Sydney Freight Strategy

“It no longer makes any sense to use precious Sydney rail capacity to carry freight.”

Greg Cameron

Greg Cameron

Sydney people need more public transport. Rail services can be increased by using all network capacity for passenger trains and removing freight trains.

Deloitte Access Economics estimates that ”in Sydney, 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”.

It no longer makes any sense to use precious Sydney rail capacity to carry freight.

A freight rail by-pass through outer western Sydney is New South Wales government policy.

Commencing at Glenfield in Sydney’s southwest, the line would pass through Badgery’s Creek, Eastern Creek and west of the Central Coast to Hexham, 15 km west of Newcastle. There would be a link from Hexham to the Port of Newcastle.

Construction would take 10 – 15 years but the NSW government has no plan to start work because there are no funds.

Sydney will have sufficient freight rail capacity until 2028, as a result of an upgrade of the Main North line, costing $1.1 billion. However, the NSW government has no funds for increasing freight capacity after 2028, which is estimated to cost $4.4 billion, in present value terms.

Therefore, the NSW government is unable to fund either of its two options for increasing freight rail capacity by 2028, even though the lead time is 10 – 15 years.

There is no time to waste.

The solution is to build a container terminal at the Port of Newcastle and rail containers directly to an intermodal terminal at Eastern Creek using the freight rail by-pass.

Private enterprise would fund and build the three projects because they are all commercially viable. Paying for the projects would be possible by replacing trucks with trains for transporting containers for the Sydney market, and using rail for all interstate freight entering Sydney.

Port Botany container terminal would continue to operate until the Newcastle-Glenfield freight rail line was completed. Last year, containers moving through Port Botany terminal numbered 2 million TEU (twenty-foot equivalent unit). But by 2030, the number of container movements is estimated by the NSW government to be 7 million TEU.

To cope with the growth in container movements, the NSW government intends to build an intermodal terminal at Eastern Creek. Such a terminal would be able to handle all of Sydney’s container requirements with unlimited scope for expansion, to meet demand well into the next century.

The NSW government recently leased Port Botany container terminal for 99 years, to raise capital for state infrastructure projects. A transfer of container terminal operations to Newcastle would be possible by including the Newcastle container terminal site in the lease deal, for nothing.

The site’s former owner, BHP, paid the NSW government $100 million in 2001 to assume ownership of the site. Therefore, leasing the site comes at no cost to the state but enormous economic benefit to the NSW economy, especially northern NSW.

Until the freight rail by-pass line was built, all containers would be railed between Port Botany and the Eastern Creek intermodal terminal.

With completion of the South Sydney Freight Line this year, there is now a dedicated freight rail line between Port Botany and Glenfield. Building the section of the freight rail line between Glenfield and Eastern Creek would occur concurrently with building the Eastern Creek intermodal terminal.

Eastern Creek would be the closest intermodal terminal to the main demand areas for containerised goods in Sydney.

Factories and warehouses currently occupy 5,500 hectares of land in inner western Sydney. At present, these factories and warehouses are mainly served by truck from Port Botany. In 2012, the number of containers moved by truck was 1.7 million TEU but only 0.3 million TEU were moved by rail.

There would be great incentive for owners to relocate their inner western factories and warehouses to outer western Sydney, to take full advantage of an Eastern Creek intermodal terminal. Use of the land for residential development would pay for building new facilities with much cash to spare.

Containers would be railed between Newcastle and Eastern Creek faster than they would be shipped past Newcastle to Port Botany and then railed to Eastern Creek. The cost difference, if there was one, would be trivial.

A future use of the Port Botany container terminal site is for airport purposes.

A key restriction on passenger movements at Sydney Airport is the length of the parallel runway. At 2438 metres, it is 1524 metres shorter than the main runway. The runway imbalance limits the scope for continued increases in the use of very large aircraft as a key element in the strategy to handle growing traffic within the constraints of the site.

Additionally, ships using Port Botany container terminal constrain aircraft movements. Therefore, it seems that multiple constraints could be overcome by relocating the container terminal to Newcastle.

At Newcastle, the container terminal would be rail-based. Initially, the terminal would serve customers in northern NSW, and would be commercially viable immediately.

An intermodal terminal would be built west of Newcastle to handle northern NSW requirements and a series of intermodal terminals would be built at major centres in northern NSW.

