After three and a half years of planning, the Australian Government is changing its Moorebank intermodal terminal project.
Greg Cameron writes:
Competition over rail capacity is behind the change. Although line capacity between Port Botany and Moorebank is 1.2 million containers (twenty-foot equivalent unit or teu) per year, there are two proposals requiring 2.2 million teu rail capacity.
There cannot be a 1.2 million teu intermodal terminal operated by the Australian Government, alongside a 1 million teu intermodal terminal operated by SIMTA (assuming both proposals received planning approval). Sydney Intermodal Terminal Alliance, SIMTA, is a joint venture formed in 2007 between Qube Holdings and Aurizon.
In December, the Australian Government called for ”Expressions of Interest” to develop ”a new freight hub” at Moorebank. SIMTA is ideally placed to respond because it owns the land for its proposed terminal. But with the Australian Government wanting to change the ”scope and configuration” of the intermodal terminal ”precinct”, SIMTA’s land would be an obvious requirement.
”The [Australian] Government has selected Moorebank as the next major intermodal terminal to manage the growth of both interstate freight via Sydney and import-export freight that transits through Port Botany,” said The Hon Warren Truss, Minister for Infrastructure and Regional Development.
In reality, rail capacity is insufficient for current container demand and there is no rail capacity to meet future container demand.
In 2012, there were 0.85 million container truck movements between Port Botany and western Sydney, averaging 2 teu per truck. The rail line between Port Botany and Moorebank has capacity to replace 0.6 million container truck movements. If an intermodal terminal is operating at Moorebank in 2020, there will be no change in the number of container truck movements between Port Botany and western Sydney.
The number of container truck movements in 2030 will be 2.6 million. By 2040, container truck movements will exceed 5 million should Port Botany throughput reach 13 million teu. At this rate, container trucks will require 50 per cent of the capacity of the M5 East westbound tunnel and 25 per cent of the capacity of the eastbound tunnel. Why build WestConnex?
”The scale and configuration of the Moorebank intermodal terminal precinct will be informed by the Expression of Interest process currently being undertaken by the Moorebank Intermodal Company,” said Mr Truss.
”It is envisaged that this process will produce innovative private sector proposals that take account of freight logistics, port-rail interface and wider precinct considerations.
”Moorebank is large enough to support interstate freight trains, handle expected growth in container numbers and is ideally situated between major road freight corridors.
”This growth is expected to continue and will eventually impact the effectiveness of Port Botany to handle future demand,” said Mr Truss.
Port Botany’s effectiveness, however, is already impacted by inadequate road and rail infrastructure. For example, traffic volumes in both M5 East tunnels exceed capacity. The NSW Government lifted the cap on Port Botany container terminal expansion to maximise the lease price. The cap was 3.2 million teu and growth is expected to reach 7 million teu in 2030 and up to 13 million teu by 2040.
It is impossible for an intermodal terminal at Moorebank to improve the effectiveness of Port Botany container terminal by reducing use of trucks.
The Australian Government’s other justification for an intermodal terminal at Moorebank is for handling interstate freight entering Sydney.
It will cost $4.4 billion to upgrade the ”Northern Sydney Freight Corridor (NSFC)”, between Strathfield and Newcastle, to maintain an interstate rail service to Moorebank.
NSFC is a joint Australian and NSW Government initiative to ”improve the capacity and reliability for freight trains between Strathfield and Newcastle”. The NSW Government is asking the Australian Government to pay for the upgrade.
Both governments support a freight rail bypass of Sydney.
The bypass can be financed, built and operated by private enterprise. It can be paid for by railing containers between a container terminal at Newcastle and an intermodal terminal at Eastern Creek. Both terminals, as well, can be privately financed.
Sydney requires only one dedicated freight rail line. The saving to the Australian Government from private enterprise financing a freight rail bypass would significantly exceed the $5.1 billion received by the NSW Government for leasing Port Botany and Port Kembla, and what it will receive for leasing the Port of Newcastle.
In 1997, BHP proposed building a container terminal on its Newcastle steelworks site. The NSW Government blocked BHP’s plan by taking ownership of the site in 2001. Advance 13 years and the NSW Government is privatising the Port with a condition that there will be no container terminal.
This obliges the Australian Government and NSW Government to provide $4.4 billion for upgrading NSFC.
Alternatively, the NSW Government is able to lease the Port of Newcastle – for $1 – on condition that the lease-holder finances, builds and operates a container terminal, freight rail line to Glenfield and intermodal terminal at Eastern Creek.
Sydney requires additional freight rail capacity by 2028.
NSFC stage 1 will provide sufficient freight rail capacity through Sydney until 2028. Stage 1 will be finished in 2016 at a cost of $1.1 billion. Stages 2 and 3 must start in 2016 if they are to be finished by 2028. Stage 3 will provide the equivalent of a dedicated freight line within Sydney’s main passenger rail corridor.
