PORT BOTANY – WHITE ELEPHANT FOR SALE – 10 REASONS WHY

Sydney Ports have  spent $1 billion on the new T3 terminal, and many millions on internal road upgrades and a new Operations Centre.  So why would the O’Farrell Government be prepared to sell Australia’s second biggest container port  so cheaply – the figure quoted is $2.1billion, less than what the Bligh government realised on Port Brisbane.  The answer is why not. The landside bottlenecks are legendary.  At a House of Representatives Inquiry in 2006, former head of the ARTC, David Marchant, referred to the Sydney scenario as the  ‘bloodclot on the Eastern Seabord”.  Before the March election commentators were regarding the sale and low price as a done deal. (See Link) The infrastructure spend to make this port workable, in keeping with the capacity of the three terminals, is prohibitive.  Items include the M5 East ‘amplification’, the M4 East, Gardeners Road ramps to the ED, possible F6.  All of these projects will meet strong community opposition.  Getting them off the ground would be an electoral nightmare.   Port Botany is a black hole and the O’Farrell government wants to extract itself as soon as possible and proceed by developing ports like Newcastle and particularly Kembla (as outlined in the Ports Growth Plan) as well as ‘fully participate’ ** in the National Strategy where the State benefits from the Inland Rail – Melbourne to Brisbane/Gladstone. (Cartoon Peter Nicholson).  Relevant details in submission to IPART Inquiry 2008

It was the Askin Government that made the first mistake in choosing Botany Bay over a longer term solution such as Kembla.  Askin (pictured) couldn’t see the potential in Sydney.  London has its main container port of Felixstowe over 90km south while in Sydney Port Botany is walking distance from the CBD.

1.  CONGESTION AND EMPTIES: The number one export through Port Botany is HOT AIR.  Over 10,000 empty containers * a week are ‘traded’ out through Botany Bay.  The  area containing the Port/Airport complex-less than 10km from the CBD- is one of the most congested in Australia and there is no strategy for dealing with the increasing volume of empty containers. If the 3 ports(Kembla, Botany,Newcastle) were managed for the benefit of NSW, then this and other shortcomings could be addressed within a broader freight strategy.  Far too difficult for the Government to achieve this so easier to sell off the mess and concentrate on a better designed freight network and let Port Botany eventually become redundant.

2. RAIL: The target for moving freight by rail is 40% by 2015.  With just over 3 years to go the rail share is worse than it was when the target was set – less than 19%.  The only way to boost the rail share is for the government to recognise the negative externalities(health, safety and amenity) associated with trucks and subsidise rail.  Business won’t do this so the chance of achieving 40% is zilch.  There are further complications with rail.  Firstly, it is not economically viable for short haulage.  This was one of the reasons why Enfield was such a poor choice as an intermodal.  Secondly,  it is essential to have the capacity to double stack and between Port Botany and the proposed Moorebank  intermodal there are 26 overhead bridges which would need to be raised – more expense.  (See link )

3.  COMMISSION OF INQUIRY(COI) In October 2005 the then Planning Minister Frank Sartor overruled his Government’s own Commission of Inquiry and approved the construction of the 3rd terminal(T3).  The Commissioner, Kevin Cleland, had recommended against T3 because of the environmental constraints (Botany Bay as well as landside) and proximity to Sydney Airport.  He also stated that it didn’t have the growth potential of Melbourne and Brisbane.  Commissioner Cleland recognised the limitations of landside capacity (rail and road infrastructure) to handle the projected 3.2 million containers(TEU).  Under the Ports Growth Plan (announced 5/10/2003) Newcastle was supposed to take over after Botany reached capacity which had then been estimated at 3.2million.

