survey team installed new weather development ofchartsfor mariners. Hydrographic Office to assist inthe All data collected was sentto the limits for Sydney andBotany. began itssurveys oftheoffshore port on thecoast ofNSW. The team also and tributaries withinallitsportwaters by continuing to survey allthebays on itscampaignto aidsafe navigation The hydrographic survey team carried Tributaries program Licence, Bays and Port Safety Operating Survey team onSydney Harbour The year ahead The teams have a number of assets to support at fires, pollution, booming In 2019/20, the survey team will be and ship assists. involved in a world-first trial with the Australian Hydrographic Office to Some of the incidents that were produce bathymetric electronic chart responded to in 2018/19 include: overlays. These products will enable • 93 booming operations the port pilots and ships to have access • 109 pollution incidents to the same higher-accuracy chart information when entering our NSW • 10 firefighting operations ports. It is hoped that seabed data will • 52 emergency towage be available in an official Hydrographic and vessel assists. Office product within two weeks of the survey. The 2018/19 financial year saw Marine Operations teams in Port Jackson The team will continue to install and and Port Botany respond to numerous maintain the Port Authority met-ocean spills and fires, including vessel fires equipment in Sydney Harbour, Botany at Birkenhead Point and Rose Bay and Bay and Eden. The team will look to small-scale pollution events in Brotherson further support Newcastle, Kembla Dock and up the Parramatta River. and Yamba over the next 12 months. As well as managing or combating these Port governance survey work will also incidents in its own jurisdiction, 2018/19 continue, with an emphasis on updating also saw pollution responders lending hydrographic surveys of port approaches their expertise in a multi-agency response within all the port limits. Hydrographic to the MV Solomon Trader incident in the surveys of minor ports such as Trial Solomon Islands. Details of these events Bay, Coffs Harbour and are provided below. will be completed in preparation for new planned visits from cruise vessels. Solomon Trader, February 2019 Port safety surveys are also scheduled On 5 February 2019, the bulk carrier in Sydney Harbour, Port Botany, Port Solomon Trader grounded on a reef off Kembla, Port of Eden and Port of Yamba. Rennell Island, Solomon Islands, causing a large-scale oil spill. Port Authority was called upon to support with National 10.5 Emergency Response Team personnel, and Marine Operations sent one employee as part response of the response effort.

Operations Rose Bay fire, February 2019 Port Authority’s emergency response On 1 February 2019, Port Authority crew teams are available 24/7 to respond attended to a recreational vessel fire in to any incident in the ports of Sydney Rose Bay to support Fire & Rescue NSW and Botany and to coastal limits. Every in fighting the fire and avoiding further year, Port Authority’s highly trained vessels catching alight. emergency response teams respond to hundreds of reports of marine pollution, and undertake thousands of safety audits of vessels transferring bulk oil, gas and chemicals.

Sydney Harbour and Port Botany • 37 38 Port Authority of New South Wales Annual Report 2018/19 are describedasfollows. employees participated during2018/19 Exercises inwhichPort Authority and to carryoutinter-agency drills. crews withMarineOperations vessels, where itcontinues to familiarise their agencies, includingFire andRescue NSW, maintain strong relationships withother Marine Operations hascontinued to increase collaboration between agencies. support multi-agency responses and training exercises are designedto As arequirement ofthePSOL,these to incidents. to test preparedness and response emergency exercises withstakeholders Port Authority heldanumberof Exercises and National oilresponse teams. and provides personnelto boththeState 200 reports ofmarinepollutioneachyear response team responds to more than Port Authority’s highlytrained emergency Marine pollution into thewater. from thespillseepingthrough theland consider thepotential marineimpacts give advice ontherecovery process and team was calleduponto attend thesite, spilt onthelandside, thePort Authority Liquids berth.Althoughthefuelwas fuel from Vopak terminals at theBulk Port Authority attended to aspillofjet Vopak oilspill,26May 2019 from therest ofSydney Harbour. as an exclusion measure and containment between Manns Point andBerryIsland loading arm.The crew deployed boom a release ofjet fuel from afailed marine exercise inGore Bay, withViva simulating a desktop andequipmentdeployment Sydney-based crew participated in July 2018 Viva simulated jetfuelrelease, stronger relationships. simulation andfor theopenness to build for thevaluable role itplayed inthe Botany Bay. MTO praised Port Authority about fictitiousactivitiesplaying outin a key role infeeding criticalinformation at Brotherson House, Sydney VTS played called theShippingCoordination Team well asplaying host to adetachment Organisation (MTO) inthisventure. As Royal Australian Navy’s MaritimeTrade Port Authority participated withthe Operations BellBuoy, May 2019 pollution to runinto portwaters. tank where there was potential for a loss ofcontainment from aViva storage Viva ran adesktop exercise to manage In November 2018, Port Authority and to protect Quibray Bay andBonnaPoint. a shipat Caltex anddeployment ofboom Botany-based crew simulated aspillfrom October 2018 Simulated Caltex oilspill, the required skills upto date andcorrect. (OEH). This isessential for keeping Office of Environment andHeritage Protection Authority (EPA) andthe Fire andRescue NSW, Environment government agenciesincludingRMS, undertake external training withother Port Authority staff continued to External training water ontheshipfire. in to drilltheuseoftheirtugfor spraying to observe. EngageMarinewas brought Rescue NSW andNSW Police attended establishing anexclusion zone; Fire and Maritime Services (RMS)was involved in both Viva andPort Authority; Roads and Boom deployment was exercised by in Gore Bay andafire aboard aship. exercise at Viva to simulate bothaspill Sydney-based crew ran multi-party June 2019 Viva simulated oilspillandfire, The Port Botany team in training to clean up oil spills with our boom equipment

Port Authority staff attended a number Tasmanian workshop, April 2019 of courses, many of which were Another NRT exercise was run in competency based. Tasmania. This year, the workshop Port Authority staff are part of both focused on the planning section the National Response Team (NRT) of incident management, including and the State Response Team, along situational awareness, risk assessment with members of other government and Incident Action Plan development. agencies. These highly skilled personnel are available to be called upon to Ongoing education respond to and assist with various In addition to these examples, staff have maritime incidents, both in NSW participated with ongoing education by and nationally around Australia. Marine attending AMSA training courses, the Operations’ representation on these Maritime Industry Australian Limited teams would not be possible without conference and Ports Australia Working the training and exercises that occur Groups, and by completing training in each year. the use of forklifts, manual handling, International Maritime Dangerous Goods Exercise Torres, September 2018 code, and emergency life support Members of the NRT participated in a apparatus (ELSA) masks. multi-agency and multi-jurisdictional Port Authority regularly supports other exercise called Exercise Torres 2018, agencies with their training. One example which simulated an oil spill in the Torres is providing the tug to the Australian Strait and Kaiwalagal Region. Border Force team so that they can practice boarding vessels at speed.

Sydney Harbour and Port Botany • 39 40 Port Authority of New South Wales Annual Report 2018/19 10.6 Cruise shipvisitsto Sydney Harbour, 2018/19 terminal, 2018/19 Total passenger exchange inSydney Harbour splitby passenger * Sydney White Bay includes bothWhite Bay Terminal andWhite Bay berth4. Note: Includesboth debarked andembarked passengers. * White Bay includesbothWhite Bay CruiseTerminal andWhite Bay berth4. Passenger Terminal Sydney Overseas Terminal Passenger Overseas Sydney TOTAL Bay* White Sydney Sydney White Bay* Sydney other TOTAL

Cruise inS 44,492 50,296 JULY 5,804 38,302 47,242 8,940 AUG. JULY 10 14

2 2 72,247 10,272 61,975 SEPT. AUG. 11 8 2 1 ydney Harbour 119,039 119,039 SEPT. 99,314 OCT. 19,725 161 13 0 3 OCT. 165,056 147,357 27 27 NOV. 17,699 21 0 6 Queen Victoria NOV. 26 33 204,849 145,982 0 7 58,867 DEC. DEC. 48 26 21 1 205,919 205,919 153,957 51,962 JAN. JAN. at theOverseas Passenger Terminal, February 2019 43 26 15 2 125,965 165,877 FEB. 39,912 FEB. 42 22 14 6 MAR. 44 195,870 27 147,907 15 47,963 MAR. 2 APR. 24 24 17 0 7 118,432 118,432 90,303 APR. 28,129 MAY 10 0 8 2 46,460 46,460 JUNE 37,519 MAY 8,941 10 11 0 1 TOTAL 47,075 47,075 42,616 2018– JUNE 4,459 4,459 19 323 214 95 95 14

1,438,362 1,438,362 1,135,689 TOTAL 2018–19 302,673 2017– TOTAL 18 352 352 219 121 12

1,599,836 1,169,589 2017–18 430,247 TOTAL

Total passenger exchange in Sydney Harbour, 2014/15 to 2018/19

JULY AUG. SEPT. OCT. NOV. DEC. JAN. FEB. MAR. APR. MAY JUNE TOTAL 2014/15 25,774 40,483 63,197 114,266 126,190 170,577 173,713 142,626 148,440 76,572 20,529 48,791 1,151,158 2015/16 38,213 22,260 62,467 111,746 141,263 170,459 189,889 172,696 149,117 126,771 63,192 61,250 1,309,323 2016/17 57,288 45,103 64,157 103,593 186,488 180,831 246,518 202,301 193,176 137,351 61,684 54,512 1,533,002 2017/18 53,951 56,737 52,568 120,080 199,017 228,229 227,212 216,204 229,689 121,580 37,962 56,607 1,599,836 2018/19 50,296 47,242 72,247 119,039 165,056 204,849 205,919 165,877 195,870 118,432 46,460 47,075 1,438,362 Note: Includes both debarked and embarked passengers.

Summary and statistics Changes to domestic deployment cycles during 2018/19, including the sale and • In 2018/19, Sydney Harbour hosted redeployment of some smaller, homeport 323 cruise ship visits (down from 352 ships to interstate and overseas in 2017/18). locations, have resulted in a significant • There were six maiden visits this season reduction in visits at White Bay Cruise (down from seven in 2017/18). Terminal. Replacement ships will re-enter the Sydney market in October 2020 • Over 1.4 million passengers passed and late 2021. through our terminals (down from 1.6 million in 2017/18). Cruise lines are also replacing some of their ‘standard’ size cruise ships Reduction in cruise ship visits calling at the Overseas Passenger and passenger numbers Terminal with larger ships carrying up to 5000 passengers. The financial year 2018/19 recorded the first year of negative growth During the year, 214 cruise ship for Sydney cruise activity in more than visited the Overseas Passenger a decade, with the number of cruise ship Terminal compared to 219 in 2017/18. visits decreasing from 352 in 2017/18 In comparison, 95 cruise ships visited to 323 visits in 2018/19 (an eight per White Bay Cruise Terminal in 2018/19 cent reduction). compared to 121 in 2017/18. The reduction in ship visits in 2018/19 In the longer term, cruise activity is was also reflected in passenger numbers, expected to return to previously forecast with over 1.4 million passenger exchanges levels with the arrival of replacement (includes both debarked and embarked ships in October 2020 and late 2021 passengers) in Sydney in 2018/19 in line with continuing strength in compared to almost 1.6 million in 2017/18. passenger demand and growth projections by the cruise industry. Port Authority anticipates the next two years will be an unusual interim The largest of the cruise ships to visit period where the larger cruise lines Sydney, the Ovation of the Seas, carries are adjusting and repositioning their 4905 passengers and visited the product to changing industry conditions Overseas Passenger Terminal 17 times in preparation for future growth. throughout the cruise season.

Sydney Harbour and Port Botany • 41 42 Port Authority of New South Wales Annual Report 2018/19 Maiden visitsto Sydney Harbour Season highlights Terminal at Circular Quay. sailed into theOverseas Passenger Queen ElizabethandVictoria February astheprestigious cruiseships Sydney welcomed two royal arrivals in Two royal arrivals Overseas Passenger Terminal inMarch. and theMSC Magnifica,similarlyat the Overseas Passenger Terminal inFebruary followed by theLe Laperouse at the berth at White Bay CruiseTerminal, headlands. Januarysaw theSilver Muse the Viking Orionsailedthrough the shape. InDecember, theAIDAaura and designed fenders dueto itsunique The ship required additionalcustom- arrived withover 3300passengers. In September 2018, theMajestic Princess maiden visits. Harbour hosted sixcruiseshipsontheir cruiseseason,SydneyDuring the2018/19 Sydney welcomes the Queen Elizabeth,February 2019 on a 112-day, round-trip world voyage. at theOverseas Passenger Terminal made her2019 Sydney debut,stopping On 28February, QueenVictoria also of Southampton, United Kingdom. a 38-day voyage from herhomeport season, arrivingon20February following Line’s vessels to visitSydney thiscruise Queen Elizabethwas thefirst ofCunard • • have beenmade. These include: November 2017, on-goingrefinements the cruisebookingsystem (CBS) in Following thesuccessful launchof Cruise bookingsystem –ongoing Operational efficiencies

while protecting theirbookingsdates. a media announcement ofshiparrivals bookings, whereby industry canlink the abilityto make ‘confidential’ which provide alive view ofavailability automatic alertsfor cruiseoperators, The most recent booking window Regional port development allowed for cruise ship slots until 30 Action 9 of the Cruise Development June 2022, providing for more accurate Plan, released in July 2018, calls for forecasting. The booking window for the the NSW Government to support the 2022/23 cruise season will be opened growth of the cruise industry in key during the 2019/20 season, allowing for NSW regions and potential emerging even greater foresight and accurate berth destinations through: utilisation data. • education and training programs Cruise capacity strategic to build the tourism industry capability business case to cater for cruise calls The NSW Government has committed • supporting locally run ambassador to investigating solutions to the programs constraints being experienced by the • working with local government to cruise industry in accessing terminal explore wayfinding at port facilities. berths in Sydney. The need to resolve cruise capacity issues in Sydney has In response, Port Authority is leading repeatedly been identified as a priority the NSW Regional Port Development for the industry and government, project. All regional NSW ports have including through the State Infrastructure now been scoped for their viability Strategy 2018–2038, NSW Cruise as cruise destinations, with a report Development Plan (CDP) and Visitor to be presented to Port Authority Economy Industry Action Plan 2030. Harbour Master and Chief Operating Officer (COO) in July 2019. During 2018, Port Authority, in conjunction with NSW Treasury, Working alongside Destination NSW, delivered on Action 4 of the CDP, Port Authority is developing cruise and developed a strategic business case collateral, detailing maritime information which tested the feasibility of a new and shoreside tourism offerings for passenger cruise terminal at two sites – all regional ports across NSW. This Yarra Bay and Molineux Point. information, along with accompanying Harbour Master’s instructions and Following NSW Government passage plans for each port, as well consideration, the project is anticipated as experience development programs to progress to a detailed business case (run by Destination NSW), will provide to investigate cruise capacity, industry invaluable information to cruise lines demand and assess two potential looking for new ports to include in sites at Yarra Bay and Molineux Point Australian itineraries, and therefore drive near Port Botany. visitation to these NSW ports. This cruise Comprehensive community and collateral will be presented to the cruise stakeholder consultation will also industry in September 2019. take place. The model of Port Authority and Destination NSW working together to build cruise visitation into regional ports is unprecedented. These initiatives are led by state tourism offices in all other Australian states. It provides the best outcome for ports and cruise lines alike through the marriage of maritime and tourism expertise.

Sydney Harbour and Port Botany • 43 44 Port Authority of New South Wales Annual Report 2018/19 experience inandoutofSydney. continued to enjoy theiraward-winning cruise shipsandtheirpassengers have and theprecinct transformed, whilst Works have largely now beencompleted for construction vehicles. was theprimaryaccess/egress point Overseas Passenger Terminal roadway precinct ofCampbellStore. The main to asignificantupgrade ofthenorthern roadway upgrades andwharfcivilworks, refurbishment ofrestaurant tenancies, terminal activities.The work ranged from side-by-side withhighlyfluidcruise and improvements could bemade This was to ensure new construction to accommodate cruiseoperations. construction activitywas closelyplanned Over cruiseseason, the2018/19 precinct construction Overseas Passenger Terminal Seabourn Encore inFebruary 2019. Seabourn SojourninDecember 2018 and Bateman’s Bay alsoreceived visitsfrom Bateman’s Bay ontheNSW SouthCoast. days later theshipmadeamaidencallat Caledonian Sky, on24 October. Two a maidencallfrom expedition vessel Bay (SouthWest Rocks), whichreceived toseen withinitialvisitsin2018/19 Trial Growth inregional NSW portscanbe ever-increasing numberofpassengers will safely and efficiently transfer the removal, thelarger SPBBstructures outdated and non-functional.With their as shipdesign,lefttheCR Gangways passenger movement technology, aswell in July2019. Ongoingadvances in Bridges (SPBB)scheduledfor installation two new SeaportPassenger Boarding 1960s, were removed inpreparation for movement onandoffships since the which hadbeenfacilitating passenger Connection Reliant (CR) Gangways, Terminal changedwhenthehistoric The face oftheOverseas Passenger Gangway removal Connection Reliant (For more information seeSection10.9.) to and from theterminal withease. various cruiseships’crew. to high rate ofattendance from the to the shipswas deemeda success due relax. The venture to bringtheservice support services, callhomeorsimply opportunities to share experiences, seek available asrequired, provided crew with quarters to theships,withtransport The erection ofamarquee inclose long beena meetingplace for seafarers. office inHickson Road,the Rocks, has support for cruiseshipcrew. The mission’s southern forecourt to provide additional on the Overseas Passenger Terminal Seafarers, amarquee was installed in collaboration withtheMission to From 29October 2018 ongoing,working who come into ourports365days ayear.’ moral andphysical well-being ofseafarers committed to promoting spiritual, ‘the The Mission to Seafarers, Sydney, is Mission to Seafarers in September 2018. Port Authority and Virgin Australia check-in system launchedbetween Asia Awards 2018, for theirmobileairport Singapore’s Future Travel Experience a specialmentionfor innovation at Sydney’s cruiseterminals alsoreceived the whole of Australia’. for cruisinginNew SouthWales and publication cited as: ‘the 2018. With 10,500 votes counted, the Passenger’s Readers’ Choice Awards as the best Australian portinCruise Sydney alsowon thepeople’s vote Editors’ PicksAwards. Homeport inthe2018 CruiseCriticAU was chosenastheBest Australian In thefirst oftwo cruise awards, Sydney cruise accolades. as thecitywas awarded afurthertwo cruise destination received anotherboost Sydney’s reputation asaworld-leading Cruise accolades Aerial view of Glebe Island and White Bay

10.7 The Bays Precinct • staging areas for events such as the New Year Eve The port precinct at Glebe Island and Australia Day fireworks and White Bay, known as The Bays • berthing facilities for commercial Precinct, is a critical asset for Sydney shipping and harbour service Harbour and for New South Wales. providers, such as tugs and refuelling It currently provides: vessels, as well as research vessels. • Port capacity and critical marine • Staging areas for major transport supply-chain capability for essential projects, including Sydney Metro construction materials for Sydney’s City & South West, WestConnex, infrastructure growth. Western Harbour Tunnel and Sydney • An award-winning cruise terminal, Metro West. which hosted nearly 100 cruise ships In the future, The Bays Precinct will and over 300,000 passengers have capacity for greater economic in 2018/19. productivity by increasing the intensity • Operational capabilities essential and variety of its land uses through for Sydney’s harbour economy, which urban renewal. are critical functions to maintaining Detailed planning and delivery processes the strategic value of the Harbour as for The Bays Precinct will be ongoing Sydney’s greatest single physical asset. for a number of years. Even so, Port These activities include: Authority has sufficient clarity on the • vessel refuelling and pump-out NSW Government’s strategic objectives facilities for Sydney’s commercial to plan and deliver port and working vessels, including ferries harbour outcomes through a period • space for marine contractors, which of major infrastructure delivery before maintain Sydney’s seawalls, jetties ultimately integrating these outcomes and other marine infrastructure into the future urban renewal.

Sydney Harbour and Port Botany • 45 46 Port Authority of New South Wales Annual Report 2018/19 supply chaininSydney. port capacityto service theconcrete there issignificantunmetdemand for of themajorinfrastructure projects), (beyond construction staging demands profile for cruiseor working harbouruses any majorchangeinthecurrent demand While Port Authority isnotanticipating while alsoaccommodating portuses. major transport infrastructure delivery through aninterim phasethat facilitates supply chainandworking harbouruses and future demandsofcruise, port Port Authority willmanagetheexisting to proceed withinthenext 10years. Glebe IslandandWhite Bay isnotlikely transport projects, urbanrenewal within Due to thetimingofthesemajor Station, andGlebeIslandberths3to 6. (berths 1,2and3),theWhite Bay Power locations includeareas ofWhite Bay and handlingdredged material. The main construction staging, truckmarshalling used for arange ofactivitiesincluding for project delivery. The landwillbe from Port Authority inThe Bays Precinct Sydney Metro West, willalsolicense land including Western HarbourTunnel and Other majorinfrastructure projects, Cove Link. and theRozelle Interchange andIron M5 South-West Motorway at St Peters, Motorway at Haberfieldandthenew tunnels between thenew M4Western Link, whichinvolves constructing twin construction works for thecriticalM4–M5 an area oflandonGlebeIslandto stage The WestConnex project haslicensed These projects are: to service theconcrete supplychain. Port Authority hasidentifiedtwo projects Following extensive market engagement, proportion istransported viarail). to Sydney mainlyby road (asmall NSW SouthCoast, andtransported and surrounds, andBass Point onthe quarries intheCentral Coast, Newcastle industry, andare currently sourced from concrete production by theconstruction and aggregates are usedasinputsto sand sources are dwindling. Sand government for many years, aslocal requirements hasbeenforecast across the Sydney construction industry’s Increasing demandfor sandfor Concrete supply 1100–1500 truck movements. – asinglevessel canreplace between arising from truckmovements onroads pollution androad maintenance costs benefits by reducing congestion, air significant environmental andsocial Importing ofmaterials by seabrings entry pointfor construction materials. low cost, low impactandsustainable berths 1and2.This would provide a sand andaggregates at GlebeIsland facility to receive, store anddistribute Authority plansto buildabulkmaterials and diversify sandsources, Port In order to reduce truckmovements sea Multi-user facility to supportthe • •

plant from . a relocation oftheHansonbatching plants, oneofwhichwould support the potential for two concrete batching to be imported by sea sand, aggregates andcement a multi-userfacility (MUF)to allow ‑ based concrete supplychain The proposed MUF was assessed using aggregate unloading facility, and its a Review of Environmental Factors (REF) adjacent concrete batching plant from and consent conditions were imposed Blackwattle Bay to Glebe Island. Hanson by Port Authority under its Part 5 powers proposes using a marine supply chain granted by the Environmental Planning from its Bass Point quarry into Glebe and Assessment Act 1979 (NSW). Island. The proposed facility would have the capacity to manage up to one As part of its assessment, Port Authority million tonnes of aggregates per annum, reviewed over 300 submissions lodged delivered by ship. during the voluntary public exhibition period, which ran through February 2018. Hanson is in the process of obtaining Key issues raised in submissions include planning approval under Part 4 of the concerns about the noise, air quality, Environmental Planning and Assessment traffic impacts and visual amenity of Act, 1979, for their proposed concrete the proposal, and how these potential batching plant adjacent to Glebe impacts will be managed or mitigated. Island berth 1. Hanson prepared an Environmental Impact Statement, which Port Authority has prepared a Response was placed on public display from 11 April to Submissions (RtS) report and made to 15 May 2018, and has also prepared the Part 5 Determination, which will a RtS report, which will be released be released soon. Further stakeholder later in 2019. engagement will be undertaken once the RtS report is released. The EOI that sought interest from the market in potential tenancies At the same time, Port Authority is in the MUF also sought interest from continuing to engage with potential the market in obtaining a tenancy on future tenants for the MUF and, as part land at Glebe Island for a potential of the market testing process, Port second concrete batching plant adjacent Authority released an Expression of to the MUF. Port Authority has evaluated Interest (EOI) in December 2018. A key the responses and it is proposed that objective of the EOI was to ascertain the proponents will be asked to respond level of demand from participants in the to a RFP in due course. concrete supply chain. Port Authority has evaluated the responses and proponents The concrete batching plant on will be asked to respond to a Request for Glebe Island will play a critical role in Proposals (RFP). supporting the immediate and ongoing concrete batching needs of the central Concrete batching on Glebe Island business district (CBD) and surrounding Infrastructure NSW’s (formerly areas, as well as the major infrastructure UrbanGrowth NSW Development projects in The Bays Precinct. It will Corporation) redevelopment of the also enable the redirection of raw Sydney Fish Market and surrounding materials to a more sustainable marine- Bays East precinct means that Hanson based supply chain, taking a significant Construction Materials (Hanson) number of trucks off the road will be required to vacate its site at and reducing congestion. Blackwattle Bay. Hanson has proposed relocating its vessel berthing and

Sydney Harbour and Port Botany • 47 48 Port Authority of New South Wales Annual Report 2018/19 These includedthefollowing: improve securityresponse andcapability. by federal andstate agencies,and contemporary riskinformation provided a numberofdevelopments to access In 2018/19, Port Authority implemented New developments • • • • • and public withinthesespaces: and infrastructure andtheemployees security ofitswaterways, assets Port Authority iscommitted to the 10.8 • •

that operate within thewaterways. Maritime Industry service providers Port Botany boat ramp export operations used for drybulkandimport/ White Bay andGlebeIslandwharfs, and White Bay CruiseTerminal the Overseas Passenger Terminal two world-class cruiseterminals – Port of Eden andthePort ofYamba Newcastle Harbour, Port Kembla, of Sydney Harbour, Port Botany, the waterways andshippingchannels Vehicle andDeterrent Communications. Device, Active ArmedOffender, Hostile topics suchasImprovised Explosive Tactics Command. The forum covered Police Counter Terrorism andSpecial Assistant Commissioner andtheNSW Crowded Places Forum hosted by the Operating Officer attending theCEO Crowded Places Forum, withtheChief attended stages 2and3ofthe Port Authority representatives and trending attacks. ‘lonewolf’ addressing armedactive offenders and crimeprevention, inparticular Cruise Terminal to enhance security Passenger Terminal andWhite Bay Border Force at theOverseas with NSW Police andtheAustralian Two operational exercises were held

Security Security • • • • security environment. mitigate thecontinually evolving global products to assist Port Authority to increased riskcontext, andintelligence will give theMaritimeIndustry an The DepartmentofHomeAffairs Compliance Plan. as partoftheDepartment’s Maritime with theexternal auditsandinspections and haswelcomed andwas compliant formed DepartmentofHomeAffairs, Government regulator from thenewly working relationship withtheAustralian Port Authority maintainsastrong events andtrends. evaluate andrespond to thelatest world contemporary securitymitigation to and drills,proactively developing facilities, undergoing securityexercises Port Authority iscontinually monitoring

towards industry. expectations andisnotcost-prohibitive is maintained,meetsoperational terminals to ensure security integrity plan was introduced for thecruise An updated securitydeployment to investigations ofcrimesat sea. of processes andprocedures inrelation development andimplementation The committee willdiscuss theongoing with itsmeetingsheldtwice ayear. by the NSW Marinearea command, The committee was ledandhosted of the Crimes At SeaCommittee. attended thesecond sitting Port Authority representatives Committee meetings. hosting thescheduledPort Security a strong port-wide securitynetwork, Port Authority continued to build ongoing excellence. customer service focus andensuring was introduced, establishing astrong for thecontracted securitycompany A customer service-training module The year ahead 10.9 Capital projects A number of initiatives were identified for 2019/20, to assist Port Authority Seaport Passenger Boarding to provide robust, efficient and risk- Bridges – Overseas based security outcomes for employees, Passenger Terminal passengers and customers. Some of these include: Two giant gangways – technologically advanced Seaport Passenger Boarding • the revision of all Maritime Security Bridges (SPBBs) – are scheduled for plans to update the current risk context arrival at the Overseas Passenger and port development, inclusive of the Terminal in July 2019 and will be put into new wharf extension at Eden service for the 2019/20 cruise season. • the update of the access control The SPBBs were custom-built to better system at all Port Authority facilities support visits from cruise ships including and terminals in the Sydney region Quantum-class vessels that can carry • updates to the CCTV program at the over 5000 passengers. Together, the Overseas Passenger Terminal and bridges will move over 1200 people every White Bay Cruise Terminal 30 minutes, improving the terminal’s • continuing to build a strong port-wide operational efficiency, increasing security network at the two scheduled capacity and allowing for quicker Port Security Committee meetings. and easier embarkation and debarkation for passengers.

