Will Port Botany battle through the Newcastle storm?

Will Port Botany battle through the Newcastle storm?

The Port of Newcastle has developed the concept for a staged container terminal development at its Mayfield site, which the company says is the largest and best connected vacant port land site on the eastern seaboard of Australia.

Together with direct water frontage and potential for deep water berthing, the Newcastle Container Terminal represents a once in a generation opportunity within the Port of Newcastle, the company says.

The Mayfield site has the capacity for a 2 million TEU per annum container terminal, coupled with a shipping channel that can accommodate vessels up to 10,000 TEU, with the capability of even larger vessels with some ancillary channel modifications.

Newcastle is an efficient option for importers and exporters in northern, western, north western and far western NSW.

A Newcastle Container Terminal would deliver substantial cost savings for NSW exporters and importers, save the NSW government billions in infrastructure spending and help reduce Sydney road and rail congestion.

Report quantifies benefits at $6 billion

In a report released on 11 December 2018, economic consultants AlphaBeta quantified the potential economic benefits to the NSW economy of $6 billion by 2050 and 750,000 truck movements off Sydney roads.

The report examined the economic impact of opening a container terminal at Port of Newcastle. It found the NCT would increase NSW Gross State Product (GSP) by $6 billion by 2050. Over half of the $6 billion in new economic value for the state would come from lower freight costs. Customers would save $2.8 billion in land transport costs in Port of Newcastle’s potential market by 2050 through shorter journeys and more efficient operations.

The average land transport journey to port for northern NSW exporters (compared with Botany) would nearly halve. Meanwhile, customers served by Port Botany would save $1.2 billion in freight costs as competitive pressure leads to lower prices. Sydney would also benefit from less freight traffic on its roads. This would create $500 million in extra value from avoided infrastructure spending, and reduced congestion and pollution costs (see Exhibit 3.).

Opening a container terminal in Newcastle would also have broader economic and social benefits, including stimulating exports and jobs in the Hunter Region and Northern NSW. Key sectors, such as agriculture, food processing and advanced manufacturing, would see exports grow in value by an extra $800 million by 2050. More than 4,600 jobs would be created in the Hunter Region and Northern NSW by 2050, in industries as diverse as transport, construction, agriculture, manufacturing and local services.

Adding a container terminal to Port of Newcastle could generate $2.8 billion in freight savings to importers and exporters in the Newcastle, Hunter and Northern regions of NSW by 2050. Currently, importers and exporters are served by Port Botany in Sydney or Port of Brisbane.

Both ports are hundreds of kilometres from the origin or destination points of freight in the Hunter Region and Northern NSW, an area responsible for about a sixth of imports and exports in NSW.

Opening a container terminal in Newcastle would nearly halve the average overland freight journey in these areas, immediately reducing transportation costs for imports and exports.

As Port of Newcastle will be home to a new, fully automated container terminal with an integrated intermodal terminal facility, it would also introduce productivity improvements in freight handling, generating further savings for Hunter Region and Northern NSW customers. If all freight customers in the potential addressable market switched to being served from Newcastle, the cumulative savings would be equivalent to $2.8 billion in additional GSP in NPV terms by 2050.

Potential market for Port of Newcastle

This study defines the potential market as NSW regions that are more cost-effectively served from Port of Newcastle than from alternative ports such as Port Botany, Port of Brisbane, and Port of Melbourne.

Importantly, the report did not consider the potential benefits that could be gained by actively promoting the Newcastle container port to Sydney-based businesses.

 

MREC HERE

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