port futures New Priorities and Directions for Victoria’s Ports System minister’s message
Victoria’s commercial trading ports are key drivers of our Although the current policy and planning settings have economy and play a defining role in shaping the State and served Victoria’s port system well, it is now necessary to make national freight networks. adjustments to respond to new pressures and challenges as our port task continues to grow. As well as being the major gateways to our overseas markets, they are also key freight hubs connected by road, rail and Port Futures advances and reviews a number of aspects of pipeline networks to freight origins and destinations locally, the existing settings, including a revised approach to the regionally and Australia wide. sequence of container terminal development in the Port of Melbourne and important improvements to port governance For these reasons, it is important that the ports be planned arrangements, particularly the integration of the governance and operated to complement each other in the context of the and management of the ports of Melbourne and Hastings. broader economy and freight and logistics networks within which they have evolved and to which they contribute. Significantly, Port Futures is accompanied by the release of long term port land use strategies for each of the commercial Only by effectively coordinating the port system, recognising trading ports. These strategies set out the projected trade the unique roles and strengths of the individual ports – tasks for each of the ports and the land use and infrastructure Melbourne, Hastings, Geelong, Portland and the 14 local ports development and management programs proposed to respond – can the benefits of the ports to the Victorian economy and to these specific tasks. community be maximised. I would like to acknowledge the significant effort and Port Futures develops this integrated system thinking in the cooperation of port managers, both public and private, context of the recently released overarching transport strategy, and their respective communities in developing these plans The Victorian Transport Plan, and the first ever comprehensive and the significant contribution they collectively make to the Victorian Freight Network Strategy, Freight Futures. overall vision for Victoria’s port system. Port Futures is consistent with both of these flagship Victoria, through Port Futures, now has the opportunity to documents and represents a key package of work under enhance its position as the nation’s pre-eminent freight the suite of directions announced in Freight Futures. State. Our ports are critical elements of the national freight The critical role our ports play in the economy and the infrastructure and we can maximise their contribution to freight network has been strongly acknowledged from the national economic prosperity by delivering an efficient, outset by this Government, most notably through a wide integrated and sustainable ports system that fits seamlessly ranging package of reforms implemented in response to into national transport and freight networks. The Next Wave of Port Reforms in Victoria, released in 2002, The approach to port planning and development in and then through the Victorian Ports Strategic Framework Port Futures, with its emphasis on coordination of effort, (VPSF), released in 2004. judicious use of competition and integrated land use planning, Over this period, the Government has put significant aligns with the Commonwealth Government’s new agenda investment into the development of Victoria’s commercial port for a ‘National Ports Strategy’, highlighting priorities for system, including essential transport connections, in line with investment in these assets of national significance. directions set out in these policy and strategic frameworks. I now look forward to continuing this important work as we Critical port infrastructure is being delivered, including the roll out the actions of Port Futures in partnership with port Channel Deepening Project in Port Phillip Bay (nearing managers, port users, local and Commonwealth governments. completion) and improved land side connectivity through the completion of the Dynon Port Rail Link, the Cliff Street Overpass project in Portland, the Geelong Rail Access Improvement Program, and many other projects.
Tim Pallas Minister for Roads and Ports August 2009 contents
MINISTER’S MESSAGE Essential port services 42 – Current policy settings 42 EXECUTIVE SUMMARY 1 – Challenges and opportunities 43 – Priorities and actions 44 PART A – BACKGROUND 4 • Towage 44 The special role of the ports 4 • Slipping facilities 45 – Ports as drivers of the economy 4 Port Governance 46 – The ports system 7 – Current policy settings 46 – Victorian port policy since 2000 9 – Challenges and opportunities 49 – Key achievements to date 11 • Integration of Melbourne and Hastings 49 The Need for Port Futures 12 • International supply chain – The need for regular review 12 ‘beyond the port gate’ 51 – Essential Services Commission • Governance arrangements for the Review of Port Planning 13 Port of Geelong 51 – The Victorian Transport Plan • Local ports 51 and Freight Futures 14 • Transport Integration Bill 52 – A new national agenda for ports 14 – Priorities and actions 53 • Integration of Melbourne and Hastings 53 Key drivers, goals and objectives 16 • International supply chain – Key drivers 16 ‘beyond the port gate’ 55 – Goals and objectives 17 • Governance arrangements for the Port of Geelong 55 PART B – PRIORITIES AND ACTIONS 20 • Local ports 55 • Transport Integration Bill 55 Port roles, competition, capacity and sequence of development 20 Port Planning and Protection 58 – Current policy settings 20 – Current policy settings 58 – Challenges and opportunities 21 – Challenges and opportunities 59 – Priorities and actions 22 – Priorities and actions 62 • • Roles 22 Port development plans 62 • • Competition 25 Recognition in the planning system 62 • • Capacity 25 Port of Melbourne buffer planning 62 • • Sequence of development 26 Regional Ports Planning Framework 65 Port access, efficiency, productivity Port Safety, Security and and investment 28 Environmental Management 68 – Current policy settings 28 – Current policy settings 68 – Challenges and opportunities 30 – Challenges and opportunities 69 – Priorities and actions 72 • Improving channel access 35 • Safety Environment and Management 72 • Improving landside access and efficiency 37 • Pilotage 72 • Improving productivity 42 • Marine emergency response 72 • Facilitating investment 42 • Carbon Pollution Reduction Scheme 72 – Priorities and actions 35 • Sea level rise 72 • Improving channel access 35 • Green ports 72 • Improving landside access and efficiency 37 • Improving productivity 40 CONCLUSION: DELIVERING PORT FUTURES 74 • Facilitating investment 40 GLOSSARY OF TERMS 76 executive summary
Port Futures updates policy and strategy settings Accelerate port development at Melbourne contained in the Victorian Ports Strategic Framework and Hastings (VPSF), released in 2004, and governance arrangements Port Futures proposes to meet strong projected medium established in the Port Services Act 1995 (PSA), to long term growth in freight volumes by accelerating as amended in 2002/2003. the development of an initial module of new stevedoring Over the past five years, these policy settings have capacity at Webb Dock and progressing the development provided sound strategic and governance foundations of the Port of Hastings. Specifically, the Government will: to enable all participants in the port system to plan their • Consider bringing forward an initial module of operations and investment strategies with confidence. terminal capacity at Webb Dock (up to one million Many of the actions identified in the VPSF have been TEUs) subject to a satisfactory business case and all completed, such as the port land use strategies or necessary Government approvals; substantially progressed, including the Channel Deepening Project. • Maintain the existing planning reservation for the Webb Dock Rail Link for future consideration; The goal of Port Futures is to introduce improved policy and strategy settings to ensure that the • Progress planning to increase capacity of the existing contribution of Victoria’s ports to state and national East and West Swanson Dock container terminals and economic prosperity and sustainability is maintained wharves, subject to a satisfactory business case and and maximised. all necessary Government approvals; and • Progress planning and environmental investigations Port Futures identifi es the following for the staged expansion of the Port of Hastings, key priorities and actions: subject to a satisfactory business case and all necessary Government approvals. Re-affirm port trade roles and development Under Port Futures, the four commercial trading ports will develop their existing core trade roles: • The Port of Melbourne, the largest container and general port in Australia, will continue to develop its specialised capacity to handle containerised cargo; • The ports of Portland, Geelong and Hastings will continue to focus on the bulk trades and break bulk cargoes related largely to steel and aluminium production; and • The role of the Port of Hastings to act as an overflow container port for the Port of Melbourne is also reaffirmed, with further assessment of timing of this development to be undertaken.
Port Futures 1 Enhance port access, efficiency, productivity Secure the provision of essential port services and investment Port Futures identifies towage and ship lift facilities Port Futures details a range of strategies to improve in the Port of Melbourne as essential port services port access, efficiency, productivity and investment, and proposes that: including: • Legislation be introduced to ensure that minimum • Opening the Port of Melbourne for servicing by up to standards of towage service in the Port of Melbourne 14 metre draft vessels at all tides by completing the CDP can be guaranteed following the completion of the on schedule, on budget and performing strongly against Channel Deepening Project; and the Environmental Management Plan; • The Government work in partnership with PoMC and • Progressing development of a staged, long term ‘channel other relevant stakeholders to ensure that adequate improvement program’ for the Port of Geelong, focussing ship lift facilities are available to service key port work initially on identifying potential operational safety risks vessels, such as tugs and bunker barges, once the and providing treatments to mitigate those risks; Victoria Dock slipway in the Port of Melbourne is closed.
• Implementation, in conjunction with industry, of a Improve port governance arrangements range of initiatives arising from the Truck Optimisation Plan prepared by the Victorian Freight and Logistics Port Futures confirms the Government’s intention to Council (VFLC); integrate the governance and management of the ports of Hastings and Melbourne and to review the role of the • Design and implementation of a Road Freight Access PoMC ‘beyond the port gate’ in order to maximise the Charge for trucks accessing the major terminals at contribution of Victorian ports to the efficiency of the the Port of Melbourne; and broader freight and logistics network. Specifically the • Development of the Metropolitan Freight Terminal Government will: Network, subject to funding to create the conditions • Integrate the planning and operation of the ports for the efficient operation of next generation High of Melbourne and Hastings by amending the PSA Productivity Freight Vehicles and to facilitate rail’s to establish an expanded PoMC, to come into effect increasing viability as a mode for metropolitan during 2010; and container distribution over the medium to longer term; • Subject to the development of a sustainable business • Exploring, in conjunction with the Port of Melbourne model, review the charter of the PoMC to ensure Corporation (PoMC), the scope to secure ongoing port that it is able it to contribute effectively to the productivity improvements through direct negotiations efficient operation of the international supply chain with port service providers; and ‘beyond the port gate’. • Undertaking further analysis and development of • Bring the planning and management of all of Victoria’s Victoria’s Infrastructure Australia Pipeline Projects ports together under a single ports portfolio by and other critical port related projects as a platform transferring departmental responsibility for Victoria’s for securing both public and private sector investment local ports from Department of Sustainability and in Victoria’s ports and freight system. Environment to Department of Transport; and
2 • Refresh the charters of the port corporations and Improve Port Safety, Security and Environmental align them with the State’s broader transport Performance principles and objectives through the development Port Futures builds on improvements in safety, security of the Transport Integration Bill. and environmental risk management established through the implementation and operation of Safety and Introduce measures to improve planning and buffer Environment Management Plans (SEMPs) in the ports, protections for ports and local communities by committing to: Port Futures identifies the critical need to facilitate • A review of the implementation and operation of the port planning and protect ports from encroachment SEMP requirements under the PSA, commencing by surrounding sensitive uses as well as protecting in the second half of 2009; neighbouring communities from the impacts of port operations. It proposes a range of initiatives be • Give effect to agreed recommendations of the examined to streamline and strengthen planning Review of Pilotage Arrangements in Victoria; processes and protections, including: • Release the OESC’s Marine Emergency Framework • Formally recognising port strategic plans and Review (MEFR) and a comprehensive Government strengthening policies to separate port activities response; and from residential and other sensitive uses in the • Work with the ports to develop the internationally State Planning Policy Framework (SPPF); recognised ‘green port’ concept, incorporating • Establishing the Minister for Planning as the new environmental technologies and best practice ‘responsible authority’ for the land controlled by environmental management into port development the regional ports, as is already the case for the and ongoing business activities. Port of Melbourne; • Ensuring that the interests of the ports are explicitly considered in the evaluation of planning scheme amendments involving policy and/or zoning changes in the environs surrounding the ports controlled land; and • Considering the reinstatement of industrial zones where appropriate and new planning controls to establish effective two-way buffer protections for ports.
Port Futures 3 Part A – Background
the special role of the ports
Ports as drivers of the economy Victoria’s four commercial trading to its international markets, this port ports – Melbourne, Geelong, Portland activity translates directly into very and Hastings – are the State’s key substantial economic benefits for the trade gateways to the world. Between State, estimated at nearly $3 billion them they handle over 99% by volume in economic output; $1.5 billion in and 90% by value of our international value add; and 15,000 direct jobs. trade (imports and exports). When The Port of Melbourne is the largest coastal trade is included, in the 2007/08 container and general cargo port in year this represented over 90 million Australia and was recently ranked mass tonnes of cargo, valued at over in the top 50 container ports in the $100 billion, carried by over 4,500 ships. world. On its own, it accounts for As well as performing the irreplaceable over $85 billion of trade and over strategic role of connecting Victoria two million TEU movements per year.
FIGURE 1 Value of International & Coastal Trade, FY 2007/08
120
100 International Coastal 80
60
$ (Billion) 40
20
0 Exports Imports Total
* The value of coastal trade has been derived using ABS international trade data and the weight of costal trade provided by the ports. Source: ABS Quarterly Trade Statistics, Customised Tables and Ports
4 FIGURE 2 Value of International Trade, Victorian Ports, Financial Years
90
80
70
60
50
40
$A (Billion) 30
20
10
0 Exports Imports FY Total 2005/06 2006/07 2007/08
Source: ABS State & Regional Indicators
FIGURE 3 Contribution of port industry to Victorian economy
3,000 16,000
14,000 2,500 12,000 2,000 10,000
1,500 8,000 $(M) 6,000 1,000 4,000 employed Total 500 2,000
0 0 Port of Melbourne Port of Geelong Port of Portland Port of Hastings
Output ($M) Value Added ($M) Employment
Source: Economic Impact Studies conducted for Victoria’s commercial trading ports 2004/05 (Hastings 2005/06)
Port Futures 5 FIGURE 4 Cargo throughput (‘000 mass tonnes) – Victorian Ports 2003 to 2008
35,000
30,000
25,000
20,000
15,000
Mass Tonnes (’000) Mass Tonnes 10,000
5,000
0 2003 2004 2005 2006 2007 2008
Melbourne Geelong Portland Hastings
Source: Essential Services Commission “Ports Monitoring Report 2006/07 & 2007/08”
FIGURE 5 Ship visits to Victorian ports 2003 to 2008
4,000
3,500
3,000
2,500
2,000
1,500 Number of Ships 1,000
500
0 2003 2004 2005 2006 2007 2008
Melbourne Geelong Portland Hastings
Source: Essential Services Commission “Ports Monitoring Report 2006/07 & 2007/08”
6 The ports system Because of their special attributes and Ports are a very special form of role, it is important to focus on the intermodal hub and, because of ports as a system in their own right the particular function they serve (although a subsystem of the broader (i.e. of connecting the sea leg of freight network), to ensure that they freight and passenger journeys to are appropriately enabled, empowered, the land leg), they play a defining role protected and coordinated to perform in shaping the Victorian and Australian their role to the optimum benefit of the freight networks. Victorian economy and community. Ports cannot be located anywhere – The ports do not and cannot operate in the number of sites around the Victorian isolation from the broader freight and coastline with the necessary attributes logistics network within which they of deepwater access, weather protection, are located. This broader network is suitable backup land and proximity to actually a multi-use transport network, markets is, in fact, very limited. Most of shared amongst a range of users of the suitable sites are already occupied transport infrastructure and services. by our existing commercial trading ports and this is where major investment in Ports are, in effect, intermodal freight port infrastructure has occurred over hubs within this broader network, the last 150 years. connected by their channels and international shipping lanes to major For these reasons, to a significant overseas ports and by road, rail and degree, the connecting freight network pipeline links to points of freight origin must be organised around the ports to and destination in Victoria and Australia. service them efficiently and effectively, rather than the other way around.