Carrier ship delivers new gangways to the Overseas Passenger Terminal, July 2019

Sydney Harbour and Port Botany • 49 50 Port Authority of New South Wales Annual Report 2018/19 connection reliant gangways. furniture andremoval oftwo redundant of power supply, modification to wharf along thelengthofwharf, upgrade the installation ofgangway supportrails works have beencompleted, including Prior to thearrival oftheSPBBs,enabling in an impressive precision duallift. onto thewharfviaship’s cranes July 2019. They willbeinstalled directly on thecargo vessel Helvetia (AG) inmid- in Spain,andwillarrive fullyassembled manufactured over aperiodof15months The SPBBswere designedand The upgraded northernaccess to theOverseas Passenger Terminal at CampbellsCove the appearance oftheprecinct. and repaving theentire area to enhance end ofCircular Quay West Road, existing roundabout at thenorthern Authority landinvolved lowering the The work undertaken on Port Passenger Terminal, Circular Quay. Rocks andto cruiseshipsat theOverseas to deliver enhanced publicaccess to The and wideningtheforeshore promenade Cove publicdomain,includinglowering NSW to fundanupgrade ofCampbells Port Authority partnered withProperty Overseas Passenger Terminal Upgraded northernaccess – The lowered roundabout created a new and accurate decisions by commercial route for providoring trucks to access shipping. In the event of incidents the northern part of the Overseas on the harbour, the system is able to Passenger Terminal wharf to provide provide detailed scenario playback to cruise ships with necessary supplies. fully support investigations as required. The additional access point for trucks As part of the upgrade, significant improved the overall efficiency in improvements have been realised servicing cruise ships. on the network architecture, including The project was completed in time full redundancy to reduce any risk for the 2018/19 cruise season, facilitating of system down-time. a faster turnaround of large ships carrying in excess of 3000 passengers. The year ahead Port Authority is focusing on projects Vessel Traffic Services to facilitate the continued performance upgrade of critical port infrastructure, including: Port Authority’s VTS hardware received • refurbishment of Glebe Island 8 wharf a significant upgrade in the first half of (see Section 2.7) 2019. VTS operators in Botany use PC- based software to combine a series of • upgrade to Aids to Navigation cameras, radars, radios and automatic (see Section 2.7) identification systems (AIS), installed • replacement of capital plant within at several locations across Sydney the Overseas Passenger Terminal and Harbour (Port Jackson) and Botany Bay. White Bay Cruise Terminal, including These monitor and coordinate the safe air-conditioning equipment, fire movement of large commercial ships. services and lifts. The upgrade targeted the main Airbus (previously Signalis) integrated radar system, which was last updated in 2010. The Airbus system integrates six radars, AIS data, weather and shipping databases into one package that is utilised in two control centres and six workstations. The hardware and software allow the VTS operators to have clear visibility of all vessel movements across both Sydney and Botany, allowing them to provide information to support fast

Sydney Harbour and Port Botany • 51 52 Port Authority of New South Wales Annual Report 2018/19 representatives continued to: During thereporting year, Port Authority Community meetings • • • • refer to thefollowing sections: and sponsorshipat different ports,please For detailsofcommunity engagement and understand thembetter. continually lookfor ways to work with our various community groups and operate. We value ourrelationship with member ofthecommunities where we Port Authority isproud to beanactive 10.10 • •

Port ofEden (Section13.5). Port Kembla, (Section12.4) Newcastle Harbour(Section11.4) (section below) Sydney andPort Botany Penrhyn Estuary andForeshore Beach. including thePort Botany Boat Ramp, that remain underitsmanagement, relating to nearby community assets provide information on matters Authority continues to attend to the landowner ofPort Botany, Port NSW Ports. Althoughnolonger meetings, whichare convened by Community Consultative Committee Attend quarterly Port Botany West Councils. tenants andCityofSydney and Inner by community representatives, port meetings. These meetingsare attended White Bay Community LiaisonGroup Convene quarterly Glebe Islandand

and sponsorship engagement Community Community detailed onthePort Authority website. communities appointed to theCLG are from the Balmain/Rozelle andPyrmont The 11community representatives Chair to facilitate themeetings. Port Authority hasappointed anexternal on any initiatives beingconsidered. the portandobtaincommunity feedback the opportunity to discuss activitiesat and portindustry stakeholders with also aimsto provide Port Authority at Glebe IslandandWhite Bay. The group local community aboutportactivities The aimoftheCLG isto inform the the activitiesat theport. to participate inandcommunicate about local community andotherstakeholders Liaison Group (CLG) isaforum for the The GlebeIsland/White Bay Community Community LiaisonGroup Glebe Island/White Bay •

Cruise Terminal. from cruiseshipsberthedat White Bay The group meetsto discuss impacts Planning, Industry andEnvironment. of Health,andNSW Departmentof Protection Authority, NSW Department Inner West Council, NSW Environment representatives from thecommunity, meetings. These are attended by Terminal agency andcommunity Attend bi-monthlyWhite Bay Cruise Community complaints Community notifications and enquiries Members of the community can sign During 2018/19, Port Authority received up to a community notifications email 182 complaints — down from 263 in to receive information about changes 2017/18 and 216 in 2016/17. to shipping movements and significant marine incidents, such as an oil spill. Most complaints related to noise and ship emissions from vessels at White During the reporting year, 15 community Bay Cruise Terminal and Glebe Island notifications were issued and published in Sydney. All complaints are registered on the Port Authority website. in a central database. Community events Service NSW continued to manage the Port Authority complaints and Community venues enquiry line on a 24-hour basis to ensure Port Authority has several iconic locations complaints are managed in real time available for events, activation and filming where possible. hire on non-ship days. These include the Port Authority’s enquiry contact Overseas Passenger Terminal precinct details are: at Circular Quay West and White Bay Cruise Terminal at Rozelle, and several P: 02 9296 4962 other hardstand locations on the Sydney E: enquiries@ portauthoritynsw.com.au Harbour foreshore.

During the year, proactive management The Overseas Passenger Terminal of potential issues included: is Sydney’s premier location for events and activations, offering hirers direct • contacting each ship and ships’ agent views of the Sydney Opera House ahead of their arrival into White Bay and harbour from each of its four indoor to remind them of their responsibilities event spaces. Major public events • briefing onsite security and duty dominated the first quarter of 2019 cruise terminal managers about at the Overseas Passenger Terminal. reporting and managing noise, and White Bay Cruise Terminal offers views in particular non-safety related public of the Sydney skyline, with the versatility announcements and music to host all types of events, such as • ensuring Service NSW is adequately cocktail parties, corporate conferences, briefed about the complaint reporting gala dinners, exhibitions, fashion shows, process ahead of a ships’ arrival. festivals, charity events, community events, public parades, outdoor cinemas and live sites.

Sydney Harbour and Port Botany • 53 54 Port Authority of New South Wales Annual Report 2018/19 of vessels on thewater. and safety information to thehundreds shipping channelsto provide navigational Service (VTS) team monitored the pollution. Port Authority’s Vessel Traffic in trouble orrespond to reports of were onstandby to assist vessels in Australia Day, Port Authority’s crews With somany shipstakingpart in bothSydney HarbourandBotany Bay. emergency response for marineincidents Port Authority provides a24-hour to the program’s ongoingsuccess. Port Authority’s supportisakey factor throughout theday andinto theevening, on and around Sydney Harbour With somuchoftheprogram focused and peoplewithaccess considerations. multicultural andIndigenouscommunities a series ofsuccessful strategies to engage was ‘Everyone, every story’, continuing 2019. This year thethemeofAustralia Day Australia Day celebrations on26January Passenger Terminal were againcentral to Port Authority andtheOverseas Australia Day mapped by the hydrographic survey team Sydney majorshipping channels Harbour’s for Australia Day 2019 onSydney Harbour Firefighting tugShirley Smithdresses up appropriate andeducational. by key Aboriginalgroups asrespectful, The program was widelyrecognised and meaningfulAboriginalcontent. program through theinclusionofrich commitment to strengthening the Australia Day 2019 reinforced the course oftheday. tapped theirOpalat Circular Quay over factor thisyear, although330,000 people enjoy theevent. The hotweather was a the Sydney central business district to with anestimated 450,000 peoplevisiting Australia Day drew strong attendance Cruise ShipAccess andAustralia Day Live. Parade, Tall ShipsRace andviewing, Tug andYacht Ballet, theAustralia Day Salute to Australia, In theSky Flyover, Harbour activitiesincludedtheFerrython, reporting year. on socialmediaby theendof and received more than13,000 viewings is featured onthePort Authority website place around Sydney Harbour. The video increasing numberofmajorevents taking the State, whilst participating inan support ofboththecitySydney and clearly demonstrates Port Authority’s take place onSydney Harbour. The video Master’s insightsinto theactivitiesthat engaging videofeaturing theHarbour The Australia Day Council created ahighly large crowds. the Opera House forecourt drawing in neighbouring First FleetPark and with many nightlylive activations The event continues to grow inpopularity southern forecourt hosted theSpiral Pigs. Terminal’s entrance portico andthe suspended from theOverseas Passenger New Year 2019. The GoldenSnake was Authority participated inSydney’s Lunar For thethird successive year, Port Sydney LunarNew Year

The forecourt of the Overseas Passenger Terminal during Vivid Sydney 2019 © Bespoke Boulevard © Bespoke

Vivid Sydney 2010 Vinnies CEO Sleepout Port Authority played a major role in Vivid In June 2019, Port Authority hosted the 2019, again facilitating the build of the 2019 Vinnies CEO Sleepout at White activation at White Bay Bay Cruise Terminal for the second berth 3. The Overseas Passenger Terminal year running. Both Philip Holliday, Chief precinct hosted major installations Operating Officer (COO) Sydney, Port in the entrance portico and on the Kembla and Eden, and Harbour Master, Port Authority roadway. For the third Sydney; and Brad Milner, Executive General consecutive year, Port Authority managed Manager, Commercial Technical and Legal; a food truck precinct in the southern participated in raising more than $23,000 forecourt and curated its own lighting for the homeless. Nearly 400 CEOs took activation for the Arrivals Hall. This part in the event for 2019, raising more kinetic display of coloured orbs proved than $2.1 million in Sydney alone. to be a crowd favourite, drawing more than 200,000 visitors to the Overseas Passenger Terminal over the course of Vivid. The terminal also provided a welcome respite area for families. On the opening weekend, the wharf of the Overseas Passenger Terminal hosted the Sydney Heritage Fleet’s ; and MilknSugar, a dessert festival that received more than six million hits on social media.

Port Authority hosted the 2019 Vinnies CEO sleep out at White Bay Cruise Terminal © Visionair Media © Visionair

Sydney Harbour and Port Botany • 55 56 Port Authority of New South Wales Annual Report 2018/19 be very popular, withmore than26staff were invited. The workshop proved to week. AllPort Authority staff in Sydney Sydney office in July 2019 forNAIDOC a traditional weaving workshop at the a locally basedtraditional weaver, hosted with theBlakMarkets, Karleen Green, As partofPort Authority’s involvement and education outcomes. communities to drive better health the Fair of$610,000 goto Indigenous art andtraditional works. Salesfrom centres virtuallysellingoutoftheir to Sydneysiders, withmany ofthe the opportunityto show theirwork of 30remote communities took the ArtFair over theweekend. A total More than10,000 peopleattended and dance performances. contemporary andtraditional music event featured avariety line-upof live theme, ‘Voice Treaty Truth!’ thetwo-day the spiritof2019 National NAIDOC unique artsandcultural practices. In host workshops demonstrating their jewellery, to Sydney to exhibit, selland and accessories, suchashand-made their artworks, sculptures, textiles Torres Strait Islanderartists brought Committee) week. Aboriginal and Aboriginal and IslandersDay Observance heralded thestart ofNAIDOC(National 2019. This event on 29and30June Passenger Terminal at theOverseas Fair (BlakMarkets) Indigenous Art second National hosted the Port Authority National Indigenous Art Fair information onSustainability.) Customs Hall.(SeeSection15for more Terminal alongsidetheOpera Housein now beplaced intheOverseas Passenger has been gifted to Port Authority andwill circles. The HarbourBridgesculpture centrepiece oftheArtFair’s weaving of theSydney HarbourBridge –the work finishedoffa woven sculpture traditional weaving techniques andtheir participating. Karlene taughtthestaff ocean environment. and theprotection ofAustralia’s unique ongoing commitment to sustainability visits were asignalofPort Authority’s world’s last pristine wildernesses. These significant impactsononeofthe to oildrillinglicences that may have Great Australian Bight to draw attention by Passenger Terminal alsosaw avisit the Great BarrierReef. The Overseas The tripwas partofacampaignto save way to campaigninnorthern Australia. Shepherd’s flagshipSteve Irwin onher Passenger Terminal hosted theSea Over thecourse ofwinter, theOverseas Saving ourOceans bike racing series. hosted alegoftheNational Criterium a dance floor. InNovember, White Bay Terminal, transforming thestage into event –Dance Noir–at White Bay Cruise Company hosted theirmajorfundraising of four days. Additionally, Sydney Dance people visited theFair over thecourse time inmany years. More than3000 Terminal from Melbournefor thefirst moved to Sydney’s White Bay Cruise The National Australian AntiquesFair Other notableevents Rainbow Warrior onherway to the Centrum’s children’s playground provided entertainment at the southern forecourt, Overseas Passenger Terminal © MJ Fusion Studio

Major brands proved to be exceptionally popular for Besides a large program of public events, members of the general public to view Port Authority continues to draw major the fireworks display. Port Authority’s brands for events at its venues – including tenants within the Overseas Passenger Red Bull, the NRL for the annual Dally Terminal held their own ticketed-events – M Awards, Uber, Ford, Fenty Makeup all of which sold out. by Rihanna, Jeans West, Tiffany, Savills, Smiths and the Conservatorium of Music. Mission to Seafarers Mission to Seafarers is committed The popularity of the southern forecourt to promoting ‘the spiritual, moral and of the overseas Passenger Terminal physical wellbeing of seafarers who continues to grow, hosting a live site arrive in our ports on every day of the for the opening ceremony of the Invictus year’. There are more than 250 centres Games, a Koala Museum (a possible vision around the world, and more than 20 of the future with continued destruction of those are in Australia. Wherever there of koala habitat), a Mary Poppins is a major port, Mission to Seafarers will double-decker bus, and a Centrum have a presence there. children’s playground. Port Authority assists the Sydney Mission New Year’s Event 2018 by providing parking at Moore’s Wharf New Year’s Eve 2018 drew more than for the bus that offers a free transfer 1.5 million people to Sydney’s foreshore. service for seafarers from Port Botany The southern forecourt and the roadway into the city and paying for Wi-Fi on the of the Overseas Passenger Terminal bus to enable seafarers to keep in touch with family and friends whilst ashore.

Sydney Harbour and Port Botany • 57 58 Port Authority of New South Wales Annual Report 2018/19 a significant gateway to the resource-rich Hunter Valley. of thenorthandnorth-west ofNSW. The harbourprovides economic andtrade centre for theHunter region andfor much Newcastle is162kilometres northofSydney and isthe 11 • • • following functionsinNewcastle Harbour: The ChiefOperating Officer manages the 11.1 alumina fertilizer and ore concentrates. bulk cargoes suchasgrains, vegetable oils, cent oftotal tonnage, which includesother Coal exports represent more than90per largest tonnage throughput ports. export portandoneofthecountry’s Newcastle HarbourisAustralia’s oldest

Vessel enters Newcastle Harbourto loadcoal • functions including: Port Safety Operating Licence (PSOL) Vessel Traffic Information Centre (VTIC) the port about depthsindifferent areas of Master, includingpublishinginformation pilotage services andtheHarbour incident reporting

Newcastle Harbour Overview • • • • • • •

asset management. maintenance of Macquarie Pier management ofNobby’s Headland knowledge certificates approval andadministration oflocal Chain Coordination participation intheHunter Valley Coal sites inNewcastle Harbour inductions for access to Port Authority Framework arrangements under the Hunter Coal Export roles andresponsibilities • •

in a combustible environment) could result inafire or works and hotworks (any works that bunkering (refuelling vessels) notifications for dangerous goods, emergency response 11.2 Marine Operations • carried out navigation and environmental patrols. Marine Operations maintained its high All marine operations activities focused standard of service delivery during on maintaining a safe and environmentally 2018/19, promoting the safe and efficient sustainable port with a timely and movement of commercial vessels effective response to water-based operating on Newcastle Harbour. incidents and emergencies. During the reporting year, Marine Operations in Newcastle Harbour: • completed 4619 pilot movements for movements into, out of, and within the ports requiring a pilot on board) – an average of 12.6 per day • actioned 307 bulk dangerous goods transfer checks • undertook 493 audits of work permits • actioned 338 bunker permit notifications • responded to 10 calls reporting In Newcastle, the majority of our marine pilots transfer to ships by helicopter pollution

11.3 Summary review of operations

Trade vessel visits to Newcastle, 2018/19

TOTAL TOTAL 2018– 2017– JULY AUG. SEPT. OCT. NOV. DEC. JAN. FEB. MAR. APR. MAY JUNE 19 18 Newcastle 210 197 181 205 170 212 205 175 197 189 168 188 2,297 2,272 In 2018/19, there were 2297 trade vessel visits to Newcastle Harbour, a 1.1 per cent increase on trade vessel visits when compared to 2017/18. This increase can be directly attributed to coal vessel visits, which increased by five per cent compared to the previous financial year. However, grain shipments were down considerably, due to the current drought conditions affecting grain exports from the east coast of NSW. A total of 4619 pilotage movements (inward, outward and harbour removals) were performed – 3526 of these by helicopter and 1093 by cutter.

Cruise ship visits to Newcastle, 2018/19

TOTAL TOTAL 2018– 2017– JULY AUG. SEPT. OCT. NOV. DEC. JAN. FEB. MAR. APR. MAY JUNE 19 18 Newcastle 0 0 0 2 0 1 3 5 2 2 0 0 15 11 Port of Newcastle owns cruise infrastructure and manages cruise activity in Newcastle Harbour. A total of 15 cruise ships called in to Newcastle Harbour in 2018/19, up from 11 in the previous year.

Newcastle Harbour • 59 60 Port Authority of New South Wales Annual Report 2018/19 • • • • theVTIC: During 2018/19 movements andoperations. port usersafety, theenvironment orport or developing situations that canaffect limits. The VTICmonitors for potential efficiency of movements withintheport that facilitates thesafe operation andthe The VTICprovides ahighlevel ofservice Harbour since 2002. (VTIC) hasoperated withinNewcastle The Vessel Traffic Information Centre Information Centre Vessel Traffic to respond to and combat maritime response team up-to-date andready and knowledge oftheemergency courses assisted inkeeping theskills and anumberofexternal training On-the-job training, real-life response of suspected pollution. maritime incidents,including10reports Operations responded to anumberof reportingDuring the2018/19 year, Marine vessels equippedto respond to incidents. and avariety ofresponse equipment and team includeshighlytrained employees Port Authority’s emergency response Emergency response as for thecommunity ingeneral. port stakeholders andvisitors, aswell organisation butalsoto andfrom other communication, notonlywithinthe Newcastle Harbour. Itisaconduit for interface ofthewholeoperation within The VTICistheinterconnecting

weather events. in preparation for forecast proactively cleared anchoring to 10 pollution reports coordinated theresponse watch for 3526 helicopter movements provided Search andRescue (SAR) of 4669 vessel movements facilitated safe andefficient transit to meet itsobligations. paramount to enablingPort Authority other agenciesonaregular basisis incidents. This and cross training with 2018/19 are2018/19 describedbelow. Authority employees participated during Exercises inwhichNewcastle Port reporting year. of employees was ongoingthrough the obligations underthePSOL.Training to test response plansand meetits participated inanumberofexercises, During thereporting year, Port Authority Exercises andtraining which makes it unsafe to sailfurther. to a port becauseof anemergency where avessel hasto bediverted issues. ‘Port ofrefuge’ isasituation the resulting oilspillandportofrefuge to an incidentinBurnieHarbourand The exercise focused onaresponse Burnie, Tasmania, April2019 National Response Team Training, management. to supportmulti-agency incident and emergency service providers) response agencies(law enforcement training andfamiliarisation withother Ongoing training continues, withfield response structure. Control System, thepresent incident for theOilSpillResponse Incident Management System, anditsimplications the Australasian Inter-Service Incident National Planfunctionalareas, and updates onState arrangements, the and MaritimeServices. The team received The workshop was conducted by Roads workshop heldinKiama. participated intheState Response Team Four attendees from Port Authority September 2018 State Response Team workshop, Newcastle Oil Spill Exercise, Shipping incident MV Aquadiva December 2018 On 16 November 2018, the Australia Port Authority personnel conducted Transport Safety Bureau (ATSB) released an oil-spill equipment familiarisation its report on the near grounding of the and desktop discussion. dry bulk ship MV Aquadiva in Newcastle Harbour on 12 February 2017. Port Authority employees also conducted training on the deployment Following the incident, Port Authority of various booms at the berth. reported the incident to the Australian Transport Safety Bureau (ATSB) and Development and projects conducted its own internal investigation. Projects conducted by Port Authority Port Authority has commenced and over the reporting year included: continues to implement learnings from both the internal and ATSB • completion of the inbound tanker investigations. Most significantly, the two project, opening port access to Large overall lessons learnt as a result of the Range 1 (LR1), Large Range 2 (LR2) near grounding are: and Medium Range (MR) tankers • the need to transition from a VTIC • preliminary surveys on Macquarie to a Vessel Traffic Service (VTS) Pier revitalisation • the importance of making decisions • Nobby’s Headland rock fall mitigation and change consistent with a highly work completed in September 2018 reliable port resource management • two new outboard engines for one system. of the two launch vessels Port Authority has commenced work • scoping options for Goodwood Island to transition from a VTIC to a VTS and Wharf refurbishment makes continual improvements to its port • a range of minor capital projects. resource management systems. In January 2019, Port Authority . contracted the manufacture of a pilot launch to replace the Brian Cecil. Delivery of the pilot launch is expected in December 2019.

Pilot vessel Brian Cecil underway on Newcastle Harbour

Newcastle Harbour • 61 62 Port Authority of New South Wales Annual Report 2018/19 Newcastle Harbour 11.4 Community These groups are chaired and coordinated by Port of Newcastle engagement (the private operator of the port). and sponsorship They are designed to provide a forum for information exchange and discussion Port Authority is proud to be an active on port operations and activities. member of communities where we Representatives are chosen because operate. We value our relationship they live or work near the port and with our various community groups have existing communication links and continually look for ways to work with the local community. with and understand them better. Community events Community support Port Authority also helps to facilitate local Port Authority has a long history events and provides access to Macquarie of supporting community groups, Pier for Million Paws Walk, Glow Walk, especially locally, and this has Cupids Undie Run, Newcastle Running continued throughout 2018/19. Festival, Sparke Helmore Triathlon, This includes support for: and New Run. • Newcastle Coal Infrastructure Group Port Authority continues its involvement (NCIG) Charity Ball in the Port Welfare Committee. This group was formed to provide an overarching • Hunter Business Awards management of all of the local groups • Australasian Marine Pilots Institute providing support to seafarers. The goal Limited (AMPI) Conference of this group is to eliminate the duplication of services and provide the best welfare • Buy a Bale option available. • World Biggest Morning Tea • Alzheimer’s Australia • Westpac Rescue. 11.5 The year ahead Port Authority will continue to work Community liaison towards achieving accreditation from the Australian Maritime Safety Authority In addition to providing support to operate the current VTIC as a licenced for local community groups, Port Vessel Traffic Service. Authority participates in community liaison groups including: This will involve the following actions: • Port User group, for port stakeholders • Pilot portable units (PPU) will be fully • Port of Newcastle Community Liaison and effectively integrated into modern group, for community members pilotage technique. and community associations • Electronic Master Pilot exchange • Newcastle Port Welfare Committee. will be developed and implemented. • Pilot transfer safety review will be undertaken. • Pilot station information technology and displays will be upgraded.

Newcastle Harbour • 63 64 Port Authority of New South Wales Annual Report 2018/19 12 terminal in Australia. and south-western NSW andisthelargest carimportation It isthe principalgrain export portfor producers insouthern steel (importofraw materials andexport ofsteel products). the needsofregional industries suchascoal (export) and Located 90kilometres southofSydney, Port Kembla serves • • following functionsinPort Kembla: The HarbourMaster managesthe 12.1

Explorer of theSeas • • functions including: Port Safety Operating Licence (PSOL) operations oftheport safety outcomes for theday-to-day

and approaches up to date depths intheharbour hydrographic services for providing and crew) pilotage services (pilots,cutters

Port Kembla Overview at berthinPort Kembla, February 2019 • • • • • • • • •

asset maintenance andmanagement. maintenance of navigation aids providing andmaintainingportsecurity sites inPort Kembla inductions for access to Port Authority out in theport in a combustible environment) carried that could result inafire or works auditing ofhotwork (any works bunkering (refuelling vessels) notifications for dangerous goods, emergency response to incidents reporting ofincidents Vessel Traffic Information Centre (VTIC) 12.2 Marine Operations • actioned and monitored a wide range of miscellaneous marine activities, During the reporting period, including towage services, line handling Marine Operations: operations and commercial diving activities to facilitate maintenance • completed 1647 pilot movements of the port infrastructure (for movements into, out of, and within the ports requiring a pilot on board) – • responded to reports of pollution an average of five per day that required deployment of personnel and equipment. • undertook hydrographic surveys for all of the port channels and berthing boxes • issued 81 and audited 53 dangerous goods cargo permits • undertook 116 audits of work permits • issued 88 bunker permit notifications and audited 81 vessels • carried out navigation and security patrols Port Authority’s vessel Kestrel returns from escorting a pilot

12.3 Summary review of operations

Trade vessel visits to Port Kembla, 2018/19

TOTAL TOTAL 2018- 2017- JULY AUG. SEPT. OCT. NOV. DEC. JAN. FEB. MAR. APR. MAY JUNE 19 18 Port Kembla 59 72 71 64 64 67 63 63 73 64 67 68 795 836

In 2018/19, total vessel visits were down approximately five per cent compared to the same period last year, due to a reduction in pure car and truck carrier vessels. In addition, there were no grain exports due to the current drought conditions in the key growing regions of NSW. Coal performed far better this financial year, with greater throughput, compared to the previous year.

Cruise ship visits to Port Kembla, 2018/19

TOTAL TOTAL 2018- 2017- JULY AUG. SEPT. OCT. NOV. DEC. JAN. FEB. MAR. APR. MAY JUNE 19 18 Port Kembla 0 0 0 0 0 0 0 1 0 0 0 0 1 2

During the year, Port Kembla welcomed one cruise ship – Explorer of the Seas in February 2019. The visits continue to attract significant local attention and was well received.

Port Kembla • 65 66 Port Authority of New South Wales Annual Report 2018/19 outcomes for vessel visitsto theharbour. development willimprove thesafety Traffic Services (VTS). Thissignificant will transition to AMSA recognised Vessel As stipulated inthePSOL,VTIC at all times. 24/7 operation was maintained as required, thereby ensuringa seamless workloads andaugmentstaffing levels officer to assist inmanagingpeak Port Kembla recruited anotherVTIC interactive permitmanagementsystem. and other marineactivities,usingits dangerous goodsmanagement of portoperations, shippingsafety, incrementally improve theefficiency The continuing upgrades to cPORTS shipping andportmanagementsystem. Kembla’s up-to-the-minute commercial to the performance of‘cPORTS’ –Port Port Authority continued upgrades in Port Kembla. for portandshippingmanagement continue to provide ahigh-qualityservice trained to international standards and All Port Kembla VTICemployees are Information Centre Vessel Traffic power pack.This purchase renewed complete with aself-contained hydraulic of oilspillcontainment boomandreel, Port Kembla haspurchased two sets knowledge ofdeployment andoperation. stored inPort Kembla andfulloperational proficiency withthe variety ofequipment training throughout theyear to ensure In addition,employees undergo agencies andportstakeholders. regular exercises withothergovernment response committees, andundertakes the local,regional andState emergency Port Kembla isanactive memberof Exercises andtraining of emergency response services. Authority to continue itsexcellent level new kitfortifies the commitment by Port the Iron Chieftainfire intheport. This old equipmentthat hadbeenusedfor in Turkey. 27 March 2019, destined for ascrapyard The Iron Chieftaindeparted theporton emergency andthevessel’s stay inport. works completed’ for theduration ofthis being paidto Port Authority for ‘at-cost vessel in2018/19, resulted in$500,000 Subsequent work carriedoutonthe berthed alongsideBlueScope’s berth113. the vessel MVIron Chieftain,whichwas when amajorfire occurred onboard A real-time portemergency was declared MV Iron Chieftainfire, June2018 of emergency scenarios. to exercise andtrain on awiderange operators andancillaryservice providers members ofPort Authority, port provided anopportunityfor all The activitysurrounding thisvessel from theportto herscrapyard. another (berths113to 101), andtowage of vessel from oneberthintheport to deadship duringheavy winds,movement booming, deadshipinport,securingofa by theteam. These spannedoilpollution several emergency taskswere enacted 2018, portdeparture on27 March 2019), Iron Chieftainintheport(fire on18June As aresult oftheextended stay ofthe June 2018 Vessel MVIron onfire Chieftain at Port Kembla, 12.4  Community Work has started on implementing a purpose-built safety Port Marine engagement Management System (PMMS), which and sponsorship replaces the old and dated ISO quality management framework. The new PMMS Port Authority is proud to be an active provides optimum risk‑mitigation member of communities where we and port-specific operation operate. We value our relationship management tools. with our various community groups VTIC to VTS migration will continue and continually look for ways to work through the coming year with with and understand them better. new procedures, training and certification progressing as per Community liaisons the assigned milestones. Port Authority has a long involvement in Continuing upgrades to the infrastructure the Port Kembla and greater Wollongong of the Port Kembla coal terminal are public and business community and is expected to increase exports throughout a proud major sponsor of Mission to the next financial year. Seafarers Port Kembla, Port Kembla Surf Club and Port Kembla Golf Club. The Liquid Natural Gas (LNG) import terminal – a floating regasification The Harbour Master is the current Chair storage unit envisaged by the private of the Port Kembla Port User Council sector company AIE – has completed and is also a member of the Illawarra its feasibility studies and development Business Chamber. Port Authority approvals. Finalisation of the funding is a proactive user of local services, model is now in progress. This is where possible, to support its operations. expected to be completed in the fourth quarter of 2019. If approved, construction of the berth is expected to commence 12.5 The year ahead soon afterwards, with imports slated Port Authority will continue with for 2021. upgrades of the CCTV camera and . peripheral equipment around Port Kembla Inner and Outer Harbours, allowing even better coverage and identification of vessels, people and operations around the port. These initiatives will ensure Port Kembla remains at the forefront in providing high-class, efficient and safe services to port stakeholders, shipping and the Illawarra community.

