2020/21 Statement of Corporate Intent Pilbara Ports Authority STATEMENT of CORPORATE ~ ~ FPILBARA PORTS INTENT 2020/21 ~ AUTHORITY
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. ~:,-{:..--:- 1 rt:;.'_j ·•• - • l I ·• ~· . ............ .~ .Siii.;'. ·-~~;:;:;~ - - ., .:_ ,. :...:,·. ,,,. .. : .1 -~ - -·· ~t- - . - ..:~~ili ~ - •'-4A l i."l"f.'-, l •• i..:,•·. '. --~ - , •., ·~.. • : , . I 2020/21 Statement of Corporate Intent Pilbara Ports Authority STATEMENT OF CORPORATE ~ ~ FPILBARA PORTS INTENT 2020/21 ~ AUTHORITY TABLE OF CONTENTS 1. FOREWORD .... ... ........ ... .. .. .. ... .. ..... .. ... ... .... .. ....... .. ........ ... .... ........ .. .. .. ..... .. ..... ....... ....... 3 2. STRATEGIC CONTEXT ...... ...... ..... ..... ...... .... .... ..... .. ... ........................ ... ... .... .............. 4 2.1 Legislative Context .... ... .. .... ..... ... ....... .. .... .... .... ...... ....... ....... ..... .. .... .. .... .. .... .... ... 4 2.2 Port Governance Review ...... ........................ ..... .. .... .... ... ..... .... ....... .... ... ... ... ... .4 2.3 Port Services ............. .... .............. ........ ... ... ..... ... .... ......... ...... ..... .. ... .... ..... ...... .. .4 2.4 Assets and Port Facilities ... .... ............. ... ........................... .. ... ... .... ...... ...... ..... ... 5 2.5 Major Customers .. ............. .... ............................. ... ..... .. .... ..... ........ .... .. ...... ....... 6 2.6 Current and Emerging Markets .. .. ................... .. ........................... ..... .. ....... .. ..... 6 2.7 Procurement .. .... ......... ... .. ... ....... .. ... .... .... ... ..... ........ ... .. ... .... .. .. .... .... .... ... ... ..... .. .6 2.8 Certification .... ................. .. ... .... ........ .. ... ... ....... .... ........ ....... .. .. ... .. ...... .. ..... .. ... .. .. 7 2.9 Risk Management Framework .. .. .... .. ...... ......... .................... ...... .. ... ... ... ........ .... 7 2.10 Environment and Heritage ................................. ......... ..... .... ... ... .. .. ....... ... .. ....... 7 2.11 Salaries and Wages ................ ..... .............. ..... .. .... ..... .... ...... ......... ..... .. .. ........ ... 8 2.12 Pilbara Ports Authority response to COVI D 19 ............. .. ................. ..... ..... .. ... ... 8 3. KEY STRATEGIC THEMES AND MAJOR INITIATIVES ...... ...... ... .... .... .... ... ........ ...... 10 4. FINANCES AND PERFORMANCE INDICATORS ... .. .. ...... .. .. ........ ..... .. ...... .... ..... ... ... 11 4.1 Trade Forecasts ...... ......... .. .. ....... .. .. ... .. ..... .. ....... ............ ...... ..... ... ..... .. ... .... ..... 11 4.1.1 Port of Port Hedland .... ..... ............. .............. .... .. ........ ... ..... ............... .. .. ... ...... 12 4.1.2 Port of Dampier .... ....... ....... ..... ..... ... .. .... ....... .. ..... .... ..... .. ....... ...... ... ..... ..... ... .. .. 12 4.1.3 Port of Ashburton ......... .... .. ..... ... .. ..... ... ... .... .. .... .... ... .. ...... ... .... ..... .. .. .. .. .... ...... 12 4.2 Performance Indicators ...... ... ........ ..... ... ..... ... .. ..... ............ .. .. ...... .. ............. ...... 15 4.3 Financial Summary ...... ... ........ ................. .......... ...... ...... ..... ... ...... ........ .... .... ... 16 4.3.1 Dividend policy ...... ... ..... ........ .. ... ... ... ... ........ ......... ..... ... .. ..... .. .. ... .. .. .. ....... .. ..... 17 4.3.2 Efficiency Dividend .. ...... .... ....... .... ... ... .... ....... .... ... .. .. ...... ...... ..... ... ..... ...... .. ... .. 17 4.3.3 Investment policy ..... .... ... .. ..... ....... ... .... .. .. .. .... .. ...... ...... .... ..... ....... .... ... ..... ... .... 18 4.3.4 Pricing ... ......... ..... .............. .. ... .... ... ....... ... .. ... .. ... .. ...... ........ .. .. .. .. ..... ... .... .... ...... 18 4.3.5 Sustaining Infrastructure Due ..... .. ........ .. ...... ... .... ............ .... .... ..... .... ... .. ...... .... 19 4.3.6 Rate of return .... ....... ... .. ........ ........ .... .... .. .... .. ...... ..... .. .... .. ... ... .. ... ...... ....... ...... 19 4.3.7 Operating subsidy- Dampier Bulk Liquids Berth .. .... ...... ... ... ... .. .... .............. .. 20 4.3.8 Financial Parameters ... ... ... .. ....... ..... ... ... .... ............ .. .. ..... .. ........................ ... .. .22 4.4 Capital Expenditure Program ........................... ................ .......... ..................... 23 4.4.1 Service Delivery Objectives ... ... .... ..... .. ........... ... .. ..... .... .......... .... ....... .... .... ..... 23 4.4.2 Capital Works Program ...... ... ...... ............... .. ........ ...... ...... ..... .... .. .... .. ..... ........ 