Port Futures 7 FIGURE 6 Victoria’s commercial trading ports and key transport networks
Merbein
Mildura
NSW Not in service Deniliquin (NSW)
Tocumwal Eltamogah (NSW) SA
Wodonga Donald Mooroopna Horsham
Not in service
Ballarat Ararat Melbourne Not in service Maryvale
Portland Geelong Morwell Warrnambool Hastings N
Intermodal Terminal – operational Major trading port Major freight airports Freight rail networks Road network Proposed Intermodal sites
8 Victorian port policy since 2000 Over the past decade Victoria has A major finding of the Russell Review been a national leader in port policy was the need for ports to “operate and strategy development and within a broad strategic framework implementation. that provides clarity of purpose, In 2000 the Victorian Government greater certainty for industry and commissioned Professor Bill Russell effective integration with other key to undertake a major independent State Government strategies”. review of the privatisation and In November 2004, the Victorian Ports corporatisation reforms of the mid Strategic Framework (VPSF) was 1990s. His report, The Next Wave of released, setting out an overarching Port Reform in Victoria, was released policy and strategic framework for in July 2002 with a broad ranging the development of the Victorian Government response supporting ports system under the following its key directions. key directions: Over the next two years significant – Building on existing capabilities amendments to the legislation and competitive strengths; governing Victoria’s ports were – Anticipating and planning enacted, resulting in the creation for future land, access and of the current primary institutional infrastructure needs; and arrangements, consisting of: – Providing the right regulatory • Port of Melbourne Corporation and institutional settings for (PoMC); a sustainable port system. • Port of Hastings Corporation (PoHC); and • Victorian Regional Channels Authority (VRCA).
Port Futures 9 Key achievements to date The Next Wave of Port Reform and • Comprehensive economic impact Government Response have been assessments have been prepared effective in filling the policy and and published for each of the strategic vacuum left in the wake commercial trading ports, clearly of the reforms of the mid 1990s. demonstrating the value of the ports They have provided the necessary level to the regional, state and national of clarity of direction for port owners, economies; managers, service providers, users and • All ports now have in place the general community to enable the comprehensive, risk based Safety Victorian port system to develop and and Environmental Management contribute effectively to the State and Plans (SEMPs); national economies and the prosperity and wellbeing of Victorians and • A range of important road and Australians more generally. rail infrastructure improvements have been delivered or are currently Largely as a result of these improved being delivered to improve the policy, regulatory and institutional connectivity and integration of settings and the positive business the ports with the broader freight environment they have engendered, network (e.g. the Dynon Port Rail the following achievements have been Link and the Port of Melbourne secured during this period: Rail Improvement package in • Rapid trade growth, particularly Melbourne; the Cliff Street Overpass in containers and cars through project in Portland; the Geelong the Port of Melbourne, has been Rail Access Improvement Program; successfully accommodated; and many others); • Victorian port charges have remained • Cruise ship visits to the Station Pier competitive with ports in other States; International Passenger Terminal have steadily increased, culminating • Approvals have been obtained for in a record season in 2008-09 with the critical Port Phillip Channel ‘home porting’ being achieved for Deepening Project and the project the first time; and is now nearing completion, on time, on budget and performing • The profile of ports and general strongly against the Environmental community awareness of their role Management Plan; and importance to the economy has increased through a range • Significant planning and community of educational initiatives and consultation work has been improved approaches to community undertaken in preparation for consultation and information sharing. development of the Port of Hastings; • Long term port development plans, prepared in consultation with industry and community stakeholders, have been completed and released for all ports;
10 Port Futures 11 Part A – Background
the need for port futures
The need for regular review A process of regular public policy In responding to the review, the review and reform, on roughly a Government implemented a number five to ten year cycle, is healthy and of major improvements to the policy common practice for a sector of settings, including the introduction such key strategic importance to the of explicit responsibilities on port State as the ports sector. It is also an corporations to facilitate the growth of essential process to ensure that our trade, undertake strategic planning and ports remain efficient, competitive, meet ‘triple bottom line’ obligations. sustainable and adaptive to emerging This second round of reforms has internal needs and external pressures. been successful in setting broad The major port reforms of the mid directions for long term sustainable 1990s in Victoria were competition growth; refocussing effort on port and efficiency driven, focussing on infrastructure investment (e.g. the privatisations and corporatisations and Channel Deepening Project); and stripping of non-commercial functions rebalancing commercial drivers away from the core port businesses. with social and environmental In essence, they were designed to responsibilities. remove inefficiencies from the system, Port Futures represents a further round reduce costs to users and let the of reforms designed to ensure that market do the rest. Victoria’s ports system remains at Although these reforms were effective the forefront of best practice nationally in reducing direct port authority and internationally. charges, The Next Wave of Port Reform review identified significant weaknesses and gaps in the institutional and regulatory arrangements.
12 Essential Services Commission Review of Port Planning – specify obligations for commercial In February 2006, the Council of trading port managers to prepare Australian Governments (COAG) and regularly update port strategic signed the Competition and land use plans Infrastructure Reform Agreement • address a range of port landside (CIRA), which included a requirement effi ciency issues through the for each State/Territory to undertake development and release of a transparent public review of Freight Futures, the Victorian the impact of port regulation on Freight Network Strategy. competition by the end of 2007. In Victoria’s case, it was agreed that the Through Port Futures, the Government review would focus on the relationship is addressing a further key between port planning frameworks and recommendation of the ESC’s Final competition in stevedoring. Report, that it review and refine Victoria’s Essential Services Victoria’s port policy and planning Commission (ESC) undertook this frameworks to clarify that the State review and its Final Report, which does not require rigid adherence to provides an in-depth discussion of exact sequences of port development a range of competition issues relating and that, should opportunities arise for to port planning, was publicly released out of sequence development, they will on 30 January 2008. be assessed on their merits. In adopting the ESC’s key recommendations, the Government has already acted to: • amend the Port Services Act 1995 to: – clarify the responsibilities of statutory port corporations for implementing competition principles in relation to the provision of port services; and
Port Futures 13 The Victorian Transport A new national agenda Plan and Freight Futures for ports On 8 December 2008, the Victorian The role of ports in our economy Government released The Victorian is becoming an increasing focus for Transport Plan (VTP) and Freight Futures the Commonwealth Government – the Victorian Freight Network Strategy. through the development of a National The VTP sets out the Government’s Transport Policy Framework charged to vision and plans for developing an the Australian Transport Council by the integrated, sustainable transport Council of Australian Governments. system for Victoria over the next The nation’s maritime precincts, 20 years. Freight Futures forms an including major trading ports and important companion document, smaller local ports, make significant developed in concert with the VTP, contributions to the national economy. providing detailed support and These ports are the gateways for the elaboration of the Government’s nation’s trade and key export industries, thinking in relation to freight in the VTP. and represent critical nodes within Freight Futures is a network strategy transport networks and supply chains and its key underpinning concept at both regional and national levels. involves the identification and Following the completion of the development of a Principal Freight National Infrastructure Audit process Network (PFN) connecting a hierarchy and Infrastructure Priority List, of Freight Activity Centres (FACs). the Commonwealth Government, It identifies ports as particularly through its statutory authority, important and sensitive FACs with Infrastructure Australia (IA), has special attributes and needs and sets announced its intention to develop out a range of actions to ensure their a number of national infrastructure ongoing efficiency and sustainability. strategies in consultation with States Freight Futures, under Direction 17 and Territories. This includes the (Implement improved governance development of a National Ports arrangements for ports), foreshadows Strategy and a National Freight the role and release of Port Futures. Network Strategy.
14 Infrastructure Australia’s National Port Strategy will focus on: • Port governance; • Improved strategic planning; • Coordinated land-use and port planning; and • Unlocking higher levels of private sector investment in ports.
An important function of Port Futures is to position Victoria to respond to this new national agenda and ensure Victoria continues to play a leading role in promoting an integrated, efficient and productive ports system for Victoria and Australia as a whole.
Port Futures 15 Part A – Background
key drivers, goals and objectives
Key drivers The Victorian ports system operates New, high level policy settings arising in a highly dynamic social, economic from the Victorian Transport Plan (VTP), and environmental climate at the local, Freight Futures and the Essential national and global levels. Services Commission (ESC) Review As discussed in the previous section, of Port Planning have also now been a key impetus for Port Futures is the established to which Port Futures need to regularly review and reset the responds. Port Futures also responds agenda for Victoria’s ports system in to the emerging national policy the context of both external pressures agenda for ports being developed by and internal experience. Infrastructure Australia (IA). A number of the key policy and strategy Some of the key external factors driving settings put in place over the past five the need for review and change include: to ten years now need to be reviewed • Continuing strong long term growth and revisited to ensure they remain projections for international trade; relevant and robust in the face of the • Impact of the Global Financial Crisis new issues and challenges emerging (GFC) on short to medium term for the port system today. growth projections and investment climate; • Continuing globalisation of manufacturing production and distribution; • Increasing supply chain competition at the national and international levels; • Rapidly evolving technologies;
16 Goal and Objectives • Climate change and Emission The goal of Port Futures is to introduce • Progress measures to improve Trading Scheme (ETS) improved policy and strategy settings to port efficiency, productivity and implications; and ensure that the ports system remains investment; competitive and sustainable over the • Increasing energy prices. next 10 years and that the contribution • Improve port governance of the ports to the prosperity of all arrangements established under Key internal factors include: Victorians is maximised. the Port Services Act 1995; • Emerging mismatches between More specifically, its key objectives are to: • Establish effective, consistent institutional/governance settings • Review and clarify the broad trade strategic planning requirements and achievement of key Government roles of Victoria’s four commercial for the commercial trading ports objectives; trading ports; and appropriate recognition of port • Changes in the competitive strategic development plans in the • Progress a process to introduce Victoria Planning Provisions; environment between Victorian ports additional competition to the and for service provision within the provision of container stevedoring • Improve buffer planning for ports ports; services in the Port of Melbourne, to ensure they can maintain • The need for improvements in port where it can be shown to promote efficient, sustainable operations landside efficiency and integration to improved outcomes for port users within existing or developing urban match port capacity increases; and the economy; environments; and • Increasing urban encroachment • Progress planning in a timely manner • Improve safety, security and pressures around the periphery of for the provision of short, medium environmental risk management the ports; and and long term port capacity; practices in the ports, including planning for climate change • Increasing community expectations • Review and clarify the sequence of port development for container mitigation and adaptation. in relation to social, amenity and handling set out in the Victorian environmental responsibilities. Ports Strategic Framework (VPSF); • Progress measures to improve port channel and landside access and the integration of transport systems in the ports with the general transport systems supporting Victoria’s cities and communities;
Port Futures 17
Part B – Priorities & Actions
port roles, competition, capacity and sequence of development
Current policy settings The current policy settings for Victoria’s acknowledging that it will also continue ports system are derived primarily to play an important role in relation from the Government’s response to bulk and break bulk commodities to the Russell Review as expressed (such as cars) while space permits. through the significant revisions to the The VPSF nominates Hastings as Port Services Act 1995 (PSA) in 2002-03 Victoria’s second container port, to and the release of the Victorian Ports act as an overflow for this trade once Strategic Framework (VPSF) in 2004. Melbourne reaches its full capacity. In essence, the policy proposes that In relation to competition between the four commercial trading ports Victoria’s ports, the policy settings should focus on reinforcing and generally encourage this for the bulk developing their pre-existing core and break bulk trades (noting that trade roles. In the case of the ports of some trades are relatively fixed in Portland, Geelong and Hastings, these location due to pre-existing high levels are primarily the handling of dry and of sunk investment in plant), but not liquid bulk cargoes and break bulk for international containers which are cargoes related largely to steel and earmarked exclusively for Melbourne aluminium production. (See figure 7, until it reaches capacity around 2035 page 24) (based on current trade forecasts and In the case of the Port of Melbourne, anticipated productivity improvements the largest container and general in stevedoring terminals) and then port in Australia, the emphasis is on for Hastings. developing its specialised capacity to handle containerised cargo,
20 On the question of competition for It is important to note that the ACCC connection to Webb Dock would not service provision within the ports, does not advocate the pursuit of be commercially or economically particularly for container stevedoring, competition for its own sake, but viable for an early stage container the VPSF makes no explicit statement, rather as a means of achieving greater terminal development at Webb Dock. but implicitly favours an approach of efficiency. In this context, it is concerned Such a link could only service the deferring a process which might attract that opportunities for enhancing relatively small volumes of interstate a new third entrant until around 2017. competition are not passed over, given (Adelaide) and regional export rail It anticipates that, by then, all potential that they occur relatively infrequently. freight (approximately 15% of current capacity available to the two incumbent The ACCC’s comments reinforce the container throughput). It could not, stevedores at Swanson Dock would be position put by the Essential Services at this stage, service the much larger exhausted and it would be necessary Commission (ESC) in its Review of Port metropolitan freight distribution establish a new terminal at Webb Dock. Planning, that “there should, in general, task, as no freight from the port is The VPSF does, however, note the be less reliance on specifying the currently distributed to metropolitan need for flexibility, stating that “this precise sequence of port development Melbourne by rail. For metropolitan sequence should be considered the and more reliance on assessing the freight, the link would only connect presumption for planning purposes relative merits of market opportunities Webb Dock to the Dynon rail terminal – a presumption that should be that arise”. The Government agreed and trucks would still have to pick up revalidated periodically as commercial with this position in its response to the or drop off at this already congested and other changes occur.” ESC. central location for transport to Despite the short term impacts of the destinations within the metropolitan Challenges and Opportunities current global financial crisis (GFC), area. This would be less efficient and sustained higher than projected growth more costly than direct servicing of On 31 October 2008 the Australian Webb Dock by road. Competition and Consumer in international container volumes Commission (ACCC) published its through the Port of Melbourne has The Government considers that tenth annual Container Stevedoring raised concerns about the risk of the initial priority for facilitating Monitoring Report. The report over reliance on the two existing metropolitan rail operations to the comments on the consistent high terminals at Swanson Dock to provide Port of Melbourne is to progress the levels of profitability of Australian the necessary capacity to efficiently development of the Metropolitan stevedores and questions “the extent to service projected volumes to 2017, as Freight Terminal Network (MFTN), which the stevedores actually compete proposed in the VPSF. focussing on servicing the core with each other’s business”. In the Government’s view, Swanson-Dynon precinct. The ACCC comments in relation to notwithstanding the GFC, these Connection of Webb Dock by rail Melbourne that “Any unnecessary combined competition and capacity could be considered in the future delays in establishing additional factors make it essential that as part of a second stage of container terminal facilities could consideration be given to additional stevedore terminal development, result in lost opportunities for greater container capacity, including the should this be determined to be the competition. The future challenge is possibility of developing Webb Dock for preferred location for provision of in coping with growth while ensuring international containers. additional capacity in the medium incentives for improving efficiency Development of Webb Dock for large to longer term. are maintained”. scale container handling has previously been predicated on the reconnection of the Webb Dock Rail Link (WDRL). However, it is apparent that a rail
Port Futures 21 FIGURE 7 Export and Import Commodities by port FY 2007/08
Port of Portland, Import Commodities Port of Portland, Export Commodities (Tonnes) FY 2007/08 (Tonnes) FY 2007/08
Melbourne
Geelong Portland Hastings Paper Pulp Alumina Wheat Soft Woodchips Liquid Pitch Fertilser Hard Woodchips Logs Sulphuric Acid Petroleum Coke Aluminium Ingots Fertiliser Exports Wind Farm General Cargo Fodder Mineral Sands Components Livestock exports (sheep & cattle) 675,884 head
Port of Melbourne, Leading Categories Port of Melbourne, Leading Categories of Non-containerised Import Trade* of Non-containerised Export Trade* FY 2007/08 FY 2007/08
Motor Vehicles Motor Vehicles Crude oil Miscellaneous manufactures Petroleum products Accompanied passenger * Port of Melbourne charts in this figure indicate vehicles relative proportions of leading trades and Cement commodities only, not total trade. Transport equipment
Source: Individual ports.