Port Kembla • 67 68 Port Authority of New South Wales Annual Report 2018/19 13 is a deep natural harbour. between Sydney andMelbourne. Itsharbour, , Eden issituated onthefar southcoast ofNSW –midway • is responsible for thefollowing functions: and Port ofEden. InEden, Port Authority Operating Officer, Sydney, Port Kembla The Harbour Master reports to theChief managed by theHarbourMaster. Port Authority inPort ofEden is 13.1 an established cruiseship destination. Royal Australian Navy (RAN),andis forestry exports and fishing–andthe of both regional industries –including Port ofEden services theneeds

Port ofEden isthethird deepest natural harbourintheworld pilotage services Harbour Master and24-hour

Port ofEden Overview • • • adjacent to theRANmulti-purposeberth. on the southsideofTwofold Bay, an eight-hectare cargo storage facility Authority alsoowns andmanages in the Eden portprecinct andPort There are five commercial wharves

Zones withintheport. for thedesignated MaritimeSecurity emergency response andsecurity the maintenance ofnavigation aids goods management,surveys and functions, includingdangerous Port Safety Operating Licence and the RAN’s multi management ofSnugCove ‑ purpose berth 13.2 Summary review of operations Total vessel visits (trade and cruise) to Port of Eden, 2018/19

TOTAL TOTAL 2018– 2017– JULY AUG. SEPT. OCT. NOV. DEC. JAN. FEB. MAR. APR. MAY JUNE 19 18 Eden 6 5 5 9 9 8 6 10 12 6 8 5 89 101 Note: Includes visits at both Port Authority’s berths and privately owned terminals. The total number of vessel visits to Eden during 2018/19 was 89, of which 65 were chargeable. There were 95 piloted movements during the year. The largest users to the port during the reporting year were the dry bulk cargo ships (25), closely followed by the RAN (24), which is a non-chargeable user, and cruise ships (15).

Cruise ship visits to Port of Eden, 2018/19

TOTAL TOTAL 2018– 2017– JULY AUG. SEPT. OCT. NOV. DEC. JAN. FEB. MAR. APR. MAY JUNE 19 18 Eden 0 0 0 1 1 2 3 4 3 1 0 0 15 15

In 2018/19, 15 cruise ships visited, the same number as in 2017/18. There were four maiden voyages to Eden, including Caledonian Sky (27 October 2018), Silver Muse (3 February 2019), Amadea (24 February) and Seabourn Encore (26 March).

The Silver Muse on her maiden voyage to Eden, February 2019

Port of Eden • 69 70 Port Authority of New South Wales Annual Report 2018/19 will be managedby Port Authority. and theoperation ofthenew wharf Industry –Lands(DepartmentofLands), managed by theDepartmentofPrimary Construction oftheextension hasbeen in length. berthing ofcruiseshipsupto 325metres breakwater wharfwillenablethe The extension to theSnugCove growth inthe region. government initiative to drive economic Extension project isanimportmulti- $44 million Eden Breakwater Wharf ort development and Bega Valley Shire Council, the Government, theNSW Government Jointly fundedby theAustralian 13.3 receives aguidedtour ofthenew wharfduringitsconstruction Chief Operating Officer Sydney, Port Kemblaand EdenandHarbourMaster, Sydney, PhilipHolliday

P completed inMay 2019 and included: Stage 2construction works were • • • • • breakwater wharf. were setuponbarges andtheexisting dolphins. Pilingrigsandotherequipment for the new wharfextension and the seabedto create thefoundations A total of126steel pileswere driven into

installing navigation aids. and emergency fire-fighting water as lighting, power, potablewater upgrading existing services such bollards ontheexisting wharf installing three onshore mooring and two breasting dolphins installing three mooringdolphins by 110 metres extending theexisting wharf During construction, the port remained 13.5  Community open and Port Authority managed shipping and transport movements engagement around the ongoing works. The wharf and sponsorship extension is expected to be open for business in August 2019 after Port Authority is proud to be an active some minor works on the existing member of communities where we wharf are completed. These works operate. We value our relationship include the installation of a heavy-lift with our various community groups zone to allow crane operations for and continually look for ways to work a mobile crane up to 300 tonnes and with and understand them better. renewing the pavement on the existing breakwater wharf. Community support The new Breakwater Wharf Extension Port Authority sponsors local will allow cruise ships to berth in Snug organisations such as Eden Men’s Cove, instead of having to anchor and Women’s Golf Clubs and Eden in the harbour and ferry passengers Killer Whales Soccer Club. to and from shore by tender. This will make Eden an even more attractive Community events cruise destination and is expected to significantly boost the local economy Port Authority is the major sponsor and open up the entire region to the of the Eden Whale Festival held in cruise industry, driving economic growth November every year, a celebration across the Sapphire Coast and creating of the migration of humpback and more than 80 jobs in tourism, hospitality other whales along the NSW Sapphire and stevedoring Coast. The festival is an important local community event that attracts tourists from NSW, Victoria and the ACT. 13.4 Other highlights As part of the Memorandum of 13.6 The year ahead Understanding with Bega Valley Council, a member of the Eden team supported In 2019/20, there are 22 scheduled cruise the CEO’s visit to the Seatrade Cruise ship visits, including first visits from Global conference in Miami Beach, Explorer Dream, Seven Seas Navigator, representing the Port of Eden to the Pacific Aria and Celebrity Solstice. world’s cruise lines. The conference Celebrity Solstice, at 317 metres in length, was an important opportunity to will take the title of being the largest ship provide details and insight into the new to visit Port of Eden. Breakwater Wharf Extension and attract additional visits to the facility, which will be ready for the 2019/20 cruise season.

Port of Eden • 71 72 Port Authority of New South Wales Annual Report 2018/19 and exports. second largest fishingfleet.Ithandlesa rangeofimports and New England regions andisthehomeportofState’s New South Wales, Yamba serves thewholeNorthernRivers Located at themouthofClarence River innorthern tug wharf, apontoon and a large shed. up to 120metres inlength,plusa small Wharf, whichcanaccommodate vessels Port Authority owns Goodwood Island stewardship ofPort ofYamba. Authority inNewcastle maintains erview Master since 1October 2015. Port responsibility oftheNewcastle Harbour Port of Yamba hasbeenunderthe Australia’s eastern-most seaport, 14.1 ort ofYamba 14 A Port ofAuthority survey vessel inYamba

P Ov or works inacombustible environment). works (any works that could result inafire (refuelling vessels) andlicensing for hot for dangerous goods,bunkering emergency response, permitnotifications functions includingincidentreporting, for Port Safety Operating Licence The Yamba operation isalsoresponsible the port hasadedicated pilotageservice. Operating onacontinuous 24/7 basis, 14.2

Pilotage and and Pilotage navigation services 14.3 Summary review of operations

Trade vessel visits to Port of Yamba, 2018/19

TOTAL TOTAL 2018– 2017– JULY AUG. SEPT. OCT. NOV. DEC. JAN. FEB. MAR. APR. MAY JUNE 19 18 Yamba 3 3 2 0 1 4 3 4 6 4 6 2 38 54

The total number of vessel visits to Yamba during 2018/19 was 38 (down from 54 in 2017/18). Of these, 31 were chargeable. Last year, there were a number of vessel calls associated with delivering materials by barge for the local Pacific Highway upgrade. The completion of this project has resulted in a reduction in ship visits. The majority of these vessel visits were for ship repair at Harwood Island.

Yamba Oil Spill Exercise, November 2018 Port Authority employees conducted an oil spill equipment familiarisation exercise with staff from Yamba and Newcastle, and local port stakeholders and emergency response organisations.

14.4 Port development There were no specific development activities in 2018/19.

Port of Yamba • 73 74 Port Authority of New South Wales Annual Report 2018/19 15.2 innovation indesignandoperation. business approaches andpromote and operators inadoptingsustainable We support shipping,portdevelopers and operations withintheports. environmentally sustainable development beyond ourown operations to advocating environmental managementrole extends Port Authority alsobelieves that our to the environment, employees andthecommunity. future trade andgrowth ofourportswhilst minimisingrisks is central to Port Authority’s commitment to provide for into allofitsbusiness decisionsandactivities. Sustainability responsibility andaimsto integrate sustainable practices Port Authority views sustainability asafundamentalcorporate 15.1 15 found that noisefrom cruiseships opened inApril2013, monitoring has facility. Since White Bay CruiseTerminal on thecruiseshipsberthingat this Terminal inRozelle, andmore specifically, largely focused onWhite Bay Cruise Noise issues for Port Authority have Noise managing andmitigating theseissues. Port Authority continued itsfocus on living andworking nearby. In2018/19, or airemissions, that may affect those accompanied by issues, suchasnoise State. However, thesebenefitscanbe provide substantial benefits to the and theOverseas Passenger Terminal, Glebe IslandandWhite Bay portprecinct Significant infrastructure, suchasthe

Sustainability of port impacts Management Introduction

The three elementsoftheStrategy include: measured shipnoisenon-compliances. as theappropriate outcome ofpreviously endorsement by theConsent Authority formally on1October 2018, following the NoiseRestriction Policy, commenced The NoiseMitigation Strategy, including Cruise Terminal. to address noiseissues at White Bay to fundaNoiseMitigation Strategy Authority hasallocated $5.3million project approval noiselimits.Port at berth sometimesexceeds therelevant • As ofJune2019: Bay CruiseTerminal. areas affected by cruiseships at White of noiseexperienced at residences in program isdesignedto reduce thelevels (attenuation eligibilitytrigger).The reach orexceed 55decibelsat night indicates that average noiselevels of residences where noisemodelling treatments to homesto adefinedarea Noise attenuation comprises physical 1. Noise Attenuation Program

40 properties have beeninspected. on behalf ofPort Authority) and (the Project Managerappointed treatment withtheworks coordinator attended meetingsto discuss the Over 40property owners have • Following the inspections, scopes Air quality of works have been prepared and over 25 offer deeds based on these scopes Port Authority continued 24/7 air have been issued to owners. quality monitoring in the residential area adjacent to White Bay Cruise • Once the deeds are executed Terminal, Rozelle. The monitored between owners and Port Authority, parameters include sulphur dioxide construction is able to commence. (SO2), particulate matter less than The construction contract for the builder 2.5 micrometres in diameter (PM2.5), for the Noise Attenuation Program wind speed and wind direction. The data will be awarded in early July 2019. is available in real-time and monthly The physical installation of windows reports are also produced and published and architectural treatments will on the Port Authority website. commence soon thereafter. Port Authority supports the continued Completion of construction for the ship exhaust emission benefits achieved first set of properties is anticipated from the introduction of a Direction by by the second quarter of 2020. the Australian Maritime Safety Authority (AMSA) in December 2016 for a two-year 2. Noise Restriction Policy period, and extended in December 2018. This requires cruise vessels in Sydney A new policy restricts on-deck music Harbour to use fuel with a sulphur and public announcements (not related content not exceeding 0.1 mass per cent to safety) from cruise ships, and includes concentration, or an alternative measure restrictions for ships that continue to that achieves an equivalent outcome cause exceedances of the attenuation (such as the use of an approved exhaust eligibility trigger at residences. gas cleaning system), applying from one Port Authority monitors compliance hour after the vessel arrives at berth until and enforces the Noise Restriction one hour before the vessel’s departure. Policy. Since the commencement of Port Authority notes that AMSA the policy on 1 October 2018 to end commenced publishing compliance data June 2019, two rebates of $11,000 were in May 2018 in relation to the Direction withheld by Port Authority for breaches for ship visits from 6 January 2017, and that relate to controllable noise (public that 100 per cent compliance has been announcements or music on-deck). observed since the Direction has been In addition, six warnings have been in place. issued for controllable noise, and one The International Maritime Organisation warning has been issued for engine noise. (IMO), a United Nations specialised 3. Noise monitoring agency, confirmed that the date for the implementation of a global sulphur cap Continuous real-time logging is used of 0.5 mass per cent concentration would to monitor noise levels and guide be 1 January 2020, bringing a significant ongoing noise management. reduction from the current 3.5 global Monitoring reports are produced mass per cent concentration cap. and monthly summaries have been published on the Port Authority website.

Sustainability • 75 76 Port Authority of New South Wales Annual Report 2018/19 • • • • enhancement works are to: project. The primaryobjectives ofthe out aspartofthePort Botany Expansion enhancement works that were carried the success oftheenvironmental enrhyn Estuary to monitor Penrhyn Estuary andevaluate year, $3millionenvironmental program In early2012, Port Authority beganafive- 15.3 requirements for thesefactors and/ will consider any future monitoring completed previously. Port Authority water qualityandsaltmarsh)was sea ecological components (seagrass, for the estuary, monitoring oftheother with theapproved monitoring plan to November 2018. Inaccordance numbers andspeciescontinued through Monitoring ofmigratory shorebird

Seagrass monitoring at Foreshore Beach, May 2019 within the estuary. in order to minimisedisturbance provide controlled publicaccess expand thearea ofsaltmarsh habitat create aseagrass habitat of migratory birds habitat to attract increasing numbers expand theexisting shorebird ‑ bed sediment-dwelling invertebrates,

P in improving thehabitat for seagrass. of theForeshore Beachgroynes Beach, primarilyto evaluate thesuccess seagrass monitoring alongForeshore the second ofthree years ofadditional In 2018/19, Port Authority undertook The groynes were installed in2017. Beach, partlyto address thisproblem. and install three groynes at Foreshore action. A decisionwas madeto design and beach erosion causedby wave being smothered by sandmovement along Foreshore Beachandwas seagrass was notableto re-establish of monitoring from 2012 indicated that Expansion. However, thefive years the construction ofthePort Botany had declinedsubstantially priorto Seagrass alongForeshore Beach and mangrove invasion. as ongoingmanagementofweed continued throughout theyear aswell activities, focusing mainlyonfoxes, Penrhyn Estuary. Predator control disturbances to shore birds in opportunities to reduce oreliminate Port Authority continues to investigate reporting, whichisexpected inJuly 2019. the evaluation oftheend-of-project or managementactionsbasedon There are encouraging signs that the groynes at Foreshore Beach have promoted the growth of seagrass

In the last seagrass survey under 15.4 Vehicle and the Penrhyn Estuary environmental monitoring program, there had been marine fleet encouraging signs that the groynes Port Authority has a fleet of 34 vehicles had addressed the ongoing issue and 32 vessels or floating plant in use of sediment mobilisation that contributed across the six port locations. to the declines, given new, high density patches of Zostera muelleri subsp. capricorni (Zostera) had colonised the south-eastern parts of the Foreshore Beach site. Results of the first additional seagrass survey, undertaken in May 2018, were encouraging in that key indicators show a general improvement in seagrass cover since the 2017 survey. This included a doubling of the shoot density of both Halophila and Zostera, with the healthy and dense Zostera patch in the south- eastern part of the site more than tripling in size since the 2017 survey. Our marine pilots assist over 6000 vessels Preliminary results of the second navigate safely through our ports each year additional seagrass survey, undertaken in May 2019, indicate that the Zostera patch had almost doubled in size again since the 2018 survey.

Sustainability • 77 78 Port Authority of New South Wales Annual Report 2018/19 • • • Port Authority: Government’s Resource Efficiency Policy, In 2018/19, inaccordance withtheNSW 15.5 participation amongst ourtenants. Yamba were turnedoff, andpromoted Newcastle, Port Kembla, Eden and essential lightsat itsfacilities inSydney, Hour inMarch 2019, ensuringthat allnon- Port Authority alsoparticipated inEarth can beundertaken. where re-use ofmaterials andrecycling maintenance activitiesandidentifyareas generated by construction projects and are required to minimisewaste In addition,Port Authority’s contractors

Neutral Program. Carbon Offset Standard Carbon carbon neutral undertheNational 100 percent recycled andcertified is Australian Forestry Standard including most office paper, which and products withrecycled content, purchased low-waste products toner cartridges (such asglass, plastic and metal)and paper, employee-generated recyclables continued recycling programs for waste to reduce paperusageinoffices used on-lineworkflows andapprovals

Ener gy andwaste For more information seeSection 10.10. from around Australia. circle featuring weaving andfibre artists workshops andacommunal weaving music anddance performances, art we can’andincludedtwo days offemale NAIDOC Week theme‘Becauseofher businesses. The ArtFair adopted the alongside 40NSW stallholders and centres across Australia soldtheirart artists from 22remote Aboriginalart people attended theFair, where 25 of NAIDOCweek. More than15,000 Terminal to herald thecommencement Markets at theOverseas Passenger Fair withFirst HandSolutionsandBlak a two-day National IndigenousArt In July2018, Port Authority hosted 15.6 social and environmental benefits. achievement ofreal andtangible with a focus ontheproactive target specificsustainability initiatives, a suitable framework to assess and sustainability visionand provide he year ahead which willoutlinePort Authority’s development ofasustainability strategy, Port Authority willfocus onthe 15.8 the year. issued against Port Authority during There were no environmental penalties 15.7

Indigenous Indigenous sponsorship penalties T Environmental 16 Heritage

16.1 Overview Port Authority actively inspects and maintains its heritage assets. The Sydney Port Authority is committed to and Botany Bay assets have been preserving its port heritage and integrated into the Computerised maritime history. All projects and Maintenance Management System significant port maintenance works (CMMS), allowing for improved are assessed for potential heritage inspections, preventative maintenance impacts and existing heritage assets are and record keeping. Port Authority inspected and maintained. continues to update its heritage register and ensure that available information Under the Heritage Act 1977 (NSW), is accurate. Port Authority is required to identify, list and protect heritage items on a Section In addition, any possible heritage items 170 Heritage and Conservation Register. of port and maritime significance that At present, the Port Authority Heritage are identified during the year or through Register contains around 50 items, development assessment processes including items assessed as having State are investigated for potential inclusion and local heritage significance. All Port on the register Authority’s heritage items are listed on the State Heritage Inventory, available on the NSW Office of Environment 16.2 The year ahead and Heritage (OEH) website. The year 2019/20 will focus on continuing to work with the OEH to consolidate Port Authority heritage items in Newcastle Harbour into one register with the heritage items in Sydney.

Heritage • 79 80 Port Authority of New South Wales Annual Report 2018/19 sessions andonsocialmediachannels. information shared at yacht clubbriefing Harbour andPort Botany, andimportant The packswere distributed inSydney of sight ofrecreational boats. ships donotalways have aclearline a timely reminder that cruiseandcargo instructions andasticker –provided pack containing aflyer, HarbourMaster a video, dedicated web page, andsafety harbour. The campaign–consisting of to ensure thesafety ofeveryone onthe more importantto take furthermeasures increasing every year, itwas becoming With thenumberofrecreational boaters and Maritime Services. Authority, inconsultation withRoads wasShips About’, developed by Port Harbour. The campaign, ‘Look Out, importance ofkeeping safe inSydney’s recreational boaters aboutthe in December 2018, aimedat educating A new safety campaignwas launched for recreational boaters New safety campaign 17.1 17 do. Italsohighlights key facts andfigures to stakeholders whowe are andwhat we brochure to assist incommunicating Port Authority released acorporate Corporate brochure was launched inDecember 2018 safe in Sydney HarbourandPort Botany A new safety campaignedaboutkeeping

Communication highlights Overview functions andtheimportance ofports A new corporate brochure highlightscore and will be launchedby theendof2019. video iscurrently indevelopment of ourworking ports.Anew corporate that advocate for thevital importance and 13 per cent via tablet devices. 38 per cent viamobile devices, sessions were viadesktop computers, During 2018/19, 49 per cent ofuser resulting in1.8million pageviews. 339,183 visitsto portauthoritynsw.com.au, In thereporting year 2018/19, there were Port Authority website working port. and to advocate for thevalue of the showcase itsroles andresponsibilities to better engagewithcommunity, to over hasallowed 2018/19 Port Authority The increase insocialmediaactivity updates were posted. of 30percent. Duringthistime, 55news total follower baseof 4269 —anincrease 1268 followers to during2018/19 reach a Port Authority’s LinkedIn account gained as of 30 June 2019. organically gained1501 followers Since itslaunch,theaccount has ports ofNew SouthWales. photography ofactivitiesacross the Port Authority’s work. The pagefeatures 2018, to increase publicunderstanding of account @portauthorityNSW inOctober Port Authority launchedanInstagram Social media In the reporting year 2018/19, 41 news Sponsorship and feature stories were published to the website. Port Authority has had a long involvement with supporting business The website’s vessel movement pages and events with common goals. This year also underwent a major improvement we sponsored a number of community to increase readability and ease of use and industry events including the Surf for users seeking information about Life Saving NSW Awards of Excellence vessel arrivals and departures. event and the Australian Shipping and Maritime Industry Awards, run by Daily Stakeholder newsletter: Cargo News. Port Matters By sponsoring the Surf Life Saving This financial year, Port Authority NSW Awards 2018, we supported our published four issues of its quarterly common goal with them – to keep those stakeholder newsletter Port Matters. who use the waters safe from harm – while recognising the immeasurable Each edition of Port Matters contains contributions the lifesavers make to a mix of news, features and video our communities, and the achievements content that educates, informs of these everyday heroes. and increases awareness of the role and responsibilities of Port Authority. Sponsoring the Australian Shipping and Maritime Industry Awards was an Each issue leads with a main feature, opportunity to show our dedication video and related stories that focus to diversity. Our sponsored Gender on a key aspect of Port Authority’s work. Diversity Award was proudly won by The features for 2018/19 were: Port of Townsville, with commendations • Spring 2018: Sydney’s lighthouse – going to 1-Stop Connections and DP a guiding light for 160 years World Australia. • Summer 2018: Look Out, Ships About – safety campaign for recreational boaters 17.2 The year ahead • Autumn 2019: A guide to the working ports of New South Wales Community and • Winter 2019: Hydrographic surveying – stakeholder engagement mapping the mysteries of the seafloor. Port Authority will work to identify further engagement opportunities Port Matters gained 353 subscribers with communities, key stakeholders during 2018/19 to reach a total and relevant industries working subscriber base of 1086 – an increase in and around our ports. of 33 per cent. Subscribers are a mix of customers, community, industry Safety campaign and government stakeholders. The safety campaign – Look Out, The average readership rate for Ships About – will be further promoted Port Matters is 50 per cent, compared through social media and at key to a benchmark average of 24 per maritime events, including the Sydney cent for the government sector. Boat Show, and at yacht club briefings. Subscribe to Port Matters at The campaign will also be expanded portauthoritynsw.com.au/newsletter. to other ports.

Communication highlights • 81 82 Port Authority of New South Wales Annual Report 2018/19 Newcastle Harbour 18 Financial statements

Newcastle Port Corporation (Trading as Port Authority of New South Wales) Financial statements For the year ended 30 June 2019

Director’s declaration 84

Independent auditor’s report 85

Statement of comprehensive income 88

Statement of financial position 89

Statement of changes in equity 90

Statement of cash flows 91

Notes to the financial statements 92 Note 1 Corporate Information 92 Note 2 Summary of significant accounting policies 92 Note 3 Revenue 96 Note 4 Expenses 98 Note 5 Other gains (losses) 99 Note 6 Income tax equivalent expense 100 Note 7 Cash and cash equivalents 103 Note 8 Trade and other receivables 105 Note 9 Property, plant and equipment 109 Note 10 Investment property 114 Note 11 Intangible assets 115 Note 12 Trade and other payables 117 Note 13 Provisions 117 Note 14 Interest-bearing lans and borrowings 119 Note 15 Dividend payable 121 Note 16 Equity 121 Note 17 Defined benefit superannuation schemes 123 Note 18 Fair value measurement of non-financial assets 132 Note 19 Financial risk management objectives and policies 134 Note 20 Commitments 141 Note 21 Contingencies 142 Note 22 Consultancy fees 142 Note 23 Related party disclosures 143 Note 24 Events after the reporting period 144

Statement of land holdings 145

Financial statements • 83 84 Port Authority of New South Wales Annual Report 2018/19 For theyear ended30June2019 Director’s declaration

and Assurance Standards Board website at:Board Standards and Assurance Auditing the isat located statements financial the of audit the for responsibilities my of A description statements. financial on the based take users decisions economic the influence to expected be reasonably they could in aggregate, accounting. of basis going concern theusing of appropriateness the and concern going related to matters applicable, as disclose, must assessment concern a going financial the In preparing or error. fraud to due whether misstatement, material from that are free statements financial the of presentation fair and preparation SYDNEY • • • My does opinion report. part of auditor’s my forms description The or individually if, material areconsidered Misstatements fraud or error. from canarise Misstatements will always with Auditing Standards misstatements. Australian accordance detect material Re • • to: are objectives My Auditor’s Responsibilit 1989 Act the and Act PF&A the Standards, Accounting Australian with accordance in statements the financial of presentation and fair preparation the for areresponsible directors The Responsibility Directors’ Financial Statements forthe 13 September 13 September Services Audit Financial Director, Karakatsanis Caroline

asonable assurance is a high level of assurance, but does not guarantee an audit conducted in in auditconducted an guarantee not does but assurance, of level high is a assurance asonable about any other information which may have been hyperlinked to/from the financial statements. the financialstatements. to/from hyperlinked been have which may information other any about presented be may where they website on any statements financial audited the of publication electronic the over controls and security the about economically and efficiently effectively, its activities out carried that Corporation the opini my including Report Auditor’s Independent an issue or error fraud to whether due misstatement, material from are free whole a as statements financial the whether about assurance obtain reasonable and for such internal control as the directors determine is necessary to enable the the enable to is necessary determine directors the as control internal such for and

2017 except where except not provide assurance: assurance: provide not

statements, the directors must assess the Corporation’s ability to continue as as to continue ability the Corporation’s assess must the directors statements, yAuditfor the of t they intend to liquidate the Corporation or cease operations. The The operations. orcease the Corporation liquidate to intend they www.auasb.gov.au/auditors_responsibilities/ar4.pdf.

he Financial StatementsFinancial he on.

State Owned Corporations Corporations Owned State

Independent auditor’s report For the year ended 30 June 2019

INDEPENDENT AUDITOR’S REPORT INDEPENDENT AUDITOR’S REPORT Newcastle Port Corporation (trading as Port Authority of New South Wales) Newcastle Port Corporation (trading as Port Authority of New South Wales)

To Members of the New South Wales Parliament OpinionTo Members of the New South Wales Parliament IOpinion have audited the accompanying financial statements of Newcastle Port Corporation (trading as Port Authority of New South Wales) (the Corporation), which comprise the Statement of Comprehensive IncomeI have audited for the yearthe accompanying ended 30 June financial 2019, the statements Statement ofof NewcastleFinancial P Portosition Corporation as at 30 June (trading 2019 as, the Port SAuthoritytatement of of New Changes South in Wales) Equity and(the theCorporation), Statement whichof Cash comprise Flows for the the Statement year then ofende Comprehend, notes sive comprisingIncome for athe summary year ended of significant 30 June a2019ccounting, the Statement policies and of otherFinancial explanatory Position information as at 30 June. 2019, the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, notes Incomprising my opinion, a summarythe financial of sstatementsignificant accounting: policies and other explanatory information.

