A Privately Financed Freight Rail Bypass of Western Sydney

Submission to the “Productivity Commission – Public Infrastructure Inquiry” by Greg Cameron, Australian Capitol Territory, 13th December 2013

Greg Cameron

Greg Cameron

 Summary

A privately financed freight rail bypass of outer western Sydney can be built and in use by 2028.

The line leaves the Southern Sydney Freight Line at Glenfield, in south-west Sydney, and extends to Badgery’s Creek, Eastern Creek and Hexham, 15km west of Newcastle, where it connects with the Main North Line. A spur line links Hexham with the Port of Newcastle.

Funding is generated by railing containers and interstate freight to an intermodal terminal at Eastern Creek. All containers for the Sydney market are railed between a container terminal at the Port of Newcastle and the intermodal terminal. The proposition is that railing containers and interstate freight will provide more benefits for NSW than trucking.

The funding solution is to set a price on container movements that covers all capital and operating costs for the freight rail bypass, container terminal and intermodal terminal. The market already exists and is currently serviced by trucking individual containers between Port Botany container terminal and their final destinations.

Over the next 40 years, around three-quarters of all container movements at Port Botany will occur by truck. By relocating container terminal operations to Newcastle, this revenue stream can be applied to rail. Consequently, the financing strategy is underpinned by the demand for containers.

The NSW government’s freight plan for containers is a three-fold increase in annual truck movements through Port Botany, from 850,000 trucks in 2012 to 2.6 million trucks by 2030.

NSW government policy in relation to a freight rail bypass of Sydney is contained in the ”NSW Freight and Ports Strategy, November 2013” (NSWFPS):

”… long term infrastructure projects such as the Outer Sydney Orbital [defined as ”transport corridor in the western part of the Sydney Basin to provide future transport capacity”] and Western Sydney Freight Corridor are unlikely to commence construction within the next 10 to 15 years. However, work is needed to plan and implement corridor preservation requirements to expand network capacity.” (page 209)

”Identifying a new Outer Sydney Orbital corridor and protecting it from incompatible development is an increasingly urgent priority, particularly as the corridor is of key strategic significance to both the road and the rail task.” (page 10

Intermodal Terminal Proposals

Sydney is currently served by three small intermodal terminals – Enfield, Minto and Yennora – with combined capacity of 0.6 million TEU (SIMTA EIS, June 2013, G-1, table 2.2) (TEU stands for ”twenty-foot equivalent units” and is the international unit of measure used for standardising container throughput numbers.)

There are two proposals for intermodal terminals at Moorebank in western Sydney. Moorebank Intermodal Company (MIC) proposes a terminal with capacity for 1.2 million TEU import/export and 0.5 million TEU interstate transfer. MIC is owned by the Australian government. SIMTA (Sydney Intermodal Terminal Alliance), a private company, proposes a 1 million TEU terminal.

According to the NSW government, ”Once complete, these two IMTs are expected to result in up to two million TEU of intermodal terminal capacity.” (NSWFPS, page 122)

MIC has been advised by the NSW government that ”the freight rail line between Port Botany and Moorebank, even with augmentation, can only support an intermodal terminal with a capacity of around 1.2 million TEU per year in import/export containers”. (MIC, private communication, 26 November 2013)

Assuming that the NSW government includes interstate transfer capacity in its 2 million TEU expectation – understandable, given the recent heavy investment by the Australian government in the Southern Sydney Freight Line and Northern Sydney Freight Corridor stage 1 – there is rail capacity for only one of the current proposals. And, with container movements through Port Botany expected to reach 3.2 million TEU around 2020, a 1.2 million TEU import/export intermodal terminal at Moorebank should be full as soon as it opens.

