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Advice on Securing Victoria's Ports Capacity

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Advice on Securing Victoria's Ports Capacity ADVICE ON SECURING VICTORIA’S PORTS CAPACITY Contents EXECUTIVE SUMMARY 4 LIST OF FIGURES 6 LIST OF TABLES 7 Glossary and abbreviations 8 OUR TERMS OF REFERENCE 11 OUR ADVICE 12 RECOMMENDATIONS 13 A CONSULTATIVE APPROACH 24 Consultation snapshot 25 Overview of consultation activities 26 Key themes of feedback on the evidence base 28 How consultation on the evidence base influenced our work 29 CHOOSING A NEW PORT 30 The importance of an efficient international port 33 Port capacity factors 36 Victorian commercial ports today 37 DEVELOPING OUR ADVICE 38 EVIDENCE FOR FUTURE DEMAND, CHANNEL CAPACITY AND SHIP SIZES 41 Demand forecasts 42 Channel capacity, including Port Phillip Heads 46 Changing ship sizes 54 WHEN A SECOND PORT WILL BE REQUIRED 67 Port of Melbourne supply chains 67 Port of Melbourne road and rail links beyond the port gate 73 Opportunities to expand capacity at the Port of Melbourne 78 Maximum effective capacity of the Port of Melbourne 88 Environmental and social considerations 90 Calculating the least economic cost 95 Likely development pathways for the Port of Melbourne 98 The interaction between the Port of Melbourne and the Government 105 WHERE A SECOND CONTAINER PORT SHOULD BE LOCATED 110 Hastings port concept technical evidence 114 Bay West port concept technical evidence 128 Economic evidence for where 140 Potential environmental impacts 149 Approvals and offsets 155 Social issues – major differentiators 159 Multi-criteria assessment 161 The evolution path and trigger points to investing in Bay West 167 SOURCES 176 ABOUT US 179 3 Executive summary In May 2016 the Special Minister of State requested that Infrastructure Victoria provide advice on options to secure Victoria’s future ports capacity. This request directed us to consider a number of factors and scenarios, and to consult with the community and stakeholders, in order to develop robust, independent advice on the sequencing, timing and location of investment. Developing this advice has been a complex task that We have identified an optimal capacity of approximately highlighted the inherent challenges of ports planning – 8 million TEU at the Port of Melbourne. Achieving this long lead times, future uncertainty, complicated interfaces will require a holistic approach to ports management and environmental sensitivities. But it has also highlighted and may require the relocation of some existing trades the importance of commercial ports to the Victorian to Victoria’s other commercial ports. While some economy. There is no doubt ports are an important investment in transport upgrades will be required, this economic driver that deliver benefits right across the should stop short of a dedicated road and rail Freight State. They provide access to goods from around the Link through Fishermans Bend to Webb Dock. world and facilitate the export of products to international Once the Port of Melbourne reaches a capacity of markets. They are critical to Victoria’s future economic approximately 8 million TEU around 2055, Infrastructure growth and competitiveness. Victoria considers it makes better economic, social and We have endeavoured to develop our advice and urban planning sense to move some container trade to recommendations in a way that provides clear direction a new port at Bay West. but also encourages flexibility and responsiveness to When assessed against key social, economic and change. There is a great deal of uncertainty in ports environmental criteria, the Bay West location is preferred planning. Government will need to closely monitor key over Hastings for a second major container port. This indicators and stand ready to adapt ports planning, either assessment has been made in light of new evidence by bringing decisions and actions forward, or delaying and analysis now available and published by Infrastructure them, according to variations in these areas. Victoria. Bay West can initially handle overflow container Infrastructure decisions need to be based on the best capacity from the Port of Melbourne, and is also well available evidence. Our approach provides, for the first suited to becoming Melbourne's future container port in time, a direct comparison of the available options taking the long term. account of key criteria. This approach provides rich new The Port of Hastings will be an important part of Victoria’s data and technical analysis to guide ports planning and future commercial port network, and is particularly well investment decisions. suited to handling automotive trade. The ports of Geelong In line with our guiding principle of making the most of and Portland are not suitable for a large container port, existing assets, we considered non-build solutions first. but could increase throughput to support We examined the social, environmental and economic growing volumes of their current trades and benefits and impacts of ports development. This reflects emerging supply chains. the consultation process which highlighted the increasing Stakeholder and community engagement has been community expectation that greater emphasis be placed a critical component in the development of this advice. on achieving good environmental and social outcomes Input received through consultation challenged our when developing our ports. Land-use conflicts between thinking, identified areas of importance and shaped our ports users and communities are likely to increase unless recommendations. We thank all those who participated for they are actively managed, which will be important to their valuable contribution to this important piece of work. achieve the objectives of this advice. 