•In my giveopinion, a true the and financial fair view statements: of the financial position of the Corporation as at 30 June 2019, and of its financial performance and its cash flows for the year then ended in accordance with • Australiangive a true Accounting and fair view Standards of the financial position of the Corporation as at 30 June 2019, and of • areits financialin accordance performance with sec andtion its41B cash of the flows Public for theFinance year andthen Audit ended Act in 1983 accordance (PF&A Act)with and theAustralian Public Finance Accounting and StandardsAudit Regulation 2015 •• complyare in accordance with International with section Financial 41B Reporting of the Public Stand Financeards as anddisclosed Audit inAct Note 1983 2. (PF&A Act) and the Public Finance and Audit Regulation 2015 My• opinioncomply should with be International read in conjunction Financial with Reporting the rest Standards of this report. as disclosed in Note 2.

BasisMy opinion for shouldOpinion be read in conjunction with the rest of this report. I conducted my audit in accordance with Australian Auditing Standards. My responsibilities under the standardsBasis for are Opinion described in the ‘Auditor’s Responsibilities for the Audit of the Financial Statements sectionI conducted of my my report. audit in accordance with Australian Auditing Standards. My responsibilities under the standards are described in the ‘Auditor’s Responsibilities for the Audit of the Financial Statements I am independent of the Corporation in accordance with the requirements of the: section of my report. • Australian Auditing Standards I am independent of the Corporation in accordance with the requirements of the: • Accounting Professional and Ethical Standards Board’s APES 110 ‘Code of Ethics for • ProfessionalAustralian Auditing Accountants’ Standards (APES 110). • Accounting Professional and Ethical Standards Board’s APES 110 ‘Code of Ethics for I have fulfilled my other ethical responsibilities in accordance with APES 110. Professional Accountants’ (APES 110). Parliament promotes independence by ensuring the Auditor-General and the Audit Office of NewI have South fulfilled Wales my areother not ethical compromised responsibilities in their rolesin accordance by: with APES 110.

•Parliament providing promotes that only independence Parliament, andby ensuring not the executive the Auditor-General government, and can the remove Audit anOffice of New SouthAuditor Wales-General are not compromised in their roles by: •• mandatingproviding thatthe Auditoronly Parliament,-General as and auditor not the of executivepublic sector government, agencies can remove an • precludingAuditor-General the Auditor -General from providing non-audit services. • mandating the Auditor-General as auditor of public sector agencies I believe the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit• opinion.precluding the Auditor-General from providing non-audit services.

I believe the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Financial statements • 85 86 Port Authority of New South Wales Annual Report 2018/19 Independent auditor’s report of Parliament or otherwise cease operations. operations. cease or otherwise Parliament of Act an by dissolved will be Corporation where the except accounting of basis going concern theusing and going concern to related matters applicable, as disclosing concern, a going as continue ability to and Assurance Standards Board website at:Board Standards and Assurance Auditing the at is located statements financial the of audit the for responsibilities my of A description the on based take users decisions economic the influence to expected be reasonably they could in aggregate, or individually if, material areconsidered Misstatements fraud or error. from canarise Misstatements will always with Auditing Standards misstatements. Australian accordance detect material in auditconducted an guarantee not does but assurance, of level high is a assurance Reasonable • • My Auditor’s Responsibilit the assessing for responsible are the Directors statements, financial the In preparing or error. to fraud due whether material misstatement, from free that are statements financial the of presentation fair and preparation the enable to is necessary determine the Directors the PF&A and Standards Act with Accounting Australian accordance in statements the financial of presentation fair and preparation the for are responsible Directors The Director in regard. this to report nothing I have fact. reportthat I must information, other the of misstatement material is a there I conclude Ihave performed, work the based on If, misstated. materially to be appears otherwise audit, or the in obtained knowledge or my statements financial with the inconsistent is materially information other the whether consider so, doing in and, information other the is to read my responsibility statements, the financial of audit with my In connection information. other on the assurance conclusion of any form express not I do Accordingly, information. the other cover does not statements financial on the opinion My Declaration. the Directors’ comprise received Ihave information other the Report, Auditor’s this Independent of date the At information. other the for are responsible and Independen my statements the financial 30 year the ended for report annual Authority’s The InformationOther report. part of auditor’s my forms description

objectives are to: to: are objectives issue from are free whole a as statements financial the whether about assurance obtain reasonable material misstatement, whether due to fraud or error or error fraud to whether due misstatement, material ’ s Responsibilities fors Financial the Statements an Independent Auditor’s Report including my opinion. my including Report Auditor’s Independent an financial statements. statements. financial ies for the Auditfor the ies the of

t Auditor’s Report thereon. The directors of the Authority of directors The thereon. Report Auditor’s t continued www.auasb.gov.au/auditors_responsibilities/ar4.pdf June 2019 includes other information in addition to to in addition information other includes 2019 June

Financial Statements

, and for such internal control as as control internal such for and Corporation’s Corporation’s

. The The Independent auditor’s report continued

My opinion does not provide assurance:

• that the Corporation carried out its activities effectively, efficiently and economically • about the security and controls over the electronic publication of the audited financial statements on any website where they may be presented • about any other information which may have been hyperlinked to/from the financial statements

Caroline Karakatsanis Director, Financial Audit Services

Delegate of the Auditor-General for New South Wales

11 September 2019 SYDNEY

Financial statements • 87 88 Port Authority of New South Wales Annual Report 2018/19 For the yearForthe ended June30 2019 Statementofcomprehensive income Wales) South New Authorityof Port as (Trading Corporation Port Newcastle For theyear ended30June2019 Statement ofcomprehensive income The accompanying notes form a part of the financial statements. statements. the financial part of a form notes accompanying The Other comprehensive income / (expense) /(expense) income comprehensive Other the for profit Net expense tax equivalent Income expense tax equivalent income Profit before (losses) gains Other equipment and plant property, of on sale Net gain expenses Total costs Finance expenses Other expenses amortisation and Depreciation expenses related Employee Expenses revenue Total revenue Other port management from Revenue Revenue operations Continuing the for income comprehensive Total the for income comprehensive Other equipment and plant property, of on revaluation expense tax equivalent Income equipment and plant on property, gain revaluation Fair value gains (losses) actuarial benefit employment post on (expense) benefit tax equivalent Income gains (losses) actuarial Superannuation loss: or profit to reclassified be not will Items that equivalent expense expense equivalent

year

year year

, net of income tax income of , net 16(a) 16(a) 16(b) 16(b) Note 4 4 4 4 3 3 6 5

(11,982) (11,982) 176,094 176,094 155,013 152,980 152,980 (7,068) (7,068) (5,175) 54,015 54,015 22,620 72,328 21,081 10,952 10,952 18,020 23,195 4,017 4,017 1,884 1,884 3,595 (565) (565) $000 2019 35 46

(10,687) (10,687) 71 168,8 149,855 146,166 (4,173) (4,173) (5,064) 53, 23,499 68,864 19,016 52,217 52,217 34,673 13,910 35,623 17,544 22,608 (179) (179) $000 2018 757 46 82 5

NewcastleStatement Port of Corporation financial position (TradingAs at 30 Juneas Port 2019 Authority of New South Wales) Statement of financial position As at 30 June 2019

2019 2018 Note $000 $000 ASSETS Current assets Cash and cash equivalents 7 17,015 51,308 Trade and other receivables 8 14,685 13,468 Total current assets 31,700 64,776

Non-current assets Receivables 8 97,992 91,087 Property, plant and equipment 9(a) 441,617 448,353 Investment property 10 7,700 7,700 Intangible assets 11 1,353 1,487 Deferred tax equivalent assets 6 14,209 10,745 Total non-current assets 562,871 559,372

TOTAL ASSETS 594,571 624,148

LIABILITIES Current liabilities Trade and other payables 12 19,184 16,931 Income tax equivalent payable 6 2,111 2,045 Dividend payable 15 9,000 200,000 Provisions 13 20,085 18,820 Total current liabilities 50,380 237,796

Non-current liabilities Other liabilities 12 2,068 2,276 Interest bearing liabilities 14 144,177 - Deferred tax equivalent liabilities 6 53,092 54,481 Provisions 13 2,808 2,551 Post-employment benefits 17 20,038 6,988 Total non-current liabilities 222,183 66,296 TOTAL LIABILITIES 272,563 304,092 NET ASSETS 322,008 320,056

EQUITY Contributed equity 16 165,768 165,768 Reserves 16 60,089 58,770 Retained earnings 16 96,151 95,518 TOTAL EQUITY 322,008 320,056

The accompanying notes form a part of the financial statements.

6

Financial statements • 89 90 Port Authority of New South Wales Annual Report 2018/19

For theyear ended30June2019 Statement ofchangesinequity The accompanying notes form a part of the financial statements. statements. the financial part of a form notes accompanying The yearForthe ended June30 2019 Statementofchanges in equity Wales) South New Authorityof Port as (Trading Corporation Port Newcastle

Balance at 30 June 2019 165,768 60,089 96,151 322,008 322,008 96,151 60,089 165,768 2019 June 30 at Balance declared Dividend as owners their capacity in owners with Transaction year the for income comprehensive Total income comprehensive Other year the for Net profit 2018 June at 30 Balance declared Dividend as owners their capacity in owners with Transaction year the for income comprehensive Total income comprehensive Other year the for Net profit Balance at 1 July 2017 2017 July at1 Balance Balance at 1 July 2018 2018 July at1 Balance 16(a)&(b) 16(a)&(b) 16(a)&(b) 16(a)&(b) 16(b) 16(b) 16(b) Note 15 15 15 15

Contributed Contributed 165,768 165,768 165,768 165,768 equity equity $000 ------

revaluation revaluation reserve reserve 58,770 58,770 58,770 49,050 Asset Asset 9,720 9,720 9,720 1,319 1,319 1,319 (8,387) (7,068) (7,068) (8,387) 1,319 $000 - - - -

(200,000) (200,000) Retained Retained earnings earnings 253,021 253,021 (9,000) (9,000) 95,518 95,518 95,518 42,497 24,953 17,544 18,020 18,020 9,633 9,633 $000

(200,000) (200,000) 320,056 320,056 320,056 467,839 (9,000) (9,000) 52,217 52,217 34,673 17,544 10,952 10,952 18,020 Total Total $000 7

StatementNewcastle Port of Corporationcash flows For(Trading the year as ended Port 30 Authority June 2019 of New South Wales) Statement of cash flows For the year ended 30 June 2019

Note 2019 2018 $000 $000 Cash flows received from operating activities Receipts from customers 183,690 178,789 Payments to suppliers and employees (141,440) (137,135) Interest received 309 697 Finance costs paid (2,390) (5) Income tax equivalent paid (6,932) (8,033) Net cash flows received from operating activities 7(a) 33,237 34,313

Cash flows used in investing activities Purchase of property, plant and equipment (12,669) (5,352) Proceeds from sale of property, plant and equipment 139 298 Net cash flows used in investing activities (12,530) (5,054)

Cash flows used in financing activities Proceeds from borrowings 145,000 - Dividends paid (200,000) (5,171)

Net cash flows used in financing activities (55,000) (5,171)

Net (decrease) increase in cash and cash equivalents (34,293) 24,088 Cash and cash equivalents at the beginning of the financial year 51,308 27,220 Cash and cash equivalents at the end of the financial year 7 17,015 51,308

The accompanying notes form a part of the financial statements.

8

Financial statements • 91 92 Port Authority of New South Wales Annual Report 2018/19 Note 1 For theyear ended30June2019 Notes to thefinancial statements Note 2 Wales Wales Corporate information The financial statements of Newcastle Port Corporation trading as Port Authority Note1. Notestothe financialstatements Wales) South New Authorityof Port as (Trading Corporation Port Newcastle Corporation The jurisdiction. ports’ the within goods dangerous of storage and emergency response and administering the legislation concerning the handling, transportat safety functionsinclude the provision and maintenance of aids tonavigation, marinepollution Licen Operating Safety Port the in navigationprescribed as and functions safety port pilotage and services, of provision the function, Master’s Harbour statutory Yam the of Port including and Eden of Port Kembla, Port Harbour, Newcastle Botany, por Port the Harbour, in functions marine commercial all for responsible is Corporation The Principalactivities sectorentity for financial reportingpurposes. assess Corporation The Australia. Wales, Australia with its principal office at Level 4, 20 Windmill Street, Walsh Bay, NSW 2000 the under Government S Wales South New the by incorporated corporation, state-owned a is Corporation The accordancewith resolution a ofDirectors the 10on September2019 (iii) the the (iii) the (ii) AustralianAccounting Standards andAustralian Accounting Interpretations; (i) in accordancewith: The financial statements are general purpose financial statements which have been prepared Summarysignificantof accounting policies Basis ofpreparation Note2. activities include managementof dry bulk facilities atGlebe Island. Terminal (OPT) at Circular Quay and the White Bay Cruise Terminal (WBCT). Other business and related assets, predominantly cruise activities at its two facilities, the Overseas Passenger ofmanagementactivitiesbusiness the isresponsible CorporationSydney the for In Harbour, Chain Co-ordinator. Coal Valley Hunter the in participant a and Framework Export Coal Hunter the of regulator (iv) the the (iv) accounting basis using historical cost accounting conventions unless otherwise stated accrual an on prepared been have statements financial the information, cashflow for Except (v) statements. information is disclosed in respect of the previous year for all amounts reported in the financial comparativ otherwise, requires or permits Standard Accounting Australian an when Except andcash equivalentscash and defined benefits provisions. property,investment equipment, andplantproperty, include value fairat liabilitiesstated and NSW NSW Treasurer’s te ‘Corporation’) (the PublicFinance and Audit Regulation PublicFinance and Audit Act 1983 StateOwned Corporations Act1989

Summary ofsignificantac C orporate Information Directions. State Owned Corporations Act 1989 Act Corporations Owned State o te er end year the for ed its status and determined that it is a ‘for profit’ public profit’ ‘for a is it that determined and status its ed ; ; and 2015 ed 0 ue 09 r atoie fr su in issue for authorised are 2019 June 30 ;

counting policies and is domiciled in New South New in domiciled is and

. of New South South New of ts of Sydney Sydney of ts s als is ce. Port Port ce. . Assets o the the o tate tate ba, ba, ion ion e 9 , Note 2 continued

Where necessary, comparative figures have been reclassified to conform to the changes in presentation made in the financial statements.

The financial statements are presented in Australian dollars and all values are rounded to the nearest thousand dollars ($000) unless otherwise stated.

Compliance with IFRS

The financial statements comply with Australian Accounting Standards, which include Australian Accounting Interpretations and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

New accounting standards and interpretations

New accounting standards and interpretations – issued and effective

The Corporation has adopted new and amended Australian Accounting Standards and Australian Accounting Standards Board (AASB) Interpretations as outlined below as and when they became applicable during the year.

(i) AASB 15 Revenue from Contracts with Customers AASB 15 Revenue from Contracts with Customers (AASB 15) is effective for reporting periods commencing on or after 1 January 2018. It establishes a five-step model to account for revenue arising from contracts with customers. Revenue is recognised when the control of goods or services is transferred to the customer at amounts that reflect the consideration to which the Corporation expects to be entitled in exchange for transferring the goods or services to the customer.

The Corporation has elected to apply the full retrospective transitional relief when first adopting AASB 15. Recognition and measurement principles of the new standards will be applied for the current year and comparative year as though AASB 15 had always applied. The impacts to balances resulting from the adoption of AASB 15 have been assessed by the Corporation and concluded no adjustment to equity under the full retrospective approach.

(ii) AASB 9 Financial Instruments The Corporation has adopted AASB 9 Financial Instruments (AASB 9) from 1 July 2018. AASB 9 significantly amends other standards dealing with financial instruments such as the revised AASB 7 Financial Instruments: Disclosures. It proposes a new model for classifying and measuring financial assets and financial liabilities. The Corporation applied AASB 9 retrospectively but has not restated the comparative information which is reported under AASB 139 Financial Instruments: Recognition and Measurement.

The adoption of AASB 9 did not result in any adjustment to equity.

Classification and measurement of financial instruments On 1 July 2018, the initial application date of AASB 9, the Corporation has assessed which business model applies to the financial assets held by the Corporation and has classified its financial instruments into the appropriate AASB 9 categories. The Corporation uses the business model whose objective is to hold financial assets in order to collect contractual cash flows.

Under AASB 9, subsequent measurement of financial assets, such as trade and other receivables, is based on assessing the contractual cash flow characteristics of the debt instrument and the Corporation’s business model for managing the instrument. The assessment of the business model was made as of the date of initial application, 1 July 2018. The assessment of whether contractual cash flows on debt instruments are solely comprised 10

Financial statements • 93 94 Port Authority of New South Wales Annual Report 2018/19 Note 2 distinction between operating and financial leases is largely removed. Under AASB 16, 16, AASB Under removed. largely is leases financial and operating between distinction financial of statement the on recognised being leases most in result will 16 oron after 1 January2019.For lease arrangementsthat theCorporation is t 16 AASB Leases 16 AASB (i) isset out below: Corporation)the toextent relevant the (to standardsnew of impact the of eue prtn lae etl xess n h saeet o statement the on expenses rental lease operating r liabilities reduce and expenses interest assets and depreciation in increase also will increase It position. an financial of be statement will 16 AASB of implication The lo and short-term are exceptions only The lease. the of commencement the asset (the right to use the leased item) and a financial liability The following are the changes in the classification of the Corporation’s financial assets. assets. financialCorporation’s the of classification the in changes the are following The the at as circumstances and facts recognitionof assets. the the on based made was interest and principal of for for the annual reporting year Corporat the by adopted been not effectivehaveyet not are amendedbut or issued been AccountingAustralian Standardsand Interpretations,AASB, the issuedthatby Newstandardsaccounting andinterpretations t adopting on Corporation the to impact impairment model. no is There 139. AASB or 9 AASB either recognition requiring impairment any identify not did Corporation The v fair at held instrumentsnotdebt all losses for credit expected for al an appro recognise to Corporation the loss requires 9 AASB approach. incurred loss credit expected 139’s AASB replacing by assets financial adoption The AASB of 9 changedCorporation’shas the accounting impair for Impairment liabilities. no are There Corporation The has not designatedany financial liabilitiesvalue at fair through pr forw going and 2018 July 1 of date classified and measured as value fair through profit or loss. transition at required mandatorily now are at valuefair through profit or loss under AASB 139 as at 30 June 2018. Under AA Investments in TCorpIM Funds are managed on a fair value basis and hence were designate measuredas debt instruments at amortised cost. flows cash contractual collect to held representing were solely payments and of principal and costinterest. At 1 amortisedJuly 2018, these are at cl stated were 2018 June 30 at as 139 AASB under receivables” and “loans as classified receivables other and Trade

changes of classification do not impact on their measurement categories or carry te eevbe Loansand receivables,at TCorpIMFunds Loansand receivables,at Other receivables Trade receivables continued Leases changes in the classification and measurement for the Corporation’s financial Corporation’s the for measurement and classification the in changes (AASB 16), will be effective and applicable for reporting periods be periods reporting for applicable and effective be will 16), (AASB

Fairvalue through profit lossor ended 30 June amortisedcost amortisedcost 2019 Measurementcategory AASB 139 139 AASB – issued butnot effective . The The Corporation’s prelim

Fairvalue through profit lossor to pay rentals are recognised at Debtinstrument, at amortised Debtinstrument, at amortised c wt a forward-looking a with ach f alue through profit or loss.or profitthrough alue opeesv income. comprehensive of an allowance under allowance an of and interpretationsand inary assessment he lessee,he AASB w-value leases. w-value position, as the as position, eported on the the on eported ment losses ment for haverecently ing amounts. amounts. ing assified and SB 9, these ofit or loss. loss. or ofit r t be to ard AASB 9 9 AASB lowance e new he ginning cost cost initial initial The The and and ion ion an an 11 d

Note 2 continued

Expenses recognised in the earlier years of the lease term will be higher as the interest charges will be calculated on a larger lease liability balance.

Existing finance leases are not expected to be significantly impacted from the transition to AASB 16.

For the lease arrangements that the Corporation is a lessor, the accounting for lessors under AASB 16 will not significantly change. The Corporation will however review the classification of sub-leases in which the Corporation is a lessor. Finance lease receivables will be recognised for sub-leases reclassified as finance leases.

The Corporation will adopt AASB 16 on 1 July 2019 through application of the partial retrospective approach, where only the current year is adjusted as though AASB 16 had always been applied. Comparative information will not be restated.

The preliminary impact assessment of AASB 16 will be the recognition of right of use assets of $14.6 million and lease liabilities of $14.6 million on 1 July 2019. The estimated impact to the statement of comprehensive income will be a reduction in rental expense of $3.1 million, an increase in the right of use assets depreciation expense and lease interest expense of $3.5 million, amounting to a pre-tax net increase of $0.4 million in expenses in the first financial year ending 30 June 2020.

Significant accounting judgements, estimates and assumptions

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management bases its judgements and estimates on historical experience and on other various factors it believes to be reasonable under the circumstances, the result of which form the basis of the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions.

The nature of these assumptions and conditions are found in the following notes to the financial statements.

 Note 6 Income tax equivalent expense  Note 8 Trade and other receivables  Note 9 Property, plant and equipment  Note 13 Provisions  Note 17 Defined benefit superannuation schemes

Accounting policies

The accounting policies described in these financial statements are based on the requirements applicable to the Corporation. The Corporation has consistently applied the accounting policies to all reporting periods presented. Significant accounting policies that summarise the basis of recognition and measurement of material items presented in these financial statements are provided in each applicable note about those items.

12 Financial statements • 95 96 Port Authority of New South Wales Annual Report 2018/19 Note 3 oe3 Revenue Note3. Other revenueisrecognised when distinct the performance obligation issatisfied. Otherrevenue Interestrevenue is recognisedanon accrualbasis using effective the method. interest Interest revenue enteredintobetween theCorporation and NSW PortsPortandof Newcastle. Navigation recharge revenue is recognised in accordance with the Port Services Agreem Navigationrecharge revenue Rentalrevenue isaccounted foraon straight-line basis over lease the term. Rental revenue cha occupation site wharfage, services, navigation mooring feesand other services are recognisedon delivery to the theserviceof customer. and pilotage from revenue Port Port revenue transactionprices have notbeen adjusted for the time value of money. result, a As year. one exceeds customer the from payment transfer and goods or the services promised between period the where customers with contracts any have not does Corpora The estimation. any without rates agreed by determined are prices Transaction providedthe customer. to aligns the Corporation’s performance obligations; or at a point in time when goods and services todistinct the of customers. deliveryRevenue is the recognised considering either overby time and in a customers manner with that contracts the on based identified t services or goods of performanceThe Corporationto. control isentitled the amount which an at customer transfers Corporation the when recognised is Revenue Recognitionand measurement

Totalrevenue Other revenue Other recoveries Recoverable security Fee Penrhyn for Estuary services Landtaxrecoverable from tenants Financelease income Interest bankfrom and other Other revenue Navigation recharge Rentalrevenue Port revenue Revenue fromport management Continuingoperations

R evenue

155,013 128,652 176,094 21,081 21,081 11,036 15,325 4,471 2,777 5,707 1,260 6,282 $000 2019 231 353

the service is fully

obligations are obligations 149,855 126,759 168,871 19,016 19,016 10,345 12,751 2,531 2,642 5,809 1,243 5,873 $000 2018 of the of rges, rges, 196 722 ents ents tion tion a o 13

Note 3 continued

(a) Revenue disaggregation

The Corporation generates its port management revenue from the provision of its port facilities and rendering of its commercial marine functions. Most of its revenue is recognised at a point in time when services are rendered to the customers. During the year, revenue recognised at a point in time amounted to $87.6 million (2018: $87.4 million). Key types of revenue recognised at a point in time include the majority of port revenue and recoverable security revenue. Where satisfaction of a performance obligation is completed over time, revenue is recognised in line with the progress towards complete satisfaction of the performance obligation. During the year, revenue recognised over time amounted to $66.5 million (2018: $62.1 million). Key types of revenue recognised over time include Penrhyn Estuary service revenue and a portion of port revenue. The duration of service completion ranges from days to weeks.

The following table summarises the revenue disaggregation.

2019 2018 $000 $000

Total revenue recognised from contracts with 154,134 149,525 customers Rental revenue 15,325 12,751 Finance lease income 6,282 5,873 Interest from bank and other 353 722 Total revenue 176,094 168,871

14 Financial statements • 97 98 Port Authority of New South Wales Annual Report 2018/19 Note 4 oe4 Expenses Note4.

cu. at evc css r rcgie imdaey n h saeet f comprehensi of statement the income. in immediately recognised are costs service Past occur. actuarial in changes and adjustments assumptions are recognised directly in other comprehensive experience income in the year in which they from arising losses and gains Actuarial assessmentin accordance withaccounting the policy. actuarial annual an on dependent is obligationssuperannuation of determination The funds. benefitdefined the of position net the quantify to required are assumptions actuarial Various Cor The funds. nominated to paid are contributes definedto benefit plans and defined contribution plans. contributions Such employees. by made contribut to addition in funds superannuation employee to contributes Corporation The Retirementbenefits obligations Recognitionand measurement

Retirementbenefits Payroll tax Longservice leave leave Annual Salariesand wages Employeerelated expenses Continuingoperations Totalexpenses Other finance costs Unwindingof discount on provisions Financecostloans on and borrowings Financecosts operationsOther and services Channel fees Auditors’ remuneration Directors’ remuneration Operatingleases Materials costsLegal Insurance Utilities andcommunications Indirecttaxes Service contractors expensesOther Amortisation ofintangible assets Depreciation Depreciation andamortisation expenses Retirementbenefits

Expenses – – defined benefit accumulation

9(d)(i) 11(a) 23(a) Note

152,980 25,134 25,134 22,620 22,195 72,328 53,5 54,015 54,015 3,982 5,160 1,094 3,610 2,459 6,467 4,017 4,044 5,539 7,121 2,858 1,714 3,248 2,959 $000 2019 (30) (30) 425 237 372 851 38 3

146,166 poration poration 23,499 23,499 26,147 26,147 23,144 68,864 51,796 5 3,757 3,690 4,923 2,055 3,463 1,034 5,593 5,348 6,658 2,885 1,438 3,023 3,224 $000 2018 355 231 435 678 ions ions 46 10 36 ve ve 15 -

Note 4 continued

Contributions to the defined contribution plans are recognised as an expense as they become payable. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.

Operating lease payments Where the Corporation is the lessee, operating lease payments are recognised as expenses in the statement of comprehensive income on a straight-line basis over the lease term.

Borrowing costs Borrowing costs are expensed as incurred within finance costs in the statement of comprehensive income unless they relate to qualifying assets, in which case they are capitalised as part of the cost of those assets. Qualifying assets are assets that take a substantial period of time to be ready for their intended use.

Capitalisation of borrowing costs is undertaken where a direct relationship can be established between the borrowings and the relevant projects giving rise to the qualifying assets. Where funds are borrowed specifically for the acquisition, construction or production of a qualifying asset, the amount of borrowing costs capitalised is net of any interest earned on those borrowings.

NoteNote 5. 5 Other Gains gains (Losses) (los ses)

2019 2018 Note $000 $000 Other Gains (Losses) Net revaluation increments (decrements) – property, plant and equipment 9(d)(i) 35 (36) Impairment of property, plant and equipment 9(d)(i) - (50) Investment property revaluation losses 10 - (93) Total other gains (losses) 35 (179)

Recognition and measurement

Asset revaluation increments (decrements) Asset revaluation increments are credited directly to the asset revaluation reserve, except that, to the extent that an increment reverses a revaluation decrement for an asset previously recognised as a loss in the statement of comprehensive income, the increment is recognised as a gain in the statement of comprehensive income.

Asset revaluation decrements are recognised immediately in the statement of comprehensive income, except that they are debited directly to the asset revaluation reserve to the extent that a credit exists in the asset revaluation reserve in respect of that asset.