Container movements through Port Botany were 2 million TEU in 2012. Movements are expected to reach 7 million TEU by 2030 and 13 million TEU by 2040/2050. (Sydney Ports/NSWFPS page 31)

The NSW government acknowledges the need to build additional intermodal terminal capacity: ”To cater for forecast growth in the container market, further intermodal capacity will be needed in Sydney. In the longer term a key strategic location for an intermodal terminal could be in the Eastern Creek area. A future intermodal terminal in Western Sydney will need to be connected to the Metropolitan Freight Network. The necessary lands should be identified and protected in planning instruments to cater for future growth in the freight task.” (NSWFPS, page 101)

Modal Split

The modal split for Port Botany container movements in 2012 was 1.7 million TEU truck and 0.3 million TEU rail. (Sydney Ports) In 2030, the modal split will be 5.2 million TEU truck and 1.8 million TEU rail. (Assumes total intermodal terminal import/export capacity of 1.8 million TEU.)

MIC says 80% of containers railed to its Moorebank terminal will be trucked to the final destination. For the intermodal terminals at Enfield, Minto and Yennora, all containers are trucked to the final destination. Of the 1.8 million TEU containers moved by rail to an intermodal terminal, 93% will be trucked to and from the final destination.

On average, a Port Botany container truck carries 2 TEU. In 2012, Port Botany container terminal generated 0.85 million truck movements. (1.7m / 2) In 2030, Port Botany container terminal will generate 2.6 million truck movements. (5.2m / 2) On average, a container-carrying truck serving MIC’s proposed facility will carry 1.7 TEU. (MIC, op cit)

Environment and Noise

The NSW government released its ”NSW Transport Masterplan” in December 2012.

In relation to environmental and noise impacts of freight, the report said: ”If growth on freight networks is not managed and future networks are not well planned, increases in freight volumes will adversely impact the natural and built environment, particularly in the context of increased emissions and noise pollution. This will reinforce negative community views and perceptions about freight, potentially driving a less efficient outcome for all.” (para 7.5.2)

In contrast, the NSW government’s freight plan for containers is to increase truck movements through Port Botany from 0.85 million in 2012 to 2.6 million in 2030.

Relocating Port Botany container terminal operations to Newcastle allows for removal of all container-trucks from Sydney’s roads. Container trucks would be replaced by lighter trucks.  Hazardous emissions, noise, road damage and traffic congestion, would be measurably less. Productivity would rise and costs lowered. (Lloyds List Australia, 24 October 2013, page 3)

Intermodal terminals at Enfield, Yennora and Minto can be closed and plans for intermodal terminals at Moorebank would be terminated.

Rail can be used for moving 1.8 million TEU between Port Botany and Eastern Creek, via Glenfield, until the freight rail bypass is completed to a container terminal at Newcastle. There would be no need to build the Western Freight Line, between Chullora and Eastern Creek.

Eastern Creek Intermodal Terminal

Railing containers between Port Botany and an intermodal terminal at Moorebank will prevent containers being railed between Port Botany and an intermodal terminal at Eastern Creek, because of insufficient rail capacity.

The advantage of railing containers between Newcastle and Eastern Creek is that an intermodal terminal at Eastern Creek can be scaled to handle all container movements to 2050 and beyond. In addition, ample land is available for warehousing to manage the de-stuffing/stuffing of all containers on site so that all container-carrying trucks may be removed from Sydney’s roads.

Additionally, it is more efficient to rail empty containers to Newcastle, where they may be filled with export goods from northern NSW, than trucking them back to Port Botany. Around 25% of all container movements involve empty containers. (Sydney Ports)

Investment in Sydney Freight Rail Capacity

Whereas the Australian government is investing heavily in increasing Sydney’s freight rail capacity, little of this investment is for container transportation. The additional capacity will be used for freight entering Sydney from Queensland, Victoria and regional NSW.