22 Port of Geelong, Export Commodities Port of Geelong, Import Commodities (Tonnes) FY 2007/08 (Tonnes) FY 2007/08
Bulk Grain Woodchips Bulk Grain Steel Steel Aluminium Ingots Aluminium Ingots Calcite Logs Fertilisers Logs Fertilisers Other Dry/ Petrol & Crude Oil Other Dry/ Sulphuric Acid Break Bulk Cargoes Break Bulk Cargoes Alumina/Pet. Bulk Liquid Chemicals Petrol & Crude Oil Coke/Al Fluoride Bulk Liquid Chemicals
Port of Hastings Export Commodities Port of Hastings, Import Commodities (Tonnes) FY 2007/08 (Tonnes) FY 2007/08
LPG ULP Oil Oil Steel Steel
Port of Melbourne, Leading Export Port of Melbourne, Leading Import Containerised Commodities* FY 2007/08 Containerised Commodities* FY 2007/08
Miscellaneous Pulp & wastepaper Miscellaneous Fruit & vegetables manufactures Paperboards & fibreboards manufactures Metal manufactures Furniture Dairy products Beverages Electrical equipment Vehicle parts Meat Fruit & vegetables Machinery Toys & sporting goods Stockfeed Paper & newsprint Clothing Cereal grains Paper & newsprint
Port Futures 23 Priorities and Actions
Roles Capacity The Government considers that the Apart from the potential competition broad roles for the four commercial benefits, the Government believes it trading ports, as set out in the VPSF, is also prudent to consider an initial remain relevant and appropriate. module of development at Webb Dock for capacity reasons. Development of Competition a new stevedoring terminal at Webb The Government considers that there Dock ahead of the current proposed are potential benefits to be gained timing of 2017 would ensure that by considering the introduction of there is sufficient capacity in the greater competition into the provision Victorian ports systems, with a prudent of container stevedoring services in safety margin for planning purposes, the Port of Melbourne. These benefits to accommodate projected container would generally translate into lower volume growth until around 2020. prices to port users. Other possible Securing capacity in Victoria is also benefits of competition include critical to ensuring that the Australian improved service levels to shipping ports system as a whole is well placed lines and land transport operators to accommodate expected growth over servicing the port. this period. Testing the market for interest in the As a further potential means of development of an initial module of increasing capacity in the Port of additional stevedoring capacity at Melbourne, PoMC is also proceeding Webb Dock, ahead of the 2017 date with detailed planning for the proposed in the VPSF, would provide expansion of the Swanson Dock an opportunity to more fully assess container terminals and the ultimate these benefits. extension of the Swanson Dock wharves. The decision to proceed This approach is consistent with and timing of the various stages of the findings of the ESC’s Review of construction of this project will involve Port Planning which recommended negotiations with the incumbent that there be less reliance on a stevedores and will be subject to precise sequence and timing of port a satisfactory business case and all development and more emphasis on necessary Government approvals. assessment of individual proposals on their merits. The Government, in responding, has implemented an amendment to the port legislation, effective 1 July 2009, clarifying the obligation of port corporations to promote the implementation of competition principles in the provision of port services, such as stevedoring.
24 Port Futures 25 Sequence of development • progress planning and environmental It is proposed to revise the investigations necessary to inform sequence/timing of container formal environmental assessment terminal development proposed and approval processes for the in the VPSF, as follows: staged expansion of the Port of Hastings, subject to a satisfactory • consider bringing forward the business case for each stage. development of an initial module of terminal capacity at Webb Dock of Under this approach, an initial module up to one million TEU, subject to a of container capacity at Webb Dock satisfactory business case and all would be serviced by the road network, necessary Government approvals; which will have sufficient capacity • maintain the existing planning to accommodate a new terminal reservation for the Webb Dock Rail development of this scale. Subject Link. Future consideration of a link to funding, targeted investment in would depend on determination of the Principal Freight Network (PFN) the role of Webb Dock in meeting servicing the port and increased use the State’s longer term container of next generation HPFVs on selected capacity requirements, development routes, particularly off peak and at of a satisfactory business case and a night as proposed in Freight Futures, suitable funding model; will further extend the capacity of the road network to support expanded • progress detailed planning to terminal capacity at Webb Dock. extend the Swanson Dock container A trial of next generation HPFVs will terminal yards and wharves towards commence shortly on selected routes Footscray Road to increase the servicing the Port of Melbourne and capacity of the East and West in the Green Triangle region. Swanson container terminals, with the decision to proceed and timing The Government considers this to be of construction stages to be subject a logical and sustainable approach to a satisfactory business case and to securing capacity and the potential all necessary Government approvals; benefits of competition in the medium term. In the longer term, • progress planning and, subject subject to confirmation of funding to funding, implementation of through the Infrastructure Australia the MFTN as proposed in Freight (IA) process, the Government will Futures, including planning for a new Melbourne International Freight Terminal in the Dynon precinct, immediately north of Footscray Road; and
26 progress development of a Melbourne International Freight Terminal in the Dynon precinct, connecting to an effective network of intermodal terminals on the periphery of Melbourne, creating more favourable conditions for metropolitan distribution of containers by rail. During 2010, it is further proposed to conduct a comprehensive assessment of options for the location/timing of further tranches of container terminal capacity to accommodate long term Key Actions needs, beyond 2020. This assessment • Confirm the broad roles for Victoria’s will effectively review the longer term four commercial trading ports set out development locations and sequence in the VPSF; set out in the VPSF, with a view to either confirming this strategy or • Consider bringing forward the adjusting it as required. development of an initial module of terminal capacity at Webb Dock of up to one million TEU, subject to a satisfactory business case and all necessary Government approvals; • Maintain the existing planning reservation for the Webb Dock Rail Link for future consideration; • Progress detailed planning to increase capacity of existing East and West Swanson Dock container terminals by extending the terminal yards and wharves, with the timing of construction stages to be subject to a satisfactory business case and all necessary Government approvals; • Progress planning and environmental investigations necessary to inform formal environmental assessment processes and achieve project approvals for the staged expansion of the Port of Hastings; and • Undertake a long term container capacity study during 2010 to provide a basis for review and confirmation or adjustment as required of the longer term development locations and sequence set out in the VPSF.
Port Futures 27 Part B – Priorities & Actions
port access, efficiency, productivity and investment
Current policy settings Over the past five years the major focus Having successfully addressed this in terms of port access has been on key infrastructure constraint, the addressing the problem of inadequate focus of attention is switching to channel depth in the approaches to the landside access and efficiency issues. Port of Melbourne. To accommodate increased trade As a result, the Port Phillip Bay volumes, it will be equally important Channel Deepening Project (CDP) that infrastructure and systems are is now well over 90 per cent complete developed to move cargo quickly and and will be fully complete by the end cost effectively through scarce port of 2009, enabling vessels with a draft land, to and from points of origin and of up to 14 metres to access the port destination in the catchment of the port. of Melbourne at all tides (up from the To date Government policy has currently available 11.6 metres). focussed on improving port landside The CDP is the largest and most efficiency and access by improving complex dredging project undertaken road and rail infrastructure connecting in an Australian port and the most the ports to broader transport and significant in terms of ensuring that logistics networks. the nation’s largest container and Notable examples of such projects general cargo port can continue to be include the Dynon Port Rail Link and accessed efficiently by international other rail improvement projects around shipping lines serving the Australian the Port of Melbourne/Dynon precinct; market as trade volumes and vessel the Geelong Rail Access Improvement sizes grow over the next 30 years. Program; and the Cliff Street Overpass adjacent to the Port of Portland.
28 A limited number of permits have stevedoring terminals (i.e. combining Consumer Commission (ACCC), been issued by VicRoads in recent container pick up and delivery in the as opposed to the State based years for the use of next generation one trip to ensure that the truck is regulators. Regular monitoring High Productivity Freight Vehicle loaded in both directions). and reporting of indicators such as (HPFVs), specifically Super B Doubles More broadly, maximising port crane lifting rates, costs to users capable of carrying up to four TEUs, productivity and minimising costs to and profitability is undertaken by on specified routes connecting to the users have been consistent themes for Bureau of Infrastructure, Transport Port of Melbourne. the Victorian ports system, although and Regional Economics (BITRE) Mechanisms have also been put the means available to the State to (through Waterline published in place to measure and monitor influence these outcomes have to date bi-annually) and the ACCC (through landside distribution patterns and been relatively limited and indirect. its annual Container Stevedoring Monitoring Report). efficiency, including periodic container Productivity in Australian ports, origin/destination studies and annual particularly the five capital city Some of the costs of using Victoria’s truck utilisation surveys conducted container ports, is largely driven by ports, particularly ‘port authority’ by the Port of Melbourne Corporation the performance of the incumbent charges such as wharfage and (PoMC). stevedores in these ports. This in turn tonnage, are regulated by the The results of these studies and is driven by factors such as labour Victorian Essential Services surveys have been used by bodies such practices and levels of investment Commission. These charges as the Victorian Freight and Logistics in infrastructure, technology and typically make up only a small Council (VFLC) to educate port and operating systems in the terminals. proportion (5 to 10 percent) of the transport industry stakeholders about total interface costs of using a port Responsibility for labour relations faced by importers and exporters. the potential efficiency gains to be rests with the Commonwealth made from improved operational Government and economic regulation practices, such as higher ‘two-way of the stevedores is the responsibility loading’ rates for trucks servicing of the Australian Competition and
FIGURE 8 Total Port Interface Costs by Jurisdiction Ships 35,000 – 40,000 GT range January – June 2008
$1,000 $900 $800 $700 $600 $500
$/TEU $400 $300 $200 $100 $0 Brisbane Sydney Melbourne Adelaide Fremantle
Imports Exports
Source: Bureau of Infrastructure, Transport and Regional Economics (BITRE), 2009, Waterline 45, BITRE, Canberra ACT
Port Futures 29 FIGURE 9 Total Port Interface Costs, Ships 35,000 – 40,000 Melbourne 2008
$900
$800
$700 * Port Interface Costs January – June 2008. Port Authority & Port Related Costs July – December 2008 $600 Port Authority costs include conservancy, tonnage, wharfage, $500 harbour dues, berth charges
Port Related Costs include pilotage, $/TEU $400 towage, mooring Other Interface Costs include $300 steverdoring, customs brokers’ fees, road transport charges $200 Source: Bureau of Infrastructure, Transport and Regional Economics $100 [BITRE], 2009, Waterline 45, BITRE, Canberra ACT. $0 Import Export
Other Port Related Port Authority Other Interface
Challenges and Opportunities
In general, the State’s approach to Improving channel access influencing achievement of these key By securing an efficient, high capacity outcomes has been to set in place connection to the major international the right combination of policies, sea lanes connecting Australia to strategies, institutional arrangements overseas markets, completion of the and regulatory settings to provide CDP in 2009 will provide the opportunity the necessary business certainty and for Victoria’s key port, the Port of incentives for the private sector to Melbourne, to cement its position as the optimise productivity. nation’s leading container port. This approach has been supplemented This will mean that the significant by targeted investment by the State proportion of vessels already servicing in key port related infrastructure, the port which are draft constrained particularly landside transport links (i.e. cannot fully load) will be able (road and rail) connecting the port to fully load and operate to their to the broader freight and logistics maximum potential efficiency. network. For the most part, direct investment in infrastructure within In addition, the sooner larger next the port boundaries has been seen as generation container ships can be the responsibility of the port manager, attracted to the port, the sooner the full whether it be a private company or benefits of the project will flow through a Government owned port corporation, to cargo owners and consumers. It is with costs recovered from port users therefore imperative that the PoMC on a commercial basis. remains active in negotiations with
30 relevant shipping lines to secure services utilising these larger vessels and that the port is fully prepared in an operational sense to receive them. Adequate channel access is also a requirement for the successful operation and development of Victoria’s other commercial trading ports. While the ports of Hastings and Portland are generally regarded as natural deep water ports, the Port of Geelong, which shares a common channel with the Port of Melbourne at the Entrance to Port Phillip Bay, is becoming increasingly constrained by the limited design parameters of its approach channels in Corio Bay. As liquid bulk tankers and dry bulk carriers become larger and demand for accommodating different trades materialises, it will be necessary to investigate these constraints from both a safety and operational capacity perspective and to implement improvements in a timely manner to ensure the port is able continue to perform its role in the Victorian ports system efficiently and effectively.