Impairment losses The Corporation assesses at each reporting date whether there is any indication that a cash generating unit, or an asset within a cash generating unit, may be impaired. If such an indication exists, the Corporation estimates the recoverable amount. An impairment loss is recognised where the carrying amount of the asset or cash-generating unit exceeds the recoverable amount. Impairment losses are recognised in the statement of comprehensive income except for assets under revaluation as the impairment loss will first be recognised through each asset’s revaluation reserve prior to recognition in the statement of comprehensive income. 16

Financial statements • 99 100 Port Authority of New South Wales Annual Report 2018/19 Note 6 Note 5 Note6 periodin the of which theyarise. the fair value of investment properties are included in the statement of comprehensive income from arising losses and Gains value. fair at measured are properties Investment Investmentproperty revaluationgains (losses)

nefne eie eeissprnuto 602 2,097 6,012 Other Leave entitlements Underfunded definedbenefits superannuation Deferred taxequivalent assets Decrease indeferred taxliabilities (Decrease) Increase/ in deferred taxassets comprises: includedin income equivalenttax expense Deferredincome equivalenttax expense Deferred tax Deferredtax Currenttax Incometax equivalent expense Other equipment Depreciation and revalued property,plantand attributable to: The balance comprisestemporary differences Deferred taxequivalent liabilities Incometax equivalent ex . continued

Inc ome taxequivalent expense

pense ,8 2,400 6,248 1,483 3,365 6,714 1,823 (131) (5,064) 3,365 (8,429) (5,175) 1,823 (6,998)

53,092 54,481 54,481 54,224 53,092 52,677 10,745 14,209 ,5 2,581 1,954 $000 2019 415

changes in changes $000 2018 784 257 17

Note 6 continued

2019 2018 $000 $000 The difference between income tax equivalent expense provided in the financial statements

and the prima facie income tax equivalent expense is reconciled as follows: Profit before income tax equivalent expense from 23,195 22,608 continuing operations Prima facie tax thereon at 30% (6,959) (6,782) Add tax effect of items with differential

accounting / tax treatment: Add items not deductible (77) (10) Subtract items not assessable 1,885 1,762 Other non-deductible expenses in respect of

initial recognition exemption assets (24) (34) Total income tax equivalent expense attributable (5,175) (5,064) to operating profit

Amounts recognised directly in equity Net deferred tax (credited) debited directly to (3,030) 14,860 equity

Movement in income tax equivalent payable Balance at the beginning of the financial year 2,045 1,649 Current income tax equivalent 6,998 8,429 Payments (6,932) (8,033) Balance at the end of the year 2,111 2,045

Movement in deferred tax equivalent assets Opening Charges to Charges to Closing balance income equity balance $000 $000 $000 $000 Leave entitlements 6,248 466 - 6,714 Underfunded defined benefits superannuation 2,097 320 3,595 6,012 Other 2,400 (917) - 1,483 10,745 (131) 3,595 14,209

18 Financial statements • 101 102 Port Authority of New South Wales Annual Report 2018/19 Note 6 partof receivables or payables statement the in of financialposition. noe a euvln i rqie t b pi t te S Gvrmn i Government NSW the 20TofSectionthe to paid be to required is equivalent tax Income Incometax equivalent Recognitionand measurement

authortaxation theto, payable orrecoverable GST from, ofamount net The amount the of GST included. or asset as part of the expense item as applicable. Receivables andpayables stated are t from recoverable not taxation is authority, in whichservices case the GST and is recognised as goods part of theof cost o purchase a on incurred GST the where G of amount the of net recognised are liabilities and assets expenses, Revenues, G and liabilitiesto relatethe sametaxable entity. an liabilities tax current against assets tax current off le set a to exists if only offset are liabilities tax deferred and assets tax Deferred equityand not in theprofit orloss. are equity in directlyrecognised items to equivalentsrelating tax Income date. tax laws) that have been enacted or substantively enacted at the statement ba settled, of is liabilitythe or fi realisedis asset the whenyear the to apply expe are that rates tax the at measured liabilitiesare and assets incometax Deferred Deferred taxassets and liabilities enactedare or substantivelybyenacted the statement of financialposition date tho are amount the compute to used laws tax the and rates tax The income. taxable expected to be recovered from or paid to the taxation authorities based on the relev meas are years prior and current the for liabilities and assets tax Current Current tax assetsand liabilities fi for recognisedin equityas part amountsof other comprehensive income. carrying their and liabilities purposes. andCurrent and deferred tax amounts relating assets to items recognised d of bases tax the da position financial of statement the at differences temporary all on provided is i Deferred tax. deferred and current both includes expense equivalent tax Income amountsthat would payable be the under normal income taxlaw Commonwealth. the of Other plantand equipment derecognitionof property, Depreciation, revaluationand Movement deferredin tax equivalent liabilities ST

continued State Owned CorporationsState Owned Act1989 Opening balance 54,481 54,481 54,224 $000 257

Chargesto income (1,954) (2,112) . The paymentsareThe. equivalent tothe $000 158

Chargesto d the deferred tax assets tax deferred the d

gally enforceable right enforceable gally equity sed on tax rates (andrates tax on sed $000 ured at the amount the at ured 565 565 acrac with accordance n irectly in equity are f acquisition of the aca reporting nancial ity is included asincluded is ity -

nancial position recognised inrecognised . te between te ncome tax ncome ST except except ST ant ant year’s balance Closing Closing 53,092 53,092 52,677 se that se cted to cted $000 415 with with he 19

Note 6 continued

Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows arising from investing and financing activities which is recoverable from or payable to the taxation authority are classified as operating cash flows.

Commitments and accrual items that are shown in the statement of financial position are inclusive of GST where applicable.

NoteNote 7. 7 Cash and and cash cash equivalents equiv alents

2019 2018 $000 $000 Cash at bank 2,117 1,695 TCorpIM Cash Fund 14,898 49,613 Cash and cash equivalents 17,015 51,308

Recognition and measurement

Cash and cash equivalents in the statement of financial position comprise cash at bank and funds on deposit in the NSW Treasury Corporation’s Investment Management (TCorpIM) Cash Fund. The value of the funds on deposit in the TCorpIM Cash Fund is at fair value.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above.

TCorpIM Cash Fund The Corporation places funds on deposit in the TCorpIM Cash Fund. These funds are represented by a number of units in the managed fund. TCorp appoints and monitors fund managers and establishes and monitors the application of appropriate investment guidelines. These funds are generally able to be redeemed with up to 24 hours prior notice. The value of the funds on deposit represents the share of the value of the underlying assets of the fund and is stated at fair value.

20 Financial statements • 103 104 Port Authority of New South Wales Annual Report 2018/19 Note 7 operatingactivities: from received flows cash net the to year the for profit net the from Reconciliation (a)

activities cashNet flowsreceived fromoperating Increasein otherliabilities Increasein provisions Increase Increasein income taxequivalent payable Decrease indeferred taxequivalent liabilities assets Decrease receivables (Increase) operatingactivities Changes assetsin and liabilitiesapplicable to Financelease income Write-off of property, plantand equipment Impairmentof property, plantand equipment Net ongain sale ofproperty, plant and equipment property,plant and equipment revaluationNet (increments) decrements Amortisation ofdiscount borrowingson Investmentproperty revaluation loss Depreciation andamortisation expenses Adjustments for: profitNet year for the continued /

/ (Decrease)in tradeand other payables / (Increase)in deferred taxequivalent Decrease in tradeand other –

(1,95 (1,841) (6,282) 22,620 22,620 18,020 33,237 33,237 33,496 1,068 1,522 (823) $000 2019 (46) (46) (35) 749 131 42 66 4) - -

(2,581) (5,873) 23,499 23,499 17,544 34,313 34,313 35,290 1,993 (621) (784) $000 2018 (82) (82) 585 389 23 50 36 93 42 21 -

NoteNote 8. 8 T Traderade and and other other receivables receivables

2019 2018 $000 $000 Current Trade receivables 7,003 6,702 Other receivables 3,175 2,548 10,178 9,250 Prepayments 1,015 1,357 Lease incentive receivable 117 27 Accrued income 3,375 2,834 14,685 13,468 Non-current Lease incentive receivable 1,478 726 Other non-current receivable 65 194 Finance lease receivable 8(b) 96,449 90,167 97,992 91,087

Recognition and measurement

Trade and other receivables Trade and other receivables are amounts due from customers for services performed in the ordinary course of business. The Corporation holds these receivables with the objective to collect the contractual cash flows and therefore measures them at amortised cost using the effective interest method, less any impairment. Changes are recognised in the net result for the year when impaired, derecognised or through the amortisation process.

Impairment The Corporation recognises an allowance for expected credit loss (ECL) for all the trade and other receivables not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows and the cash flows that the Corporation expects to receive, discounted at the original effective interest rate. For trade receivables, the Corporation applies a simplified approach in calculating ECLs and recognises a loss allowance based on lifetime ECLs at each reporting date if required. The Corporation has established a provision matrix based on its historical credit loss experience for trade receivables, adjusted for current and forward-looking factors specific to the receivable. There is no allowance for ECL recognised in both financial years.

Lease incentives All incentives for the agreement of a new or renewed operating lease are recognised as an integral part of the net consideration agreed for the use of the leased asset, irrespective of the incentive’s nature, form or the timing of payments.

In the event that lease incentives are received or given to enter into operating leases, such incentives are recognised as a liability or asset. The aggregate benefits of incentives are recognised as a reduction of rental expense or income on a straight-line basis.

Finance leases A finance lease effectively transfers, from the lessor to the lessee, substantially all the risks and rewards incidental to ownership of the leased asset. Amounts due under a finance lease

22

Financial statements • 105 106 Port Authority of New South Wales Annual Report 2018/19 Note 8 ot icre fr aia degn (abu deeig o canl wr previously were channels of deepening) (harbour dredging recognised capital as prepaid licence fees with the for licensor being NSW Roads and incurred Maritime Se Costs eachAt reporting date, theageing analysis of tradeand other receivables isas follows: Ageing analysisof trade other and receivables (a) finance represent to leases. agreements these considers Corporation The 2014. in executed was Licence Agreements with NSW Roads and Maritime Services were executed in 2013 and one As part of the long term leases in 2013 and 2014 as detailed below, two revised Channel User the rateof return on entity’s the investm net in investment net constan a entity’sreflect to as so the periods accounting to allocated ofis income lease Finance amount the at receivables as recognised are for impairmentwasobjectivewasraisedwhenwouldforthere notCorporation evidence the that basis. Trade receivables which were known to be uncollectible werewritten off. An allowance receivablesAASBunder139 The comparative period (2018) was applied with the accounting policy for Accountingpolicy forimpairment of trade receivablesAASB under 139 (2018:$1.4 million) and1.34% is of total financial assets(2018: 0.89%). a single trade debtor. The largest single trade debtor included in receivables The Corporation is not considered to be materially exposed to a concentration of credit risk to identified. factors macroeconomic was onthere year, this receivables. In the settle customersto the of ability the affecting information forward-looking and current reflect to adjusted are trade ECLs, the due. The expected loss rates are based on historical measureobserved loss rates. The historical rates To receivables. trade all receivables have been grouped basedon shared creditrisk characteristics and the days past for allowance loss expected lifetime a uses which ECLs measuring to approach simplified 9 AASB the applies Corporation The that expected otherthese balances willbe receivediswhen due. It identified. were receivables other an and on trade impaired monitored No are basis. ongoing balances receivable trade addition, In guarantees. bank obtaining in transactoncredittoarewishtermscredit subjectto verification procedures whichresultmay CorporationThe tradesonly recognised withcreditworthy parties.third customers Trade who

losses credit Expected 2018 losses credit Expected 2019

continued 10,178 10,178 9,250 Total $000 0% 0%

7,887 8,600 $000 . due Not Collectabilityanongoingwasreceivablesreviewedon trade of 0% 0%

1,234 1,240 entoutstanding in respectof leases. the days days $000 0 – 0% 0% 30

31 days $000 116 205 – 0% 0% 60

days days $000 60+ 0% 0% 85 -

impairment of trade days days $000 totals totals $1.7 million 90+ 0% 0% 13 48

t periodic periodic t no lease. lease. Days Days rvices. 120+ $000 0% 0% ECL ECL 23 - -

Note 8 continued

be able to collect all amounts due. No interest was earned on trade receivables. In the prior year, there was no impairment identified.

(b) Finance lease receivables

(i) Finance lease – Newcastle The Corporation previously incurred costs to dredge Newcastle Port in creating a channel for ships to enter the wharf area. As part of the long term lease transaction, a Channel User License Deed with NSW Roads and Maritime Services was executed on 20 December 2013. The Corporation considers this agreement to represent a finance lease.

On expiry of the 98 year lease term, a dredged channel asset will revert to the Corporation. As a result, a finance lease receivable has been recognised equal to the net investment in the lease. As all lease payments were received upfront, the net investment in the lease corresponds on expiry of the 98 year lease. No further payments will be received, and a residual asset will be accreted over the 98 year term of the lease with total unearned finance income as at 30 June 2019 of $19.9 billion. The initial value of the residual interest was recognised at $30.2 million in May 2014. In the financial year ended 30 June 2019, the Corporation has recognised $2.7 million (2018: $2.6 million) finance lease income from the accretion of the finance lease receivable.

The valuation of the residual interest was carried out by external advisers as at 30 June 2014. The value was based on the information available at the inception of the lease. Management assesses for indicators of impairment of any material damage or changes to the dredged channel asset. No significant factors were identified during the year that resulted in significant changes to the valuation.

(ii) Finance lease - Botany Bay Sydney Ports Corporation, amalgamated into Newcastle Port Corporation (trading as Port Authority of New South Wales) effective from 1 July 2014, previously incurred costs to dredge Botany Bay, thereby creating a channel for ships to enter the wharf area. As part of the long term lease transaction, a revised Channel User Licence Agreement with NSW Roads and Maritime Services was executed. The agreement represents a finance lease.

On expiry of the 99 year lease term, a dredged channel asset will revert to the Corporation. As a result, a finance lease receivable has been recognised equal to the value of its net investment in the lease. As all lease payments were received upfront, the net investment in the lease corresponds to the present value of the assets that will revert to the Corporation on expiry of the 99 year term. No further payments will be received, and a residual asset will be accreted over the 99 year term of the lease with total unearned finance income as at 30 June 2019 estimated at $17.5 billion. The initial value of the residual interest was recognised at $20.4 million in May 2013. In the financial year ended 30 June 2019, the Corporation has recognised $2.1 million (2018: $1.9 million) finance lease income from the accretion of the finance lease receivable.

(iii) Finance lease – Port Kembla Port Kembla Port Corporation, amalgamated into Newcastle Port Corporation (trading as Port Authority of New South Wales) effective from 1 July 2014, previously incurred costs to dredge Port Kembla in creating a channel for ships to enter the wharf area. As part of the long term lease transaction, a revised Channel User Licence Agreement with NSW Roads and Maritime Services was executed. The agreement represents a finance lease.

On expiry of the 99 year lease term, a dredged channel asset will revert to the Corporation. As a result, a finance lease receivable has been recognised equal to the net investment in the lease. As all lease payments were received upfront, the net investment in the lease

24

Financial statements • 107 108 Port Authority of New South Wales Annual Report 2018/19 Note 8 estimated at $13.1 billion. The initial value of the residual interest was recognised at recognised was interest residual the of value initial The billion. $13.1 at estimated 2019 be will asset residual a accretedover and the99 year termof lease the with totalunearned received, financeincome 30as Juneat be will payments further No term. lease year 99 the expiryofon Corporation the to willrevert thatassets the ofvaluepresent the correspondsto

$15. year the thatresulted in significantchanges to the valuation. damage or changes to the dredged channel asset. No significant factors were identified during the inception of the lease. Management assess at out available information the carried on based was was value Kembla The 2013. June Port 30 at and as advisers Bayexternal Botany in interest residual the of valuation The financelease receivable. $ recognised 3 million in May 2013. In In 2013. May in million 3 continued 1. 5 million (2018: $1.4 million) finance lease income from the accretion the from income lease finance million) $1.4 (2018: million 5

th e financial year ended 30 June 30 ended year financial e es for indicators of impairment of any material 2019 , the Corporation has Corporation the of the the of by by 25

NoteNote 9. 9 Pr Property,operty, plant plant and equipment and equipment

(a) Carrying amounts of property, plant and equipment at fair value

2019 2018 At fair value $000 $000

Land and buildings (gross carrying amount) 319,997 318,770 Accumulated depreciation (20,738) (16,479) Net carrying amount 299,259 302,291

Roadways and bridges (gross carrying amount) 13,374 13,104 Accumulated depreciation (3,484) (2,715) Net carrying amount 9,890 10,389

Wharves, jetties and breakwaters (gross carrying amount) 87,588 86,082 Accumulated depreciation (37,649) (30,168) Net carrying amount 49,939 55,914

Plant (gross carrying amount) 112,599 110,949 Accumulated depreciation (45,991) (36,335) Net carrying amount 66,608 74,614

Construction in progress - Land and buildings 1,811 1,080 - Roadways and bridges 2,556 70 - Wharves, jetties and breakwaters 422 19 - Plant 11,132 3,976 Total construction in progress 15,921 5,145 Total property, plant and equipment at fair value (net carrying amount) 441,617 448,353

Recognition and measurement

Asset capitalisation Property, plant and equipment is initially recognised at cost, including any costs directly attributable to the asset and any restoration costs associated with the asset. Cost is the amount of cash or cash equivalents paid or the fair value of the other consideration given to acquire the asset at the time of its acquisition or construction or, where applicable, the amount attributed to that asset when initially recognised in accordance with the specific requirements of other Australian Accounting Standards. Assets acquired at no cost or for nominal consideration are initially recognised at their fair value at the date of acquisition.

The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the component will flow to the Corporation, and its cost can be measured reliably.

26

Financial statements • 109 110 Port Authority of New South Wales Annual Report 2018/19 Note 9 hr te arig mut f n se eces t rcvrbe mut h asset the amount recoverable its is determined for an individual asset unless the asset does exceeds not generate cash inf asset an recoverableamount The recoverableamount. its to down ofwritten is andimpaired considered amount carrying the Where es formal a makes Corporation the exists, impairment of indicator an Where impaired. be may At each reporting date, the Corporation assesses whether there is any indication that an asset Recoverable amountof assets . . . . . Theusefullives ofeach categoryof depreciable assetsare: with no materialchanges required. beentreatedas non-depreciable. usefullives The assets were of y during reassessed the write off the assets over their remaining useful lives on a straight-line basi Depreciation expenseshave beencalculated on depreciable assets,using ratesestimated to Depreciationof assets The amount. carrying includedstatementin the of comprehensive the income. with proceeds the comparing by determined Gains are benefits. disposaleconomic future no bring to expected is use its when or of, An item of property, plant and equipment is derecognised when it is sold or otherwise disposed Derecognition future provide to expected are they economicbenefits iffor more onethan reporting period. capitalised are $1,000 of excess in assets the Only

there is a secondary market, are valued at fair value. Specialised buildi Non-specialised buildings, which include commercial and general purpose buildings for whi Valuationbuildingsof (ii) use, existing its for value market because thatisitsat highest and best use. valued is land such future, near the in use alternative are natural, legal and socio-political restrictions on the use of land such therewhere However,that use. best andthere highest its to is regard having value no fair at valued isfeasible Land Valuationlandof (i) 14-01). (TPP NSW Standards PolicyandTreasuryon the Paper Property, plant and equipment is valued at fair value in accordance with Australian Valuationof property, plantand equipment re that rate discountcurrent market assessments of the timevalue of moneyand the specificrisks pre-tax to the asset. a using value present their to discounted are flows future estimatedcash the use, in value assessing In determined. be can sell to costs fair less and value sell to costs less value fair its to close be to estimated be can use in value asset’s case, the is this If asset’sfairtheeither unless assets.belon asset the of which to unit groups cash-generating the or for determined is assets amount recoverable other from those of independent largely are valued at market buying price, the best indicator of which is the replacement the is which of indicator best the price, buying market at valued are specific, limited purpose. Where there are no feasible alternative uses for such buildings, they ln 2toyears50 toyears 10 51 to 20 years50 Intangibles 4toyears50 Plant Wharves, jetties andbreakwaters Roadwaysand bridges Buildings timate of recoverable amount. continued – sfwr 3toyears10 software value less costs to sell is higher than its carrying amount, or theorcarryingamount, its higher than issell tocosts less value Valuation of PhysicalNon-CurrentValuationAssetsof ngs are designed for a s. Land assets have and losses on losses and lows that are Accounting cost of the the of cost se are are se flects flects ear ear gs, gs, ch ch 27 is is

Note 9 continued

remaining economic benefits. Heritage buildings are valued at fair value. Fair value is represented by market value for existing use, because there are few or no feasible alternative uses for such buildings.

(iii) Valuation of specialised plant and infrastructure Specialised plant and infrastructure is measured at market buying price, the best indicator of which is the replacement cost of the asset’s remaining future economic benefits. Infrastructure assets include roadways and bridges, wharves, jetties and breakwaters.

(iv) Valuation of non-specialised assets and construction in progress Non-specialised assets with short useful lives are measured at depreciated historical cost, as a surrogate for fair value. Assets included in construction in progress are normally recognised at historical cost and these assets are transferred to property, plant and equipment when ready for use as intended by management. The transfer may trigger a transfer between different levels of the fair value hierarchy depending on the valuation techniques used for the transferred asset. Unless there is a change in valuation technique the asset categorisation under the fair value hierarchy is not expected to change.

Refer to note 18 for further information regarding fair value and hierarchy levels.

(v) Asset revaluation Revaluations are made with sufficient regularity to ensure that the carrying amount of property, plant and equipment does not materially differ from fair value at the reporting date. Land and buildings are subject to comprehensive valuation at least every 3 years. Where the Corporation revalues non-current assets by reference to current prices for assets newer than those being revalued (adjusted to reflect the present condition of the assets), the gross amount and accumulated depreciation are separately restated.

Interim revaluations are conducted between comprehensive revaluations when cumulative changes to indicators / indices suggest fair value may differ materially from the carrying value. The Corporation undertakes an interim management revaluation when cumulative increases / decreases in indicators / indices are generally less than or equal to 20%. It undertakes an interim formal revaluation where there has been a cumulative increase / decrease in indicators / indices generally greater than 20%.

(b) Current year asset revaluation

An independent valuer (RHAS - an Aon Company) provided gross values for land and buildings at 30 June 2018. In the financial year ended 30 June 2019, the valuer considered there to be no material movement in the value for land and therefore, management applied no index to land. The values of buildings are appropriately indexed at 30 June 2019 using externally provided rate 0.49%.

A quantity and construction consultant (MDA Australia Pty Limited) provided gross values for wharves, jetties and breakwaters, roadways and bridges at 30 June 2017 when the last comprehensive valuation was conducted. They were appropriately indexed with 2.2% and 2.0% at 30 June 2018 and 30 June 2019 respectively.

The Corporation’s qualified engineers assessed the remaining useful lives of each asset. Based on these assessments, all assets are recorded at fair value. The assets that were not revalued due to materiality are also shown at fair value as the written-down value approximates fair value.

28

Financial statements • 111 112 Port Authority of New South Wales Annual Report 2018/19 Note 9 wouldas be follows: carrying the model, cost the usingmeasured were equipment and plantproperty, If accumulateddepreciation Carrying (c) amounts if property, andplant equipment measured were atcost less

Atcost Totalproperty, andplant equipment Constructionin progress carryingNet amount Accumulateddepreciation Plant(gross carryingamount) carryingNet amount Accumulateddepreciation Wharves, jetties andbreakwaters (gross carrying amount) carryingNet amount Accumulateddepreciation Roadwaysand bridges (gross carryingamount) carryingNet amount Accumulateddepreciation Landand buildings (gross carrying amount)

continued (19,141) (19,141) (46,454) (46,454) (42,158) 240,607 259,748 113,360 6,3 372,802 364,331 (3,669) 66,906 74,649 74,649 66,906 40,402 74,952 32,674 74,832 11,892 11,892 15,921 15,921 8,223 $000 2019

(15,392) (15,392) (37,062) (37,062) (34,550) 243,690 259,082 111,711 amounts amounts (2,969) 11,885 11,885 8,916 5,145 $000 2018 29

Note 9 continued

(d)(i) Movement in property, plant and equipment Wharves, Land and Roadways jetties and buildings and bridges breakwaters Plant Total Note $000 $000 $000 $000 $000

Balance at 1 July 2018 302,291 10,389 55,914 74,614 443,208

Revaluation increments recognised in other comprehensive income 16(a) 449 177 1,258 - 1,884

Revaluation increments recognised in statement of comprehensive income 5 8 22 5 - 35

Transfer from construction in progress 9(d)(ii) 666 9 - 2,224 2,899 303,414 10,597 57,177 76,838 448,026 Depreciation charge 4 (4,155) (707) (7,229) (10,104) (22,195) Write-offs - - (9) (33) (42) Disposals - - - (93) (93) Balance at 30 June 2019 299,259 9,890 49,939 66,608 425,696

Wharves, Land and Roadways jetties and buildings and bridges breakwaters Plant Total Note $000 $000 $000 $000 $000

Balance at 1 July 2017 296,706 10,174 60,342 81,116 448,338 Additions - - - 108 108

Revaluation increments recognised in other comprehensive income 16(a) 9,099 361 4,450 - 13,910

Revaluation increments (decrements) recognised in statement of comprehensive income 5 (28) 91 (99) - (36)

Impairment loss 5 - - - (50) (50) Transfer from construction in progress 9(d)(ii) 794 547 304 2,705 4,350 306,571 11,173 64,997 83,879 466,620 Depreciation charge 4 (4,118) (784) (9,083) (9,159) (23,144) Write-offs - - - (23) (23) Disposals (162) - - (83) (245) Balance at 30 June 2018 302,291 10,389 55,914 74,614 443,208

30

Financial statements • 113 114 Port Authority of New South Wales Annual Report 2018/19 Note 10 Note 9 (d)(ii 18.note propertyinvestmentofmeasurement value fair the regardingdetails Further incom property’s the to applied is itsassess value. yield a whereby approach the income in of capitalisation experience recent and qualifications appropriate deter was value fair locations.The relevant the propertiesin of valuation have They Company). Aon an - significantly 30from June 2018after a valuation carriedout by an independen pr investmentCorporation’s the of value fair the year, financial the During Note There wasborrowing no cost capitalisedin both years.

Closingbalance onLoss revaluation Transfer anotherto class of asset Balanceat 1 July Movements Atvalue fair Landand building Atvalue fair Closingbalance Transfers intangibleto assets equipment Transfers property,to plant and Additions Balanceat 1 July ) Investmentproperty 10. Movementin construction progressin continued

In vestment property

9(d)(i) 11(a) Note

Note 5

(2,899) 15,921 15,921 19,111 19,111 13,966 5,145 (291) $000 2019 7,700 7,700 7,700 2019 $000 2019 $000 mined based on theon based mined

operty did not vary not did operty - -

are disclosed indisclosed are t valuer (RHAS (1,172) (4,350) 10,667 10,667 7,390 5,145 3,277 7,700 7,993 7,700 (200) $000 2018 $000 2018 $000 2018 (93) (93) e to to e 31

Note 10 continued

The following amounts have been recognised in the statement of comprehensive income:

2019 2018 $000 $000 Rental income 628 722 Direct operating expenses that generated rental income (386) (328) Direct operating expenses that did not generate rental income - - 242 394

Recognition and measurement

Investment properties are properties held to earn rental income and/or for capital appreciation (including property under construction for such purposes). Investment properties are initially measured at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at fair value in accordance with AASB 140 Investment Property.

Gains and losses arising from changes in the fair value of investment properties are included in the statement of comprehensive income in the period in which they arise. Refer to note 5.

An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising on derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of comprehensive income in the period in which the property is derecognised.

No depreciation is charged on an investment property.

NoteNote 11. 11 Intangible assets as sets

2019 2018 $000 $000 Carrying amounts (at cost) Software 4,144 3,853 Accumulated amortisation (3,021) (2,596) Net carrying amount 1,123 1,257

Easements 230 230 Accumulated amortisation - - Net carrying amount 230 230

Total intangible assets at cost (net carrying amount) 1,353 1,487

32

Financial statements • 115 116 Port Authority of New South Wales Annual Report 2018/19 Note 11 Movements in intangible assets (a) The estimated useful life for for life useful estimated The linebasis over a range ofuseful lives 3 tofrom 10 years. The Corporation’s software intangible a Amortisation mar active no is there assumed is it easements. as value fair than rather method cost historic usin recognised are Easements land. in interest Corporation’s the to relate Easements TheCorporation’s intangible assets relateto software and ease carriedatarecostless any accumulated amortisation andanyaccumulated impairment loss. Intangible assets are initially capitalised at cost. Following initial recognition, intangible assets Intangibleassets Recognitionand measurement

usefullifeare assessed impairment for annually. balanceClosing Amortisation charge Transfer from constructionprogress in Balanceat 1 July continued

an easement is indefinite. Intangible assets with an indefinite an with assets Intangible indefinite. is easement ssets have finite lives and are amortised on a straight- 9(d)(ii)

Note 4

ments. 1,353 1,778 1,487 (425) $000 2019 291

1,487 1,842 1,172 ket for for ket (355) $000 2018 g the the g 670 33

NoteNote 12. 12 T Traderade and and other other payables payables

2019 2018 $000 $000 Current Trade payables 1,097 826 Accrued employee benefits 3,417 3,922 Accrued borrowing costs 2,480 - GST payable 1,008 996 Other payables and accruals 8,289 7,803 Maintenance funds liability 917 799 Lease incentive liability - 471 Income received in advance 1,976 2,114 19,184 16,931 Non-current Income received in advance 2,068 2,248 Lease incentive liability - 28 2,068 2,276

Recognition and measurement

Trade and other payables are carried at amortised cost and due to their short-term nature they are not discounted. Their carrying value is assumed to approximate their fair value. Trade and other payables represent liabilities for goods and services provided to the Corporation prior to the end of the financial year that are unpaid and arise when the Corporation becomes obliged to make future payments in respect of the purchase of these goods and services. The amounts are unsecured and are usually paid within 28 days of recognition.

