source: business news
Freo port deal pivotal for freight planning
SPECIAL REPORT: The privatisation of Fremantle Ports will have a major bearing on the future shape of freight movements across Perth.
In
2007, when in opposition in Western Australia, the Liberal Party came
up with a radical policy to phase out commercial shipping activity at
Fremantle in favour of a new outer harbour at Cockburn Sound.
The
policy was the brainchild of Simon O’Brien, who had a relatively short
stint in the ministry after the change of government, before losing
favour with Premier Coin Barnett.
As the Liberals settled in to
the government parliamentary benches, they reverted to the orthodox
policy that favoured development of an outer harbour as an overflow port
after Fremantle reached its capacity – at some indeterminate time in
the future.
That is still the accepted policy; yet last week Transport Minster
Dean Nalder was musing on the possibility of Fremantle being closed to commercial shipping.
His comments were made in the midst of a
Committee for Economic Development of Australia transport forum, where Mr Nalder was defending the $1.6 billion Perth Freight Link project.
Critics
believe the freight link heads in the wrong direction, because it
services the inner harbour at Fremantle rather than looking to the
future at Cockburn Sound.
Mr Nalder believes it makes sense, irrespective of future port developments.
“If we started yesterday, it would take a minimum of 10 years to develop the outer harbour,” Mr Nalder told the CEDA forum.
“On
top of that, if a future government decided to transfer completely to
the outer harbour, and decided there was another use, and a better use
for the community, for the inner harbour, that would take a number of
years as well.
“So we’re talking 15, 20 years before you could transition fully to an outer harbour project.
“In
the meantime, we’re going to see the number of trucks coming out of
Fremantle port in the next 10 to 15 years more than double, we’ll start
seeing 6,000 trucks a day.”
He then expanded on this theme.
“If you were to remove the inner harbour out of Fremantle, you will not be replacing it with lawn.
“It
will be high-density residential and commercial, and the number I’ve
heard is that there will be up to 20,000 additional people, and I think
that will be quite dynamic for Fremantle.”
Either way, the minister believes improved road links to Fremantle will be needed.
Mr Nalder said he was seeking more advice on how long it would take to fully transition to an outer harbour.
Privatisation
And clearly he won’t be the only one.
Banking group
Rothschild and accounting firm
Deloitte have been engaged by the state government to advise on the privatisation of
Fremantle Ports – for likely proceeds of $2 billion.
The
government is looking to link the sale of the existing port facilities
with development of the outer harbour, at a cost of several billion
dollars.
Treasurer
Mike Nahan told a budget briefing in May the government would look to package-up land at Cockburn Sound, including some held by
LandCorp and
Synergy, to facilitate the outer harbour development.
This would draw upon extensive planning undertaken a decade ago, when then planning and infrastructure minister,
Alannah MacTiernan, saw the outer harbour project as a priority.
Ms
MacTiernan actually announced a preferred development option in 2006,
with the outer harbour to be built north of the BP oil refinery at James
Point.
Dr Nahan believes the outer harbour development opportunity will enhance the privatisation deal.
“The
right to build, own and operate an overflow port is an extremely
valuable asset, it will enhance the value, not detract from it,” Dr
Nahan told the budget briefing.
Labor ports spokesperson
Bill Johnston believes the sale process must specify the development obligations on the purchaser, to ensure the outer harbour proceeds.
“It would be in the interests of the purchaser to keep the inner harbour as a monopoly,” Mr Johnston said.
How long?
Mr Nalder’s view is that it will be 15 years before the inner harbour reaches capacity.
The port handled 703,000 twenty-foot equivalent units last year, with TEUs the industry measure for container freight.
The port’s capacity is generally seen to be about 1.3 million TEUs, a year though Mr Nalder said the stevedores –
DP World and
Patrick – had been telling him they could handle up to 1.8 million TEUs.
The
state government is aiming to get more of this freight on to rail, with
the aspirational target of 30 per cent about double the current level.
That still leaves most containers leaving the port on trucks, which is where the Perth Freight Link is meant to help.
Perth
Freight Link is one of three major road projects, along with Gateway
and Northlink, designed to create a freight corridor from Fremantle to
north of Perth (see map).
Mr Nalder believes trucking companies
using these roads will be willing to pay a freight levy, or toll,
because the improved road network will deliver substantial efficiency
gains.
However, the freight link has upset environmental groups,
which are concerned the Roe 8 extension will damage the Beeliar
wetlands.
It has also upset residents near Leach Highway, whose houses might be resumed.
That
is why the government has asked the private consortia bidding to build
the project to evaluate alternative routes for stage 2, including a
tunnel.
Even if the government addresses all of these challenges,
it still faces a major hurdle – how to manage the extra truck movements
across Stirling Bridge and through North Fremantle.
Mr Nalder said
last week the government had evaluated extending a tunnel under the
Swan River, but concluded that was not viable.
That has led to
speculation the government will need to build a new bridge across the
Swan River, lifting the project’s total cost closer to $2 billion.
Labor’s transport spokesperson,
Rita Saffioti, believes the problems facing Perth Freight Link reflect the genesis of the project.
“It wasn’t on the agenda at the 2013 state election,” Ms Saffioti said.
“It wasn’t a priority, it wasn’t funded.”
She
said it was pulled together with the Abbott government, which was
opposed to funding metro rail projects but wanted to find an alternative
infrastructure development for Perth.
“Now it’s a massive priority,” Ms Saffioti said.
“It’s another example of chaotic and dysfunctional planning.”
Ms
MacTiernan, who has been endeavouring to obtain documents used in the
planning and evaluation of the Freight Link, suspects planning did not
get underway until March 2014, just two months before the project was
announced.
That is based on one of the few pieces of information
thast has been released. A schedule of correspondence shows the first
correspondence on Freight Link was in March 2014.
The original story can be viewed at Business News
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