Port of Melbourne investment to lift capacity and address congestion
Posted : Friday, June 29, 2012
"By investing in the future of the Port of Melbourne as
Australia's premier trading gateway we will lift capacity, boost
completion, and ensure Melbourne continues to be the number one
container port in Australia," Victorian Minister for Ports,
Major Projects, Regional Cities and Racing, Dr Denis
Napthine told a CEDA audience in Melbourne.
"By 2025 we expect to be doing 5.5 million TEUs (twenty-foot
equivalent units) and by 2035 that will be as high as eight
million," he said.
Dr Napthine said the Government has recently announced projects
that will increase short to medium-term capacity of the Port of
Melbourne's and medium to long-term capacity increases at the port
of Hastings, including:
- A $1.2 billion project to allow the Port of Melbourne to
develop a new container terminal at Webb Dock, which would increase
capacity to about five million containers annually, and generate
700 direct and 1900 indirect jobs. This will be accompanied by
- $400 million for the construction of a new automotive
stevedoring facility at Webb Dock West to increase import/export
capacity of automobiles at Port of Melbourne from about
375,000 to 600,000 vehicles per year.
- As part of the above investment, a new onsite facility for
pre-delivery inspection (PDI) and pre-export inspection built north
of Webb Dock West, connecting to the M1 (Monash Freeway) to provide
greater productivity and also reduce the traffic on the Westgate
Bridge. At present, 60 per cent of the cars arriving are taken
across the Westgate Bridge to Laverton-Altona for PDIs and then
taken back over the Westgate Bridge to the eastern suburbs.
"The government has also announced it will prioritise the
development of the Port of Hastings as a new container port for
Melbourne and Victoria, to be operated as a complementary but
competitive container port," Dr Napthine said.
"Currently there are no container facilities at Hastings and
only preliminary environmental studies have been undertaken, so it
is estimated it will take 10-15 years to make Hastings a working
Port of Melbourne Corporation, Chief Executive Officer,
Stephen Bradford said: "We weren't surprised at all when
the GDP figures were most recently announced of 4.3 per cent
growth, (it's) very consistent with what the Port of Melbourne is
seeing. We actually thought that might have been a bit higher."
"I predict going into the next quarter it would be of the same
percentage," he said.
"Being at the forefront of trade and seeing what goes through
containers and the number of cars each month, we get a very good
insight into what is happening with our economy."
Mr Bradford said the Port of Melbourne is currently ranked 53 in
the world and holds approximately 36 per cent of the nation's share
of container trade, with the prediction of higher ranks and
increased trade in the future.
"May container growth (was) 218,000 TEUs and importantly 61,000
full export containers. No port in this country has ever done
61,000 full export containers in a single month," he said.
"This is an economy and a port driven by the success of regional
Victoria and southern NSW. All cargo types are growing."
Mr Bradford said in delivering the PDI facility project a number
of community issues have been considered, including:
- Closing the Williamstown road connection for trucks at Todd
road and building a separate road which will link the whole Webb
Dock to the M1 in both directions; and
- Key Performance Indicators (KPIs) biased towards encouraging
the movement of containers outside of peak hours (currently 40 per
cent are moved out at night and on weekends).
Asciano Group, Chief Executive Officer, John
Mullen said we need to decide if ports are an asset from
which maximum returns should be extracted or a facilitator of
"As an industry we have not invested fast enough that would
significantly improve productivity," he said.
"We, as a stevedoring industry, really need to get our act
together and deliver world class services at competitive prices to
do our bit to help with the overall conundrum.
"There's no question that we have been lax for many years and
our customers, shipping line and end consumers have suffered as a
With increased competition, Mr Mullen said container ports must
focus on what they do best.
"Hiding behind protectionism, barriers to entry is disingenuous
and ultimately is doomed to fail," he said.
Infrastructure Australia (IA), National Infrastructure
Coordinator, Michael Deegan said IA's
national audit of infrastructure identified ports as a top priority
for scrutiny and action.
The Commonwealth Government is about to release its update to
the National Land Freight Strategy, which will complement the
national port strategy, he said.
Mr Deegan said IA is currently reviewing port balance sheet
capacity to determine their capacity to fund their own
improvements. In many cases state governments are coming to IA to
fund what are supposed to be commercial operations, he said.
"The ability of government owned ports to attract commercial
resources for investment is a major issue," he said.
"In our work to be released shortly, we have benchmarked eight
major Australian ports against a series of other Australian and
international ports and port operators.
"None of the eight ports is generating a return on assets
equivalent to that risk free rate (3.89 per cent Australian
Government 10 year bond rate)."
Clearly there are a range of issues around the regulatory
environment and others but return on investment is certainly below
what you would expect for a commercial organisation, he said.
In addition Mr Deegan said: "While there are few, if any,
long-term plans around our ports, there are plenty of engineering
based expansion plans...very few of them are integrated into the
supply chain and very few are subjected to rigorous cost-benefit
analysis and certainly the opportunity for private funding is
AECOM, Client Director - Ports and Freight, Nick Van
Bronswijk said Australian ports and infrastructure play a
vital role in prolonging the competitiveness of our manufacturing
sector in the short and medium term through the provision of
efficient transport for raw materials and processed goods and
"They will intrinsically influence cost of living and quality of
life of our community, and failure to invest will see a gradual
degradation of our standard of living," he said.
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