NoteNote 13. 13 Pr Provisionsovisions

2019 2018 Note $000 $000 Current Annual leave 7,674 7,263 Long service leave 11,922 11,263 Other employee benefits 489 294 20,085 18,820

Non-current Long service leave 2,295 2,008 Provision for make good (a) 513 543 2,808 2,551

34

Financial statements • 117 118 Port Authority of New South Wales Annual Report 2018/19 Note 13 an unconditionalan right to defersettlement forat least12 months after the reporting period. The annual leave provision is presented as a leave current Annual liability as the Corporation does (i) benefits. Employee benefits relate to annual leave, long service leave, termination and other Employeebenefits or (legal obligation present of the amount of the obligation. a has economic benefits will Corporation be required to settle the obligation and a reliab the when constructive) as a result of a past event, it is recognisedprobable that an outflow of r are Provisions Movements provisionin formake good (a)

Provisions Recognitionand measurement as disclosed is ascurrent there islegalyearno obligation payto within twelve months. qualifying the than less service with employees to relates which amount The settlement. defer to right unconditional an have not does Corporation unconditionalserviceallentcurrentprovisionleave long includes The for (c) months. not does Corporation expectdoes not all employees take amountaccrued the to of full the leave withinnext twel the since the experience past current on based However settlement. as defer to right unconditional presented is obligation entire The Annualleave obligationsexpected to be taken after twelve months (b)

Provision for make good Non-current within twelve months Longservice leave obligations expected beto taken twelve months Annualleave obligations expectedto be aftertaken Lon g service leave obligationsexpected to be taken twelvewithin months continued Opening balance $000 543

Adjustment to profit or $000 loss (30) (30)

Payments le estimate can be made 1,618 1,513 made made $000 2019 $000 2019 $000 esources embodying itlements whereitlementsthe -

Corporation employee balance Closing Closing not have have not provided ae an have 2,059 $000 2018 $000 2018 $000 912 513 non- ve ve 35

Note 13 continued

Annual leave is not expected to be settled wholly before 12 months after the end of the annual reporting period in which the employees render the related service. As such, it is required to be measured at present value in accordance with AASB 119 Employee Benefits. The Corporation has assessed and determined that the effect of discounting is immaterial to annual leave.

(ii) Long service leave The liability for long service leave is recognised in the provision for employee benefits and is measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on high quality corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

(iii) Termination benefits Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The Corporation recognises termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after the statement of financial position date are discounted to their present value.

NoteNote 14. 14 Int Interest-bearingerest-bearing loans andloans borrowings and borrowings

2019 2018 Non Current $000 $000

NSW TCorp borrowings 144,177 -

Recognition and measurement

Interest-bearing loans and borrowings Interest-bearing borrowings classified as financial liabilities at amortised cost are initially measured at fair value, net of directly attributable transaction costs. They are subsequently stated at amortised cost using the effective interest method.

Amortised cost is calculated by taking into account any differences between the initial fair value and the final redemption value of the borrowings, such as discounts or premiums. These differences are amortised to profit or loss as part of finance costs over the period of the borrowings on an effective interest basis. Indexation adjustments on the Consumer Price Index (CPI) indexed bonds are also recognised as part of finance costs in profit or loss.

Classification of liability The Corporation has Treasurer’s approval under the Public Authorities (Financial Arrangements) Act to borrow from NSW TCorp up to a total limit of $245.0 million (2018: $245.0 million).

36

Financial statements • 119 120 Port Authority of New South Wales Annual Report 2018/19 Note 14 2018. an 2019 June 30 at place in facilities financing following the had Corporation The Financial facilities (a) approvaltheof Treasurerand within agreed the terms of the Statement of Corporate Intent. total the within borrowing refinance to enduring discretion has an Corporation of the whereby facilitynature rolling the takes facility borrowing the that view the forms Corporation The

Detailsregarding value, fair interest andrate liquidity arerisks disclosed innot Fairvalue (ii) with $50,000) (2018: $50,000 with of facility Commonwealth Bankof Australia withbalance the cleared monthly. $170,000) card purchasing a (2018: had also Corporation $170,000 The for facility card credit a Commonwealth Bankof Australia withbalance the cleared monthly. had Corporation The securityinterest-bearing for loans andborrowings. a pledged been have assets No Guarantee. Government NSW by secured are borrowings All maturity. at principal of rollover or repayment and months six every of only interestpayments coupon by characterised are loans rate fixed TCorp NSW 2030. February 20 to 2021 April 8 from ranging dates maturity with loans rate fixed TCorp NSW of consist Borrowings Borrowingrepayments (i) Amount - unused Amount - used facility Total - Abank guarantee facility (b) Commonwealth With Bankof Australia Amount - unused Amount - used facility Total - and-Go facility Agloballoan facilityinclusive $15.0 of million Come- (a) NSW TCorp:With continued

(144, 100,823 245,000 2,000 2,000 $000 2019 177 - )

e19. e19. d 30 June June 30 d 245,000 245,000 2,000 2,000 $000 2018 the the the the 37 - - s

Note 15 Dividend payable Note 15. Dividend payable

2019 Jun 2018 $000 $000

Dividend payable 9,000 200,000

Recognition and measurement

The present obligation to pay a dividend is established when the shareholders’ approval of the dividend is received. Subsequent to the approval, there will be no further variation of the dividend amount. This occurs through a formal process. The Corporation reviews its financial performance for the accounting year and recommends to its shareholders an appropriate dividend payment in light of the current financial position and longer-term financial commitments. Under NSW Treasury’s Financial Distribution Policy for Government Businesses, the Corporation prepares a Statement of Corporate Intent which is an agreement between the relevant Ministers and the Board. This agreement establishes the dividend policy to apply for the year and sets a target dividend, if any, for the business. The dividend scheme of the Corporation also takes into consideration the agreed Target Capital Structure with NSW Treasury in order to maintain an efficient capital structure consistent with the Target Credit Rating.

Prior to 30 June 2019, the Shareholding Ministers approved the dividend recommendation in accordance with the Financial Distribution Policy for Government Entities TPP 16-04 and section 20S of State Owned Corporations Act 1989. Accordingly the dividend payable of $9.0 million (2018: $200.0 million) was recognised, with 50% to be paid prior to 1 August 2019 and the remaining balance prior to 1 December 2019.

NoteNote 16. 16 EquityEquity

2019 2018 Note $000 $000

Contributed equity 165,768 165,768 Reserves 16(a) 60,089 58,770 Retained earnings 16(b) 96,151 95,518 322,008 320,056

Recognition and measurement

Contributed equity Ordinary shares are classified as equity.

The State Owned Corporations Act 1989 requires the Corporation to have two voting shareholding Ministers. Each shareholder must, at all times, have an equal number of shares in the Corporation. At 30 June 2019, the shares were held by the Treasurer (The Hon. Dominic Perrottet, MP) and the Minister for Finance and Small Business (The Hon. Damien Francis Tudehope, MP).

38

Financial statements • 121 122 Port Authority of New South Wales Annual Report 2018/19 Note 16 Movements assetin revaluationreserve (a) revaluationproperty, of plant and equipment. The asset revaluation reserve is used to record increments and decrements resultin Assetrevaluation reserve

Movements in retained earnings (b)

Closingbalance Dividenddeclared ownersas Transaction ownerswith in their capacity Othercomprehensive (expense) income gains employment post benefit actuarial (losses) Incometax equivalent benefit (expense)on Superannuation actuarial(losses) gains earningsdisposalon of revalued assets Transfer from revaluationreserve to retained profitNet year for the Balanceat 1 July Closingbalance Totalother comprehensive income property, of plant and equipment Incometax equivalent expense on revaluation tax earningsdisposalon of revalued net assets, of Transfer from revaluationreserve to retained equipment Fairvalue revaluation of property,plant and Balanceat 1 July

continued

9(d)(i) 16(a) 16(a) 16(b) Note Note 15

58,770 58,770 60,089 58,770 58,770 60,089 (11,982) (11,982) 1,884 1,319 (9,000) (8,387) (565) 96,151 96,151 18,020 95,518 $000 2019 3,595 $000 2019 -

-

(200,000) g from the the g from (10,687) (10,687) 253,021 (4,173) 13,910 13,910 49,050 95,518 95,518 24,953 35,623 17,544 9,720 $000 2018 $000 2018 (17) (17) 17 39

Note 17 Defined benefit superannuation schemes Note 17. Defined benefit superannuation schemes

The Corporation has three defined benefit superannuation schemes covering certain employees, all of which require contributions to be made to separately administered funds.

Nature of the benefits provided by the fund

The Pooled Fund holds in trust the investments of the following closed NSW public sector superannuation schemes, in which the Corporation participates:

. State Authorities Superannuation Scheme (SASS) . State Authorities Non-Contributory Superannuation Scheme (SANCS) . State Superannuation Scheme (SSS)

These schemes are all defined benefit schemes – at least a component of the final benefit is derived from a multiple of member salary and years of membership. Members receive lump sum or pension benefits on retirement, death, disablement and withdrawal.

All the Schemes are closed to new members.

Description of the regulatory framework

The schemes in the Pooled Fund are established and governed by the following NSW legislation: Superannuation Act 1916, State Authorities Superannuation Act 1987, Police Regulation (Superannuation) Act 1906, State Authorities Non-Contributory Superannuation Act 1987, and their associated regulations.

The schemes in the Pooled Fund are exempt public sector superannuation schemes under the Commonwealth Superannuation Industry (Supervision) Act 1993 (SIS). The SIS Legislation treats exempt public sector superannuation funds as complying funds for concessional taxation and superannuation guarantee purposes.

Under a Heads of Government agreement, the New South Wales Government undertakes to ensure that the Pooled Fund will conform with the principles of the Commonwealth’s retirement incomes policy relating to preservation, vesting and reporting to members and that members’ benefits are adequately protected.

The New South Wales Government prudentially monitors and audits the Pooled Fund and the Trustee Board activities in a manner consistent with the prudential controls of the SIS legislation. These provisions are in addition to other legislative obligations on the Trustee Board and internal processes that monitor the Trustee Board’s adherence to the principles of the Commonwealth’s retirement incomes policy.

An actuarial investigation of the Pooled Fund is performed every three years. The last actuarial investigation was performed as at 30 June 2018. The next actuarial investigation will be performed at 30 June 2021.

Description of other entities’ responsibilities for the governance of the fund

The Fund's Trustee is responsible for the governance of the Fund. The Trustee has a legal obligation to act solely in the best interests of fund beneficiaries. The Trustee has the following roles:

. Administration of the fund and payment to the beneficiaries from fund assets when required in accordance with the fund rules;

40

Financial statements • 123 124 Port Authority of New South Wales Annual Report 2018/19 Note 17 . risks relating definedto the benefits are: There are anumber of risks whichto Fund the exposes theEmployer. Themore significant Descriptionof risks . . the estimated the future cash outflows. quality corporate bonds with terms to maturityhigh andon currency date that reporting match, the as at closely yieldsas possible,market using discounted are payments future Expected future wage andsalary level, experience employee of departures and years of service. actuaries using the projected unit credit valuation method. Consideration is given to expected independent byannually calculated date, reporting the to fund the of membershipfrom arise whichpayments expectedfuture on based isobligations benefit defined the of value present superannuationthe of value fair the lessdate reporting the at defined the of value present the as measured is and position, financial of A liability or asset for the defined benefit superannuation plans is recognised in the statement Recognitionand measurement

. . . ik Amounts in statement the of financial position There wereno fundamendments, curtailmentsor settlements during year. the Descriptionof significant events risk. diversified asset mix.Thesignificant no Fundhas concentration havinvestment of ris and managers fund independent with invested are assets fund benefit defined The . Compliance with otherapplicable regulations.

liability benefit Defined mlyrwl edt nraecnrbtost fstti hrfl. Employerwill increaseneedto the contributions to offset shortfall.this and assumed than lower be will returns investment that risk The - risk Investment Ma in. future increasing assumed, than pensions. longer live pensioners that risk The - risk Longevity sue,icesn uuepnin. assumed,increasing future pensions. risk indexation Pension active members will be based) will rise more rapidly than assumed, increasing defined increasingbenefitamounts and thereby requiring additionalassumed, employercontributions. than rapidly more rise will based) be will members active Salary riskgrowth cost ofprovidingcost defined the benefit risk Legislative aeetadivsmn ftefn ses n and nagement investment of the assets;fund and continued - The risk is that legislative changes could be made which increase the increase which made be could changes legislative that is risk The - - Thethatwages risk salariesor which (on benefit future amounts for Te ik ht esos il nrae t rt getr than greater rate a at increase will pensions that risk The - s.

fund’s assets at that date. Thedate. that at assetsfund’s

20,038 $000 2019 benefit obligations obligations benefit

k ork liquidity 6,988 $000 2018 e a e 41

Note 17 continued

(a) Reconciliation of the net defined benefit liability/(asset)

SASS SANCS SSS Total At 30 June 2019 $000 $000 $000 $000 Opening net defined benefit liability/(asset) 6,546 952 (510) 6,988 Current service cost 456 123 228 807 Net Interest on the net defined benefit liability 269 39 (21) 287 Actual return on Fund assets less Interest income (882) (98) (4,419) (5,399) Actuarial (gains) / losses 2,325 180 14,876 17,381 Employer contributions (2) - (24) (26) Closing net defined benefit liability 8,712 1,196 10,130 20,038

SASS SANCS SSS Total At 30 June 2018 $000 $000 $000 $000 Opening net defined benefit liability/(asset) 9,311 1,135 30,172 40,618 Current service cost 560 136 296 992 Net Interest on the net defined benefit liability 243 30 790 1,063 Actual return on Fund assets less Interest income (1,336) (161) (6,211) (7,708) Actuarial (gains) / losses (2,192) (188) (25,535) (27,915) Employer contributions (40) - (22) (62) Closing net defined benefit liability 6,546 952 (510) 6,988

(b) Reconciliation of the defined benefit obligation

SASS SANCS SSS Total Year ended 30 June 2019 $000 $000 $000 $000 Present value of defined benefit obligations at beginning of the year 29,501 3,487 110,403 143,391 Current service costs 456 123 228 807 Interest costs 1,129 130 4,419 5,678 Contributions by participants 245 - 110 355 Actuarial (gains) / losses 2,325 180 14,876 17,381 Benefits paid (2,586) (366) (5,766) (8,718) Taxes, premiums & expenses paid 84 8 662 754 Present value of defined benefit obligations at end of the year 31,154 3,562 124,932 159,648

42

Financial statements • 125 126 Port Authority of New South Wales Annual Report 2018/19 Note 17 Reconciliation of the valuefair Fundof assets (c)

Taxes, premiumsTaxes, &expenses paid Benefitspaid Contributionsby participants Employercontributions income Actualreturn Fundon assets less Interest Interestincome theof year valueFair of Fund assets atbeginning Yearended 30June 2018 year valueFair of Fund assets atend of the premiumsTaxes, &expenses paid Benefitspaid Contributionsby participants Employercontributions income Actualreturn Fundon assets less Interest Interestincome theof year valueFair of Fund assets atbeginning Yearended 30June 2019 obligationsat end of the year Presentvalue of defined benefit premiumsTaxes, &expenses paid Benefitspaid Actuarial(gains) losses / Contributionsby participants Interestcosts Currentservice costs obligationsat beginning ofthe year Presentvalue of defined benefit Yearended 30June 2018 year valueFair of Fund assets atend of the continued (3,046) (2,586) (3,046) (2,192) 22,442 22,442 22,955 23,728 23,728 22,955 22,955 29,501 29,501 33,039 SASS SASS SASS 1,336 $000 $000 $000 259 567 245 882 860 259 810 560 71 40 84 71 2

SANCS SANCS SANCS SANCS SANCS SANCS 2,366 2,535 ,2 1650 132,955 106,500 2,727 ,3 1093 136,403 110,913 2,535 (421) (366) $000 $000 161 3,487 3,862 (421) (188) $000 62 98 91 136 6 8 - - - - 92

770 6 -

114,802 110,913 (5,407) (5,766) (25,535) (25,535) 110,403 136,672 6,211 2,718 4,419 4,440 (5,407) $000 $000 SSS SSS 3,508 770 662 110 $000 Total SSS 99 22 24 296 99

Total

(27,915) (27,915) 143,391 173,573 139,610 136,403 (8,874) (8,874) (8,718) 4,410 7,708 3,347 5,399 5,391 Total $000 $000 $000 358 992 847 847 358 754 355 62 26 43

Note 17 continued

(d) Reconciliation of the effect of the asset ceiling

There is no change in the effect of the asset ceiling.

(e) Fair value of Fund assets

All Pooled Fund assets are invested by SAS Trustee Corporation (STC) at arm’s length through independent fund managers, assets are not separately invested for each entity and it is not possible or appropriate to disaggregate and attribute fund assets to individual entities. As such, the disclosures below relate to total assets of the Pooled Fund.

Quoted prices in active Significant markets for observable Unobservable identical assets inputs inputs Level 1 Level 2 Level 3 Total Asset category $000 $000 $000 $000 Short term securities 2,135,561 1,906,555 - 4,042,116 Australian fixed interest 4,992 2,289,679 - 2,294,671

International fixed interest 6,827 1,952,396 8,871 1,968,094 Australian equities 7,818,302 547,570 3,055 8,368,927 International equities 8,795,299 2,592,132 8 11,387,439 Property 698,607 717,079 2,172,544 3,588,230 Alternatives 327,329 5,758,095 4,472,758 10,558,182 Total 19,786,917 15,763,506 6,657,236 42,207,659

Level 1 - quoted prices in active markets for identical assets or liabilities. The assets in this level are listed shares; listed unit trusts.

Level 2 - inputs other than quoted prices observable for the asset or liability either directly or indirectly. The assets in this level are cash; notes; government, semi-government and corporate bonds; unlisted trusts where quoted prices are available in active markets for identical assets or liabilities.

Level 3 - inputs for the asset or liability that are not based on observable market data. The assets in this level are unlisted property; unlisted shares; unlisted infrastructure; distressed debt; hedge funds.

Derivatives, including futures and options, can be used by investment managers. However, each manager's investment mandate clearly states that derivatives may only be used to facilitate efficient cash flow management or to hedge the portfolio against market movements and cannot be used for speculative purposes or gearing of the investment portfolio. As such managers make limited use of derivatives.

44

Financial statements • 127 128 Port Authority of New South Wales Annual Report 2018/19 Note 17 Thepercentage investedin eachassetclass at the date reporting is: trustee’swebsite. Thereport Fund. These assumptions are disclosed in the actuarial investigation report availabl The pensioner mortality assumptions are as per the 2018 Actuarial Investiga (iii)Pensioner mortality 2018,For a range of CPI increase assumptions was usedas follows: 2019,For a range of increaseCPI assumptions was usedas follows: (ii)Rate of CPIincrease independentused by fund managers fund independent2018,For a range of salary increase assumptionswas usedas follows: by used increases) promotional (excluding ratemanagers increase Salary (i) Significantactuarial assumptions (g) million) in NSW government bonds. The fair value of the Pooled Fund assets as at 30 June 2019 include $99.5 m (f)

Pensionermortality Rateof CPI increase (excludingpromotional increases) Salaryincrease rate Discountrate Total Alternatives Property Internationalequities Australianequities International fixedinterest Australian fixedinterest Cash Fair value Fair of the Pooled Fund assets ...... 2.50%pa thereafter. 2018/19and 2019/20: 2.25% pa 2.50%pa thereafter. 2021/2022and 2022/23: 2.25%pa 2020/21:2.00% pa 2018/19and 2019/20: 1.75% pa 3.20%pa thereafter. 2018/19:2.70% pa continued showspension the mortalityrates each for age. Refer (iii) below Refer (iii) below below (iii) Refer below (iii) Refer Refer (ii) below Refer (ii) below below (ii) Refer below (ii) Refer 3.20%pa 2.95% 2019 pa 100.0% 25.0% 27.0% 19.8%

8.5% 4.7% 5.4% 9.6% 9 2019 illion illion (2018: $97.7 tion of the Pooled Pooled of the tion

Refer (i) below below (i) Refer 4.11% e from the the e from 100.0% 23.7% 26.1% 22.2% 10.5% 8.9% 3.3% 5.3% 2018 8 2018 pa 45

Note 17 continued

(h) Sensitivity analysis

The Corporation's total defined benefit obligation as at 30 June 2019 under several scenarios is presented below. The total defined benefit obligation disclosed is inclusive of the contribution tax provision which is calculated based on the asset level at 30 June 2019.

Scenarios A to F relate to sensitivity of the total defined benefit obligation to economic assumptions, and scenarios G and H relate to sensitivity to demographic assumptions.

Scenario A -1% discount Scenario B +1% Base case rate discount rate As above As above Discount rate As above -1.0%pa +1.0%pa

Rate of CPI increase As above As above As above

Salary inflation rate As above As above As above

Defined benefit obligation 159,648 181,998 141,262 $’000 Scenario C Scenario D +0.5% rate of -0.5% rate of CPI Base case CPI increase increase Discount rate As above As above As above

As above plus As above minus Rate of CPI increase As above 0.5% pa 0.5% pa

Salary inflation rate As above As above As above

Defined benefit obligation 159,648 169,771 150,365 $’000

Scenario E Scenario F +0.5% salary -0.5% salary Base case increase rate increase rate Discount rate As above As above As above

Rate of CPI increase As above As above As above

As above plus As above minus Salary inflation rate As above 0.5% pa 0.5% pa Defined benefit obligation $’000 159,648 160,284 159,034

Scenario G Scenario H Lower Higher Base case mortality (*) mortality (**) Defined benefit obligation $’000 159,648 161,953 157,811

46

Financial statements • 129 130 Port Authority of New South Wales Annual Report 2018/19 Note 17 accordancewith AASB1056 in calculated Fund the of position financial 2019 June 30 the of summary a is following The Surplus/deficit (k) adj be may arrangements funding requiredafter each annual review. and annually reviewed are positions Funding andSTC NSW Treasury. employer, the between discussions after set are rates Contribution review. actuarial triennial the of release the following years three every least at reviewed are arrangements Funding Fundingarrangements (j) strategyisused by the Trustee. matchingexplicitasset-liabilityliquidityNo managerequirements.cashflows monitorsto also It strategy. investment its setting in continuously risk asset-liability its monitors Trustee The (i) above,whilst retaining all otherassumptions. The defined benefit obligation has been recalculated by changing the assumptions as outlined applythe yearsfor 2019 2023.to Assumes long(**) the pensionerterm mortalityimprovement factorsyears 2023 post for also applyyears afterfor 2023. (*) Assumes the short term pensioner mortality improvement factors for years 2019-2023 also

There are norecommended contribution ratesCorporation. forthe (l) AASB1056. Allowance contributions for tax is madewhen setting the contributionrates. (*) There is no allowance for a contribution tax provisionwithin the Accrued Benefits figure for (surplus)Net deficit / Net marketvalue of Fund assets Accrued benefits(*) Yearended 30June 2018 (surplus)Net deficit / Net marketvalue of Fund assets Accrued benefits(*) Yearended 30June2019

Asset-liabilitymatching strategies Contributionrecommendations continued

SuperannuationEntities (22,955) (22,955) (22,442) 25,112 25,112 24,418 24,418 SASS 2,157 1,976 $000 :

SANCS SANCS (2,535) (2,366) 2,848 3,044 $000 509 482

(110,913) (114,802) (35,315) (35,315) (38,585) 75,598 75,598 76,217 76,217 $000 SSS

(136,403) (139,610) (32,649) (32,649) (36,127) 103,754 103,483 usted as as usted Total $000 47

Note 17 continued

(m) Economic assumptions

The economic assumptions adopted for the 30 June 2019 in accordance with AASB 1056 Superannuation Entities:

Weighted-Average Assumptions 2019 2018

Expected rate of return on Fund assets backing current pension liabilities 7.4% pa 7.4% pa Expected rate of return on Fund assets backing other liabilities 6.4% pa 6.4% pa 2.7% pa for 2018/19; Expected salary increase rate 3.2% pa 3.2% pa thereafter Expected rate of CPI increase 2.2% pa 2.2% pa

(n) Expected contributions

No employer contributions are expected to be paid to any of the schemes in the next reporting year.

(o) Maturity profile of defined benefit obligation

The weighted average duration of the defined benefit obligation is 11.5 years (2018: 11.9 years).

(p) Profit and loss impact

SASS SANCS SSS Total 2019 $000 $000 $000 $000 Current service cost 456 123 228 807 Net interest 269 39 (21) 287 Profit and loss component of the defined benefit cost 725 162 207 1,094

SASS SANCS SSS Total 2018 $000 $000 $000 $000 Current service cost 560 136 296 992 Net interest 243 30 790 1,063 Profit and loss component of the defined benefit cost 803 166 1,086 2,055

48

Financial statements • 131 132 Port Authority of New South Wales Annual Report 2018/19 Note 18 Note 17 Othercomprehensive income (q) There wereno transfers betweenanylevels year in either AtJune30 2018 At30 June accountingstandard AASB 13 TheCorporation classifies its non-financialassets into threelevels prescribed under the value Fair hierarchy (a) value Fair measurement of non-financial assets Note18.

Comprehensive Income Totalremeasurement in Other Income Actualreturn Fundon assets less Interest Actuariallosses liabilitieson 2019 Total Investmentproperty (i) Wharves, jetties andbreakwaters Roadwaysand bridges Land Total Investmentproperty (i) Wharves, jetties andbreakwaters Roadwaysand bridges Landand buildings Comprehensive Income Totalremeasurement in Other Income Actualreturn Fundon assets less Interest Actuarial ongains liabilities 2018 and buildings continued

2019 F air value measurement ofnon-financialassets FairValue Measurement ee Lvl2 ee Total Level3 Level2 Level1 Level1 $000 $000 ------

(3,528) (1,336) (2,192) SASS SASS 1,443 2,325 (882) $000 $000 Level2

per below: 7,700 7,700 7,700 7,700 $000 $000 . SANCS SANCS SANCS ------

(349) (161) (188) $000 $000 (98) (98) 180 82

368,594 302,291 359,088 299,259 Level 3 55,914 55,914 10,389 49,939 (31,746) (31,746) (25,535) 9,890 (6,211) (4,419) $000 $000 10,457 10,457 14,876 $000 $000 SSS SSS - -

(35,623) (35,623) (27,915) 376,294 302,291 366,788 299,259 (7,708) (5,399) 55,914 55,914 10,389 49,939 11,982 11,982 17,381 7,700 7,700 9,890 Total Total Total $000 $000 $000 $000 49

Note 18 continued

The Corporation uses the following hierarchy for disclosing the fair value of non-financial assets by valuation technique:

 Level 1 - inputs are quoted prices in active markets for identical assets.

 Level 2 - inputs are observable inputs, either directly or indirectly. Inputs are observable using market data. Adjustments to level 2 inputs include factors specific to the asset, including the condition, location or comparability of the asset.

 Level 3 - inputs are unobservable inputs. If an observable input requires an adjustment using an unobservable input and that adjustment results in a significantly higher or lower fair value measurement, the resulting measurement is categorised within Level 3 of the fair value hierarchy.

For the recurring fair value measurements categorised within level 3, the reconciliation from opening to closing balances is disclosed in note 9(d)(i).

(i) Investment Property The fair value of the investment property did not vary significantly from 30 June 2018 and resulted in no variance in the statement of comprehensive income in this financial year (2018: $0.1 million). Refer to note 10 for movement reconciliation. Investment property is disclosed in the fair value hierarchy table above as level 2 as only observable inputs were used in the valuation. Details on the valuation basis and inputs used for the valuation are described in note 10.

(b) Valuation techniques, inputs and process

For the non-financial assets classified as level 3 assets (land and buildings, roadways and bridges, wharves, jetties and breakwaters), details on the valuation basis, inputs used for the valuation and process are described in note 9(a).

(c) Sensitivity analysis of key unobservable inputs in level 3 of the fair value hierarchy

(i) Land Land is measured using the market approach by reference to a number of industrial, port related use and special use zoned properties. Its measurement is categorised within level 3 of the fair value hierarchy as its fair value is derived by adjusting an observable market input using an unobservable input. The unobservable input is the application of a discount to the value of the land to reflect restrictions on the use of land due to its zoning and use for port purposes. The value of the land can be heavily discounted, with majority in the range from 45% to 80%. Any change in the discount rate applied impacts directly on the value of the land. A +/- 5% sensitivity of the discount rate would result in the carrying value of the land being varied by $10.8 million (2018: $10.8 million).