Port Futures 31 Improving landside access In short, it appears that measures and efficiency such as providing improved On the landside, the performance infrastructure connections and of a port is determined not only by encouraging operational efficiencies how cargo is handled inside the port through information and educational gate, but also by the efficiency and approaches are unlikely, by themselves, effectiveness with which cargo is to produce a quantum shift in uptake moved to and from the port and by of rail as a competitive mode for the level of impact this movement has distribution of port related freight on the amenity of the communities to the metropolitan market. through which it passes. Interstate and international jurisdictions The general growth of traffic and have been progressively moving to adopt congestion on the transport networks harder edged pricing and regulatory serving the Port of Melbourne in recent mechanisms to accelerate or mandate years has placed pressure on the speed changes in operational behaviour to and reliability of freight movement achieve Government policy objectives. through the international supply chain Such objectives include more efficient and focussed attention on the need to freight outcomes, reduced urban improve its performance in a number of congestion and better utilisation of respects. Increasing adverse amenity overstretched infrastructure. impacts of truck movements through the inner West is another problem As noted previously, measures designed which has proved difficult to counter, to improve port productivity and keep although it is noted that many of these downward pressure on port prices have truck movements are not port related. generally been indirect, involving various forms of performance monitoring A range of potential responses to or ‘light handed’ price control and these challenges have been identified, relying on effective Government policy including infrastructure solutions settings and market forces to produce (such as the proposed Truck Action Plan for the Inner West announced through the desired outcomes. Regulatory the VTP and Freight Futures), measures responsibility in these areas continues to encourage off peak use of the to lie mainly in the Commonwealth’s network and measures to reduce truck jurisdiction, with some responsibility trips through improved utilisation and for port authority charges with the State use of next generation HPFVs, following economic regulator. the forthcoming trial of these vehicles. Improvements in rail mode share have been highly dependent on volatile grain harvests and consequent volumes railed to the ports. In terms of containers, interstate landbridge trains and regional export trains have continued to form the core of the rail task, but no inroads have been made into the metropolitan container distribution market, which continues to be handled exclusively by road.
32 FIGURE 10 Productivity in Containers per hour
60
55
50
45
40
35
30 Containers per hour 25
20
15
10
Jun–96Dec–96Jun–97Dec–97Jun–98Dec–98Jun–99Dec–99Jun–00Dec–00Jun–01Dec–01Jun–02Dec–02Jun–03Dec–03Jun–04Dec–04Jun–05Dec–05Jun–06Dec–06Jun–07Dec–07Dec–08 Quarter Ship rate Vessel working rate Crane rate
Sources: Source: Bureau of Infrastructure, Transport and Regional Economics (BITRE), 2009, Waterline 45, BITRE, Canberra ACT
FIGURE 11 Container Terminal Performance: Sydney Melbourne Brisbane June 2008
60
50
40
30
20 Containers per hour 10
0 Sydney Melbourne Brisbane Crane rate Vessel working rate Ship rate
Sources: Source: Bureau of Infrastructure, Transport and Regional Economics (BITRE), 2009, Waterline 45, BITRE, Canberra ACT
Port Futures 33 Improving productivity In October 2008 States and Territories In terms of port productivity, submitted priority ‘Nation Building’ as measured by crane rates reported projects to IA for analysis. IA presented in Waterline, performance has its Report to the Council of Australia continued to improve steadily over Governments in December 2008 listing the last 10 years since the major 96 projects from around the nation. industrial reforms on the waterfront After working closely with States and in the late 1990s. However, there is Territories to undertake further analysis some concern in industry that the of priority projects, IA recommended pace of improvements in operational to the Commonwealth Government a efficiency is slowing and there is a list of projects ready to proceed (those need to continue the momentum for funded from the Building Australia Fund, improvements in productivity as the including, in Victoria the Regional Rail opportunities present themselves. Link and Melbourne Metro rail tunnel projects) and also a number of projects Port pricing is also a critical measure of to form a priority pipeline. port performance and it is noteworthy that to date port authority charges and Many of the ‘priority pipeline projects’ total port interface costs for the Port of around the nation are port and freight Melbourne have remained competitive related projects. Victoria has six IA with the other capital city ports. priority pipeline projects, five of which are port and freight related: Facilitating investment • Donnybrook Interstate Freight In relation to facilitating investment in Terminal the ports, it is the Government’s view • Port of Hastings Development that Victoria’s ports should be funded on a ‘user pays’ basis, with prices regulated • Port of Melbourne International where necessary by the ESC. Freight Terminal The Government therefore broadly • Green Triangle Road and supports the Infrastructure Australia Rail Upgrades (IA) position that there should not be a • Peninsula Link need for public sector investment within the port boundaries. However, there remains a strong imperative for public investment in linking transport infrastructure outside the port gate to ensure that the port is well placed to efficiently and sustainably service its trade catchment markets.
34 In addition, there are some critical Priorities and Actions projects, which are not currently included amongst Victoria’s priority Improving channel access pipeline projects. In particular, the TAP, The most obvious and pressing priority connecting the port precinct to the in this regard is for the PoMC to Westgate Freeway via Whitehall and successfully complete the CDP, on Hyde Streets and WestLink, connecting schedule, on budget and performing the port precinct by tunnel to Geelong strongly against the Environmental Road under Footscray, form vital Management Plan, by the end of 2009. components of the future transport This will open the Port of Melbourne network required to support the for servicing by up to14 metre draft Port of Melbourne. vessels, at all tides. The Victorian Government believes It is also proposed that, subject to that these projects, individually and funding and all necessary Government collectively, have the potential to approvals, the Victorian Regional deliver strong export and economic Channels Authority (VRCA) progress development benefits to the nation. development of a staged, long term Their early delivery will provide a strong ‘channel improvement program’ for the foundation for encouraging private Port of Geelong during 2010. sector participation and partnerships in port and freight infrastructure Preliminary investigations for the first investment in Victoria. stage of this program have commenced and focus on identifying potential To facilitate delivery of and investment operational safety risks and providing in major transport infrastructure treatments to mitigate those risks. projects generally, the Government has recently introduced the Major Areas of Port of Geelong waters Transport Projects Facilitation Bill targeted for improvement works into the Parliament. in this initial stage include: The intention of the Bill is to • City Bend improve the Government’s capacity • To the West of Refinery Pier No. 4 to deliver critical road, rail and port infrastructure projects, while • To the North East of the berth maintaining a robust assessment and at Point Henry approvals framework. The Bill will introduce new streamlined decision – Subject to all necessary State and making processes at the assessment, Commonwealth Government approvals, approval and delivery phases of the treatment will involve the removal declared major transport projects, of a relatively small quantity of increasing certainty for investors and material to improve access. bringing forward the benefits to the Several studies have already been transport system and the system users. carried out to identify biological and sedimentary parameters and additional studies are planned to focus in detail on the above areas.
Port Futures 35 FIGURE 12 Port of Geelong terminals and connections
Shipping Channel
Geelong Ring Road Port of Geelong Projects Port area of interest Port of Geelong Existing Rail
36 Improving landside access Many of the strategies proposed in and efficiency the TOP relate directly to industry. The Minister for Roads and Ports In particular, initiatives to encourage launched the Victorian Freight greater customer flexibility; improve and Logistics Council’s Truck empty container park arrangements Optimisation Plan (TOP) for the and extend operating hours; improve Port of Melbourne/Dynon precinct the terminal interface and create a in March 2009. more efficient vehicle booking system; and improve collaboration between The TOP was the result of a project, transport operators. funded by the PoMC, to investigate whether two-way truck loading could The TOP also suggests strategies that be increased to better utilise trucks in would require Government involvement, the Port of Melbourne/Dynon precinct. including: Truck utilisation and two-way loading • approval for increased use of longer, at the Port of Melbourne are assessed next generation HPFVs, capable of annually in a 24 hour survey conducted carrying two 40 foot containers; by PoMC. • identifying and addressing A number of surveys preceded the TOP infrastructure capacity constraints which indicated that only around 50% that prevent optimum use of of potentially available truck container next generation HPFVs; slots were utilised. • increasing the mass limit of The investigations found that truck next generation HPFVs from optimisation and two-way loading was the current level of 68 tonnes adversely affected by late arrivals of to up to 77.5 tonnes; and vessels (60% of arrivals), equipment • measures to address driver breakdowns at port terminals, delays shortages. at gates of overflow terminals, restrictive container park operating Through the directions and initiatives hours and customer operating hours, set out in The Victorian Transport Plan late bookings from customers and and Freight Futures, the Government road congestion at peak times. will continue to work with industry to improve truck efficiency in and around the Port of Melbourne.
Port Futures 37 Further, as foreshadowed in the VTP The RFAC will also contribute to the and Freight Futures, the Government Government’s proposals for extensive will introduce a ‘road freight access investment in improved transport charge’ (RFAC) for trucks accessing infrastructure serving the Port of the Port of Melbourne. Initially Melbourne, including major new links the RFAC will be applied to trucks to be provided under the Truck Action accessing the two main container Plan (TAP) and WestLink. terminals at Swanson Dock to pick up Given the increasing profile of ports on and deliver containers. It is proposed the national and international agenda, that this charge will be collected it is vital that critical transport links on behalf of the Government by the are developed or upgraded to unlock Port of Melbourne Corporation. productivity benefits in the supply chain The RFAC has a number of key and address local amenity issues. objectives. It will provide incentives Further details regarding the for operators to improve truck implementation of the RFAC, efficiency by reducing the number including proposed rates and of truck visits to the stevedoring collection arrangements, will be terminals required to service the same released in 2009-10. freight task. Increased two way truck loading and use of next generation The Government will also continue HPFVs (subject to the outcome of trials to work towards an increased role and funding of necessary upgrades for rail in servicing the port landside to the road network) will result in distribution task. Ongoing improvements lower average charges per container to rail infrastructure will help, as will transferred in and out of the terminals. measures such as the RFAC. As the charge will not be applied to For sound operational and cost containers railed in and out of the reasons, rail has traditionally terminals, the RFAC will also support been better suited to longer haul the increased use of rail. tasks. However, the Government Subject to final assessments of recognises that for rail’s contribution operational impacts, consideration to significantly increase, it will need to will also be given to varying the RFAC become a force in the distribution of by time of day and potentially day of containers with origins and destinations the week, to encourage pick ups and in the Melbourne metropolitan area. deliveries in off peak periods and at The Government sees the role of rail night. This will reinforce and reward in servicing the short haul metropolitan the practice of night time ‘bulk runs’ market as emerging in the medium (already implemented by some of the term, in conjunction with the successful larger transport operators) and in development of a Metropolitan Freight turn will result in reduced impacts Terminal Network (MFTN), as described from road congestion around the port in Freight Futures. and central Melbourne area during peak periods and more efficient use of the Principal Freight Network (PFN) at currently underutilised times.
