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Driving Economic Investment with a $1.64b Port Expansion Project Coast & Marine Structures Summit 2018

The Port of Townsville is the largest container and automotive port in Northern Australia and last financial year handled around $10 billion worth of trade. Townsville Port is an essential component of the Queensland's transport network and connects communities, regions and industry.

A significant expansion of sea-borne trade is expected in North Queensland in the next few decades and beyond. Growth at the Port of Townsville in the near term is expected to exceed the Australia-wide average, due to some major resource projects in magnetite, nickel and fertiliser, and the potential introduction of the coal trade to Townsville, which is expected to cause very high growth rates.

Townsville Port has been identified by the Northern Economic Triangle Infrastructure Plan 2007-2012 (DI, 2007b) and the Townsville Economic Gateway Strategy (DI, 2009) As an integral asset that is expected to handle larger ships and a greater deal of trade in the coming years - encouraging and supporting economic growth, as well as tourism to the Northern Queensland Region.

Ahead of the Coast and Marine Structures Summit 2018, we explore the $1.64b Port of Townsville expansion project and delve into the economic benefits the infrastructure investment will have on not only Townsville, but on the entire Queensland region.

Project Snapshot

$1.64b

The entire expansion project is estimated at $1.64b

2018

Stage one of work, a channel capacity upgrade, is due to commence in 2018. The project is due for completion in 2023

8000 TEU

Channel capacity and port expansion will allow an increase in the size of container ships accessing Townsville from 2,500 TEU to 5-8,000 TEU.

$580m

$580 million of value to the regional economy will be added with a Benefit Cost Ratio of 2.90 and aggregated benefit over 40 years of $380 million.

245

The project will create 120 FTE jobs in Townsville during construction and support 245 FTE jobs in Queensland.

6

Port expansion will create six new berths

11.48m3

Sediment removed from the channel in widening and deepening is estimated at some 11.48 cubic metres

3000

Cruise ships carrying >3,000 passengers (up from 1,500) will be able to access the Port of Townsville, allowing growth in Townsville’s tourism industry

Overcoming Challenges, Meeting Need

The Port of Townsville is a vital trade gateway for Northern Australia and for the nation. It is the country’s biggest sugar, zinc, copper, lead and fertiliser port, and northern Australia's largest container and automotive port. The port is now Queensland’s third largest multi-commodity port, and handles 14% of the total international trade export by earned value.

Port of Townsville’s existing channels only allow access for ships up to 238 metres in length and 32 metres wide (in typical operating conditions), falling well below national and international standards. Additionally, only 5% of ships servicing Australia today can currently fit into the Port of Townsville. If improvements are not made, Port of Townsville will find it increasingly difficult to maintain competitiveness in national and international markets.

The channel width limits ship access by constraining the length and width of vessels that can be accommodated, as well as imposing restrictive conditions such as wind speed and tidal constraints. The narrow channel means that restrictive constraints are placed on many vessels, and others are simply too big to enter the Townsville Port at all.

Vessel sizes are ever-increasing and the growing prevalence for carrier alliances (vessel-sharing agreements) and ocean alliances (representing 77% of global container capacity and 96% of east-west trade). For Townsville Port to be competitive, it must be able to accept large alliance vessels to support its population and industry with affordable goods imported and exported in containers.

The economic and social growth of Northern Australia must ensure that freight produced in the region is able to cost-effectively get to global markets. It is also important that people living in the north can receive the goods they need at the same time and cost as capital cities. To achieve this, Port of Townsville must widen its access channels to accept larger vessels.

By 2045 the Port of Townsville will create up to six new berths, new land for cargo handling, and widen and deepen the channels for bigger ships. The $1.6 billion, 30-year development plan, beginning next year with the $193m channel capacity upgrade, would ensure the Townsville Port kept pace with global and domestic demands, and would further act as a catalyst for substantial economic growth through international trade and increased tourism opportunities.

Exploring Return on Investment

The Port of Townsville services a population of nearly 800,000 people, providing them with essential everyday goods such as fuel, gas, furniture, electrical goods, cement and bitumen. North Queensland farmers export agricultural products, and mining companies need the Townsville port to export minerals.

Along with being the biggest exporter of copper, zinc, lead and sugar, cargo such as fruit, vegetables, meat, seafood and dairy products all currently move through Townsville to countries in South East Asia and China. With its close locality to Asian markets, Townsville is ideally placed to service a growing economy. More than 20 shipping lines operate out of the Townsville Port; offering more than 40 services and covering 136 ports around the world.

The channel widening, the $193m first stage of the massive 30 year project will foster growth in trade and provide essential trade pathways for trades in accordance with the National Ports Strategy, enhancing the economic prosperity, growth and development of the region. Additionally the channel expansion will future-proof the project by enabling future capacity to be delivered in line with expected demand, ensuring the Port of Townsville does not become the “bottleneck” for the development of North Queensland and Northern Australia.

The Channel Capacity Upgrade will deliver benefits of more than $580 million with a Benefit Cost Ratio of 2.90 and will attract future growth in trade and investment supporting more jobs and lowering freight costs for North Queensland. The project also includes some $31m in travel time savings and $259m in operational cost savings.

Along with attracting larger international trade deals and catering for bigger cruise ships; contributing significantly to Northern Queensland's booming tourism economy, the channel widening and port expansion will also have substantial benefits from an environmental perspective.

Community consultation phases prior to the channel widening being green-lit indicated concern for the Great Barrier Reef and concern for the amount of traffic leading to and from the Port of Townsville. The project's comprehensive Environmental Impact Statement however indicates that the project is within Great Barrier Reef Marine Park Regulations and additionally indicates that best practice dredging methodology and 100% beneficial re use of capital dredge material (zero sea placement) will be utilised, along with a reduction in greenhouse gas emissions with $248.8 million in avoided environmental externalities.

Moreover, by catering for larger vessels, ships carrying cargo destined for Townsville that are currently forced to bypass Townsville for neighbouring ports due to size restrictions, will no longer place additional time burdens of up to 2 days, nor cost burdens on road and rail networks. Ultimately the expansion will reduce emissions and improve air and noise quality for the entire state.

If you're interested in learning more about some of Australia's biggest port developments, and delving into the asset management and technological innovations being integrated into these multibillion dollar infrastructure projects to future-proof them and garner the greatest return on investment, then join us at the 10th Annual Coast & Marine Structures Summit 2018.

The event held in Brisbane on the 20th – 21st of March brings together over 15 coast and marine experts from the likes of Aecom, Arup, Port Authority of NSW, Queensland Sugar Ltd, Fremantle Ports and Royal Haskoning DHV

To secure your ticket to the event, and for special early bird pricing simply call 02 9229 1000 or email registration@iqpc.com.au

Credits:

Created with images by Erwan Hesry - "Colorful shipping containers"

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