$960 million was spent building the ”Southern Sydney Freight Line”. Opened in January 2013, this 36km single-track, bi-directional line between Macarthur and Chullora, allows up to 48 freight trains a day, compared with 16 trains previously. (ARTC Annual Report 2013; transcript of interview, Hon A Albanese, 21 January 2013)

$1.1 billion is being spent building stage 1 of the ”Northern Sydney Freight Corridor”. When completed in 2016, the improvements will allow 44 freight trains a day to pass through northern Sydney, compared with 29 trains now. (Press Release, Hon A Albanese, 20 July 2012) However, more capacity is required by 2028. (NSWFPS, page 109)

In November 2013, the Australian government announced work was starting on an inland freight rail line, between Melbourne and Brisbane. When this line opens in 2026, there will be little benefit for Sydney because ”more than 75 per cent of road and rail interstate traffic entering the Sydney metropolitan area has its destination within Sydney”, as noted in Northern Sydney Freight Corridor, Strategic Review Report, July 2012, page 24.

Freight is railed through the heart of Sydney because there is no bypass and to provide a rail service to Port Botany. Railing containers between Newcastle and Eastern Creek using a freight rail bypass of Sydney would remove the need for a freight rail line to Port Botany.

The economic and environmental benefits to be gained by devoting all of Sydney’s rail capacity to passenger services, and removing container trucks from Sydney’s roads, can be easily evaluated. This includes the return on investment in using the Southern Sydney Freight Line and Northern Sydney Freight Corridor for passenger trains instead of freight trains

Removing all freight from the Sydney rail network, including the connection to Port Botany, releases 100% of capacity for passenger services, worth at least $1 billion a year in savings to the economy. Deloitte Access Economic found: ”In Sydney, for example, if rail absorbed 30% 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.” (”The True Value of Rail”, Deloitte Access Economics, June 2011, page ii).

Deloitte further reported: ”Along the North-South freight corridor, if rail was to achieve a 40% share of the market then savings, in terms of carbon pollution and accidents, would be around … $630 million a year by 2030.” (page iii)

There are other benefits for passenger rail. The proposed North-West Line can access the CBD via Strathfield, using the freight rail line from Epping and the dis-used freight rail corridor to White Bay. There would be no need to rail freight 24 hours per day through northern Sydney – $4.4 billion can be saved by cancelling stages 2 and 3 of the Northern Sydney Freight Corridor (ibid, page 50), since all rail freight will use the bypass line.

Future Container Terminal Capacity

The future capacity of Port Botany container terminal is unknown. Says the NSW Freight and Ports Strategy: ”Depending on the rate of growth, from a planning perspective it appears reasonable to expect that Port Botany might approach its natural capacity between 2030 and 2040.” (page 30) Port Botany container movements would range between 7 million TEU and 13 million TEU by 2040 (NSWFPS, page 31)

After Port Botany container terminal reaches capacity, the NSW government’s plan is for a container terminal at Port Kembla. A 36 km section of rail line would need to be built to connect Port Kembla with the Southern Sydney Freight Line.

If Eastern Creek was selected as the location for an intermodal terminal serving Port Kembla, access would be provided by the bypass line between Glenfield and Eastern Creek.

Integrated Construction Plan

Construction of a container terminal at Newcastle, an intermodal terminal at Eastern Creek and the freight rail bypass section between Glenfield and Eastern Creek, can all proceed simultaneously.

Container movements through Port Botany will decline by about 25% when a Newcastle container terminal commenced operations around 2018 (assumes around 25% of the NSW population live north of the Hawkesbury River and their demand for container services in proportion to population).

When the bypass line is completed between Eastern Creek and Newcastle by 2028, Port Botany container terminal operations can relocate to Newcastle. Essentially all road freight entering Sydney, north and south, can be transferred to rail.

There would be no need for a container terminal at Port Kembla to serve Sydney.

Evaluation

A rigorous cost-benefit analysis of all economic and environmental implications would both inform government policy and set clear commercial parameters for private sector investors, while enabling current commitments to investors to be upheld.