(ii) Buildings and infrastructure Buildings and infrastructure assets are measured at the replacement cost of the asset’s remaining future economic benefits. These measurements are categorised within level 3 of the fair value hierarchy as their fair values are derived from unobservable inputs.

Buildings The fair value of the buildings will increase/decrease if the replacement costs increase/decrease. Replacement cost is derived from estimates of rate per square metre. Another major unobservable input is the estimate of remaining useful lives of the assets. Any change in the estimates of remaining useful lives impacts directly on the value of the buildings.

50

Financial statements • 133 134 Port Authority of New South Wales Annual Report 2018/19 Note 19 Note 18 operationsor are required to Corporationfinancethe ’soperations. value thebuildingsof being varied $4.7 by million$4.9(2018: million ). 5%+/-sensitivity A estimates theon ofremainingthein resultthe carryinguseful lives would with the Corporation the with Corporation The Management payables Investment Corporation’s Treasury value of: 5%+/-sensitivity A estimates theon ofremainingthe usefulliveswould inresultthe carrying infrastructure the assets. costs lives replacement assets.Any useful change in the estimatesof remaining usefullives impactsremainingdirectly value the on of of estimate the the is input if unobservable per major times other unit increase/decrease The metre. per cost will of estimates from assets derived is infrastructure cost Replacement increase/decrease. the of value fair The breakwaters. and jetties wharves, bridges, and roadways include assets Infrastructure Corporation ’s the with accordance in risks liquidity financi the The Corporation manages its exposure to key financial risks, throughoutincluding interest included are disclosures qualitative statements. and quantitative Further The objective of these policies is to support the delivery of the Corpor thedelivery ofthe support to policiesis theseofobjective The Infrastructure assets The Corporation Financialrisk management objectives policiesand Note19. The The whilstprotecting future financialsecurity. isreviewed by Board the aon continuous basis. by th by risk and treasury management policies are established to identify and analyse the risks faced management activities and reviews and agrees policies for managing each of these risks. The   the the roadwaysand bridges being varied $0.5 by million $0.5 (2018: million) the wharves, the jetties and breakwatersbeing varied by e Corporation’s Corporation, to set risk limits and controls and to monitor risks. Compliance with policies and continued

Financial riskmanagementobjectiv on. hs fnnil ntuet aie iety rm h Corporation ’s the from directly arise instruments financial These loans. ’s principal financial instruments comprise cash, ’s main risks arising from financial instruments are outlined below outlined are instruments financial from arising risks main ’s or i rsosbe o te salsmn ad vrih o risk of oversight and establishment the for responsible is Board ’s objectives, policies and processes for measuring and managing risk. managing and measuring for processes and policies objectives, ’s TopM Cs Fn, receivables, Fund, Cash (TCorpIM) risk an risk d $2. treasury management policies management treasury 5 million (2018 million 5 funds on deposit in the NSW

es andpolicies ation

’s financial targetsfinancial ’s rate, credit and and credit rate, : $ 2. ; and and ; 8 million). 8 together of the the 51 al al .

Note 19 continued

(a) Financial instrument categories

2019 2018 $000 $000 Note Category Financial assets Cash and cash equivalents 7 Not applicable 17,015 51,308

Debt instrument at Trade and other receivables* amortised cost 13,274 11,973

Debt instrument at Lease incentive receivable 8 amortised cost 1,595 753

Debt instrument at Finance lease receivable 8 amortised cost 96,449 90,167 128,333 154,201

2019 2018 $000 $000 Note Category Financial liabilities Financial liabilities measured at Trade and other payables* amortised cost 15,714 12,862

Financial liabilities measured at Lease incentive liability 12 amortised cost - 499

Financial liabilities measured at Borrowings 14 amortised cost 144,177 - 159,891 13,361

*Trade and other receivables exclude statutory receivables and prepayments. Trade and other payables exclude statutory payables and unearned income. Therefore the amounts disclosed above will not reconcile with the statement of financial position.

(b) Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The Corporation’s exposures to market risk are primarily through the price risks associated with the movement in the unit price of the TCorpIM Cash Fund. The Corporation has no material exposure to foreign currency risk and does not enter into commodity contracts.

52

Financial statements • 135 136 Port Authority of New South Wales Annual Report 2018/19 Note 19 The levelinterest of rate volatility. interest in trends current changea structuralisreviewedi withis basiswhere there The rates. amended annually and consistent used, is 1% +/- of change possible reasonably A profitand loss or equity. affect not would rates interest in change a loans, these for Therefore, available-for-sale. as orloss orprofit through value fair at loans rate anyfixed for account notdid Corporation The and repaymentprofile. The policyalsothe limits type instrumentsof thatcan obtained.be requires that the portfolio is appropriately structured to ensure it reflects the forecast borrowing balance and composition of the portfolio is governed by arises a Corporation policy document which risk rate interest to Exposure Interestrate risk (i) analysis assumesthatTheall other variables remain constant. years. both for basis same the on performed was analysis The date. position financial of statement the at existence in exposures risk on based is analysissensitivity The economic the account into taking untilend the of next the annualperiod).reporting after assessm the determined for frame time the beenand operates Corporation the which has possible in environment reasonably variables A risk. risk price other in and risk change rate interest for below information the in The effect on profit and equity due to a reasonably possible change in risk variables is outlined

exposureNet equivalents Cashand cash Financialassets AtJune30 2018 exposureNet equivalents Cashand cash Financialassets 3 At Corporation’sexposure interestto rate risk isset out below. 0 June2019 continued

Carrying amount 51,308 51,308 51,308 17,015 17,015

$000 $000 rmrl truh h Croains orwns The borrowings. Corporation’s the through primarily

impacton Post tax tax Post +1%(100 basis profit $000 $000 points) 359 359 119 119

Equity Equity $000 $000 359 359 119 119

impacton Post tax tax Post -1%(100 basis profit (359) (359) (119) (119) $000 $000 points)

Equity Equity ent (i.e. (i.e. ent (359) (359) (119) (119) $000 $000 n the the n 53

Note 19 continued

(ii) Other price risk – TCorpIM Cash Fund

Exposure to ‘other price risk’ primarily arises through the investment in the TCorpIM Cash Fund, which is held for strategic rather than trading purposes. The Corporation has no direct equity investments. The Corporation holds units in the following TCorpIM Cash Fund:

2019 2018 Investment Investment $000 $000 Facility sectors Horizon Note Cash, Money market Up to 1.5 TCorpIM Cash Fund instruments years 7 14,898 49,613

The unit price of the fund is equal to the total fair value of the net assets held by the fund divided by the number of units on issue. Unit prices are calculated and published daily. In the fair value hierarchy, the TCorpIM Cash Fund is classified as Level 2 because prices are observable, however, no active market exists for these funds as they are only accessible to government agencies.

TCorp is trustee for the above fund and is required to act in the best interest of the unit holders and to administer the trust in accordance with the trust deed. As trustee, TCorp has appointed external managers to manage the performance and risks of the fund in accordance with a mandate agreed by the parties. However, TCorp acts as manager for part of the fund. A significant portion of the administration of the fund is outsourced to an external custodian.

TCorp provides sensitivity analysis information for the fund, using historically based volatility information collected over a ten year period, quoted at two standard deviations (i.e. 95% probability). The fund is designated at fair value through profit or loss and therefore any change in unit price impacts directly on net results. A reasonably possible change is based on the percentage change in unit price, as advised by TCorp, multiplied by the redemption value at 30 June each year for each fund.

Change Post tax impact on profit in unit Higher/(Lower) price 2019 2018 $000 $000 TCorpIM Cash Fund +/-1% 104 347

(c) Credit risk

Credit risk arises when there is the possibility of the Corporation’s debtors defaulting on their contractual obligations, resulting in a financial loss to the Corporation. The maximum exposure to credit risk is generally represented by the carrying amount of the financial assets (net of any allowance for expected credit losses).

Credit risk arises from the financial assets of the Corporation, which comprise of cash, trade and other receivables. The Corporation has not granted any financial guarantees.

The Corporation considers a financial asset in default when contractual payments are 120 days past due. However, in certain cases, the Corporation may also consider a financial asset to be in default when internal or external information indicates that the Corporation is unlikely

54

Financial statements • 137 138 Port Authority of New South Wales Annual Report 2018/19 Note 19 deemedinsignificant based yearprioron Corporation The collateral. as pledged been have assets No During current the and prior years,there wereno defaultsor breaches on anyloans payable. aimsthese are met,the policyalsoto aims minimise net finance costs. without undue concentration at times when financial markets might be strained. Provided that and required whenobtained be can refinancing and funding new that ensure to is aim its is, funds available to meet its obligations both on a day to day basis and in the longer term. That sufficient has Corporation the that ensure to is management risk liquidity of aim The assets. future cash flowsand maturities planning ensureto m through risk liquidity manages continuously Corporation The obligationsdue. payment fall its they when meet to unable be will Corporation the that risk the is risk Liquidity Liquidityrisk (d) credit enhancementsheld by theCorporation. any account into taking before full in amounts contractual outstanding the receive to togetherwith theinterest rate exposure. financial Corporation’s the of profile maturity the summarises table following The statementof financialposition. offinancialeachreconcileclass liabilitiesofthe thereforewilltoprincipalflows) cash not and The nominal amounts are the contractual undiscounted cash flows (including both interest and The maturity profile is based on the remaining contractual maturity period specified, at the reporting not date. are terms trade If terms. trade paymentis withinmade days28 of recognition. with accordance in settled services are or unsecured) goods are (which for suppliers to future owing Amounts the date. reporting inat invoiced not paid or whether be received, to due amounts for recognised are Liabilities

liabilities bearing Interest payables and other Trade liabilities Financial 2019 AtJune 30 continued Weighted Weighted effective effective average interest interest 2.86% rate rate N/A

Carrying 159,891 144,177 15,714 Value $000

Nominal Nominal 189,113 173,399 amount 15,714 $000

s’data anda current assessment interest interest 144,177 144,177 Fixed $000 Interest rate exposure Interest rate rate -

an Variable Variable interest interest adequate holdingof high qualityliquid

$000 rate rate - - -

s xoue o iudt rs is risk liquidity to exposure ’s interest interest bearing bearing 15,714 15,714 Non- $000 -

21,036 15,714 of risk. 5,322 $000 Contractual MaturityContractual year year < 1 1 <

64,502 64,502 Dates liabilities, liabilities, years years $000 onitoring onitoring 1-5 1-5 -

103,575 103,575 55 years years $000

> 5 5 > -

Note 19 continued

Contractual Maturity At 30 June 2018 Interest rate exposure Dates Weighted average Fixed Variable Non- effective Carrying Nominal interest interest interest < 1 1-5 > 5 interest Value amount rate rate bearing year years years rate $000 $000 $000 $000 $000 $000 $000 $000 Financial liabilities Trade and other payables N/A 12,862 12,862 - - 12,862 12,862 - -

Lease incentive liability N/A 499 499 - - 499 471 28 - 13,361 13,361 - - 13,361 13,333 28 -

(e) Fair value compared to carrying amount

Financial instruments are generally recognised at cost, with the exception of the TCorpIM Cash Fund, which is measured at fair value. The value of the TCorpIM Cash Fund is based on the Corporation’s share of the market value of the underlying assets of the facility.

Except where specified below, the amortised cost of financial instruments recognised in the statement of the financial position approximates the fair value because of the short-term nature of many of the financial instruments.

The following table details the financial instruments where the fair value differs from the carrying amount:

2019 2019 2018 2018 Financial liabilities $000 $000 $000 $000 Carrying Carrying Fair value Fair value amount amount

NSW TCorp borrowings 144,177 155,370 - -

The fair values have been calculated by discounting the expected future cash flows at prevailing market rates varying from 1.209% to 2.001% (2018: nil).

(f) Fair value recognised in the statement of financial position

The Corporation uses the following hierarchy for disclosing the fair value of financial instruments by valuation technique:

. Level 1 - Derived from quoted prices in active markets for identical assets/ liabilities. . Level 2 - Derived from inputs other than quoted prices that are observable directly or indirectly. . Level 3 - Derived from valuation techniques that include inputs for the asset/ liability not based on observable market data (unobservable input).

The fair values of the financial instruments as well as the method used to estimate the fair value are summarised in the table below.

56

Financial statements • 139 140 Port Authority of New South Wales Annual Report 2018/19 Note 19 (g) There wereno transfers between Levelduring1 and2 theyear. June 2019and 30 June 2018. 30 at position financialof statement the in value fair at measured were liabilities financial No

ah ao poet netet n floig oslain ih S Treasury NSW with(TPP16- BusinessGovernment Policyfor Structure Capital consultation following and investment project major each considering when structure capital the managing for policies agrees and reviews Board The and debt the of optimisation through balance. stakeholders to return the maximising while concern,going a ascontinue to able be willitensure to capital itsCorporationmanages The Gearing ratio The atgearing ratio 3 the capital structure, the Corporation may adjust the amount of dividends paid to shareholders. TCorpIMCash Funds TCorpIMCash Funds Financialassets at fair value oa etadttleut Gearing ratio Totaldebt and totalequity Totaldebt

Capital management continued 0 Junewas 2019

as

follows: follows: 2018 2019 Note

14 14

Level1

$000 03) . - -

In order to maintain or adjustor maintain to order In Level2 49,613 49,613 14,898 6,8 320,056 466,185 144,177 30.93% 30.93% $000 $000 2019

Level3

$000 in-line with with in-line - -

$000 2018 equity equity 49,613 49,613 14,898 Total $000 57 - -

Note 20 20. CommitmentsCommitments

(a) Capital expenditure commitments

Forward obligations under major contracts committed at 30 June 2019 but not otherwise brought to account have been assessed at $8.0 million including GST (2018: $11.2 million). The $8.0 million includes GST input tax credits of $0.7 million that are expected to be recoverable from the Australian Taxation Office.

Capital commitments contracted at balance date, for the Corporation, are as follows:

2019 2018 $000 $000 Not later than one year 8,046 9,086 Later than one and not later than five years - 2,100 Total including GST 8,046 11,186

(b) Operating lease commitments

Operating lease commitments – as lessee The future minimum lease payments under non-cancellable operating leases as at the statement of financial position date not recognised in the financial statements are payable as follows:

2019 2018 Payable $000 $000 Not later than one year 4,584 4,636 Later than one and not later than five years 12,678 14,687 Later than five years 584 1,537 Total including GST 17,846 20,860

The above total includes GST input tax credits of $1.4 million (2018: $1.6 million) that are expected to be recoverable from the Australian Taxation Office. The expenditure commitment relates to rental of office premises, motor vehicles, computers and office equipment, and also includes an expenditure commitment on one lease contract that has become onerous. These leases have remaining terms of between one and 17 years. The lease of office premises has a renewal option included in the contract.

58

Financial statements • 141 142 Port Authority of New South Wales Annual Report 2018/19 Note 21 Note 20 Note 22 th at as follows: as leases operating non-cancellablereceivable are statements financial the in recognised not date position under financial of statement receivable lease minimum future The Operatinglease commitments

isconsidered not remoteor able tobe reliably measured. these of disclosure contingencies. At and the date of recognition this report, accountingthe Corporation is not the aware of any for requirement the assess to counsel, business operations. It has regular reviews, including updates from internal and external legal The Corporation is subject to various actual and pending business claims arising normalfrom Contingencies Note21. market Regular terms. and maintained. rates commercial at a arrangementscommercial ensure intoto out carried are processes tendering and valuations entered are leases receivable All Leasingarrangements with remaining termsof between to be paid to the Australian Taxation Office. These lease receivables relate to property leases includes$10.1abovetotaloutputThe ofmillionGST(2018 tax oslac fe rfr o f to refer fees Consultancy Consultancy fees Note22. or specialist level high or pai payable consultants to in both years. were recommendationsfees such No provide management. by decision-making to assist to advice basis professional temporary a on contract Total including GST Laterthan five years Laterthan one and not later than five years laterNot onethan year Receivable

continued

C C ontingencies onsultancy fees ees

ad o cnutn i rlto t srie eggd under engaged services to relation in consultant a to paid – one as lessor and 20 and years.

:

$9.0 million) that isexpected$9.0thatmillion) 111,007 56,902 56,902 38,017 16,088 $000 2019 circumstance that that circumstance

98,742 98,742 52,895 33,370 12,477 d or or d $000 2018 re re 59 e

Note 23 Related party disclosures Note 23. Related party disclosures

Ultimate parent

The New South Wales Government is the ultimate parent of the Corporation.

(a) Key management personnel

The Corporation defines key management personnel as those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly and indirectly. They include the Corporation’s board members, portfolio ministers or equivalent, shareholding ministers, the chief executive and the executive team.

Compensation for key management personnel

2019 2018 Benefit $000 $000 Short term employee benefits 3,816 4,392 Post-employment benefits 202 276 Other long term benefits 55 63 Termination benefits 464 220 Total 4,537 4,951

Directors’ remuneration includes emoluments and other benefits paid, or due and payable, to Directors. Included in the above is the Directors’ remuneration $0.4 million (2018: $0.4 million).

During the year the Corporation did not enter into any disclosable transactions with key management personnel, their close family members and controlled and jointly controlled entities thereof.

(b) NSW Government-related entities

During the year, the Corporation entered into transactions with NSW Government related entities that are controlled, jointly controlled, or significantly influenced by NSW Government. These transactions in aggregate are a significant portion of the Corporation financial results. They are all arm’s length transactions in the ordinary course of the business of the Corporation.

60

Financial statements • 143 144 Port Authority of New South Wales Annual Report 2018/19 Note 24 Note 23 T date requiringdisclosure. balance the after occurring events significant other any of aware not is Management Eventsthe after reporting period Note24. disclosure in the financialstatements.

*Transactionvalue includes GST SydneyMetro Services (RMS) RoadsMaritime and ForeshoreAuthority SydneyHarbour RelatedEntity e olwn ams egh rnatos ae en identified been have transactions length arm’s following he continued

E vents after thereporting period END OF AUDITED FINANCIAL STATEMENTS AUDITEDFINANCIAL OF END leases leases Expensechannel for fee at Glebe Island Transaction Rentalincome various for Rentalincome various for temporaryexhibition centre site Rentalincome for the s niiuly infcn for significant individually as 1,135 1,305 7,604 $000 2019

TransactionValue * -

7,242 $000 2018 sheet 926 374 61 -

Newcastle Port Corporation Statement(Trading as Port of land Authority holdings of New South Wales) As at 30 June 2019 Statement of land holdings As at 30 June 2019

Land is disclosed in the financial statements under the asset grouping “Land and buildings” within “Property, plant and equipment”. In the following summary, land has been separated from buildings and other non-current assets to show land value in terms of the statement of financial position valuations.

Corporation 2019 $000 Land and buildings Land 204,208 Buildings 95,051 Total land and buildings 299,259

Other Roadways and bridges 9,890 Wharves, jetties and breakwaters 49,939 Plant 66,608 Construction in progress 15,921 Total other 142,358

Total property, plant and equipment 441,617

Financial statements • 145 146 Port Authority of New South Wales Annual Report 2018/19 o bea successful business (a) Maritime Administration Act 1995 and are: are set outinsection9of the Ports and Port Authority’s principalobjectives (Port Authority) in July 2014. ‘Port Authority ofNew SouthWales’ (NSW) andadopted thetrading name and MaritimeAdministration Act 1995 constituted undersection6ofthePorts Newcastle Port Corporation was and objectives 19.1 Charter, aims tatutory disclosures 19 tablish, manageand operate port (a) and are to: and Maritime Administration Act 1995 are set outinsection10of the Ports Port Authority’s principalfunctions o improve productivity and (e) (d) o ensure that itsportsafety (c) (b)

es t to promote andfacilitate a t to promote andfacilitate trade t facilities andservices in its ports port efficiency initsportsandthe in portoperations, and competitive commercial environment functions are carriedoutproperly through itsportfacilities and, to this end: xhibit asenseofsocial iii. ate at least as efficiently ii. i.

do so, and those interests whenableto endeavouring to accommodate in whichitoperates andby to theinterests ofthecommunity responsibility by having regard corporation State’s investment intheport as any comparable business e maximise thenetw oper S ‑ related supply chain. orth ofthe safety functionswhichinclude: requires Port Authority to carry outport Minister for Transport andRoads, and responsible for Ports, currently the The licence isissued by theNSW Minister to Port Authority of New South Wales. the NSW Government granted aPSOL and Maritime Administration Act 1995, Under section12(2)ofthePorts Operating Licence of service: Port Safety 19.2 Guarantee acilitate andco-ordinate (c) (b) • • • • • • • • • quality assurance system, including term andprovides for aport-specific Maritime andFreight for afive-year reissued by theNSW Minister for Roads, On 19December 2018, thelicence was

and Eden. Harbour, Newcastle, Port Kembla for theportsofBotany Bay, Sydney maintain atowage licence system vessel arrival system investigations ofoilandchemicalspills emergency response port communications pilotage andexemptions from pilotage navigation aidsoperation concerning dangerous goods administering regulations and berth depths monitoring ofchannel

f exercise theportsafety functions of the port-related supply chain. improvements intheefficiency with its operating licence, and for whichitislicensed inaccordance the introduction of a risk-profile • Marine Safety Act 1998 (NSW) requirement which determines the and associated regulations frequency of inspections and monitoring • Marine Pollution Act 2012 (NSW) of port safety functions. The new licence and associated regulations also requires Port Authority to maintain authorisation as a VTS Authority in • Maritime Transport and Offshore the ports of Sydney Harbour and Port Facilities Security Act 2003 (Cth) and Botany and achieve authorisation as a associated regulation VTS Authority in the ports of Newcastle • Ports Assets (Authorised Transactions) and Port Kembla during the term of the Act 2012 (NSW) licence. • Protection of the Environment Under its PSOL, the various Port Operations Act 1997 (NSW) Authority’s port operations exercise and manage port safety functions within • Work Health and Safety Act 2011 the port limits. Within the Sydney port (NSW) and associated regulations. operation, this encompasses the port Port Authority is also subject to a wide areas of Sydney Harbour and Botany variety of other legislation that provides Bay. The Newcastle port operation rights to, and imposes obligations exercises the port safety functions within on, state owned corporations. These Newcastle Harbour and Yamba, whilst rights and obligations affect Port the Port Kembla port operation exercises Authority’s governance processes and port safety functions within Port Kembla its commercial and operational activities. and Port of Eden. All performance standards of the Port Safety Operating Licence were complied with in 2018/19. 19.4 Changes in Acts and subordinate 19.3 Relevant legislation legislation Port Authority of NSW is a statutory The Government Sector Finance Act state owned corporation established 2018 (NSW) applies to public agencies under the State Owned Corporations as well as to state owned corporations Act 1989 (NSW) and Ports and Maritime and is proposed to commence in several Administration Act 1995 (NSW), and phases. The first phase commenced operates in accordance with those Acts on 1 December 2018 and the Act will and associated regulation. ultimately consolidate and replace four Other significant legislation and regulation financial management Acts previously affecting Port Authority of NSW includes: required to be followed by state owned corporations. • Biosecurity Act 2015 (Cth) The Security of Critical Infrastructure • Environmental Planning and Act 2018 (Cth) came into force on 11 Assessment Act 1979 (NSW) July 2018. This legislation introduced (through Part 5 of the Act and the measures designed at mitigating the risk State Environmental Planning Policy that a malicious foreign entity achieves (Major Development) 2005) control or access to Australia’s critical • Government Sector Finance Act infrastructure. Port Authority is a critical 2018 (NSW) infrastructure asset owner for the ports

Statutory disclosures • 147 148 Port Authority of New South Wales Annual Report 2018/19 of operational objectives affecting achievement or other factors 19.5 Economic Facilities SecurityAct 2003. with theMaritimeTransport andOffshore Harbour was gazetted inaccordance for thesecurityregulated port ofSydney On 13June2019, anupdated declaration has not yet commenced. The ModernSlavery Act 2018 (NSW) period of July2019 to 30June2020. apply to Port Authority’s reporting into effect on1January2019, and will The Modern Slavery Act 2018 (Cth) came slavery incorporate supplychains. the state andfederal level, to prevent Australia introduced new laws, at both liquid fuelfacilities. the caseofSydney Harbour, alsocontain ports contain defence facilities and,in of Sydney Harbourand Eden asthese with abudgetof$36.2million. for theyear were $43.2millioncompared depreciation, andamortisation (EBITDA) Intent. Earningsbefore interest, taxes, Statementits 2018/19 ofCorporate compared to thekey targets setin for thereporting periodwas favourable Port Authority’s financialperformance of Corporate Intent relative to theStatement 19.6 Performance of its operational objectives for 2018/19. the achievement by Port Authority No economic factors affected of costs withintarget. cost reduction initiatives management White Bay combined withthetargeted on thenoiseattenuation program at infrastructure works; anddeferred spend associated withthestaging ofmajor additional rental income at GlebeIsland of container vessels at Port Botany; due to increased total gross tonnage were revenue beingabove target, The maindrivers ofthepositive result period provisions for the reporting 19.7 Exemptions Regulation 1995. Financethe Public andAudit (General) Financethe Public andAudit Act and and Audit Regulation 2015 (PF&AR), Finance(ARSBA), theARSBR,Public (Statutory Bodies) Act 1984(NSW) areas ofthePF&AA, AnnualReports the Corporation isexempt from some As astatutory bodyincompetition, to the statutory body. granted by theTreasurer whichapply reporting provisions whichhave been modifications and variations from statements ofallexemptions, omissions, body to includeinitsannualreport 2015 (ARSBR)require astatutory Reports (Statutory Bodies) Regulation (PF&AA) andClause19oftheAnnual Finance andAudit Act 1983(NSW) Section 41B(1)(c)(va) ofthePublic The following matters are exempt but require reporting in a summarised form:

Requirements Legislative source of requirements Clause 7 section 7(1)(a)(iv) ARSBA and Schedule 1 Summary Review of Operations ARSBR Management and Activities Schedule 1 ARSBR Consultants Schedule 1 ARSBR Consumer Response Schedule 1 ARSBR Disclosure of Controlled Entities Schedule 1 ARSBR Report on Risk Management and Insurance Activities Schedule 1 ARSBR

The following matters are exempt:

Exemptions Legislative source of requirements Budgets – outline and details Section 7(1)(a)(iii) ARSBA and Clause 7 ARSBR Research and Development Schedule 1 ARSBR Human Resources Schedule 1 ARSBR Land Disposal Schedule 1 ARSBR Payment of Accounts Schedule 1 ARSBR and Clause 13 PF&AR Time for Payment of Accounts Schedule 1 ARSBR and Clause 13 PF&AR Investment Performance Clause 12 ARSBR Liability Management Performance Clause 13 ARSBR These exemptions, omissions, modifications and variations have been approved by NSW Treasury and are based on, among other things, commercial sensitivities. There have otherwise been no exemptions, omissions, modifications or variations for the reporting period.

19.8 Response to significant issues raised by the Auditor General There were no significant issues raised by the Auditor General in the 2017/18 financial year audit. Port Authority’s response to any significant issues raised by the Auditor General in the 2018/19 financial year audit will be included in the 2019/20 Annual Report.

Statutory disclosures • 149 150 Port Authority of New South Wales Annual Report 2018/19 be made inrelation to eachsuchdecision.This alsoappliesto Table B. *More thanonedecisioncanbemadeinrespect ofaparticular access application. Ifso, arecording must Table A: Numberofapplications by typeofapplicantandoutcome* Information Access) (Public AmendmentRegulation 2010. The following tablesincludestatistics asrequired by Schedule2ofthe from 2017/18. Therefore, Port Authority decided11applications during theyear, a175 percent increase in progress asat 30June 2019. applications. Two applications were transferred to otheragenciesandsixremain During thereporting period,Port Authority received nineteen formal access to be reported undertheAct for theperiod1July2018 to 30June2019. Information Access) (Public Act 2009(theAct). The following information isrequired Port Authority isrequired to report annuallyonitsobligations undertheGovernment 19.9 Government Information Access) (Public Act 2009 public (other) Members ofthe representative) by legal (application of the public Members groups or community organisations Not-for-profit business Private sector of Parliament Members Media granted Access Access in full 0 0 0 0 5 1 granted Access Access in part 0 0 0 0 1 1 refused Access Access in full 0 0 0 0 1 1 Information not held 0 0 0 0 0 0 Information available already 0 0 0 0 0 1 application Refuse to deal with deal with 0 0 0 0 0 0 confirm/deny information Refuse to whether whether is held Government 0 0 0 0 0 0 Application Application withdrawn 0 0 0 0 0 0 Table B: Number of applications by type of application and outcome

Refuse to confirm/ Access Access Access Information Refuse deny whether granted granted refused Information already to deal with information Application in full in part in full not held available application is held withdrawn Personal information 1 0 0 0 1 0 0 0 applications* Access applications (other than 5 2 2 0 0 0 0 0 personal information applications) Access applications that are partly personal 0 0 0 0 0 0 0 0 information applications and partly other *A ‘personal information application’ is an access application for personal information (as defined in clause 4 of Schedule 4 to the Act) about the applicant (the applicant being an individual).

