DP World kicks off Melbourne Port expansion

 

 

DP World Australia (DPWA) has pulled the trigger on a 100,000 teu enlargement of its Melbourne terminal at West Swanson Dock, taking capacity to 1.4 million teu. 

Fulton Hogan has won the construction contract, which will see an additional 450 container storage slots for straddle operations and “dramatically” improved access for trucks into the main terminal. It will also see construction of a new asphalt pavement, storm water drainage, new services, and the relocation and upgrade of electrical works.

Launching what will be the stevedore’s largest Melbourne expansion project since 2010, DPWA MD and CEO Paul Scurrah said the work would provide the company with a stronger competitive advantage and customers with enhanced service, and followed the recent resolution of new lease arrangements with the Port of Melbourne Corporation. 

“The certainty we have gained for our customers, service providers and the Victorian freight industry was critical in deciding to make this investment for the future,” Mr Scurrah said.

“We are investing in the future and this terminal expansion project demonstrates our commitment to growing our service offering for our customers. Being able to offer consistent terminal productivity during peak season is a massive bonus for us and our customers.”

DPWA was involved in a prolonged dispute with the PoMC over a bid by the latter to raise land rentals at the company’s two Melbourne sites by a claimed 767%. Under a new 50-year lease agreement eventually reached between the parties rents will increase incrementally from around $16/sq m to nominally $45/sq m in 2023, with agreed escalations to 2028.

The $17 expansion million project is expected to be completed in March 2016.

Industry rallies to Port of Melbourne rail link

Last week Phillip Hopkins of The Age suggested that Melbourne’s lack of rail will contribute to Botany overtaking Melbourne in container volumes. That may be true, but the issue is far bigger than elbow-your-mate tribalism. 

In 2007 the Victorian Government announced the Metropolitan Freight Terminal Network (MFTN) concept. That same year funds were allocated to the project, originally $100M. The project was later rebranded by the coalition as the Port Rail Shuttle (PRS) project but the Government’s enthusiasm was unabated, industry was supportive and research fully endorsed it’s viability including reports produced by Deloitte, the Victorian Freight & Logistics Council (VFLC) and the Port of Melbourne Corporation.

So what happened?

In 2014, the Department of Planning, Transport and Local Infrastructure (DPTLI) released an Expression of Interest for the building of the inland port network but the process was abandoned due to the Port of Melbourne sale with no stated way forward.

From a Freight & Trade Alliance (FTA) perspective they are not separate issues. We cannot talk about port privatisation without demanding consideration to landside integration. Currently our sources have predicted that there are over 5,500 trucks entering the port per day. At 3.5% growth year-on-year this will equal over 30,000 trucks per day by the end of the initial lease term.  With the Port of Hastings proposal stuck in political suspended animation, how can we assure industry that the Port of Melbourne will be developed to cater for the growth in volumes?

The Port Management Act 1995 requires a Port Development Strategy to be produced every four years. The last Port Development Strategy was produced in 2009. With the Port of Melbourne Transaction Bill Inquiry currently accepting submissions and the legislative requirement for a Port Development Strategy overdue, industry would like to see attention from Government. No, industry would like to see some action from Government.

In many respects Melbourne is lucky. Most containers are distributed into the three industrial hubs in Melbourne’s north, Melbourne’s west and according to some reports almost 30% of containers have an origin or destination in the South East/Dandenong corridor. The shelved $6.8BN East-West Link will not be the congestion-buster it was supposed to be, but a modal shift might do the job. Practically, we understand that Webb Dock will not have rail access, so our attention is firmly on Patricks (who have an off-dock rail facility at Appleton Park Rail Terminal) and DP World. There are talks of Coode Road, the public road that bisects the DP World terminal, finally being closed to the public. Time will tell but many in industry would applaud that development and it could pave the way for rail development opportunities.

Partial funding has already been allocated to upgrade the Port’s intermodal network in the 2015/2016 budget, but it still needs concerted political pressure to happen. Industry is rallying behind rail so you never know, maybe Melbourne can maintain its status as the #1 Port by volume in Australia.

 

 

 

 

 

 

 

   

 

 

   

   

 

 

 

 

 

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