Huge challenge after leasing NSW ports

Turning Port Kembla into the second container port in New South Wales would need long-term detailed and precise planning and funding work, ATA NSW Container Section Chairman Mike Moylan believes.

Huge challenge after leasing NSW ports
Huge challenge after leasing NSW ports
By Rob McKay | July 30, 2012

Turning Port Kembla into the second container port in New South Wales would need long-term detailed and precise planning and funding work, the NSW branch of the Australian Trucking Association (ATA NSW) says.

NSW Treasurer Mike Baird and Roads and Ports Minister Duncan Gay confirmed at the weekend the sale of leases on Port Botany and Port Kembla, with the proceeds to be directed towards infrastructure spending and with a view to Port Kembla taking up container traffic once Port Botany is full.

Details will be released later in the year along with the government’s freight strategy, Gay says.

But ATA NSW Container Section Chairman Mike Moylan thinks much of the practical decision-making will probably be done by a later generation, possibly as much as 20 years from now.

"Port Kembla would need a hell of a lot of thought, you’d want to do it properly and you’d want to do it better than governments do most things," he says.

He points out that there are two Port Botany container terminals operating presently at below capacity with another one to come.

Amongst the harder issues in need of attention is how to address the issue of double and triple handling of containers and the still vexed question of storage and handling of empty containers.

Decisions will also have to be made on dedicated rail freight operations, both around Sydney and in the Illawarra region.

"No doubt people want to see less trucks on the roads but . . . not everything goes to Moorebank or Minto – and there is an added cost of [taking them there]," Moylan says.

NSW has made no secret that leasing the ports is a bid to gain more cash at a time of spending constraints.

"We are facing an immense challenge to fund the backlog of critical infrastructure across NSW and more needs to be done to free-up the vital funds needed to deliver long overdue road, school and hospital projects across NSW," Baird says.

Proceeds from the transaction will be invested in Restart NSW, with 30 percent of funds reserved for projects in regional areas, while $100 million is earmarked for infrastructure projects in the Illawarra which will be determined by Infrastructure NSW later this year, the government says.

The port transactions are expected to formally commence in the fourth quarter of 2012, with a view to completing the transactions in the first half of 2013.

Following a scoping study, the these will see:

  • A 99-year lease of the Port Botany precinct, as well as the transfer of the Enfield and Cooks River logistics sites currently owned by Sydney Ports Corporation
  • Sydney Ports Corporation retain a significant maritime role in government ownership, including the role of Harbour Master, the Sydney Harbour sea pilots, maintaining navigation buoys and markers, as well as the Port Jackson wharves and cruise shipping functions
  • The Port Botany Landside Improvement Strategy regulatory function be retained by the government and
    Sydney Ports Corporation
    will retain its existing maritime security and emergency response functions
  • Sydney Ports Corporation retain the ownership of the ports of Eden and Yamba
  • The Port Kembla transaction be based on a 99-year lease of the port.

"Investors will have the opportunity to acquire both ports and we expect there will be strong interest in supporting the development over time, including improved landside logistics chains in South and West Sydney, particularly with regard to rail," Gay says.

"The public interest would be protected with the future lessee of the port to develop it under the terms of the lease and under a long term planning framework involving ongoing government oversight.

"A price monitoring regime will also be established to ensure transparency on pricing outcomes, similar to other major Australian capital city ports."

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