4. TRADE PROJECTIONS: Port Botany can’t handle the projected trade – 4 million containers by 2018;  14 million by 2040. See Sydney Ports presentation of projections. (October 2010).  The cap on the Port is 3.2 million TEU see conditions of consent A1.4

5. DISASTERS: Port Brisbane  is a greenfield port built away from residents.  Port Melbourne is on Port Phillip Bay which is 26 times the size of Botany Bay.  Both of these ports are located well away from their respective airports.  But not Botany.  It’s on the edge of Australia’s biggest city(less than 10km) and ‘spitting’ distance from the airport.  On the first day of the Commission of Inquiry into the T3 expansion Air Services Australia put a caveat on the development.  Sydney Ports had to guarantee funding into research for development of new technology (the figure quoted at the COI was $10million)  otherwise planes couldn’t fly or ships couldn’t dock at T3.  The Port/Airport area is a headache for emergency services and any large scale disaster in this area would be an economic catastrophe for the State.  For our longer term security it’s better to get rid of the mess and concentrate on better options elsewhere.  It was a mistake by Askin in the first place to put all the eggs in one basket.

6. CHEMICAL CONTAMINATION: The largest chemical spill in Australia’s history- caused by ICI/Orica –  has impacted Botany Bay around the Port.  There are monitoring points within the port precinct.  More are required.  This is a bit of sleeper.  Very little publicity but if there is greater emphasis on environmental protection the EPA might step up the level of scrutiny.

7. ENVIRONMENTAL AND COMMUNITY ASSETS: Sydney Ports are currently responsible for Penrhyn Bird habitat, the Boat Ramp, Molineux Point Reserve, Prince of Wales Scenic Drive, Foreshore Beach and the pedestrian bridge across Foreshore Road. Sydney Ports have made no secret of the fact that they don’t regard this as core business and when the terminals are ‘sold’  these assets will more than likely be handed back to local Councils to maintain  – and sort out the complaints!

8. ENVIRONMENTAL DAMAGE: Botany Bay is not a natural port and the changes made to it through dredging and reclamation have caused unpredictable negative results.  Erosion of Towra Point and Lady Robinson Beach have been long term problems for Sydney Ports.  With the T3 construction they have taken on erosion of Foreshore Beach and water quality issues.  See link

9. LOCAL COMMUNITY: The communities surrounding Port Botany were established in the 1800s.  Yarra Bay which Terminal 1, DP World, shares was the site of the first landing by Captain Arthur Phillip (18 January 1788) and adjacent Frenchman’s Bay the landing of the Laperouse expedition (26 January 1788).   Banksmeadow where Terminals 2 and 3 are located was  explored by Joseph Banks’ in May 177o.  Nearby are the remnants of Australia’s first fishing village.   This is no greenfield site.  The majority of houses surrounding the port were built before it.  There are growth targets that both Botany Bay and Randwick Councils are expected to meet under the Metrostrategy and consistent with this has been a steady growth in population.  It is also logical to locate residential dwellings close to the city.   But the health and amenity of residents is increasingly impacted by port operations.  Noise and truck traffic are two major issues. A selection of posts on the subject See Link 1 See link2 Link 3 Link 4 Link 5 Link 6 Link 7 also http://www.portbotany.wordpress.com

10. CLIMATE CHANGE: In 2006 the Principal Scientist for URS , Matt Coetzee, who oversaw the Sydney Ports Corporation EIS for the expansion had this to say at a conference titled: Critical Transportation Infrastructure in a Global Warming Future:Protecting NSW Seaports and their Hinterland,Working Paper 2,Report on Workshop Held 25th May, 2006, The University of Sydney “Matt spoke specifically on the EIS process for the expansion of Port Botany seaport. He noted that for the purposes of the EIS, spatial and temporal boundaries were tightly defined around the physical infrastructure and less on deeper connections with other structures. The alternatives considered are most often at the scale of the development (ie alternative structural solutions), and if other scales were examined other alternatives might come into play. This was certainly the case with assessing the alternative to develop Newcastle Port instead of augmenting Port Botany. This was rejected because of unsatisfactory transportation links between Newcastle and Sydney, given that the majority of container trade was sourced from or destined to the Sydney Basin. However from a climate change perspective, the Newcastle option might have more weight. Impacts that are well defined, quantified and certain are most easy to define mitigation measures for and are therefore the ones that are prioritised for attention. Consequently impacts of Climate Change are not usually considered in the EIS process. The EIS process focused on assessing the impact of a development on the environment, not that of the peculiarities of the environment on the development.”