Removing freight from the Newcastle-Lake Macquarie rail corridor would enable urban revitalisation. Medium density residential development using degraded land along the existing heavy rail corridor would fund a light rail system, with extensions to the south, west and north using existing rail easements that were originally used last century for transporting coal by light rail to the port.

Industry would be encouraged to relocate from Sydney to northern NSW, to take advantage of rail access to the Newcastle container terminal.

Containers are how the world trades. Container terminals drive new markets, supply chains and infrastructure. Any region without adequate access to a container terminal is at a competitive disadvantage in world trade.

NSW government policy requires the people of northern NSW to use Port Botany container terminal. There are many disadvantages, including–

  • requiring imported goods to be trucked from Sydney
  • requiring export goods to be trucked to Sydney
  • discouraging exports from northern NSW because of inadequate access to a container terminal
  • discouraging jobs in northern NSW because of inadequate access to a container terminal
  • discouraging firms relocating from Sydney to northern NSW because of inadequate access to a container terminal

It is difficult to imagine a more beneficial economic initiative for northern NSW than a container terminal at the Port of Newcastle.

The NSW government opposes a container terminal at the Port of Newcastle and is unable to provide a reason. There isn’t one.

Moorebank intermodal terminals are surplus to requirements

Two small intermodal terminals competing with each other are planned for Moorebank in Sydney’s southwest.

The privately-owned SIMTA consortium proposes a terminal with 1 million TEU capacity. Next door, the Australian government proposes a terminal with 1.2 million TEU capacity for import/export and 0.5 million TEU for interstate transfers.

SIMTA released its draft Environmental Impact Statement on 3 June 2013 but the Australian government is yet to release its EIS.

At combined maximum capacity of 2.2 million TEU, the number of containers moved by truck in and out of Moorebank will be 0.5 million TEU more than containers moved by truck through Port Botany in 2012.

At issue is the capacity of roads at Moorebank to handle this extraordinary increase in truck movements.

Rail would be used to transport containers between Port Botany and the two new intermodal terminals at Moorebank.

By 2020, an estimated 3.2 million TEU will move through Port Botany. Of these, 2.2 million TEU would be railed to Moorebank; 0.3 million TEU would be railed to intermodal terminals at Enfield and Cooks Hill; and, 0.7 million TEU would be trucked.

If either of the two Moorebank intermodal terminals did not proceed, the containers would be moved by truck.

If the two Moorebank intermodals terminals are built, there will still be a shortage of intermodal terminal capacity before 2020. Unless the Eastern Creek intermodal terminal is built, the capacity shortage will increase to around 4.5 million TEU in 2030.

In the time it takes to build one or two intermodal terminals at Moorebank, the intermodal terminal can be built at Eastern Creek. (An alternative location is Badgery’s Creek using buffer zone land already owned by the Australian government for a future second Sydney airport.)

Building a freight rail line between Glenfield and Badgery’s Creek/Eastern Creek would take about the same time as building the intermodal terminal.

When freight is removed from the metropolitan rail system, Moorebank would enjoy an excellent passenger rail service. However, there would be no freight rail service.

The Liverpool City Council has long advocated that the best use for the two Moorebank intermodal terminal sites is for employment-generating business parks.

NSFC stages 2 and 3 and Western Freight line are not required

”Northern Sydney Freight Corridor” (NSFC) is the name given to the 3-stage project of upgrading the Main North line between Strathfield and Newcastle to carry more freight.

NSFC is not a separate freight line but is, instead, a series of augmentations to the existing shared network which would allow passenger and freight trains to interoperate more freely and would therefore create additional freight train paths. NSFC would transition towards a dedicated freight line at completion of stage 3. (Deloitte Access Economics, June 2011)

At a cost of $1.1 billion, NSFC stage 1 is the only stage that has been funded. The Australian government is contributing $840 million and the NSW government the rest. Stage 1 comprises:

  • North Strathfield Rail Underpass;
  • Epping to Pennant Hills Third Track;
  • Gosford Passing Loops; and
  • Hexham Passing Loop.