38 FIGURE 13 Metropolitan Freight Terminal Network vision
LEGEND Seymour Freeway/Tollway Bendigo
G IN DonnybrookDonnybrookDonnybrook Major road R DonnybrookDonnybrook N A IT Sunbury L SunburySunbury O P Railway O R T E M CraigieburnCraigieburn R CraigieburnCraigieburn H E U T ME U Urban areas DiggersDiggerDiggerssRest Rest Rest O HurstbridgeHurstbridgeHurstbridge
C Ballarat A EppingEpping LD EppingEpping Urban Growth Boundary E UpfieldUpfieldUpfield R UpfieldUpfieldF F W
W Y Y MeltonMelton WatergardensWateWatergardensrgardens Melbourne @5 million investigation area W D ES R TE RN F RockbankRockbank WY Proposed Urban Growth Boundary RockbankRockbankRockbank G LilydaleLilyLilydaleLilydaledale IN LilydaleLilydaleLilydale R Y W H N H R A D DeerDeer Park Park E N DeerDeer Park Park T O Regional Rail Link S O R E MELBOURNEMELBOMELBOURNEURNE A W M Proposed transport corridor
WilliamstownWilliamstown K WilliamstownWilliamstown N I WerribeeWerribee L WerribeeWerribee T
WY S F A M Port of Melbourne
S E CE O BelgraveBelgrave IN N BelgraveBelgrave PR A S H N E P E Port of Hastings A SandringhamSandringham N H W Y DandenongDandenong FW International Freight Terminal DandenongDandenong Y
LaraLaraLara Donnybrook/Beveridge Interstate Port K
N Phillip I L Freight Terminal T
S
A
E PakenhamPakenham Metropolitan Freight Terminals CranbourneCranbourne 0 10 km
Y Traralgon W Potential Freight Terminal GeelongGeelong FrankstonFrankstonFrankston H T
R
O
P
N Concentrated freight flows - Y R E
W T H Port to terminals S
N E A MorningtonMorningtoMorningtonn E W MorningtonMornington P E N Inter-terminal freight flows
Y W F . Western IN N Port E P N O T G IN N HastingsHastings R O M
Port Futures 39 Through the development of the interstate domestic freight movement, MFTN, the Government will promote this will encourage ‘land bridging’ the concentration of international from other States, such as the Adelaide container flows on designated high trade which is currently handled by rail capacity routes on the PFN, between through the Port of Melbourne. the port and a series of ‘open access’ metropolitan freight terminals located Improving productivity within the major industrial areas to the The Government proposes to explore, west, outer north and outer south-east in conjunction with the PoMC, of Melbourne. the scope to secure ongoing port These terminals will be well serviced productivity improvements through by both major arterial roads and rail. direct negotiations with port service In the first instance, they are likely providers. This may take the form, to focus on handling high volumes for example, of performance clauses of containers transported by road – in stevedoring leases to be negotiated increasingly next generation HPFVs in the context of the provision of operating off peak and at night. additional stevedoring capacity in the Port of Melbourne. Over time, as volumes grow with the rapid growth in port trade, Facilitating investment rail shuttle operations are likely to become increasingly competitive Victoria’s IA Pipeline Projects will and, assuming they can be be required in the short to medium accommodated on pathways through term to provide enhanced access to the metropolitan system and achieve the State’s four trading ports. Victoria commercial viability, can ultimately will continue to undertake analysis of be expected to carry a significant these and other critical port and freight proportion of the metropolitan related projects for submission to IA in container distribution task. October 2009 for funding consideration. In the meantime, the Government The development of national ports and will continue to invest in the regional freight network strategies as well as intrastate rail freight network to further analysis of priority Pipeline improve its capability to service regional Projects will underpin infrastructure exports bound for the ports. It will investment decisions by both the public also work in partnership with the and private sectors to maximise the Commonwealth and local governments competitiveness of Victoria’s ports and to identify and develop regional other nationally significant freight hubs. intermodal terminals to further Through the Major Transport Projects facilitate these longer haul rail flows. Facilitation Bill, the Government will In addition, the Government also seek to provide a more streamlined will continue to work with the decision making environment for the Commonwealth Government and development and delivery of major Australian Rail Track Corporation transport projects, while maintaining a (ARTC) to improve interstate mainline robust approvals process, to encourage corridor capacity. As well as benefiting private sector investment.
40 Key Actions • Open the Port of Melbourne for servicing by up to 14 metre draft vessels at all times by completing the Port Phillip Bay Channel Deepening Project (CDP), on schedule, on budget and performing strongly against the Environmental Management Plan; • Progress development of a staged, long term ‘channel improvement program’ for the Port of Geelong, focussing initially on identifying potential operational safety risks and providing treatments to mitigate those risks; • Progressively implement the strategies set out in the Truck Optimisation Plan, in partnership with industry, to improve the utilisation and efficiency of trucks servicing the container terminals at the Port of Melbourne; • Design and implement a road freight access charge for trucks accessing the Port of Melbourne, in consultation with transport operators, stevedores and other key stakeholders; • Following the forthcoming trial, create the conditions for the efficient operation of next generation HPFVs and for rail to become a viable mode for metropolitan container distribution through the development of the Metropolitan Freight Terminal Network, as funding becomes available; • Explore, in conjunction with the PoMC, the scope to secure ongoing port productivity improvements through negotiations with port service providers; and • Undertake further analysis and development of Victoria’s Infrastructure Australia Pipeline Projects and other critical port related projects as a platform for securing both public and private sector investment in Victoria’s ports and freight system.
Port Futures 41 Part B – Priorities & Actions
essential port services
Current policy settings In response to the Next Wave of and wharves and back up area land Port Reform review released in and infrastructure) to other services 2002, the Port Services Act 1995 essential for the operation of the port (PSA) was extensively amended but usually provided by third parties. in 2003 to establish a new set of The effect of these provisions was to port corporations with the necessary ensure that should there be a failure objectives, functions and powers to or discontinuity of third party service implement the Government’s policy provision, the port corporation would directions and priorities for the be clearly required and empowered to Victorian ports system. step in and directly provide or arrange A key aspect of these changes for the provision of such services. was to re-establish appropriate Essential port services are taken to accountabilities with the port be those which are required, as a corporations for managing minimum, to ensure the continued and developing the port in effective functioning of the port. an integrated manner. The most obvious of these include In this context, one of the five new pilotage, towage, mooring and objectives for PoMC set out in the stevedoring services. PSA was to “ensure that essential port However, there are also other services services are available and cost effective”. which may be considered less critical, This objective was in turn supported by but nevertheless very important for the a new function, “to provide, or enable and cost effective functioning of the port. control the provision by others of, services These include bunkering services for for the operation of the port of Melbourne”. refuelling vessels and ship lift/repair These new provisions located ultimate facilities to enable the servicing and responsibility for the effective operation repair of a range of essential port of the port with the port corporation working vessels (e.g. tugs, bunker and clarified that this responsibility barges and line boats) within or extended beyond the facilities and proximate to the port precinct, rather services provided directly by the port than requiring these vessels to leave (e.g. channels and navigation services the port to be repaired elsewhere.
42 Challenges and Opportunities over pilotage services, they are subject to a significant degree of regulation In most cases, it is not intended that through the Director of Marine Safety, the port corporation become a direct who licenses pilots and registers provider of essential port services, pilotage service providers under the particularly those which are already Marine Act 1988. provided by the private sector. However, there is an onus on the corporation Towage services are arguably even to ensure such services are ‘available more critical to the safe and efficient and cost effective’ by ‘enabling and operation of shipping in the ports. controlling the provision by others’ Tugs assist ships to manoeuvre safely of such services. to and from their berths in confined circumstances under all weather In the case of essential land based conditions; are a critical resource in services, such as stevedoring, the responding to any navigational incident port corporation is able to achieve (e.g. a grounding) and are a frontline this requirement by making its defence in the case of a fire in the port. land available to private sector companies to develop and operate. The Port of Melbourne – with its These companies are then required challenging entrance at Port Phillip to adhere to contractual conditions Heads, its long shipping channels, established through leasing and confined river berths and heavy traffic licensing arrangements, thus – is particularly dependent on effective, providing a level of ‘control’ over high quality towage services. This the service provision activity. dependence will become even more marked as larger ships begin visiting However, in the case of water the port after the completion of the based services such as towage Channel Deepening Project. and pilotage, there is generally no contractual relationship between In the Government’s view, in the case the port corporation and the private of towage services in the Port of sector service provider, since the Melbourne in particular, the inability port has no ownership rights as such of the port corporation to effectively over the waters of the port. Whilst ensure minimum standards of service the port is able to exercise a limited provision by private towage companies degree of control over these service creates a potentially significant risk providers through the agency of the exposure to the port and the State. harbour master, this control deals In relation to ship lift facilities, or with immediate day to day safety and slipways, the lack of clarity about operational matters and does not whether these are to be treated as generally go to fundamental issues of an ‘essential port service’ or a purely ‘availability’ and ‘cost effectiveness’. optional service to be provided at the Pilotage services are critical to enable discretion of the market has created ships to safely and efficiently navigate significant and protracted uncertainty the channels in the approaches for users. to the ports. Although the port corporations have no direct control
Port Futures 43 In particular, there has been Priorities and Actions uncertainty about the future of the largest operating slipway in the Port Towage of Melbourne, the Victoria Dock In relation to towage in the Port of Slipway, for some years due to its planned closure as wharves at Victoria Melbourne, the Government proposes Dock are progressively developed to address the need for more control for increased trade. Although Port of over the availability of adequate Melbourne Corporation (PoMC) has towage services by amending the recently refurbished the slipway and PSA to provide PoMC with relevant has committed to replacing it on a powers to set minimum conditions ‘like for like’ basis elsewhere in the for provision of towage by operators. port when it closes, pricing for its The intention would not be to prevent use is such that many potential users towage service providers from choose to leave the port to access participating in the market (i.e. the similar services in other ports (e.g. conditions would not involve exclusive Portland, Launceston) and others are licensing), but rather to ensure that prevented from using it by its limited operators meet consistent minimum capacity (up to 400 tonnes), which is requirements in terms of number and not sufficient to handle larger vessels, capacity of tugs and their availability. such as newer tugs and bunker barges. It is proposed to bring forward A larger capacity facility (up to 1200 necessary legislative amendments tonnes) has been proposed, which would to ensure that PoMC is well placed to be at least capable of handling the deal with the ‘post channel deepening’ largest of the tugs required for the Port operating environment. The legislative after channel deepening and a range of provisions will be structured so as other working vessels currently unable not to be put into effect unless the to be serviced in the port. response of the existing towage Slipways are not usually considered providers to the increased service to be commercially viable facilities in demands is considered to be their own right and generally rely on inadequate by the Government. synergies with related ship building In addition, through a more general and repair businesses and strategic review of the Marine Act 1988 which is considerations to justify their existence. currently in progress, the Government In the Government’s view the strategic will consider options for strengthening merit of ensuring that slipway facilities safety requirements for water based port of sufficient capacity are ‘available and service providers, including accreditation cost effective’ in the Port of Melbourne, schemes to be administered by the the largest container and general port Director of Marine Safety. in Australia, should be considered. This would mean, for example, that key port working vessels, such as tugs and bunker barges, could be serviced and repaired cost effectively without leaving the port and potentially exposing it to reduced service levels for periods of time.
44 Ship lift facilities In relation to ship lift facilities, the Government will work cooperatively with PoMC and other interested parties and stakeholders to ensure that an adequate replacement is put in place for the Victoria Dock Slipway once it is closed. In addition to providing a more convenient local facility for port service providers (such as tug and bunker Key Actions barge operators) and other commercial • Bring forward legislative and larger recreational vessels, it is amendments to ensure that expected such a new facility, should PoMC is provided with relevant it be developed, would stimulate the powers to set minimum operating development of a more vibrant and standards for towage services viable marine service and repair if required in a ‘post channel industry in the northern part of the Bay. deepening’ operating environment; It is noted that the availability of • Develop options for strengthening suitable alternative sites for such safety requirements for water based a facility is quite limited and that, port service providers, including in this regard, it is not essential that pilots, tugs, bunker barges and line the facility be located in the Port of boats, through the current general Melbourne, provided it is located review of the Marine Act 1988; and with convenient access for port vessels in Port Phillip Bay. • In partnership with the PoMC In recognition of the generally and other potential beneficiaries, non-commercial nature of such subject to business case and budget facilities, the Government will approval processes, consider consider contributing capital funding contributing State capital funding in conjunction with the PoMC and to ensure the establishment of an other potential beneficiaries to adequate capacity ship lift facility the establishment of a suitable when required to replace the Victoria replacement ship lift facility, subject Dock Slipway. to the usual business case and budget approval processes. It is anticipated that all ongoing operating costs would be funded by users of the facility.
Port Futures 45 Part B – Priorities & Actions
port governance
Current policy settings As discussed earlier, the current Under these arrangements, private governance arrangements port operators retain significant for the Victorian ports system responsibilities within the Victorian were established through major ports system, including ownership and amendments to the Port Services management of the land of the ports Act 1995 (PSA) in 2003 in response of Portland and Geelong; management to the Next Wave of Port Reform of the waters of the Port of Portland; review. Three new port corporations and management of the land and were established through these waters of the Port of Hastings. amendments, as follows: The objectives, functions and powers • Port of Melbourne Corporation of the port corporations are clearly (PoMC) – responsible for the set out in the legislation and provide efficient, integrated and sustainable the legal charter within which they development and management of the must operate. Port of Melbourne land and waters; In relation to PoMC and PoHC, • Port of Hastings Corporation (PoHC) the charters focus on activities – responsible for the sustainable to develop and manage the specific planning, development and geographic areas which are management of the Port of Hastings, constituted by the declared land including the administration of the and waters of the respective ports. Port Management Agreement (PMA) There is some acknowledgement of the with the private sector port operator; importance of connections between and the ports and the broader freight and • Victorian Regional Channels Authority logistics systems and networks of (VRCA) – responsible for the direct the State through a requirement to management of the Port of Geelong coordinate activities with other bodies channels and oversighting the responsible for those systems and management of the channels of the networks. However, there are no specific Ports of Hastings and Portland. objectives and functions requiring or empowering the port corporations to actively participate in the development and/or management of these external systems and networks.
46 FIGURE 14 Key Players and Regulators in the Port
Contractual Relationships Water Service Providers Regulatory Relationships Land Service Providers Accredit / License Regulators
Freight Fwds & Importers / Customs Brokers Exporters
Shipping Bunkers Agents / Lines Road Operators
Rail Operators Port Manager Tugs
Harbour Master Stevedores
Pilots
Customs OESC Victoria Police Work Safe Director of AQIS AMSA EPA MMFB Victoria Marine Safety OTS CFA
Victoria also has fourteen (14) local to Local Port Managers appointed ports providing infrastructure assets under the PSA. Local Port Managers that support the commercial fishing, must be a Committee of Management recreational fishing, boating and for the Crown land within a local tourism industries (see Figure 15, port and are currently made up of page 48). These smaller ports are a mix of local councils, Parks Victoria, public facilities located on Crown Land. Gippsland Ports and other local Currently, they are managed on behalf management bodies. of the State through the Department of Sustainability and Environment (DSE). Day to day management is delegated
Port Futures 47 FIGURE 15 Victoria’s local ports
14 Melbourne 13 Geelong Portland 8 12 Hastings 1 2 3 7 4 6 9 10 11 5 N
Commercial Ports 1 Portland 6 Lorne 11 Corner Inlet Local Ports 2 Port Fairy 7 Barwon Heads 12 Gippsland Lakes
3 Warrnambool 8 Port Phillip 13 Snowy River
4 Port Campbell 9 Westernport 14 Mallacoota
5 Apollo Bay 10 Andersons Inlet
Also of relevance to the governance of The Bill has been highlighted as Victoria’s ports is the comprehensive one of the key pieces of legislation review of transport legislation and to underpin the policy direction and policy – known as the Transport projects in The Victorian Transport Legislation Review. The proposed Plan (VTP) and demonstrates the outputs of the Transport Legislation Government’s commitment to ensure Review are modern, best practice that all improvements to the transport policy, legislation and administrative system, which includes the ports, over arrangements with clearer and better the coming years are aligned to a single targeted regulatory requirements. vision for an integrated and sustainable The Government recently released the transport future for Victoria. policy statement entitled Towards an Integrated and Sustainable Transport Future: A New Legislative Framework for Transport in Victoria, which set out a new policy framework to be enshrined in the forthcoming Transport Integration Bill.
