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Tasmanian Government's 2012 Submission to Infrastructure Australia

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Tasmanian Government's 2012 Submission to Infrastructure Australia Tasmanian Government's 2012 Submission to Infrastructure Australia Department of Infrastructure, Energy and Resources Tasmanian Ports Corporation Pty Ltd Tasports Bell Bay Intermodal Expansion Infrastructure Australia Update July 2012 Confidential Bell Bay Intermodal Development 1. Proposal Summary Initiative Name: Bell Bay Intermodal Expansion Location (State/Region(or City)/ Bell Bay, Northern Tasmania Locality): Name of Proponent Entity: Tasmanian Government and Tasmanian Ports Corporation Contact (Name, Position, phone/e- Phil Cooke mail): General Manager Infrastructure and Maintenance Tasmanian Ports Corporation Phone: 0418 931 845 Email: [email protected] Head Office 48 Formby Road, Devonport PO Box 478 Devonport, Tasmania 7310 Executive summary Tasmania’s port activity will increase with growth in total tonnage, bulk trade and container volumes. Port throughput is currently focused on the three northern ports at Burnie, Devonport and Bell Bay. To meet the challenges of increased freight growth over the long term, the Tasmanian Government and Tasports identified a long-term strategy, in the mid 2000’s, to consolidate container traffic at Devonport and Bell Bay, with the highest growth targeted at Bell Bay. To progress this project, a submission was made to Infrastructure Australia in 2008 for a $150M intermodal expansion to the port of Bell Bay. The Project was submitted under the Competitive International Gateways theme. The theme focuses on developing more effective ports and connecting land transport systems to efficiently cope with imports and exports. Project updates were provided in 2009, 2010 and 2011. Significant market realities/structural changes have taken place since the project was first proposed. Based on studies and the information that has been gathered on market drivers Tasports updated the submission to IA in 2010 to modify the original proposal to a short and long term strategy focusing on immediate improvements through the Burnie Port and the long term objective of the Bell Bay development through a staged approach to construction. These changes included: Lower than projected container growth in Tasmania The loss of container shipping service from Bell Bay (AAA, ANL, Agility) Consolidation of container freight through Burnie primarily (Toll) and Devonport (SeaRoad) The ability of Burnie and Devonport to handle the projected growth of container freight in the short to medium term. Given the size of the Tasmanian international container market, and the limitations in vessel size that can navigate the Tamar River, it is unlikely that a viable international shipping service will return to Bell Bay in the foreseeable future. On this basis it is not anticipated that the Bell Bay Intermodal Expansion would be required before 2020. TasPort Bell Bay Confidential Page 2 of 7 Infrastructure Australia Update 2012 Bell Bay Intermodal Development The long term Tasmanian port strategy, which is under development in line with the national ports strategy, is based on: 1. Port access including channel and depth restrictions 2. Port development potential 3. Links to Tasmanian freight network The port development strategy is based on the principle of specialised ports to avoid duplication of facilities, with the three northern Tasmanian ports becoming specialised terminals of a single integrated port system. The strategy involves: a. The short term development of container terminal and intermodal capacity at Burnie to meet cost efficiency objectives and volume forecasts (0-5 years) b. Medium to long term – Tasmanian Port development (3 terminals) i. Bulk minerals terminal at Burnie and dry bulk terminal at Bell Bay ii. Specialised terminal (i.e. TT-Line, Cement Australia) at Devonport iii. Priority Container terminal (Location still being developed) The port of Hobart would become a specialised port for Antarctic and cruise vessels Tasports is developing a Tasmanian port strategy which will focus on port specialisation, and is likely to move toward a single container port for Tasmania. The location of this port is yet to be determined. The Bell Bay Intermodal expansion remains a project with real potential but is not an immediate requirement to handle the Tasmanian freight task. Pipeline category nominated by Real Potential proponent Estimated Capital Cost of Initiative by Bell Bay Stage 1: $56 million Proponent ($M, nominal, Bell Bay Stage 2: $25 million undiscounted): Bell Bay Stage 3: $55 million Bell Bay Stage 4: $14 million Total: $150 million BCR by Proponent excluding Wider The preliminary BCR is 1.6. Economic Benefits Final BCR is to be determined following comprehensive re- evaluation of existing analysis and confirmation of assumptions through investigative studies. TasPort Bell Bay Confidential Page 3 of 7 Infrastructure Australia Update 2012 Bell Bay Intermodal Development 1. Description of Initiative Tasmania’s port activity will increase with growth in total tonnage, bulk trade and container volumes. Port throughput is currently focused on the three northern ports at Burnie, Devonport and Bell Bay. To meet the challenges of increased freight growth over the long term, the Tasmanian Government and Tasports identified a long-term strategy, in the mid 2000’s, to consolidate container traffic at Devonport and Bell Bay, with the highest growth targeted at Bell Bay. To progress this project, a submission was made to Infrastructure Australia in 2008 for a $150M intermodal expansion to the port of Bell Bay. The Project was submitted under the Competitive International Gateways theme. The theme focuses on developing more effective ports and connecting land transport systems to efficiently cope with imports and exports. 