4 Infrastructure Victoria ADVICE ON SECURING VICTORIA’S PORTS CAPACITY Advice Capacity at Victoria’s existing The Port of Melbourne should be developed to a capacity of commercial ports should be approximately 8 million TEU, with some trades relocated to Victoria’s other commercial ports at Hastings, Portland and optimised, having regard to social Geelong. Capacity at the Port of Melbourne could be increased and environmental factors, before to approximately 8 million TEU without building a dedicated road any investment in a second major and rail Freight Link through Fishermans Bend to Webb Dock. container port. A second major container port Detailed development planning for a second major container port will not be required until the needs to begin approximately 15 years prior to the port being required. Based on current analysis and projections, detailed Port of Melbourne reaches planning for a second major container port should begin around approximately 8 million TEU 2040, with the new port to begin operation around 2055. Land which is likely to be around 2055. use planning actions to secure necessary second container port land and transport corridors need to be taken as soon as possible. Bay West is the preferred Bay West has strong transport, land use, environmental and amenity location for a second advantages, when compared to Hastings. Bay West is a good option for catering to container demand once capacity at the Port of major container port. Melbourne has been exhausted and is also well suited to becoming Melbourne's future container port in the long term. To support implementation of our advice, Infrastructure Victoria is making 19 recommendations to the Victorian Government in the following themes: Monitor and Optimise the Understand the 1. publicly report on 2. capacity of 3. variables that may key port related existing ports alter planning indicators timelines Preserve long- Baseline Optimise 4. term port options 5. and monitor 6. governance of environmental Victorian ports conditions 5 List of figures Figure 1. Land-bridging cost comparison Figure 25. Theoretical sequence of possible capacity upgrades at Webb Dock Figure 2. Methodology overview Figure 26. Proposed sequence of capacity upgrades for Figure 3. Forecasts of total container trades volumes (TEU): the Port of Melbourne central, low and high cases Figure 27. Port of Melbourne surrounding land use Figure 4. Historic demand forecasts for Victorian container demand Figure 28. Forecasts of total container trade, volumes (TEU): central, low and high cases Figure 5. Extreme high and low scenarios for container trade demand Figure 29. Recommended decision pathway for providing additional container capacity in Victoria Figure 6. Port Phillip Bay channels Figure 30. Existing Port of Hastings and surrounding land use Figure 7. Shipping channels through Port Phillip Heads Figure 31. ‘Along shore’ and ‘dig out’ concepts for Hastings Figure 8. Vessel tracks for successful transits of Port Phillip Heads by 14,000 TEU MSC Daniela in Figure 32. Hastings concept – terminal and port environs ship simulator Figure 33. Existing channels at the Port of Hastings Figure 9. Evolution of container ships and typical dimensions Figure 34. Hastings concept, elements included in costing Figure 10. Global shipping routes Figure 35. Bay West study area and surrounding land use Figure 11. Evolution of the world container fleet Figure 36. Initial location concepts for Bay West Figure 12. Forecast fleet spectrum for the constrained case Figure 37. Bay West concept terminal and port environs Figure 13. Forecast fleet spectrum for the unconstrained case Figure 38. Bay West concept, elements included in costing Figure 14. Forecast annual trade at Swanson and Webb Dock assuming 50/50 share of Asia trades Figure 39. Capital cost to expand capacity at Bay West Figure 15. Import supply chains at the Port of Melbourne Figure 40. Capital cost to expand capacity at Hastings Figure 16. Export supply chains at the Port of Melbourne Figure 41. Change in total movements of heavy commercial vehicles with a full container port move from Figure 17. Landside port capacity overview Melbourne to Hastings (2046) Figure 18. Exports origins by volume Figure 42. Change in total movements of heavy commercial vehicles with a full container port move from Figure 19. Port of Melbourne today Melbourne to Bay West (2046) Figure 20. Swanson Dock layout and possible capacity Figure 43. Hastings development footprint overlayed enhancement measures on selected habitats and Ramsar site Figure 21. Possible capacity enhancements for berth, Figure 44.
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