48 Challenges and Opportunities Despite their apparent complexity, Although PoHC has made good The inefficiency of this approach involving as they do a mix of public and progress with strategic planning for in terms of the allocation of private entities, the current governance the future development of Hastings, resources and expertise is further arrangements have operated effectively including extensive community highlighted by the fact that a key over the past five years. engagement and the preparation of task for PoHC is to prepare for the In particular, they have represented a a comprehensive Port Land Use and conduct of complex and sensitive major improvement on the pre-existing Transport Strategy (PLUTS), some environmental approval processes arrangements which were heavily inherent problems have emerged for the development of the Port critiqued in the Next Wave of Port with this overall approach. Hastings. At the same time, PoMC Reform review for their lack of Because the primary long term has just completed a similar process integration and narrow commercial role for Hastings is seen to be to in relation to the Channel Deepening focus, without sufficient regard to the accommodate container trade Project in Port Phillip Bay and is State’s broader strategic interests. servicing the Melbourne market ideally placed to undertake such a role for the Port of Hastings. Integration of Melbourne and Hastings (i.e. the same as the current role of the Port of Melbourne), PoHC has The separate management of the effectively been in competition with ports of Melbourne and Hastings PoMC in progressing its business has increasingly proved to be planning for this function. problematic in terms of efficiently advancing, in parallel, the State’s Under the current ‘competitive’ broader strategic objectives for the model, the incentives for PoMC are development of these two key ports. to maximise throughput through Melbourne and defer diversion to Under the Victorian Ports Strategic Hastings for as long as possible. Framework 2004 (VPSF), Hastings was designated as Victoria’s second This includes retaining all existing container port, to accommodate non-containerised trades for as long overflow volume from Melbourne as possible, as well as retaining the from around 2030 and beyond. PoHC container trade. was to proceed with planning for the Interdependence and competition with development of Hastings for this the planning for Melbourne has made future container role and to ensure it more difficult for PoHC to progress that necessary planning protections its business planning for Hastings were put in place. to accommodate both medium term In the intervening period, it was (non-containerised) and longer term proposed that Hastings could provide (containerised) trades. an alternative site for the handling of This problem with the inherently any non-containerised trades (e.g. cars competitive nature of the governance and coastal trades) displaced from arrangements between Melbourne Melbourne as containers consumed and Hastings has been compounded available land and berth capacity in that by the major imbalance in size and port. Under this model, Hastings would compete for non-containerised trades resources between the two entities, on an equal footing with the other ports, with Hastings having only a handful including Geelong and Portland. of staff and being heavily reliant on the DOT for funding and technical support.
Port Futures 49 FIGURE 16 Port of Melbourne Import and Export Container Distribution 2007 – Metropolitan
Seymour
Bendigo
G IN DonnybrookDonnybrook R DonnybrookDonnybrook N A IT SunburySunbury L SunburySunbuSunburyry O P O R T 15% 12% 14% E M CraigieburnCraigieburn R CraigieburnCraigieburn H E U T ME U DiggersDiggers Rest Rest O HurstbridgeHurstbridgeHurstbridge
C Ballarat A EppingEpping LD EppingEpping E UpfieldUpfieldUpfield R UpfieldUpfieldF F W
W Y Y MeltonMelton WatergardensWatergardens W D ES R TE RN F RockbankRockbank WY RockbankRockbankRockbank G LilydaleLilyLilydaleLilydaledale IN LilydaleLilydaleLilydale R Y W 8% 8% 8% H N H R A D DeerDeer Park Park E N DeerDeer Park Park T O S O R E MELBOURNEMELBOMELBOURNEURNE A W M
5% 3% 4%
20% 25% 22% WilliamstownWilliamstown K WilliamstownWilliamstown N I WerribeeWerribee L WerribeeWerribee T
WY S F A M
S E CE O BelgraveBelgrave IN N BelgraveBelgrave PR A S H N E P E A SandringhamSandringhSandringhamam N H W Y 30% 17% 24% DandenongDandenong FW DandenongDandenongDandenong Y
LaraLaraLara Port K
N Phillip I
L
T
S
A
E PakenhamPakenham CranbourneCranbournCranbournee 0 10 km
Y Traralgon
W GeelongGeeloGeelongng FrankstonFrankston H T
R
O
P
N Y R E
W T H S
N E A MorningtonMornington E W MorningtonMornington P E N
Y W F . Western IN N Port E P N O T G IN N HastingsHastings R O M
LEGEND Freeway/Tollway Imports
Exports Major road Total Railway
Urban areas
Melbourne @5 million investigation area
Regional Rail Link
Proposed transport corridor
50 International supply chain Governance arrangements for the ‘beyond the port gate’ Port of Geelong The focus of the charters for PoMC The governance arrangements for and PoHC on port land and waters the Port of Geelong remain more has proven to be too limited in terms complex than the other commercial of promoting meaningful action to trading ports, with two land managers, improve the functioning and efficiency a separate channel management of the international supply chain authority and a number a large port ‘outside the port gate’. reliant industry stakeholders with Requiring ‘coordination with other significant land holdings adjacent responsible bodies’ does not create the to the port. This complexity makes necessary incentives or accountability coordinated and integrated land use with any one body for achieving and transport planning difficult to improvements. As a result, progress achieve and suggests the need for has been slow with the development a review of roles and functions of the of an integrated approach to the key managers and operators in the port. management of international cargo Local Ports between the ports and key points of origin and destination, particularly There is a need to emphasise that all in the metropolitan area. of Victoria’s key maritime precincts, including both the major trading ports The complexity of the international and the local ports, play an important supply chain and its obvious strategic role and make significant extension well beyond the port gate contributions to the State and national has reinforced the need to see the economies and communities. While the traditional port as only one (albeit very focus tends to be on the international important) component of the chain trading role of the larger commercial and to find a champion or champions ports, local ports also contribute capable of influencing the performance approximately $546m per annum to of the chain as a whole, in terms of Victoria’s economy and represent both efficiency and sustainability. important elements in the State’s The focus in the Freight Futures transport and logistics networks. strategy on the development of a MFTN, They represent, for example, one connected by the PFN to the ports, end of the supply chain for Victoria’s requires that the port corporation, significant commercial fishing industry. as a key player in the freight network, The major functions of the local ports be tasked and empowered to take across Victoria are to provide safe a greater role in the efficient and havens and services to the commercial sustainable flows of international fishing industry, charter boats and cargo between the port and key recreational fishing and boating freight hubs and for efficient transfers interests. The local ports are also of cargo at these locations. home to, and destination points for, many local and visiting vessels.
Port Futures 51 Significant infrastructure is also • increase coordination in the planning located in the local ports – like and development of all Victorian slipways at Paynesville, Bullock ports; and Island, Queenscliff and Apollo Bay and • provide greater alignment of fish processing operations at Lakes regulatory oversight, governance Entrance and Port Fairy. By servicing and management of Victoria’s ports a wide range of users, local ports play system as a whole, by bringing their a vital part in local communities and planning and management together support industries of importance to under a single Government portfolio Victoria’s economy. – in close consultation with local The Minister for Roads and Ports communities and key local port currently has responsibility for the stakeholders. Port Services Act 1995 which includes the various governance provisions relating to establishing and managing Transport Integration Bill local ports. Consequently, the Minister Towards an Integrated and Sustainable is already responsible for appointing Transport Future: A New Legislative local port managers, recommending Framework for Transport in Victoria boundaries for local port waters provides a set of objectives for the and land and processing local port transport portfolio, supported by regulations. However, the Minister a vision for the transport system and for Environment and Climate Change decision-making principles. currently has portfolio responsibility The inclusion of shared objectives for for local ports and therefore, DSE, all entities established under Victoria’s and not DOT, is responsible for transport legislation, including ports, managing a funding program for local will ensure that it provides a modern, ports and providing broad strategic robust and enduring framework planning services for local port which reflects community needs and facilities across the state. aspirations for transport. Given the synergies between the roles and challenges facing both the commercial trading ports and the local ports, despite the differences in scale, the Government believes there is an opportunity to: • improve transport connections and land use planning for local ports to support their role in commercial fishing, tourism and recreational fishing and boating industries;
52 Priorities and Actions • To provide a broader range of site, facility and timing options for the Integration of Melbourne and Hastings accommodation of growth in a number of different trades serviced Freight Futures clearly flagged the by the Port of Melbourne; and Government’s intentions to both proceed with planning and preparatory work • To take advantage of any operational for the staged expansion of the Port of effi ciencies which may arise from Hastings and to investigate options for closer coordination of the activities the integration of the activities of the of the two ports. ports of Melbourne and Hastings. These are complementary proposals It is proposed that legislation to intended to ensure that the implement necessary structural development and operation of the changes would be introduced in 2009-10 two ports is effectively coordinated to with a view to coming into effect from produce the best possible outcomes for 1 July 2010 or soon after. the Victorian economy and community. It is noted that the land and The goal of the proposal to integrate the infrastructure of the Port of Hastings governance and management of the (except for the Bluescope Steel facilities) is currently managed by ports of Melbourne and Hastings is to a private port operator (Patrick Ports) achieve complementary development under the PMA, which is administered and operation of the two facilities which by PoHC as the owner. Under the optimises their economic contribution to integration proposal, responsibility the Victorian economy. More specifically, for administering the PMA will transfer the objectives of the proposal are: to PoMC, as the new owner of the land • To provide an effective means and infrastructure. of supplementing the specific The port waters and channels of knowledge and capabilities held the Port of Hastings are currently by the PoHC with the significant also managed by the private port planning and technical resources operator, under a ‘channel operating and expertise held by PoMC to agreement’ with the VRCA, which undertake the complex task of forms a schedule to the PMA. Under preparing the Port of Hastings the integration proposal, responsibility for expansion when required; for the port waters and channels of Hastings and for administering the • To eliminate the potential for ‘channel operating agreement’ will be duplication of resources and effort transferred to PoMC. resulting from a competitive model of operation between the two ports; • To ensure that land use and waterway development strategies for the ports of Melbourne and Hastings are fully integrated to provide capacity to meet future trade requirements in the most cost effective manner possible;
Port Futures 53 FIGURE 17 Victorian Commercial Trading Ports – Existing Governance Arrangements
MINISTER FOR ROADS TREASURER AND PORTS PMA Port Management Arrangement CMA Channel Management Arrangement Government Port Corporations/Port Managers Port Services Private Port Managers Act 1995 Management Function
POMCPOHC VRCA
PMA CMA CMA
Patrick Ports Port of Portland GeelongPort Hastings P/L
Blue Scope GrainCorp Steel
Port of Melbourne Port of Hastings Port of Geelong Port of Geelong Port of Portland Land & Waters Land & Waters Waters Land Land & Waters
FIGURE 18 Victorian Commercial Trading Ports – Proposed Governance Arrangements
MINISTER FOR ROADS TREASURER AND PORTS PMA Port Management Arrangement CMA Channel Management Arrangement Government Port Corporations/Port Managers Port Services Private Port Managers Act 1995 Management Function
POMC VRCA
PMA + CMA CMA
Patrick Ports Port of Portland GeelongPort Hastings P/L
Blue Scope GrainCorp Steel
Port of Melbourne Port of Hastings Port of Geelong Port of Geelong Port of Portland Land & Waters Land & Waters Waters Land Land & Waters
54 FIGURE 19 Port System concept
Source: Based on Port of Melbourne, Port System Plan project International supply chain This project was initiated by the PoMC ‘beyond the port gate’ to facilitate its effective involvement To support the key directions in facilitating port system efficiency underpinning the Freight Futures and identifying solutions to meet the strategy, the Government proposes needs of an expanding international to review the charter of PoMC containerised sea-freight task. to ensure that it is able it to contribute Through the Port System Plan PoMC effectively to the development has developed and analysed a number and implementation of relevant of landside container collection and landside infrastructure and systems distribution scenarios, focussing ‘beyond the port gate’. on freight terminal numbers, sizes PoMC has already undertaken locations and connectivity by road extensive work to analyse the nature and/or rail to the port. of the international supply chain in metropolitan Melbourne through the development of a draft Port System Plan.
Port Futures 55 The analysis demonstrates that certain By bringing the planning and scenarios produce better results in management of all of Victoria’s terms of key parameters such as ports together under a single ports fuel consumption, the level of carbon portfolio, the Government believes that emissions and the total distance opportunities to improve integrated travelled by trucks. transport and land use planning The Port System Plan is consistent outcomes can be more effectively with and has the potential to realised and that improved governance significantly contribute to the and regulatory alignment will produce implementation of Freight Futures a more coordinated and efficient Direction 4: to plan and develop ports system for Victoria. Metropolitan Freight Terminal Network. It is proposed to implement this It also demonstrates that further work transfer of responsibilities in close is required to develop a sustainable consultation with local committees of business model, including the management, community and industry identification of appropriate activities stakeholders, with a target date of 1 July and revenue streams, to enable the 2010. The Government is committed appropriate role of the PoMC beyond to progressing the transfer in an open the port gate to be fully resolved and consultative manner as this will and mandated. be critical to maximising the strategic benefits to local communities, the ports Governance arrangements for the system and the State as a whole. Port of Geelong Transport Integration Bill In order to improve coordination for the planning and development of the Integration of the ports of Melbourne Port of Geelong, it is proposed to and Hastings will be progressed in conduct a review of current governance conjunction with the development arrangements and to develop options of the aforementioned Transport and recommendations for improved Integration Bill, which will also provide arrangements for consideration an opportunity to refresh the charters by the Government in 2010. of the remaining two port corporations established under the PSA, the PoMC Local Ports and the VRCA. In order to take full advantage of the synergies between the roles and challenges facing both the commercial trading ports and the local ports and improve coordination of planning and development of all ports, the Government will commence a process to transfer oversight of Victoria’s local ports from DSE to DOT. This transfer will also involve reassignment of portfolio responsibility from the Minister for Environment and Climate Change to the Minister for Roads and Ports.