Table C: Invalid applications

Reason for invalidity No. of applications Application does not comply with formal requirements (section 41 of the Act) 9 Application is for excluded information of the agency (section 43 of the Act) 0 Application contravenes restraint order (section 110 of the Act) 0 Total number of invalid applications received 9 Invalid applications that subsequently became valid applications 6

Table D: Conclusive presumption of overriding public interest against disclosure: matters listed in Schedule 1 of the Act

Reason for invalidity Number of times consideration used* Overriding secrecy laws 0 Cabinet information 1 Executive Council information 0 Contempt 0 Legal professional privilege 0 Excluded information 0 Documents affecting law enforcement and public safety 0 Transport safety 0 Adoption 0 Care and protection of children 0 Ministerial code of conduct 0 Aboriginal and environmental heritage 0

*More than one public interest consideration may apply in relation to a particular access application and, if so, each such consideration is to be recorded (but only once per application). This also applies in relation to Table E.

Statutory disclosures • 151 152 Port Authority of New South Wales Annual Report 2018/19 original decisionhasbeenmade. to theoriginaldecision-maker. The data inthiscaseindicates that arecommendation to vary orupholdthe *The Information Commissioner doesnothave theauthorityto vary decisions,butcanmake recommendation (by typeofreview andoutcome) Table G:Numberofapplications reviewed underPart 5oftheAct Table F:Timeliness matters listed intableto section14oftheAct Table E:Otherpublicinterest considerations against disclosure: of Part 4oftheAct (by typeoftransfer) Table I:Applications transferred to otheragenciesunderDivision2 (by typeof applicant) Table H:Applications for review underPart 5ofthe Act Total Tribunal (NCAT) Review by NSW Civil&Administrative under section93 ofAct Internal review following recommendation Review by Information Commissioner* Total Not decidedwithintime(deemed refusal) Decided after 35 days (by agreement withapplicant) Decided withinthestatutory timeframe (20days plusany extensions) Exempt documentsunderinterstate Freedom ofInformation legislation Secrecy provisions Environment, culture, economy andgeneral matters Business interests ofagenciesandotherpersons Individual rights,judicialprocesses andnatural justice Law enforcement andsecurity Responsible andeffective government Applicant-initiated transfers Agency-initiated transfers application relates (see section54oftheAct) Applications by personsto whominformation thesubjectof access Applications by access applicants Internal review Decision varied

0 0 0 0 0 Decision upheld 0 0 1 1 1 Number ofapplications transferred Number ofapplications for review Number of occasions when Number ofoccasions when application notsuccessful Number ofapplications 0 2 1 1 Total 0 0 11 0 0 0 0 9 2 2 2 2 1 1 1 1 19.10 Corporate The Chief Executive Officer is responsible for the day-to-day management governance of the operation of Port Authority in accordance with the general policies Good corporate governance creates and specific directions of the Board. and sustains an ethical and legal It is the responsibility of the Board to environment which recognises oversee the activities of management the interests of all stakeholders in carrying out these delegated duties. in a corporation. The Board of Port Authority is responsible for overall The Board’s role and responsibilities corporate governance of the Corporation to each key stakeholder are set out in and has adopted corporate governance Port Authority’s Board Charter, which practices and procedures that are is available in the Corporate Governance appropriate to manage Port Authority section of the Port Authority website. in the best interests of the Voting Shareholders and other stakeholders. Port Authority complies with each 19.12 Board committees of the recommendations in the NSW To assist the Board in discharging its Treasury Guidelines for Governing Boards functions – and to allow a more detailed of Government Businesses. This report analysis of the specialised areas of outlines Port Authority’s governance finance, risk, audit, remuneration, human practices during 2018/19. resources and governance – the following committees were operational during 2018/19: 19.11 Role of the Board • Audit and Risk Committee The Board is responsible for overseeing • Remuneration and Human the business and commercial affairs Resources Committee of Port Authority including: • Nominations Committee. • approving business and financial strategy Each committee has a clear charter setting out its roles, responsibilities • approving the business and delegated authority from the and financial objectives Board. The Board Charter and all Board • monitoring business Committee Charters are reviewed on and financial performance a regular basis and updated to remain • reviewing performance relevant to the Corporation. and remuneration of executive management • reviewing the risk management and internal control framework • recommending to the Portfolio Minister the appointment and removal of the Chief Executive Officer • reviewing any reporting to voting shareholders.

Statutory disclosures • 153 154 Port Authority of New South Wales Annual Report 2018/19 • for oversight andreview of: The Committee isresponsible responsibilities of itsCharter. Risk Committee appropriate to meetthe of skillsandexperience ontheAudit and accounting. The Board considers themix have qualifications and experience in Matthew IrwinandRobert Dunn and hasknowledge ofthebusiness. of theCommittee isfinanciallyliterate Board on1July2014. Eachmember established by thePort Authority The Audit andRiskCommittee was independent, non-executive Directors. Bull andRobert Dunn,whowere each were Penny Bingham-Hall,Zorana of theCommittee asat 30June2019 Chair oftheBoard. Othermembers non-executive Director, whoisnotthe Matthew Irwin.Matthew isanindependent Committee asat 30June2019 was The ChairoftheAudit andRisk Audit andRiskCommittee • • • • • • • • of the Port Authority website. in theCorporate Governance section Risk Committee Charter isavailable 2018/19. Acopy oftheAudit and The Committee met five timesduring and external auditors. Senior Managementandboth theinternal communication between theBoard, The Committee provides aforum for

financial control and reporting letters andmanagement’s responses. external auditor’s audits,management appointing theinternal auditor internal auditfunction,including integrity andperformance ofthe and regulations compliance withapplicablelaws internal controls accounting policies business ethics,policiesandpractices debt structure anddebtinstruments risk management responsibilities inregards to: Board infulfillingits corporate governance Committee isresponsible for assisting the Remuneration andHumanResources Authority Board on1July2014. The Committee was established by thePort The Remuneration andHumanResources Directors. were eachindependent,non-executive Gerard Sutton andRobert Dunn,who as at 30June2019 were Zorana Bull, Board. OthermembersoftheCommittee Director, whoisnottheChairof Penny isanindependentnon-executive 30 June 2019 was Penny Bingham-Hall. Human Resources Committee asat The ChairoftheRemuneration and Resources Committee Remuneration andHuman • • • • • • Chief Executive Officer andthe Executive and evaluated theperformance ofthe Corporate Goals for 2018/19, andreviewed considered andrecommended the Chief Executive Officer. The Committee arrangements, including thoseofthe executive salariesandperformance Human Resources Committee reviewed During 2018/19, theRemuneration and

relations issues. workplace relations andindustrial diversity andculture programs engagement talent development andemployee including succession planning, human resources (HR)management Executive Management of theChiefExecutive Officer and employment terms andconditions Officer and Executive Management performance oftheChiefExecutive marketplace remuneration trends across the Management, includingreview of Executive Officer and Executive remuneration policiesfor theChief overall remuneration strategy and Management team against agreed 19.13 Code of Conduct performance goals for the 2017/18 year. The Committee oversaw HR management Port Authority’s Code of Conduct outlines including HR metrics, career development, general business ethics and acceptable talent mapping, enterprise bargaining standards of professional behaviour agreement updates and diversity expected of all directors, employees matters. It also reviewed the planning and contractors. for a mentoring program and reviewed The Code covers personal and professional the Committee Charter. behaviour, fraud and corruption The Committee met four times responsibilities including policies on during 2018/19. A copy of the accepting of gifts and benefits, ethics Remuneration and Human Resources and conflicts of interest requirements. Committee Charter is available in Business Unit Managers provide the Corporate Governance section a quarterly response that they have of the Port Authority website. undertaken a review of the fraud and corruption plan and a review of the Nominations Committee controls in place, and that the controls The Nominations Committee comprised remain current and relevant. The business all independent non-executive Directors. unit managers also provide written It was chaired by Robert Dunn. confirmation that they are not aware of any matters within their team that may The Nominations Committee was be considered fraudulent or corrupt. established by the Port Authority Board Additionally, employees are encouraged on 1 July 2014. to report any suspected breaches and The Committee meets on an as-required those who do are protected as outlined basis and is responsible for assisting in the Internal Reporting Policy. the Port Authority Board in fulfilling The Code of Conduct is available to its corporate governance responsibilities all employees on Port Authority’s with regard to Board composition. intranet. It works alongside other more This includes assessing the necessary and detailed polices including the Fraud desirable skills and experience of Directors; and Corruption Policy, Disciplinary Policy ensuring Directors have the appropriate and Internal Reporting Policy. mix of competencies and identifying skills The current Code of Conduct was and experience to fill those gaps; and implemented in 2017/18, after review overseeing the induction and continuing by each Consultative Committee and education of Directors. approval by the Board and Executive. The Committee met twice during 2018/19. Conflicts of Interest and Secondary A copy of the Nominations Committee Employment procedures were introduced Charter is available in the Corporate in 2018/19 to support and clarify Governance section of the Port Authority requirements of the Code of Conduct. website. Any significant breaches of the Code of Conduct must be reported immediately to the Chair. A copy of the Code of Conduct is available in the Corporate Governance section of the Port Authority website.

Statutory disclosures • 155 156 Port Authority of New South Wales Annual Report 2018/19 • • which is: a formalised riskassessment process, Strategic risksare identified through and services. to corporate-wide strategic risks,projects responsible underlegislation, inaddition activities for whichPort Authority is This system encompasses allthe Management Procedure. Risk ManagementPolicy andaRisk 31000:2009). Itisunderpinnedby a of RiskManagement(AS/NZS/ISO the Australian/New Zealand Standard Management system isconsistent with and timelymanner. The Enterprise Risk identified andmanagedina considered Management system to ensure risksare Port Authority usesanEnterprise Risk 19.14 Risk management • • • • and Risk Committee to: Managers andquarterly by theAudit monthly by theExecutive General The strategic riskprofile is reviewed

Management team managed by theExecutive Authority istheChiefFinancialOfficer) (the ChiefRiskOfficer for Port coordinated by theChiefRiskOfficer are monitored. strategic risksandmitigating actions ensure that any previously identified are identifiedandcaptured ensure that any new or emerging risks mitigation strategies assess theeffectiveness ofrisk Authority Board. and subsequentlyby thePort by the Audit andRiskCommittee overseen, inthefirst instance, controls putinplace. specific project’s risksare identifiedand a dedicated riskregister to ensure the value and/or complex projects apply actions are monitored. In addition,high previously identifiedrisksandmitigating identified andcaptured, andthat any new oremerging operational risksare Management team to ensure that any is reviewed quarterly by theExecutive Manager. The operational riskprofile coordinated by theCorporate Services that isconducted withinDivisionsand a formalised riskassessment process Operational risksare reviewed through Professional Indemnity. and financialloss policiessuchas Compensation, SalaryContinuance Property, Motor Vehicle, Travel, Workers’ Port Operator Liability, Liability, Public including Directors’ andOfficers’ Liability, across allPort Authority operations program provide comprehensive coverage The key policieswithintheinsurance cover procured intheprivate sector. Officers’ cover, and PortOperator Liability to provide andadviseonDirectors’ and utilises theservices ofaninsurance broker insurance cover. Port Authority also of the Treasury ManagedFundfor Port Authority isamemberagency Authority Board eachyear. Audit andRiskCommittee andthePort The renewal process isreviewed by the maintains anannualinsurance program. Management system, Port Authority In conjunction withtheEnterprise Risk 19.15 Insurance activities 19.16 Board composition 19.18 Board independence Under the State Owned Corporations Act All Directors are expected to exercise 1989 (NSW), the Port Authority Board independent judgment when making is required to have a minimum of three Board decisions. It is the approach and a maximum of seven Directors. The and attitude of each non-executive Voting Shareholders appoint the Chair, Director which is critical to determining who for the year to 30 June 2019 was independence and this must be Robert Dunn. Robert was an independent considered in relation to each Director, Director and his role was clearly separated while taking into account all other from the role of the Chief Executive relevant factors. This will include an Officer, Grant Gilfillan. Robert was assessment against the independence appointed as Chair of the Port Authority recommendations in the NSW Treasury Board effective 1 August 2018. He was Guidelines for Governing Boards of previously a Director of Sydney Ports Government Businesses. These cover Corporation, prior to its amalgamation whether the Director: with Newcastle Port Corporation on 1 July • is employed, or has been employed in 2014 to form Port Authority. The Chair an executive capacity by the business, is responsible for leading the Board and there has not been a period of at and facilitating its effective functioning. least three years between ceasing that employment and serving on the Board 19.17 Chief Executive • has, within the last three years, been a partner, director or senior employee Officer of a provider of material professional Grant Gilfillan was appointed as Chief services to the business Executive Officer of Port Authority • has, within the last three years, been effective 1 July 2014. He was previously in a material business relationship with Chief Executive Officer of Newcastle the entity, or an officer of or otherwise Port Corporation and Sydney Ports associated with, someone in such Corporation, prior to the formation a relationship of Port Authority on 1 July 2014. • has a material contractual relationship As set out in the State Owned with the business other than as Corporations Act 1989 (NSW), the Chief a Director of the business Executive Officer was appointed by • has close family ties with any person the Governor on the recommendation who falls within any of these categories of the Portfolio Minister, following • has been a Director of the entity a recommendation from the Board. for such a period (10 years or greater) The Chief Executive Officer is responsible that his or her independence may for the day-to-day management of have been compromised. the operation of Port Authority in Note: ‘Material’ means greater than accordance with the general policies five per cent of the Corporation’s and specific directions of the Board. gross revenues.

Statutory disclosures • 157 158 Port Authority of New South Wales Annual Report 2018/19 of the Board. available to allothermembers a copy ofthisadvice isto be made Authority’s expense. Where appropriate, out theirresponsibilities andisat Port be soughtto assist Directors incarrying a suitablyqualifiedadvisor. Advice can independent professional advice from informing theChair, hastherightto seek each individualDirector, subjectto employees. Further, theBoard and to allPort Authority’s information and Each Director hastherightofaccess professional advice and independent to information 19.19 Access considered independent. independent. AllotherDirectors are Chief Executive Officer, isnot considered Grant Gilfillan,asbothaDirector andthe not changed. independent status ofaDirector have circumstances that may affect the is reviewed onaregular basisto ensure The independence ofeachDirector has a material personalinterest, unless on amatter inwhichthat Director cannot take part indiscussions orvote Corporations Act 1989 (NSW). ADirector Schedule 10oftheState Owned the Board complies withClause2, In relation to specificBoard decisions, as circumstances change. update thisregister on anongoingbasis positions. Directors are required to of Port Authority, includingotherboard conflict withtheirdutiesasaDirector of Directors that may potentially register whichregisters any interests Port Authority maintainsaconflicts 19.20 Conflict ofinterest during theyear. between Port Authority andany Director have beennorelated-party transactions does notdisqualifytheDirector. There the Board resolves that theinterest has exceeded thislimit. None ofPort Authority’s Directors of more thanthree government boards. Directors shouldnotholddirectorships (November 2017) recommends that Boards ofGovernment Businesses NSW Treasury Guidelinesfor Governing memberships 19.21 Other board is listed insections19.23 and19.24. and committee meetings duringtheyear The attendance by Directors at Board of Port Authority. FGIA) isthecurrent Company Secretary of the Board. Regina Abood(B.Com. is appointed andremoved by resolution take minutes. The Company Secretary at Board andCommittee meetingsto advance ofeachmeetingandattendance for Board andCommittee meetingsin ensuring that theBoard receives papers the Board ofDirectors. This includes corporate governance supportto for providing administrative and The Company Secretary isresponsible non without executive managementand any matters that shouldbediscussed meet onaregular basisto discuss non-executive Directors ontheBoard met eighttimes.The independent require. During2018/19, theBoard meet more regularly ascircumstances schedules eightmeetingsayear andmay The Board ofDirectors ofPort Authority and their conduct 19.22 Board meetings ‑ independent Directors present.

.

19.23 Attendance at board meetings 2018/9

Board meetings Term of appointment A B R. Dunn 8 7 1 July 2018 – 30 June 2021 G. Gilfillan 8 8 2 November 2016 – 1 November 2019 P. Bingham-Hall 8 8 1 January 2017 – 31 December 2019 Z. Bull 8 8 13 February 2019 – 12 February 2022 2 February 2018 – 1 February 2021 P. Forsythe 5 5 (resigned 21 February 2019) M. Irwin 3 2 13 February 2019 – 12 February 2022 G. Sutton 8 7 1 January 2017 – 31 December 2019

A: number of meetings eligible to attend during year. B: number of meetings attended.

19.24 Attendance at committee meetings 2018/9

Audit and Risk Committee Remuneration and Human Nominations Committee Resources Committee A B A B A B R. Dunn 5 5 3 3 2 2 G. Gilfillan – – – – – – P. Bingham-Hall 5 5 4 4 2 2 Z. Bull 4 4 4 3 2 2 P. Forsythe 3 3 – – 1 1 M. Irwin 2 2 – – 1 1 G. Sutton – – 4 3 2 1

A: number of meetings eligible to attend during year. B: number of meetings attended.

Directors who are not members of committees are invited to attend committee meetings and are entitled to receive papers of committee meetings on request. Attendance above only includes attendance of appointed committee members and does not reflect attendance at meetings by Directors who are not committee members.

Statutory disclosures • 159 160 Port Authority of New South Wales Annual Report 2018/19 • • • • • • Information provided includes: and therequirements oftherole. understanding Port Authority’s business pack ofinformation to assist themin new Directors withaninduction In addition,Port Authority provides term ofappointmentandremuneration. Voting Shareholders specifyingtheir with aletter ofappointmentfrom the When appointed, Directors are provided and education appointment remuneration, 19.25 Director • • • • • • • • of Port Authority’s: key executives, to gainanunderstanding the Chair, Chief Executive Officer and which includesaseriesofmeetingswith with access to aninductionprogram In addition,new Directors are provided in the form approved by NSW Treasury. with a DeedofAccess andIndemnity New Directors are alsoprovided

Board andCommittee charters Board profiles and contact details most recent AnnualReport the copies ofrelevant legislation previous Board minutes risk managementframework. strategy remuneration executives key performance current financialandbusiness corporate governance practices operating andindustrial environment strategy, objectives andbusiness Statement ofCorporate Intent . Code ofConduct 19.26 Board performance Shareholders. Authority isdetermined by theVoting The remuneration for Directors ofPort • • program included: the Directors’ continuing education Authority’s operations. Duringthe year, briefings onissues relevant to Port director skillcourses, site visitsand continue theireducation, withpractical All otherDirectors are encouraged to probationary periods. to becompleted by allstaff duringtheir Workplace Behaviour training isrequired occurs intheworkplace. Professional potential consequences ifsuchbehaviour defines unacceptable behaviours andthe Bullying andHarassment Policy that The policy iscomplemented by the diversity progress. to measuringandmonitoring its with diversity inmind;andcommits recruits, develops and promotes Authority values diversity andinclusion; Policy outlinestheprinciplesthat Port Port Authority’s Diversity andInclusion and inclusion 19.27 Equity, diversity was completed inFebruary 2019. by an external party. Aninternal review each third review being conducted reviews are conducted annually, with by the Board inJuly2015, whereby A preferred methodologywas agreed of eachDirector onaregular basis. evaluate itsown performance andthat The Board believes it is importantto

Work HealthandSafety briefings. visits to Port Authority sites To demonstrate its commitment to Government benchmarks as outlined cultural diversity, Port Authority operates by the NSW Public Service Commission. a recruitment, selection and promotion Information is collected annually through strategy that is based on merit. Port the Workforce Profile that monitors Authority also ensures that diversity data centred on age, gender, ethnic and is represented on all selection panels. cultural backgrounds and employment information including hours worked This year, employees were recruited from and mobility. a broad range of backgrounds, consistent with the organisation’s consciousness Data collection is voluntary and of being an inclusive workplace. This anonymous, with employees having included the successful employment the right to request that their data of two female marine pilots in the Sydney be withheld from the collection. Where Operations division. there is insufficient information supplied or the numbers are too low, a ‘N/A’ As a state owned corporation, Port (not available) is displayed. Authority measures itself against NSW

Equal Employment Opportunity group

Percentage of staff at 30 June 2019

Diversity Benchmark 2018 2019

Women 50% 22.4 % 23.3 %

Aboriginal and Torres Strait Islander peoples 3.3% 0.0 % 0.6%

People whose first language as a child 19% 13 % 6.0% was not English

People with a disability N/A 0.3 % 0.3%

People with a disability that required N/A 0.0% 0.0% work‑related adjustments

Distribution Index at 30 June 2019

Diversity Benchmark 2018 2019

Women 100 81 79

Aboriginal and Torres Strait Islander people 100 N/A N/A

People whose first language as a child 100 100 100 was not English

People with a disability 100 N/A 100

People with a disability that required 100 N/A N/A work‑related adjustments

Tables (above) of diversity measures represent total staff at 30 June 2019 (excluding casual staff). A distribution index of 100 indicates that the centre of distribution of the diversity group across salary levels is equivalent to that of other staff. Values less than 100 indicate the diversity group is more concentrated at lower salary levels than for other staff. The more pronounced this tendency is, the lower the index will be. An index of greater than 100 indicates the diversity group is less concentrated at the lower salary levels.

Statutory disclosures • 161 162 Port Authority of New South Wales Annual Report 2018/19 Port Authority Work HealthandSafety statistics or potential highconsequence incidents There were no highconsequence conversations andauditinspections. that includenearmiss reporting, safety in allleadingperformance indicators employees have achieved theirgoals leadership ofouroperations andsupport The safety awareness andsafety throughout theyear. Yamba; Sydney; andPort Kembla/Eden) units ofPort Authority (Newcastle/ milestones achieved inallthree business year hasagainseensafety 2018/19 activities andbusiness. The reporting now partofeveryday Port Authority Work HealthandSafety (WHS)is and Safety 19.28 Work Health per million hoursworked. TRIFR isthecalculation ofthenumberLost Time InjuriesandthenumberofMedicalTreatment Injuries LTIFR isthecalculation ofthenumberLost Time Injuriespermillionhoursworked. There were nofatalities inthefour Lost Time Injuriesrecorded in 2018/19. practitioner resulted inarestriction that prevented theability of thepersonto perform fullduties. Medical Treatment Injury–anincident/injurywhere theassessment andtreatment from themedical Injury –anincident/injurythat resulted inpersonlosingoneormore shiftasaresult oftheinjurysustained. Lost Time Injury –anincident/injurythat resulted inpersonlosingoneormore shift as aresult Lost Time Notes: Percentage ofplannedWHSmeetingsheld Workplace Inspections Total Recordable InjuryFrequency Rate (TRIFR) Number ofLost Time Injuries Total numberofincidentsandhazards reported Number ofMedicalTreatment Injuries Lost Time InjuryFrequency Rate (LTIFR) Injury performance. Lost Time InjuryandMedicalTreatment below, which includesthehistorical performance issummarisedinthetable Kembla, Eden andYamba. The WHS operations inSydney, Newcastle, Port includes eachofPort Authority’s The WHSperformance for 2018/19 areas ofPort Authority. and working throughout theoperational WHS consultation processes are inplace meetings, WHSrepresentatives and (NSW) duringtheyear. WHSCommittee of theWork, HealthandSafety Act 2011 Port Authority relating to any breach There were noprosecutions against and processes. incident investigation understanding to invest insafety training andimproving in 2018/19. Port Authority hascontinued 2017/18 100% 6.30 13.3 374 132 4 5 2018/19 100% 6.25 207 12.5 174 4 2 19.29 Overseas travel by Port Authority employees

Name Date Destination Purpose

Grant Gilfillan 7–13 Miami, Florida To undertake consultation with the Chief Executive and Director August principals of major US cruise lines 2018 regarding capacity issues in Sydney Philip Holliday Harbour. The visit also enabled first-hand Chief Operating Officer observation of world’s best-practice cruise and Harbour Master, Sydney terminals and operating procedures. and Port Kembla Brad Milner Executive General Manager, Commercial, Technical and Legal John McKenna General Manager Cruise

Grant Gilfillan 23–24 Blenheim, To attend and present at the New Chief Executive and Director August New Zealand Zealand Cruise Association Conference, 2018 providing a platform to promote regional ports as desirable locations to a market looking for new cruise destinations. The Conference also provided networking opportunities that raise Port Authority’s profile and showcase our expertise as a mature and developed cruise destination.

Brad Milner 7–22 London, Oslo, To undertake consultation with the Executive General Manager, November Copenhagen, principals of European based major Commercial, Technical 2018 Hamburg, cruise lines regarding cruise capacity and Legal Geneva, issues in Sydney Harbour. The travel also Genoa, provided the opportunity to inspect Marseille, two new passenger gangways for the Barcelona and Overseas Passenger Terminal under Singapore construction in Barcelona, Spain and enabled meetings with major container shipping line customers in Europe and Singapore.

Jeanine Drummond, 6–10 May Guangzhou, To attend the annual International General Manager Marine 2019 China Association of Ports and Harbours Operations and Deputy (IAPH) World Conference in the capacity Harbour Master Sydney of Vice‑Chair of the Women’s Forum.

Statutory disclosures • 163 164 Port Authority of New South Wales Annual Report 2018/19 E: [email protected] P: 02 9296 4962 The 24-hour contact detailsare: three business days. All complaints are responded to within registered ononeconsolidated database. All complaints andenquiriesare day ornight. complaints are managedany timeofthe 24/7 basis.This ensures that community community complaints andenquiriesona Service NSW managesPort Authority’s response engagement/consumer 19.31 Community in 2018/19. government community organisations There were nofundsgranted to non- community organisations to non-government 19.30 Funds granted • • • • • • • • published thefollowing publications: During thereporting year, Port Authority 19.32 Publications

“Look outshipsabout” Statement ofCorporate Intent 2017/18 effective 1 July 2018 Schedules ofPort Charges Annual Report 2017/18 Port Authority ofNew SouthWales Notices to Mariners Harbour Master’s Directions Management Guidelines Goods Dangerous Schedules Cruise at available was2018/19 $26,540. The report is of New South Wales AnnualReport and designservices) thePort Authority The total cost ofproducing (editing 19.33 Annual Report cost portauthoritynsw.com.au/newsletter. the newsletter canbemadeat to subscribers.Subscriptionto news andstories, isemailed quarterly A newsletter, Port Matters, featuring and tp thecommunity. provides information to stakeholders portauthoritynsw.com.au Port Authority’s website of male to female is7:1. As at 30June2019, thegenderratio the upperlimitof$1,000,000. is ingreater than$548,950 and less than remuneration in>SEBand4max,which The ChiefExecutive Officer received seven malesandonefemale. or exceeding theequivalent SEband1: executives with remuneration equalto At 30June2019, there were eight 19.35 Executive positions to 30 June2019. $5 million duringtheperiod1July2018 any landassets ofvalue greater than Port Authority didnotdisposeof 19.34 Land disposal www.portauthoritynsw.com.au. Executives with remuneration equal to or exceeding the equivalent of SES level 1

Gender 2019 Average total remuneration SES level 30 June 30 June 2019 2018 Male Female package in band SE BAND 1 0 0 0 0 N/A Director SE BAND 2 1 1 1 0 $327,405 Executive Director SE BAND 3 5 7 4 1 $376,084 Deputy Secretary SE BAND 4 1 1 1 0 $509,106 Secretary >SE Band 4 1 1 1 0 $699,520 Max Gender ratio, 7:1 9:1 7 1 male to female

19.36 Public interest disclosures Under section 6D of the Public Interest Disclosures Act 1994, public authorities are required to have a policy and procedures for receiving, assessing and dealing with public interest disclosures (PIDs). Pursuant to Clause 4 of the Public Interest Disclosures Regulation 2011, the information below must be included in a public authority’s Annual Report.

1 July 2018 – 30 June 2019 Number of public officials who made PIDs 0 Number of PIDs received 1 Of PIDs received, number primarily about: Corrupt conduct 1 Maladministration 0 Serious and substantial waste 0 Government information contravention 0 Local government pecuniary interest contravention 0 Number of PIDs finalised 1

Port Authority has adopted an internal reporting policy that is consistent with the NSW Ombudsman’s model policy and applies across all Port Authority sites.

Statutory disclosures • 165 166 Port Authority of New South Wales Annual Report 2018/19 A marine pilot vessel passing North Head on its way back into Sydney Harbour Statutory disclosures • 167 Port Authority of NSW PO Box 25 Millers Point, NSW 2000 E [email protected] W portauthoritynsw.com.au

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