Comment – Greg Cameron
The NSW government policy to have only one container terminal for all of NSW at Port Botany is disadvantaging regional economies. Although the NSW government claims that Port Botany container terminal is adequate for the regions' needs, accessing Port Botany from outside Sydney is most difficult. Good access to a container terminal is now essential for any region wanting to participate in world trade because containers are the dominant form of transport for non-bulk commodities.
File photo courtesy of MIST Macarthur Intermodal Shipping Terminal.
But the NSW government claims that container terminals are not required in regional centres because 85% of containers that enter Port Botany are unpacked within 40 km of the port. Implicit in this argument is that the 36% of the NSW population who live in regional areas suffer no disadvantage from long-distance road freight. However, northern NSW is better served by a container terminal at Newcastle and southern NSW is able to be serviced from Port Kembla. Such terminals would be privately funded and operated and would compete with Port Botany container terminal for regional business. Competition between ports means importers and exporters can choose the terminal that best meets their needs.
However, competition between container terminals is not government policy. In 1998, BHP demonstrated the commercial viability of a container terminal on the Newcastle steelworks site after steel-making ceased. BHP's initiative was blocked when the NSW government took ownership of the site in 2001. Astonishingly, it appears that the government accepted liability for the site's contamination. NSW government policy is that there will be no container terminal at Newcastle.
The NSW government has now spent close to $1 billion to expand Port Botany container terminal. In 2005, a cap was put on container movements at 3.2 million TEU because of the environmental impact of port operations. TEU movements will reach 3.2 million in 2017, up from 2 million in 2011. The NSW government abolished the cap in November 2012 and will allow unlimited expansion of container movements without environmental assessment.
Unlimited expansion of Port Botany container terminal reflects the government's determination to maximise its return on the $1 billion recently invested. However, in purely economic terms, it is likely that a much bigger return would be gained by allowing Sydney airport to expand into the container terminal site and re-locating container terminal operations to Newcastle.
Traffic congestion was one of the reasons given by the previous NSW government for capping container movements. But the current NSW government says that Port Botany container terminal is not the primary cause of traffic congestion on the M5 East. It points out that only 1.8% of M5 East traffic is port-related. One container-carrying truck in the M5 East westbound tunnel is the equivalent of six passenger vehicles; in the eastbound tunnel it is the equivalent of three passenger vehicles (due to empty containers and a gentler slope). These figures suggest that container trucks are 10.8% of the passenger vehicle capacity of the westbound tunnel and 5.4% of the eastbound tunnel. A three-fold increase in container movements is expected by 2030. Container trucks will need more than 30% of the westbound tunnel passenger vehicle capacity and 15% of the eastbound tunnel capacity. Therefore, the M5 East needs to be expanded to cater for the increase in container truck movements.
Rail freight is not capable of reducing Sydney traffic congestion caused by container trucks. Plans promoted by the NSW government are for increasing the rail share of container movements, from 14% to 28%, by 2020. In 2011, there were an estimated 1.3 million truck movements between Port Botany and south western Sydney. These will increase to 1.8 million in 2017 and 4.2 million in 2030. The Moorebank Intermodal Terminal (IMT), which is due to start operations in 2017, will reduce truck movements by only 200,000 per year, but the net increase in truck movements will still be 500,000. Moorebank IMT's role in reducing truck movements therefore is largely irrelevant, except of course for the residents of Moorebank. At 1.2 million TEU movements per year, Moorebank IMT is too small. With unlimited expansion of Port Botany – 7 million TEU movements are estimated by 2030 – work needs to start immediately on additional IMT capacity.
Moorebank IMT is being built by the Australian government not only to handle containers from Port Botany but also from interstate. Northern freight shares the main northern passenger railway between Newcastle and Sydney. The Australian government is contributing 80% of the $1.1 billion stage 1 cost of the Northern Sydney Freight Corridor improvement program (NSFC), which will double the number of freight trains from 22 to 44 per day. Stage 1 will provide enough additional capacity to accommodate demand up to 2028, when further capacity will be required to accommodate subsequent growth. Stages 2 and 3 will transition to a dedicated freight line through metropolitan Sydney and a freight rail by-pass of Newcastle, costing $6.6 billion. Funding for stages 2 and 3 will be sought from the Australian government. But stages 2 and 3 are not required if a privately-funded freight rail bypass of Sydney and Newcastle is built, which would link Newcastle to Eastern Creek and Macarthur in the south.
According to the Australian and NSW governments, a freight rail bypass of Newcastle and Sydney is feasible and would cost 'many billions' of dollars. In deciding not to further consider the bypass option, the Australian and NSW governments are committing to funding stages 2 and 3 of the NSFC by default, because the opportunity to secure a freight rail corridor for a bypass will disappear soon, due to Sydney's westward urban growth.
There is an alternative, called "Sydney freight west". This is a concept for a privately-funded three-part project comprising a container terminal at Newcastle; a dedicated freight rail line extending from Newcastle to Eastern Creek and Macarthur; and, a major IMT at Eastern Creek. Sydneyfreightwest would compete with Port Botany container terminal, unless the site was used for airport purposes and container operations transferred to Newcastle. Sydney freight west would enable containers to be railed between Eastern Creek and Newcastle faster and probably cheaper than if they were shipped through Port Botany. Sydney freight west would provide cost and scheduling certainty compared with the use of trucks to service Port Botany container terminal. Road congestion and pollution associated with Port Botany operations represent long term commercial and environmental risks.
Sydneyfreightwest has significant implications for transport policy. Moorebank IMT would not be required, because it would be supplanted by a much bigger facility at Eastern Creek. Port Botany container terminal would continue to operate while Sydneyfreightwest was under construction. If Port Botany container terminal site was used for airport expansion, the removal of container trucks would benefit all users of the M5 East. Stages 2 and 3 of NSFC would not be required, with a saving to government of $6.6 billion. Passenger capacity of the Sydney metropolitan rail network would significantly increase when freight was removed from the network. Removing freight from the Newcastle rail line would allow for re-development of degraded urban land along the rail corridor, and a new passenger rail service. The Sydney-Newcastle rail corridor is the single biggest impediment to sending more interstate freight by rail. According to a study by Deloitte Access Economics, if 40% of interstate freight shifted from road to rail, the saving to the national economy would be $630 million per year in 2030.
Politicians representing regional areas of NSW might care to re-consider the merit of regional container terminals, starting with Newcastle and Port Kembla.