56 Key Actions • Integrate the planning and operation of the ports of Melbourne and Hastings by amending the Port Services Act 1995 to transfer the functions and assets of the PoHC to the PoMC, to come into effect during 2010-11; • Subject to the development of a sustainable business model, review the charter of the PoMC to ensure that it is able it to contribute effectively to the development and efficient operation of the international supply chain ‘beyond the port gate’; • Review current governance arrangements and develop recommendations to improve coordination for the planning and development of the Port of Geelong, for consideration by the Government in 2010; • Transfer departmental responsibility for Victoria’s local ports from DSE to DOT and reassign portfolio responsibility from the Minister for Environment and Climate Change to the Minister for Roads and Ports, effective from 1 July 2010; and • Refresh the charters of the port corporations and align them with the State’s broader transport principles and objectives through the development of the Transport Integration Bill.
Port Futures 57 Part B – Priorities & Actions
port planning and protection
Current policy settings The Victorian Ports Strategic Framework degree of interpretation and the (VPSF) set in place an expectation exercise of discretion in relation that each of the four commercial to policy means that the ports are trading ports would prepare long term not automatically protected. As a strategic land use and development result, there is a heavy reliance on plans to respond to and support the structured application of zoning the broad roles and sequence of instruments available within the development set out in that strategy. VPPs to provide protection for the These plans were also to form a ports. These zones range from port basis for transparent planning and specific zones for port land, to various engagement with key stakeholders industrial zones applied around port and local communities. Drafts of land to act as transitional buffers, these plans have been the subject of to more sensitive business, commercial extensive consultation over the past and residential zones further away few years and the final plans are now from the port. ready for release with Port Futures. The Port of Melbourne land is covered In terms of recognition of the ports by a separate planning scheme, in the State planning system, the State for which the ‘Responsible Authority’ Planning Policy Framework (SPPF) is the Minister for Planning. However, within the Victoria Planning Provisions the land of the ports of Portland, (VPPs) contains a number of high level Geelong and Hastings falls within the references to the important economic planning schemes of the respective role of the ports and the need to local councils, which in turn perform protect port land and access corridors the roles of Planning Authority and from encroachment by competing uses. Responsible Authority for all planning However, while there are policy applications on port owned and mechanisms designed to address surrounding land. the threat of encroachment on port operations, they are open to some
58 Challenges and Opportunities While strategic land use and both road and rail, which enable cargo development plans have now been to be transferred quickly and efficiently completed for all of the commercial to and from the port. trading ports, this has been an It is important that there is clarity extended process and there are about appropriate development in opportunities for improvement. the immediate vicinity of the ports of The ESC in its Review of Port Planning Melbourne, Geelong and Portland, commented on this and recommended to ensure that conflict is minimised that requirements for these plans be between different users. A key clarified in the port legislation. priority is to ensure that the future Like other intensive industrial land development and operation of these uses, ports require appropriate ports is not compromised. separation from adjacent sensitive The Victorian planning system has an land uses, such as residential areas, important role to play in establishing certain business and commercial and reaffirming clear, consistent and uses, educational precincts or health appropriate buffers between the ports facilities, to both ensure the ability of and surrounding sensitive land uses. the port to operate efficiently, often on a 24/7 basis, and to protect the amenity Although, as noted, the Port of of the sensitive uses. Melbourne has a separate planning scheme applying to port-owned The need for physical separation land, this land is surrounded by four does not need to involve the municipal councils responsible for underutilisation of scarce land. As administering local planning schemes. noted above, if properly planned, this Changes to land uses in the ‘port physical separation or buffering can environs’, which falls within these be achieved through the application adjacent planning schemes, need to of transitional land uses through an be sensitive to port operations and appropriate zoning structure. In the the appropriateness of different uses case of ports, the need for careful close to the port. planning of this buffering extends to the key landside transport connections,
Port Futures 59 Significantly, the transitional zoning applies. While there are already clear structure needs to adequately protect provisions for buffers in the SUZ1 the port and be enforced. For example, Zone, the local planning scheme on the Port of Melbourne’s westerly imposes limitations on the type of boundary, a particularly significant industrial development allowed section of land has been rezoned from (limiting development to those uses an industrial zone to a business zone, which are reliant on “deep water which is typically far less effective access”). It is feasible that proposals in performing the buffering function for developments which are compatible between the port and residential uses. with port development (e.g. transport The issues of development in the port depots), but which are not directly environs surrounding the port also occur reliant on access to deep water, could at the ports of Portland, Geelong and be rejected by Council under the Hastings, where the land of the ports current arrangements. is covered by the planning schemes of While it could be argued that, in the local council within which the port the short to medium term planning is located. In these areas there have horizon, only the immediate port been instances where the transitional precincts require planning controls industrial buffer zones surrounding administered at the State level, it is port lands are inadequate or have been important that decisions made by breached through rezoning. the local planning authority in the In the case of Hastings, the Port Land surrounding ‘port related’ zonings Use and Transport Strategy (PLUTS) do not adversely affect longer term identifies ‘port precincts’ where port development. particular development proposals may apply. There are, however, significant parcels of land adjacent to these port precincts where the current Special Use Zone, ‘port related uses’ (SUZ1)
60 FIGURE 20 Port of Hastings, Port Development Precincts
Frankston - Flinders Rd
Somerville
Coolart Rd
Western Port Hwy
Tyabb - Tooradin Rd
Tyabb
Peninsula Link
McKirdys Rd
Western Port Hwy
Graydens Rd
Bayview Rd Long Island
Precinct Watts Rd Watts
Hastings
Port of Hastings 0 24 km
Existing rail Potential rail extension Potential local rail corridor Western Port
Main road Crib Point Potential regional road corridor Potential local road corridor Crib Point and Stony Point Stony Point Precincts
Somers
Port Futures 61 Priorities and Actions Port of Melbourne buffer planning Building on the extensive work Port development strategies undertaken by PoMC and a range In response to the ESC’s of relevant Government agencies recommendation and coinciding with in developing a Port of Melbourne the finalisation and publication of port Port Environs Planning Framework land use/development plans for each (PEPF), the Government will examine of the four commercial trading ports, a range of initiatives to streamline and the Government recently advanced a strengthen planning processes and legislative amendment, effective from 1 protections, including: July 2009, to require port development • Strengthening of the SPPF by, strategies to be prepared and updated for example, incorporating a set of every four years in accordance with overarching principles that seek guidelines to be issued by the Minister to balance and protect both port for Roads and Ports. operations and community safety These strategies will clarify and and amenity; regularise the obligation of port • Strengthening of policy support managers to undertake long term for protecting the operation of the port planning and will result in port in the Melbourne, Maribyrnong, better quality planning, with greater Hobsons Bay and Port Phillip consistency and more transparency Planning Schemes; for stakeholders. • Revision of current provisions Recognition in the planning system and definitions in the SPPF Ports are a special type of Freight to prevent encroachment on Activity Centre (FAC). Consistent with ports by residential land use the directions set out in Freight Futures (e.g. related to what are purported for the Principal Freight Network to be caretakers’ houses); (PFN) and Freight Activity Centres • Definition of a role for the Minister (FACs), the Government will seek to for Roads and Ports in relation have port strategic plans formally to planning proposals in the port recognised and referenced in the environs (i.e. outside the Port of SPPF. This will ensure that the critical Melbourne land) to ensure that an economic role of ports and the need amendment to a Planning Scheme to protect their ability to grow and is not automatically lodged for operate efficiently and sustainably approval if it is likely to have a is fully recognised in practical terms significant adverse impact on the in future planning decisions. operations of the port;
62 FIGURE 21 Port of Melbourne, Port Development Precincts
Dynon Road
Road Coode Road Dock Link
Anderson Road
Appleton Dock Road Whitehall Street Wurundjeri
Enterprize Road Etihad Way
Mackenzie Road Stadium Coode Island
Francis Street Lorimer Street
Salmon Street
Stony Creek backwash
Holden Dock
Plummer Street
T odd Road
Williamstown Road
d
a
o The Boulevard
R
e d i s k c Do
Princes Pier
Station Pier
Metres
Port Futures 63 • Preparation of a Planning Practice Regional Ports Planning Framework Note to guide planning decisions Complementary initiatives are also around ports; proposed to improve the planning • Consideration of planning controls frameworks for the regional that could manage interface commercial trading ports of Hastings, areas or a mechanism to provide Geelong and Portland. Specifically, two-way buffer protection, tailored the Government will: to recognise the need to balance • consider establishing the Minister and protect both port operations for Planning as the ‘Responsible and community safety and amenity Authority’ for port (and port related) (eg. similar to the Airport Environs zoned land at the ports of Portland, Overlays applied to the environs of Geelong and Hastings; and Melbourne Airport, Moorabbin Airport and many regional airports); and • ensure that the interests of the ports are explicitly considered • Consideration of the need to reinstate in the evaluation of planning industrial zoning in Yarraville, where scheme amendments involving business zones were applied later local policy and/or zoning changes without adequately considering their in the environs around the ports impact on port activity. (i.e. outside but in proximity to port land), including consideration of the There is considerable community nomination of the Minister for Roads interest in these matters. It is therefore and Ports as a ‘Prescribed Minister’ proposed that a suitable advisory for such amendments. committee process under the Planning and Environment Act 1987 In the case of Hastings, in addition be established by the Minister to the immediate ‘port precincts’ for Planning to enable broader identified in the PLUTS, it is proposed consideration of these measures that the Minister for Planning’s and related issues, including ‘Responsible Authority’ status should implementation arrangements. extend to adjoining land with relevant Such a process will facilitate zonings (e.g. SUZ1, PUZ4, PUZ7) re-engagement with stakeholders on with longer term port development the draft PEPF prior to its finalisation potential or functionality for transport and adoption by the Government. corridor protection.
64 FIGURE 22 Port of Portland
Princes Hwy Princes Hwy
Portland Henty Hwy Bay
Portland - Nelson Rd Legend Railway Major Port Road New St Foreshore area Port Precincts 1 Marine Anderson Point 2 Bulk commodities & smelter Henty Hwy 3 Incitec Pivot 4 Canal Court Whalers Point
Lee Breakwater Bridgewater Rd
Percy St 2 1
Main Breakwater Fawthorp Lagoon 4 3
Cape Nelson Rd Madeira Packet Rd
Smelter
012 km
Port Futures 65 66 Key Actions • Finalise and publish port strategic development plans for each of the four commercial trading ports; • Amend the Port Services Act 1995 to require port strategic development plans to be prepared and updated every four years; • Formally recognise port strategic development plans in the State Planning Policy Framework (SPPF); • Clarify and strengthen policies to protect ports from encroachment by residential and other sensitive uses through, or in conjunction with, the current review of the SPPF; • Adopt, subject to advice from an advisory committee established by the Minister for Planning, key directions and proposals arising from the draft Port of Melbourne Port Environs Planning Framework to strengthen policy and planning control frameworks and address local interface issues, including implementation of agreed changes to the planning schemes of the four surrounding municipalities; • Establish the Minister for Planning as the Responsible Authority for port zoned land of the ports of Portland, Geelong and Hastings; and • Ensure that the interests of the ports are explicitly considered in the evaluation of planning scheme amendments involving policy and/or zoning changes in the environs around the ports.
Port Futures 67 Part B – Priorities & Actions
port safety, security and environmental management
Current policy settings In 2003, in response to deficiencies of coordination and accountability for identified through the Next Wave of ensuring that all material risks arising Port Reform review, the Government from activities undertaken within the legislated to require port managers port’s land and water boundaries are to put in place integrated, risk based identified and appropriately managed. Safety and Environment Management Under separate Commonwealth Plans (SEMPs). legislation, the commercial ports are SEMPs are now in place for the four also required to have in place Maritime major commercial trading ports Security Plans (MSPs) to manage and for the smaller local ports, the potential risks posed to critical administered through the Department facilities within the ports by terrorism. of Sustainability and Environment. On a more macro scale, in 2008 The plans are required to be prepared the Commonwealth Government in accordance with Ministerial recognised Australia’s vulnerability Guidelines issued by the Minister for to climate change and its responsibility Roads and Ports and are certified to mitigate its contribution to and audited by independent auditors greenhouse gas emissions. The approved for that purpose. Government’s response to climate The SEMPs are intended to change culminated in the release of complement regulatory requirements a White Paper in December 2008 titled already applying to port operators Carbon Pollution Reduction Scheme, and service providers under generic Australia’s Low Pollution Future. safety and environmental legislation As a result of climate change, this (e.g. marine safety, workplace safety, century we will see sea level rise due to: dangerous goods, major hazardous facilities and environment protection • Thermal expansion of sea water legislation) by establishing the as it heats up port manager as a central point
68 • Melting of non-polar glaciers does not have any effective means of and ice caps controlling the activities of tenants and service providers operating within • Greenland and Antarctic ice the port, but must instead rely on sheet melt. influencing strategies to promote On the basis of the Intergovernmental desired behaviours. Panel on Climate Change (IPCC) Two recent reviews, the Review of Fourth Assessment Report, the Pilotage Arrangements in Victoria Victorian Coastal Strategy (VCS) has commissioned by Marine Safety proposed a policy of planning for sea Victoria (MSV) and the Marine level rise of not less than 0.8 metres by Emergency Framework Review 2100 be implemented. This clearly has (MEFR) conducted by the Office of the significant implications for Victoria’s Emergency Services Commissioner ports system. (OESC), have highlighted some more Environmental performance around specific issues which need to be the ports will also be addressed addressed within the broader safety through a series of measures outlined and environment management and in Freight Futures. Of particular regulatory frameworks. relevance to port operations is The Review of Pilotage Arrangements the Government’s commitment to in Victoria was announced in 2007, work with industry to establish a to assess the statutory framework, ‘Sustainability Partnership’ to develop pilot licensing, training arrangements and implement environmental and safety standards in Victoria. initiatives and the establishment of Environmental Freight Zones. The first The review noted that large of these is to be established around commercial vessels were over the Port of Melbourne and Dynon rail represented in marine incidents. terminal precincts. In 2006-07, 30 per cent of collisions and groundings involved commercial vessels greater than 150 metres Challenges and Opportunities in length. Of the 14 investigations The implementation of the SEMP undertaken by MSV in this period, requirements has been effective in 11 involved ships under pilotage. significantly improving the focus on The review identified the need for a safety and environmental performance more comprehensive and integrated in the ports. However, the SEMPs approach to safety, noting that the in their current form are best seen safety of pilotage depends not only as a first step in the development of on the skill and safe practice of an a fully effective, comprehensive system individual marine pilot, but also on the of risk management in the ports. effective operation of the entire marine The SEMPs have received some safety system. Pilotage therefore needs criticism for being too process driven to be considered in the context of the and not sufficiently practical in their statutory framework governing pilotage application. They are also unable to waters and the practice of all parties fully address the problem created by responsible for marine safety and the fact that the port manager often vessel operations.