 *****

For more up-to-date information check here:

http://www.containerterminalpolicyinnsw.com.au/

 

 

7 Responses to A Privately Financed Freight Rail Bypass of Western Sydney

  1. Greg Cameron says:

    Australian Financial Review Letters

    Terminal case of waste
    PUBLISHED: 27 FEBRUARY 2014
    Infrastructure Australia’s opposition to stage one of the Northern Sydney Freight Corridor – to increase rail freight capacity between Strathfield and Newcastle (“Investment outlook bad”, AFR February 25) – failed to prevent the Australian Government contributing $840 million to the $1.1 billion cost. One hopes that IA also opposes the Australian government providing a further $4 billion for stages two and three. This upgrade is required to service the Moorebank intermodal terminal. There is no justification for the Moorebank intermodal, when containers can be railed to an intermodal terminal at Eastern Creek via a privately-funded rail freight bypass of Sydney.
    Greg Cameron
    Florey, ACT

    Federal and NSW government are all talk and no funds
    PUBLISHED: 31 JANUARY 2014
    email
    Will $4.4 billion be provided in the federal budget for building stages 2 and 3 of the Northern Sydney Freight Corridor to service Moorebank and Port Botany? If not, why is the Australian government promoting Moorebank as an interstate freight hub (“MIC vetoes separate Moorebank terminals”, AFR, January 30)?
    Are the Australian and NSW governments prepared to acknowledge that private enterprise will use a container terminal at Newcastle to fund a freight rail bypass of Sydney, by railing containers to an intermodal terminal at Eastern Creek, as compared with trucking containers from Port Botany? If not, why is a freight rail bypass of Sydney the policy of federal and state governments?
    Greg Cameron
    Florey, ACT

    Freight rail bypass better idea than WestConnex
    PUBLISHED: 14 JAN 2014
    Port Botany container trucks will require 50 per cent of Sydney’s M5 East westbound tunnel’s capacity and 25 per cent of the eastbound tunnel’s capacity when the terminal reaches “natural capacity” of 13 million by 2040. This defeats the purpose of building WestConnex.
    Increasing the port’s selling price (“The inside story of the astonishing $5.1 billion NSW Ports sale”,AFR, January 3) was achieved by the NSW government abolishing the cap on container throughput, which existed because of inadequate transport infrastructure. Maximum rail capacity is a meagre 2 million containers, while 5.5 million truck movements would be needed in 2040 to transport another 11 million containers.
    NSW government policy, however, is to build a freight rail to bypass Sydney, between Glenfield and Newcastle. Railing all containers between a container terminal at Newcastle and an intermodal terminal at Eastern Creek would pay for the new line.
    Freight can then be removed from Sydney’s rail network, increasing rail’s share of urban travel, and $4.4 billion will be saved by cancelling stages two and three of the Northern Sydney Freight Corridor.
    Interstate goods entering Sydney can be railed, not trucked.
    The freight rail corridor between Epping, Strathfield and White Bay can be used for the new North West Rail passenger service. Sydney Airport’s environmental performance and passenger capacity can be improved by extending the parallel runway and building a second cross runway, using the container terminal site.
    Creg Cameron
    Florey, ACT

  2. Greg Cameron says:

    Informatively, I submitted the following letters to the editor of the Australian Financial Review today.
    Regards,
    Greg

    Infrastructure Australia’s opposition to stage 1 of the Northern Sydney Freight Corridor – to increase rail freight capacity between Strathfield and Newcastle (”Investment outlook bad”, AFR, 25 February) – failed to prevent the Australian Government contributing $840 million to the $1.1 billion cost. One hopes that IA also opposes the Australian Government providing a further $4 billion for stages 2 and 3. This upgrade is required to service the Australian Government’s Moorebank intermodal terminal, chaired by IA member Dr Kerry Schott. The Abbott government is obliged to confirm that $4 billion will not be provided and there is no justification for the Moorebank intermodal, when containers can be railed to an intermodal terminal at Eastern Creek via a privately-funded rail freight bypass of Sydney from a container terminal at Newcastle. Neither the NSW nor Australian government’s supports a container terminal at Newcastle because this would remove Port Botany’s monopoly over container movements, as sold to various industry super funds for $5.1 billion. Bad policy still is bad politics and bad business.