2. Project Background Tasmania is reliant on port infrastructure with over 99 per cent of total import and export freight by volume being moved by sea. Of this freight task, 99 per cent of imports and exports move through the three northern Tasmanian ports of Bell Bay, Burnie and Devonport and it is likely that the movement of the majority of freight through the North of Tasmania will continue due the shorter sea distance relative to the Port of Hobart. To drive a state wide strategy for the Tasmanian ports, Tasports was formed in 2006, and since this time, Tasports has been working to develop a cohesive strategy for the Tasmanian ports. This strategy is aimed at consolidating freight into and out of Tasmania, and reducing the duplication of facilities at the ports. On this basis Tasports and the Tasmanian Government applied for funding from Infrastructure Australia (IA) in 2008 and provided project updates in 2009, 2010 and 2011. The Bell Bay Intermodal Expansion project was categorised by IA as a pipeline project that required more information prior to further consideration to fund the project. This was updated in IA’s June 2010 report to a project with real potential and this status was maintained in IA’s 2011 report. Significant market realities/structural changes have taken place since the project was first proposed. Based on studies and the information that has been gathered on market drivers Tasports updated the submission to IA in 2010 to modify the original proposal to a short and long term strategy focusing on immediate improvements through the Burnie Port and the long term objective of the Bell Bay development through a staged approach to construction. These changes included: Lower than projected container growth in Tasmania The loss of container shipping service from Bell Bay (AAA, ANL, Agility) Consolidation of container freight through Burnie primarily (Toll) and Devonport (SeaRoad) The ability of Burnie and Devonport to handle the projected growth of container freight in the short to medium term. The loss of an international container service into Bell Bay was due to a number of factors, not related to a lack of port facilities. Most significant are reduced container numbers for AAA and the restrictions in both depth and navigation in the Tamar River. The limitations on entering the Port are a maximum draft at high tide of 11.4m, and a maximum length of 262m. TasPort Bell Bay Confidential Page 4 of 7 Infrastructure Australia Update 2012 Bell Bay Intermodal Development This can be contrasted with the Port of Melbourne which can now accommodate container vessels up to 14m draft. Given the size of the Tasmanian international container market, and the limitations in vessel size, it is unlikely that a viable international shipping service will return to Bell Bay in the foreseeable future. To change this outlook would require dredging of the Tamar River, both to increase depth, and to straighten the channel. The cost of this would be prohibitive and would result in unacceptable environmental outcomes. Tasports is working towards the development of a Tasmania Port Strategy in line with the National Ports Strategy. This strategy considers: Port access including channel and depth restrictions Port development potential (including depth, navigation and access to open water) Links to the Tasmanian freight network In the development of this strategy, consideration of a “one port” model is contrasted with the current arrangement of three major northern Tasmanian ports and one southern port. Tasmanian freight falls in the broad categories of: Containers Bulk Liquids and Gas Minerals/metals/Mining Forestry Ferries/cruise/tourism/fishing Antarctic To service all of these categories at a single port would be impractical in terms of cost and the lack of a suitable location for a “mega port”. The strategy is aimed at developing a single port system of specialised terminals (one northern port with three terminals at Bell Bay, Devonport and Burnie). This specialisation would be aimed at avoiding duplication of facilities in the State, and providing the optimum freight movement from the landside road and rail network through the ports. The strategy involves: a. The short term development of container terminal and intermodal capacity at Burnie to meet cost efficiency objectives and volume forecasts (0-5 years) b. Medium to long term – Tasmanian Port development (3 terminals) i. Bulk minerals terminal at Burnie and dry bulk terminal at Bell Bay ii.
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