The following has been extracted from the Australian Government Publication “About the House”, September 2008: In 2006, the Insurance Council of Australia assessed the number of Australian addresses within three kilometres of the coast and with baseline elevations below four, five and six metres. It estimated that more than 425,000 Australian addresses are below four metres above mean sea level and within three kilometres of the
current shoreline. …. “The potential impacts on the Australian community arising from sea level rise when combined with the current exposures to inland flooding are therefore likely to be significant,” the Insurance Council states in its submission to the inquiry. “It is in this context that the general insurance industry considers that urgent adaptive measures are required. We submit that the significant implications for the Australian economy that flow from this hazard require significant consideration and treatment.”………. ………………Professor Thom raises a series of pertinent questions in his submission, pointing to low-lying areas in Australia he believes could be at risk. “When will barrages be needed at Port Philip or Botany Bay? When will the very low runway at Sydney Airport need to be elevated?

*over 500,000 TEU a year on current trade of 2million+

**  There was no submission to the National Ports Strategy from Sydney Ports and past NSW Treasurers have been luke warm in support of the Inland Rail.

Media Release on ‘Sale of Port Botany’

Tuesday 6 September 2011

REFINANCING OF PORT BOTANY & DESAL PLANT TO FUND MAJOR INFRASTRUCTURE PROJECTS

The NSW Liberals & Nationals Government today announced plans to refinance State-owned assets at Port Botany, in addition to the leasing of the Sydney Desalination Plant, to fund priority infrastructure projects.

Treasurer Mike Baird said it is anticipated the Port Botany facility will be refinanced under a 99-year lease with a view to completing the transaction in the first half of 2013.

“The Port Botany assets include three container terminals with six container vessel berths, increasing to 11 berths upon completion of the Terminal 3 expansion project in 2012, and a bulk liquids berth,” Mr Baird said.

“The recent $2.1 billion transaction of a 99-year lease to operate the Port of Brisbane demonstrated strong private sector interest in operating port facilities and the value that can be realised for taxpayers.

“Having the private sector acquire a long-term lease to operate Port Botany will improve efficiencies and enable the NSW Government to invest in priority infrastructure, both of which will enhance ongoing productivity.

“The proceeds from the transaction will be invested in Restart NSW – the fund established by the NSW Government to deliver vital infrastructure projects, with 30 per cent of the fund to be reserved for projects in regional areas.

“A major constraint on the Government’s ability to fund priority infrastructure is the level of debt and unfunded superannuation liabilities on the State’s balance sheet that was inherited from Labor.

“The transaction proceeds will be used to deliver that priority infrastructure, such as Pacific Highway and Princes Highway upgrades.”

Mr Baird said the refinancing transaction for the desalination plant was progressing well and Expressions of Interest would be sought from prospective interested parties by late-2011, with the aim of completing the transaction by mid-2012.

“Advisors to the Sydney Desalination Plant refinancing process were appointed by Sydney Water in July and are now actively working with NSW Treasury and the NSW Government on progressing the transaction,” Mr Baird said.

“Proceeds from this refinancing will also be allocated to Restart NSW.”

Ports Minister Duncan Gay said private management of Port Botany will allow port businesses to focus on efficiency and service outcomes such as enhancing the operation of the supply chain.

“The Government will ensure key public interest outcomes are protected,” Mr Gay said.

“This transaction only relates to Port Botany facilities and does not apply to Port of Newcastle or Port Kembla. A pre-transaction scoping study will be undertaken and will include an assessment of the best way to deal with Sydney Ports Corporation’s residual Sydney Harbour facilities,” Mr Gay said.

The NSW Government will immediately commence preliminary work for the transaction process. Based on a similar timetable to the Port of Brisbane sale, the sale process should run between October 2012 and March 2013, with completion by mid- 2013.

Media: Rachael Storey 0467 741 310 (Treasurer’s office)

or Lance Northey 0467 743 192 (Minister Gay’s office)

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