    Political dithering over a Badgery’s Creek airport decision (”MPs air unease over second Sydney airport”, AFR, 25 February), ignores the problem’s root cause: two of Sydney Airport’s three runways are too short! The two short runways are unable to be used by the latest, biggest and quietest jets. Smaller aircraft using the shorter (2438 metres) parallel runway have to cut across the main runway (3962 metres) to access the terminals, which delays all aircraft. When weather prevents the dual parallel runways being used, the single east-west runway (2530 metres) limits landings to a maximum 55 per hour out of 80 permitted. This creates the air transport chaos for which Sydney is renowned. The solution is to extend the short parallel runway by about 1000 metres into Botany Bay and build a new east-runway at least 3500 metres long into the container terminal site, having relocated the terminal to Newcastle and railing the containers to Eastern Creek, via a privately-funded rail freight bypass of Sydney.

    Greg Cameron

  3. John says:

    Hello All.
    I think it is appropriate that I put my two bobs worth into the discussion. As you all know I have been involved in the discussion on the Moorebank Intermodals for the last 6 years and have been amazed with the way the impact on the south west of Sydney particularly Liverpool has not been properly addressed. One thing I do know is that it would be impossible to estimate the number of diesel vehicles that would descend on the area as the number of consignments is an unknown factor and with 465,000 extra residents coming to the area in the next 25 years it is an insult to all residents now and the future to contemplate what is proposed.
    With the main roads under stress for a big portion of the day, due to the number of vehicles the number of hours to run a container terminal is too short to enable any proper time when the roads would be not gridlocked. I live near the intersection of Moorebank Ave and the M5 and have seen huge traffic volumes at very late times in the day sometimes at 22:00. The one thing that gets me annoyed is the health impact on our young, sick and the wildlife in the area that would quite obviously desert it if the diesel emissions got out of control. I have had at least 10 discussions with officers of the South West Area Health Service and they are always in complete denial which is very alarming.
    I have spoken to many residents and most have family members who have respiratory problems, that is very alarming. I still think what they are trying to achieve is virtually impossible but that won’t stop me doing everything in my power to stop this monstrosity.
    John Anderson

  4. Paul says:

    Hi All

    As a transport orientated thinking person, I have been asking the question, “where are the final destinations of the goods, that are being carried in the containers?” Now and in the Future.

    Let us look at two scenarios: Now and Future. Then we can look “at the big picture” of the changes between these two scenarios.

    Now
    What we have now seems to be working – obviously needs to be improved.

    Future
    For simplicity – everything remains the same – and just add the South West and the North West Growth Centres.
    (In reality there is some infill developments.)
    The combined population is about ½ the size of Brisbane – the Capital City of Queensland. This development is going to be at the back of Sydney.

    Now look at the growth in containers.
    In this simplified scenario the growth in containers would be destined for the city half the size of Brisbane.
    This development is at the back of Sydney.

    Transportation of goods
    In very simplistic terms, there are two aspects: what happens to the goods to be transported, and what happens to the transporter.

    What happens to the goods
    For ‘short’ distances, put it on a truck, travel to destination and take it off a truck.
    For ‘long’ distances, put it on a truck, take it to a collector station, transport from collector station to distribution station, deliver to destination.
    Note the double handling and delays in collecting and distribution, but the economical ‘transport from collector to distributor’.

    What happens to the transporter
    The task is to ensure that there is back-loading work – otherwise it becomes very expensive to transport goods.
    Hence the economical two-way collector to distributor travel. There is a load both ways – all the time.

    From a transportation point of view, how can we get the goods to the city, half the size of Brisbane, living at the back of Sydney (50 – 60 km from Port Botany).
    This question is in three parts: (1) which of the tree Ports should these (additional) containers come through (Port of Newcastle, Port Botany, or Port Kembla, (2) where is the best place to unstuff the containers, and (3) how do we get the containers from the Port to that place?