An analysis by Infrastructure Australia supported a multi-modal corridor from western Sydney north to the Central Coast and lower Hunter. A technical evaluation by the Transport Construction Authority found that construction time for the rail line would be 10 to 15 years. Therefore, a freight rail bypass of Sydney can be completed by 2028.
The NSW Government is proceeding to secure a land corridor for the bypass. But the government does not plan to start building for 10 to 15 years. This means the line won’t be finished for 20 to 30 years.
On this basis, the Australian Government and NSW Government must provide funding immediately for NSFC stages 2 and 3.
Along with securing a land corridor for the bypass, the NSW Government is also securing a land corridor for the ”Western Freight Line”, between Penrith and Chullora. This line would connect the bypass line with the Metropolitan Freight Line and Port Botany container terminal.
The NSW Government supports an intermodal terminal at Eastern Creek connected to the Western Freight Line and the bypass line. The purpose of the Eastern Creek intermodal terminal would be to service Port Botany container terminal. Inadequate rail capacity from Port Botany, however, defeats the purpose of connecting Penrith/Eastern Creek and Chullora.
85 per cent of containers have a destination no further than 50 kilometres from Port Botany because Port Botany is the only container terminal in NSW. It stands to reason that importers and exporters located as close as possible to the Port because of almost total reliance on road transport.
It is commercially viable to relocate Port Botany container terminal operations to Newcastle and to rail containers to Eastern Creek, for the following reasons:
(1) A freight rail bypass would enable freight to be removed from the Sydney rail network. All freight rail capacity would be used for passenger services. Deloitte Access Economics estimated that ”if rail absorbed 30 per cent of the forecast increase in urban travel then congestion, safety and carbon emission costs could be reduced by around $1 billion a year by 2025.”
(2) The freight corridor between Epping, Strathfield and White Bay can be used for the North-West rail passenger line.
(3) Rail’s share of interstate freight would be maximised with a rail bypass. According to Deloitte Access Economics, ”Along the North-South freight corridor, if rail was to achieve a 40 per cent share of the market then savings, in terms of carbon pollution and accidents, would be around $630 million a year by 2030.”
(4) There would be no need to find $4.4 billion for building NSFC stages 2 and 3.
(5) There would be no need to build the Western Freight Line.
(6) The freight rail line between Port Botany and Glenfield would be available for a passenger service for an airport at Badgery’s Creek, should one be built.
(7) There would be no intermodal terminal at Moorebank because freight rail capacity servicing Port Botany would be used for passenger services. Should the Moorebank project proceed, however, this would leave no capacity for railing containers between Port Botany and Eastern Creek via Glenfield, for the period that the bypass line was under construction.
(8) Industry would be encouraged to relocate to outer western Sydney from the inner west. There are 5500 hectares of land occupied by industry in inner western Sydney. Imaginative planning would see this land re-zoned for residential use while the firms would realise a capital gain by moving to better premises on industrial land surrounding Eastern Creek. Transport costs would be lower due to shorter freight distances. Costs would be further lowered by warehousing containers at Eastern Creek and trucking only palletised goods. (A twenty-foot container weighs 2.5 tonnes and a forty-foot container weighs 4 tonnes. Self-loading cranes on some container trucks add even more weight.)
(9) Port Botany container terminal site can be re-developed for airport use. Modern aircraft need runways at least 4000 metres long, and Sydney Airport has just one. The short parallel runway can be extended to 4000 metres, and a second cross runway of 4000 metres can be built into the container terminal site. As the primary airport for the Sydney region, it is logical to maximise Sydney Airport’s environmental performance by maximum use of modern aircraft when this also is the lowest cost way to increase passenger capacity.
(10) The cost of railing empty containers to Newcastle would be met by filling the containers with export goods manufactured in northern NSW. At present, 25 per cent of all Port Botany container movements are empties being returned.
(11) Containerised goods destined for northern NSW would not be trucked between Sydney and Newcastle – another cost saving.
(12) A Newcastle container terminal is commercially viable just by serving the northern NSW economy. Assuming construction time of 3 to 4 years, container throughput at Port Botany would be about 25 per cent lower by 2018.
(13) Jobs would be created throughout northern NSW when regional firms have proper access to a container terminal. World trade is conducted using containers: no container terminal means no trade and therefore, no production for export.
(14) Decentralisation would occur. There would be a net economic benefit in substituting under-used regional infrastructure for over-used Sydney infrastructure as Sydney workers were encouraged to re-locate to northern NSW and northern NSW workers had less incentive for moving to Sydney.
(15) Freight would be removed from the Newcastle rail line and this would enable a re-design of public transport in Newcastle, using existing light rail corridors. There would be significant value-capture by using land along all rail corridors for medium-density development, based on rail transport.
The Australian Government should reject the NSW Government’s request for funds to build stages 2 and 3 of NSFC, and cancel its plans for an intermodal terminal at Moorebank.
An independent cost-benefit analysis of the Newcastle alternative is required before the NSW Government proceeds with leasing the Port of Newcastle.