Port Futures 69 In Victoria, the responsibility of The MEFR was completed in late 2008 regulating safety in commercial and is currently being considered by trading ports and shipping channels Government. It contains an extensive is shared by MSV, port managers, range of recommendations designed to channel operators, harbour masters improve the preparedness of our ports and waterway managers. All vessel to respond to emergency incidents operators have safety obligations within their boundaries, many of which within this regulatory framework. overlap with the recommendations The key recommendation of the review arising from the Review of Pilotage is the need to adopt a contemporary Arrangements in Victoria. ‘best practice’ model of safety Implementation of Australia’s Carbon regulation, including the following Pollution Reduction Scheme (CPRS) key elements: is set to commence in 2010, subject • That safety be a paramount to the passage of relevant legislation, consideration in legislation with significant potential implications and regulation; for the transport sector and some port customers. Ports will need to respond • Development of an accreditation to and adapt to CPRS by determining regime that requires industry their emissions profile and take steps participants to demonstrate to reduce emissions and CPRS liability their capacity to manage risk in through their direct operations and accordance with appropriate risk commercial arrangements and through management standards; their supply chains. • Clearly defined roles, supported As new scientific data becomes in legislation, for both the Safety available, the 0.8 metres sea level Regulator and accredited industry rise policy will be reviewed. The participants; VCS indicates that this benchmark may also be superseded by national • Promotion of a sustainable safety benchmarks. Observed sea level rise culture in all organisations having is currently tracking near the upper safety obligations; limit of current IPCC projections. While • All parties with waterway safety our understanding of the processes responsibilities being accountable to contributing to sea level rise continues the regulator through regular audits to advance, it is recognised that of their safety management systems; current projections may have been underestimated and higher changes • Supporting in legislation, the are likely. independence of the safety regulator. The interface between land and sea is a In late 2007, following some concerns dynamic space. Sea level rise must be raised over the reduction of fire considered in conjunction with storm fighting response capability at the surge, high or king tides, wave run up Port of Hastings, the Government and erosion. Extreme sea level events commissioned the OESC to conduct are likely to occur more frequently a review of the adequacy of marine and with greater severity as weather emergency response arrangements patterns change with climate change. in Victoria’s commercial trading ports.
70 FIGURE 23 Climate change risk management framework
COMMUNICATE AND CONSULT
ESTABLISH IDENTIFY ANALYSE EVALUATE TREAT THE CONTEXT THE RISKS THE RISKS THE RISKS THE RISKS Objectives What can Review controls Evaluate risks Identify options Stakeholders happen? Likelihoods Rank risks Select the best Criteria Consequences Scream minor Develop plans Key Elements How could it Levels of risk risks Implement Climate scenarios happen?
MONITOR AND REVIEW
Critically, climate change will present Future Coasts, a Victorian Government performance of ports by further increasing risks to the management program led by the Department of institutionalising sustainability and development of port infrastructure. Sustainability and Environment (DSE) principles within their ongoing Infrastructure may need to be ready to is seeking to provide a comprehensive management and development withstand sea level rises and increased vulnerability assessment of the risk practices. severity and frequency of storm surge of climate change to the Victorian events and rising levels. Rising acidity coastline by the end of 2010. The in sea water is also of concern, as it is program will also develop strategies, expected to result in an increased rate planning tools and other responses of deterioration of concrete and metal for coastal planners and managers. structures and could undermine the While the bulk of environmental gains structural integrity and the longevity for ports will be addressed through of critical port infrastructure. Future the above measures and the more planning and risk management general efficiency and sustainability strategies will need to reflect the measures detailed in Freight Futures, increasing importance of sustainability there is an opportunity to consolidate issues in the context of up to date and strengthen the environmental climate change data and projections.
Port Futures 71 Priorities and Actions
Safety Environment and Sea level rise Management Plans Victoria’s commercial ports will be In order to build on the sound platform directly impacted by sea level rise. created by the introduction of the Given the long term nature of port SEMP requirements, and to address infrastructure and network investment some deficiencies identified, the decisions ports, the Government will Government proposes to conduct a work with ports through DSE’s Future review of SEMP implementation and Coasts program to develop climate operation, commencing in the second change strategies and incorporate half of 2009. This timing will allow for sea level rise considerations into the completion of the first four year port planning decisions. cycle of SEMP certification, audit and re-certification for the commercial Green ports trading ports and for the lessons learnt The Government will also work with to be fully incorporated into the review. Victoria’s commercial trading ports to develop the ‘green port’ concept. Pilotage This concept is being advanced In responding to the Review of internationally amongst a network of Pilotage Arrangements in Victoria, the key ports and aims to utilise a holistic Government has committed to giving risk management approach, based effect to recommendations where on sound research and evaluation, possible through relevant amendments to ensure that ports not only manage to the current Marine Act 1988 and their short term environmental risks, regulations during 2009, with the but also integrate sustainability balance of recommendations to be into port development and ongoing addressed through the Department business activities. of Transport’s current Marine Safety An important part of this initiative will Legislative Review. be promotion of the application of new environmental technologies and best Marine emergency response practice environmental management. The Government will provide a full This initiative will draw on the leading response to the MEFR in late 2009. edge work of PoMC in undertaking its In the interim, have been amended extensive environmental assessment the SEMP Ministerial Guidelines to for the Port Phillip Bay Channel strengthen requirements for all port to Deepening project and on the have in place comprehensive, risk based environmental benchmarking and marine emergency management plans. port design work currently being Carbon Pollution Reduction Scheme undertaken by PoHC for the future development of the Port of Hastings. Ports and port service providers will need to decide the best course of action for reducing their carbon costs under the CPRS. The Government will actively encourage port managers to take steps to reduce emissions by adjusting their own operations if it is cost effective for them to do so.
72 Key Actions • Conduct a review of the implementation and operation of the Safety Environment and Management Plans (SEMP) requirements under the Port Services Act 1995, commencing in the second half of 2009; • Where practicable, give effect to agreed recommendations of the Review of Pilotage Arrangements in Victoria through relevant amendments to the Marine Act 1988 and regulations during 2009, with the balance of recommendations to be addressed through the Department of Transport’s current Marine Safety Legislative Review; • Release a full response to the OESC’s Marine Emergency Framework Review (MEFR) in late 2009; • Work with port managers to determine the emissions profiles of their ports and take steps to reduce emissions by adapting their own operations and encouraging port service providers to reduce their emissions; • Work with port managers to develop climate change strategies and incorporate sea level rise considerations into port planning decisions; and • Work with ports to develop the ‘green port’ concept, incorporating the application of new environmental technologies and best practice environmental management into port development and ongoing business activities.
Port Futures 73 conclusion
Delivering Port Futures Port Futures represents a significant General monitoring and reporting update and refresh of policy, strategy Within Government, responsibility for and governance settings for Victoria’s implementing the challenging new ports system. priorities and directions of Port Futures It contains a number of significant lies with the Department of Transport new directions and initiatives which (DOT), through its Freight, Logistics and the Government is committed to Marine Division, in close collaboration progressing in a timely and effective with all stakeholders. manner, in partnership with other key A Freight Futures Interdepartmental stakeholders with a vital interest in the Committee (IDC) has been established, success of Victoria’s ports system. convened by DOT, to steer and monitor Port Futures also sits within the implementation activities. This IDC will broader policy and strategic framework also be used for Port Futures. established by the VTP and Freight Also as for Freight Futures, the and, more recently, the Futures Government will continue to utilise Victorian Transport Legislation Review. the Victorian Freight and Logistics It is therefore proposed that, wherever Council (VFLC), now integrated with appropriate, monitoring and reporting the Victorian Airfreight Council, as a arrangements against the delivery of key source of industry advice on freight Port Futures initiatives will be integrated and port matters. with arrangements already established Under Freight Futures, an Industry for these overarching statements. Supply Chain Executives Forum Freight Futures stressed the will also be convened with relevant importance of working closely with the Ministers on a six monthly basis to Commonwealth Government and its discuss opportunities to enhance new national infrastructure authority, Victoria’s freight network and Infrastructure Australia (IA), on the implementation of Freight Futures. development and delivery of freight This forum will be expanded to initiatives. The recent announcement include consideration of Port Futures by IA of the development of a delivery issues. National Ports Strategy reinforces Ministerial oversight and whole of the importance of this link for the Government coordination will be delivery of . Port Futures undertaken by the Minister for Roads Port managers (both public and and Ports, who will have primary private), port service providers, responsibility for ensuring the full port users local councils and benefits of Port Futures are realised. communities are also key stakeholders in the delivery of Port Futures.
74 Port Managers Forum In order to engage on a more formal and regular basis with the organisations responsible for the ownership, operation and development of the ports, DOT will establish a Port Managers Forum to meet on a six monthly basis. This forum will be structured to provide effectively for the interests of both the large commercial trading ports and the local ports
National Ports Strategy Port Futures has the potential to provide an important bridge between individual port strategic planning and the new national ports agenda, in the form of a National Ports Strategy to be developed by IA. DOT is already actively engaged with IA on the development of this national strategy and will seek, wherever possible, to provide conduit between Victoria’s ports and IA to ensure the full potential of the Victorian ports system can be fostered in a national context.
Port Futures 75 glossary of terms
ABS Australian Bureau of Statistics ACCC Australian Competition and Consumer Commission AMSA Australian Maritime Safety Authority AQIS Australian Quarantine and Inspection Service ARTC Australian Rail Track Corporation BITRE Bureau of Infrastructure, Transport and Regional Economics CDP Port Phillip Bay Channel Deepening Project CFA Country Fire Authority CIRA Competition and Infrastructure Reform Agreement COAG Council of Australian Governments CPRS Carbon Pollution Reduction Scheme Crane rate Total containers handled divided by the elapsed crane time. Elapsed crane time is defined as the total allocated crane hours, less operational and non-operational delays. DOT Department of Transport DSE Department of Sustainability and Environment EFZ Environmental Freight Zone is a declared freight area designed to encourage freight emissions minimisation. EPA Environment Protection Authority ESC Essential Services Commission ETS Emissions Trading Scheme FAC Freight Activity Centres is a key node where intense freight and logistics activity takes place. GFC Global Financial Crisis GRAIP Geelong Rail Access Improvement Program Home Porting To base a cruise ship in a given port HPFV High Productivity Freight Vehicles IA Infrastructure Australia IPCC Intergovernmental Panel on Climate Change MEFR Marine Emergency Framework Review MFTN Metropolitan Freight Terminal Network MMFB Melbourne Metropolitan Fire brigade MSV Marine Safety Victoria OESC Office of the Emergency Services Commissioner OTS Office of Transport Security Output The total value of all of the goods and services produced in an entity's economy.
76 PEPF Port Environs Planning Framework PFN Principal Freight Network is the part of the larger transport network over which the movement of heavy freight will be concentrated. PLUS Port Land Use Strategy PLUTS Port of Hastings land Use and Transport Strategy PMA Port Management Agreement PoHC Port of Hastings Corporation PoMC Port of Melbourne Corporation Port environs adjoining areas to a port PSA Port Services Act 1995 Responsible Authority The body responsible for the administration or enforcement of a planning scheme or a provision of a scheme. Referral Authority A person or body specified in a statutory planning scheme as a body or agency to which an application for a permit or a plan must be referred, or which must be satisfied that certain things have been done, before a planning permit can be granted. RFAC Road Freight Access Charge SEMPS Safety Environment and Management Plans Ship rate The crane rate times the crane intensity. SPPF State Planning Policy Framework SUZ1 Special Use Zone; commonly applied to core port land, the zone allows prescription of detailed land use requirements and development conditions specific to the land and specialist use. TAP Truck Action Plan TEU Twenty-foot Equivalent Unit TOP Truck Optimisation Plan Value added The total output from port related organisations less the costs associated contribution with brought in materials, services and components (as defined in the port economic impact studies) VCS Victorian Coastal Strategy 2008 Vessel Working Rate Total containers handled divided by the elapsed labour time (in hours). VFLC Victorian Freight and Logistics Council VPP Victoria Planning Provisions VPSF Victorian Ports Strategic Framework 2004 VRCA Victorian Regional Channels Authority VTP The Victorian Transport Plan WDRL Webb Dock Rail Link
Port Futures 77 www.transport.vic.gov.au Affairs Branch, DepartmentofTransport on(03)96556000. format, suchas large printoraudioplease telephone Public If you would like to receive thispublication inanaccessible Printed byImpactDigital, Unit3-4,306AlbertSt,Brunswick VIC3056. 121 ExhibitionSt,MelbourneVictoria 3000. Authorised byTimPallas, ISBN 978-0-7311-8775-1 © State ofVictoria 2009 except inaccordance withtheprovisions oftheCopyrightAct1968. This publication iscopyright. Nopartmaybereproduced byanyprocess
DOT4086/09