    When I look at Greg’s proposal, it makes very good sense.
    Greg has shown that trucking the containers from Port Botany is not a realistic option, and that there are fundamental issues with using rail from Port Botany.

    Further than that, I very strongly suspect that the Greg suggested rail line, bypassing Sydney, will have a far bigger impact on truck movements than even he anticipates.
    I have come to this conclusion from a simple exercise that I did by looking at the existing origins and destinations of heavy trucks that travel over the Hawkesbury River.
    I looked at these movements in just two parts:
    (1) truck movements travelling through Sydney – this number took me by surprise –
    • If Greg’s rail line could help taking some of the through-Sydney truck movements off Sydney’s roads it would be an indirect benefit – because that is not its primary purpose.
    (2) truck movements who started in Sydney and their final destinations.
    • When I looked at the heavy truck origins in Sydney, it becomes very obvious, that it would make great sense if some of those truck movements could be directed to a common point along Greg’s railway line. If that were possible, it would have enormous impacts on capacity of the F3 to Newcastle – that is, many trucks would be taken off the F3.

    If I had some time, I would dearly love to do some more analyses.
    From a transportation point of view, I very strongly suspect that Greg’s proposed rail solution will have a much wider (positive) impact than what he has outlined.

    Paul

  5. Allan Corben says:

    Greg,
    My background being the Transport Industry I’m somewhat confused as to your comment on page 5 that includes the wording, ”allows for the removal of all container-trucks from Sydney Roads. I find this an impossible task as the majority of containers are FCL and require direct delivery to the end customer.

    Regards
    Allan Corben

    • Greg Cameron says:

      Allan, this is what is exciting about the concept of port-centric logistics, as described by Professor Mike Bell in his recent presentation to CILTA , see Lloyd’s List Australia article enclosed. His point is that containers are de-stuffed at the Port to prevent them being trucked anywhere.

      Containers cannot be de-stuffed at Port Botany (because of space limitations) nor can they be de-stuffed at Moorebank. Therefore, there is little point in railing containers to Moorebank. Railing containers to Eastern Creek from Newcastle allows containers to be de-stuffed on site.

      The cost-benefit of this approach allows a comparison with trucking containers from Port Botany as FCL.

      My proposition is that the evaluation would favour the Eastern Creek/bypass/Newcastle container terminal option.

      Perhaps you could invite Professor Bell to address your Committee or Liverpool Council?

      Regards,
      Greg

      • Allan Corben says:

        Greg,
        Professor Bell’s concept is interesting. The problems I see with the Centric Logistics is,

        (1) Freight is double handled and although he makes comment of palletised freight in reality a large percentage of containers are hand stacked and would need to unloaded in that manner and palletised prior to delivery.

        (2) In double handling freight a delay in the delivery time is possible.

        (3) The volume of goods contained in a container will still need the same length of vehicle for delivery IE 40 foot container will require a 40 foot trailer for delivery.

        When I entered the transport and logistics industry in 1967 we spent most of days man handling freight from one vehicle to another. From that time through to the time I retired in 2011 the industry made massive improvements to reduce double handling including direct delivery of large consignments, palletising of freight to eliminate double handling & etc. One company I spent many years with even converted parcel freight to containers that were loaded by the delivery driver upon his return to the depot and then loaded by forklift into the linehaul vehicle. Each linehaul vehicle carried ten containers per and they would be handled in the same manner at the delivery end depot. This process eliminated having to have two or three men in the back of linehaul vehicle stacking or un stacking thousands of parcels. The cost saving was substantial.

        Having spent my working life trying to do the job smarter I don’t see the benefits of double handling freight.

        In closing I would say that I would have to agree to disagree with the Centric Logistics concept. I do however do fully support your concept of a freight bypass.

        Regards
        Allan Corben

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