Port Kembla: look to containers

Illawarra Mercury Tuesday August 6, 2012 
Opinion Philip Laird

A better model for Port Kembla is that of the Port of Tauranga in New Zealand

The proposed sale by the NSW Government of Port Kembla as part of a package with Port Botany is likely to work against the economic growth of the Illawarra.

The reason for this is that already consultants advising the government on the sale of the two ports has stated that a better price would be obtained if the planning cap on Port Botany on container movements can be lifted from the current 3.2 million TEUs (twenty foot equivalent units) per annum. In this case, a private sector owner of both ports would expand Port Botany rather than invest in new container facilities at Port Kembla.

During 2010-11, Port Botany moved a record 2.02 million TEUs of containers. The cap is likely to be reached by 2017. Seven out of eight of these containers moved to and from Port Botany by trucks using congested roads.

To lift the Port Botany container cap, it has been suggested that the M5 East will need to be duplicated. The cost will be at least $4.5 billion.

It could well be more cost effective to expand other ports rather than Port Kembla. With Newcastle port exporting record and growing amounts of coal (114m tonnes during 2011) and given the road congestion between Newcastle and Sydney, it makes more sense to develop Port Kembla as a container port.

This in turn will require completion of the Maldon Dombarton rail link with a 4 km tunnel. However, as presently planned, only $100 million from the long term lease of Port Kembla is to be applied to Wollongong infrastructure. This may not be enough to complete Maldon Dombarton at a cost of about $650 million.

A better model for Port Kembla is that of the Port of Tauranga in New Zealand. This port is separately owned from the Port of Auckland and both ports compete with each other to provide better level of service to shipping lines along with importers and exporters.

The Port of Tauranga owns a container pick up and delivery facility called Metroport located in an industrial area to the south of Auckland. Metroport is linked to Tauranga by at least two container trains, each way, each day operated by KiwiRail.

To quote, Metroport is a " ... strategic initiative on the part of the Port to offer a competitive door-to-door import service and to provide importers and exporters with a choice of ports in the Auckland region."

The trains linking the Port of Tauranga to Auckland move along an upgraded railway, which includes an 8 km tunnel under the Kaimai Range. Without this tunnel which gave a more direct route to Auckland, Metroport would not work.

Their main competing port is the Port of Auckland. The Port of Tauranga keenly competes with Auckland to be the port of choice by shipping lines, has won several awards, and strives to be "The Port of the Future."

Most recently, the Port of Tauranga was shortlisted for the international Lloyd's List Port Operator award.

In short, a vibrant port that not only supports the regional economy, but also assists New Zealand's largest city of Auckland as a nearby second container port.

Clearly, this would not have happened if the Port of Tauranga had been operated by the Port of Auckland.

With the completion of the Maldon Dombarton rail ink and the planned new Moorebank intermodal terminal, Port Kembla has the potential to grow in the way the Port of Tauranga has.

It is up to our region to see that this potential is realized.

Associate Professor Philip Laird is with the Faculty of Informatics at the University of Wollongong. He is a well-known commentator on land transport issues.