23 5. INFORMATION TO BE REPORTED TO THE MINISTER FOR PORTS ..... .... .. .... ... .... 25 6. ABBREVIATIONS ................... ... .. .. ..... .... .. ... .. ........ ..... .................. ..... ..... .... ... .... .... ... ..26 A848846 Page 1 of 26 STATEMENT OF CORPORATE ~ ./h lLBARA PORTS INTENT 2020/21 ~ AUTHORITY VERSION PREPARED BY DATE AMENDMENT 1.0 R Sarros 08/11/2019 Initial for Executive approval 2.0 R Sarros 21/11/2019 incorporating feedback from Executive 3.0 R Sarros 10/12/2019 incorporating feedback from Board 4.0 R Sarros 7/09/2020 re-submission incorporating changes for Minister A848846 Page 2 of 26 STATEMENT OF CORPORATE ~ ./h lLBARA PORTS INTENT 2020/21 ~ AUTHORITY 1. FOREWORD PPA's primary function is to facilitate trade in the Pilbara. In 2019/20, a total annual throughput of 717.2Mt was achieved through 17,061 safe vessel movements. Profit before income tax for the financial year was $188.1 million, and total payments to the State were $116.2 million, including dividends and income tax. The forecasts presented in this Statement of Corporate Intent are for continued trade growth. Forecasts indicate a two (2) per cent increase in trade in 2020-21 , to 732.82 million tonnes. Exports of iron ore, LNG and salt through privately operated berths are forecast to increase by 12.5 million tonnes (2%), while trade across PPA operated multi user berths is estimated to increase by 12.5%, from 25.3 million tonnes in 2019-20 to 28.4 million tonnes in 2020-21 . The major initiatives presented in this Statement of Corporate Intent has been devised through collaboration with the Executive and Board of PPA whilst also aligning with the priorities of Government. These include delivering the WA Government's Spoilbank Marina development and administering the Port Hedland Voluntary Buy-Back Scheme and Maritime Precinct, growing freight links and capability to service direct shipping into the Pilbara. PPA will continue to work with industry to establish an LNG bunkering Hub in the Pilbara, which will also support the Government's climate policy. PPA will continue work closely with the Minister for Ports, the Department of Transport, the Department of Jobs, Tourism, Science and Innovation and the Department of Treasury, the Pilbara Development Commission and other Government agencies, port users and the communities in which it operates, to achieve the objectives in this Statement of Corporate Intent. Brad Geatches Chair, Pilbara Ports Authority Board of Directors A848846 Page 3 of 26 STATEMENT OF CORPORATE ~ ~ h lLBARA PORTS INTENT 2020/21 ~ AUTHORITY 2. STRATEGIC CONTEXT 2.1 Legislative Context This Statement of Corporate Intent (SCI) has been prepared by Pilbara Ports Authority (PPA) and is submitted under the provisions of the Port Authorities Act 1999 (YVA) (the Act) . PPA is a statutory authority established on 1 July 2014 and encompasses the operating ports of Ashburton, Dampier and Port Hedland. In 2017, the Port of Balla Balla was proclaimed and PPA was granted a Management Order over Port of Cape Preston East. This SCI outlines PPA's planned achievements and proposed major initiatives in the 2020-21 financial year. As per Section 34A of the Act, PPA will comply with approved requirements regarding capital expenditure limits and associated funding, and endeavour to achieve financial outcomes that are consistent with forecasts contained in approved financial statements. 2.2 Port Governance Review The Ports Legislation Amendment Act 2019 (YVA) came into effect in February 2019. The legislation amends seven port-related Acts, enabling transfer of ports currently regulated under the Shipping and Pilotage Act (1967) (WA) (and related Acts) to the Port Authorities Act (1999). This enables regulatory responsibility for the Ports of Port Walcott, Barrow Island, Cape Preston, Onslow and Varanus Island to be transferred from the Department of Transport (DoT) to PPA. Figure 1 provides a map of PPAs existing and future ports. 2.3 Port Services PPA provides overall port management and coordinates vessel traffic service (VTS) coverage, ship scheduling , berthing allocations for multi user facilities and port communications. PPA also oversees safety and port security and cooperates with Commonwealth Government agencies responsible for customs, quarantine and marine safety. PPA contracts out or issues licences for pilotage, towage, helicopter and pilot boat transfers, mooring, bunkering, stevedoring, security and waste management. All service provider licences are issued under the provisions of the Act on a non exclusive basis. A848846 Page 4 of 26 STATEMENT OF CORPORATE ~~h lLBARA PORTS INTENT 2020/21 ~ AUTHORITY 2.4 Assets and Port Facilities In total , PPA manages assets with a written down value exceeding $2.3 billion (financial year 2018-19). Additionally, PPA manages a total 10,527 hectares of land (including wharves and