DOES IT STACK UP?: A better understanding of the state-wide benefits and costs of containerisation at our port is crucial, the author says. Photo: Max Mason-HubersThe NSW Government has called for feedback on its 2017 draft NSW Freight and Ports Plan. Thisreview is aimedatassuringinvestment in the state’s system of roads, rail, and ports meetsthe needs of freight customers by providing efficient and reliable movement of goods. In the draft plan, thegovernment states that freight in Greater Sydney is projected to double over the next 40 years and increase by 25 per cent in regional NSW in the same period.
Shipping accounts for more than 99 per cent of Australia’s foreign trade by weight. Export of bulk goods, such as coal and grain, dominates in the Port of Newcastle.However, containerised trade nationally has been growing faster than Gross Domestic Productsince the 1990s. Containerised trade will double over the next 20 years according to the Bureau of Transport and Regional Economics.
The Port of Newcastle is the world’s largest coal export port and is one of Australia’s largest ports. It handled 168 million tonnes in 2016. For the Port, the draft plan’s focus is on improving rail and road connections. The plan avoids directly addressing the issue of potential containerisation or its ability to help diversify and grow the Hunter economy. These possibilities have been raised in the Port of Newcastle’s submission in response to the draft plan. Any measures in the NSW Freight and Ports Plan relevant to containerisation at the Port of Newcastle need to be based on evidence and must reflect a broad view of potential flow-on impacts.
A container terminal at the Port of Newcastle appears to offer economic advantages for the Hunter region, for northern NSW and potentially for Sydney. Benefits could include greater access to international markets for the agricultural and manufactured products in the region and to the north, more effective use of rail infrastructure, and relieved congestion in Sydney. However, a more detailed assessment is required to identify where the benefits and potential costs will fall, including flow-on impacts of this option for the Sydney metro region and regional NSW.
The Upper Hunter, for example, has a number of industries, including agriculture – grains, beef and dairy – that would benefit from greater access to domestic and international markets. Such access could be afforded by port containerisation. The government has identified opportunities for the development of new commodities – poultry, oil seeds and industrial hemp, among others. Their shipment would be facilitated by the rail network for thermal coal that already connects the Upper Hunter to the Port of Newcastle. Containerisation facilities at the Port would enhance connections to the Asia-Pacific and allow both Hunter and Upper Hunter industries to reach markets in Australia and abroad.
An initial HRF Centre review of national and international evidence has indicated that container ports contribute significantly to their local economy through output, value add, direct and indirect employment, income and taxes. The research also documented expected burdens, such as the cost of infrastructure development and consequences of increased road, rail and sea traffic.
The NSW government needs a better understanding of the state-wide benefits and costs. Also needed is a much more sophisticated assessment of the distribution of them within the region. These elements are not present in the draft plan. It would be wise to include them before making investment decisions relating to infrastructure that potentially offers widespread benefits.
Dr Anthea Bill is Lead Economist at HRF Centre