Stage 2 of NSFC is forecast to cost around $3.4 billion and stage three $3.2 billion. This expenditure would be spread over 12 years and so, in present value terms, the capital cost for stages 1, 2 and 3 is around $5.2 billion. Given that stage 1 is fully funded, the unfunded capital cost for stages 2 and 3 is around $4.4 billion in present value terms. (Deloitte) The NSW government is asking the Australian government to fund stages 2 and 3.

As a result of NSFC stage 1, the proportion of freight entering Sydney by rail from Queensland is expected to increase from around 11% in 2005 to over 40% in 2025. (Deloitte, December 2011) The NSW government is satisfied that Stage 1 will provide enough additional capacity to accommodate demand up to about 2028. (Transport for NSW, February 2012)

The NSW government is also proposing to build the ”Western Freight Line”, between Villawood and Eastern Creek. This line would provide direct access to Eastern Creek for freight carried on NSFC. The Western Freight line would also connect Port Botany by rail with Eastern Creek. The NSW government is planning for an intermodal terminal to be built at Eastern Creek, which would also receive freight from Victoria. Seventy-five per cent of interstate freight entering Sydney has Sydney as its end destination.

If the outer western Sydney freight rail by-pass was built, between Glenfield and Newcastle, it is feasible that all freight entering Sydney would be railed. Stages 2 and 3 of NSFC would not be built – a cost saving of $4.4 billion in present value terms. The Western Freight Line would also not be built – a further cost saving.

The commercial appeal is that rail freight is cheaper than road freight. Consequently the Australian economy would benefit from the increased efficiency.

Airport or Container terminal: which is the best land use for the Port Botany site?

Sydney Airport suffers physical constraints. Would it benefit New South Wales for Sydney Airport to have use of the land occupied by Port Botany container terminal and relocating these operations to Newcastle?

In March 2012, the physical constraints of the airport site were discussed in the ”Report of the Steering Committee overseeing the Joint Study on aviation capacity for the Sydney region”, prepared by the NSW and Australian governments. This is what they said–

”The capacity for Sydney (Kingsford-Smith) Airport to continue to grow to meet demand is affected by a number of factors.

The site measures some 907 hectares, small by comparison to other major airports in Australia and overseas. The site has operated as Sydney’s main airport since 1920 and, has been developed and expanded over time, including by extending runways to the south into Botany Bay. Any further extension of the site is limited by urban development and by Botany Bay to the south, the Cooks River to the west and Port Botany to the south-east.

The particular configuration of the runways, taxiways, terminals and aprons arises from the staged development of the site over time and the constraints of the site. It does not reflect the optimal layout for terminals and runways at a major airport.

There are currently three runways: the main runway 16R/34L at 3,962 metres long, the parallel north-south runway 16L/34R at 2,438 metres and the single east-west cross runway 25/07 at 2,530 metres.

If weather prevents the use of the dual parallel runway system, the capacity is limited to a maximum of around 55 movements per hour – well below the current demand during substantial periods of the day. The length of the cross runway means that it is not suitable for use by all large aircraft operations.

There is a variety of limitations on runway 16L/34R due to its shorter length. For example, the taxiway fillet design does not cater for long wheel base aircraft such as the B777-300.

Standard operating procedures also generally preclude aircraft greater than B767 from using that runway. This creates an imbalance between the two parallel runways and reduces the capacity to operate the parallel runway system efficiently.

In the long term, the runway imbalance will limit the scope for continued increases in the use of very large aircraft as a key element in the strategy to handle growing traffic within the constraints of the site.

The constraints of the small airport site also rule out any significant realignment of runways or rationalisation of the taxiway and apron systems. At current demand levels, the existing stands and apron areas are already heavily utilised at each terminal during peak times. Growth in aircraft movements, particularly in peak times, will require additional gate capacity in the near to medium-term.

There is already a requirement to tow aircraft off to remote stands, particularly from the international terminal, to free up gate availability. This has flow-on effects to the runways and taxiways.”

Would these problems be lessened or indeed overcome by using the Port Botany container terminal site?

Links to articles on Alternatives.

Lloyds List DCN 11 July 2013 p4

Lloyds List DCN 11 July 2013 p5

*Greg Cameron is an independent consultant in the field of public policy regarding transport infrastructure and urban water supply. He has previously worked in public affairs in the mining and steel industries. At BHP Newcastle steelworks, from 1994 to 2000, his focus was on participative economic development in collaboration with the University of Newcastle.