1.1 Background to the Study
In 2008, Infrastructure Australia (IA) and the National Transport Commission (NTC) were tasked by the Council of Australian Governments (COAG) to prepare a National Ports Strategy. That Strategy was finalised and agreed by Australian Infrastructure and Transport ministers, and is to be
considered for adoption by COAG in early 2012.
The Strategy seeks to improve the efficiency of port related freight movements across infrastructure networks, minimise negative externalities associated with freight movements and influence freight policy development. A recommendation in the Strategy (rec 3.10) is that:
“The Bureau of Infrastructure Transport and Regional Economies should assess the conditions under which the introduction of dedicated freight land transport
infrastructure segments related to relevant container ports would be justified”
The Bureau of Infrastructure Transport and Regional Economies (BITRE) appointed Ernst & Young (EY) to prepare a report that would inform its response to the recommendation. It sought advice on the conditions under which dedicated land freight transport infrastructure segments would be justified, and consideration of any case studies for such freight infrastructure development around container ports in Australia.
1.2 What is ‘dedicated or priority freight infrastructure’?
For this study, the term ‘dedicated or priority freight infrastructure’ refers to infrastructure that demarcates freight traffic from other transport users such as commuters or passengers, either by providing exclusive or preferential access to freight on that infrastructure network or asset.
Dedicated freight infrastructure can involve a wholly discrete network such as a dedicated truck road, or a segment of wider access infrastructure such as a truck lane on a major freeway.
Priority freight infrastructure may involve signalling, pricing or other measures such as curfews that provide advantageous access to freight users.
Introducing dedicated and priority freight infrastructure may mean retrofitting existing infrastructure to provide dedicated or priority use or developing new infrastructure.
The focus of this study is on dedicated or priority freight infrastructure associated with Australia’s major metropolitan container ports.
In defining the conditions that would justify dedicated or priority freight infrastructure, we have examined economic, market and commercial conditions around Australia’s five major container ports – Port Botany, Melbourne Port, Port of Adelaide, Freemantle Port and Port of Brisbane.
1.3 Study objectives and purpose
The objective of the study is to assist BITRE to respond to the National Ports Strategy
recommendation by providing a practical and evidence based assessment of the conditions that would support the development of dedicated and priority freight infrastructure around Australia’s major container ports.
The study consists of two stages of work and this report constitutes completion of Stage One.
Stage One: A scoping study and literature review The purpose of this stage is to:
Australian Government Department of Infrastructure and Regional Development
► Define the issues that drive dedicated or priority freight infrastructure proposals with reference to international examples and the Australian context
► Propose case studies for further examination in Stage Two
The key output from this stage of the analysis is a set of case studies for more detailed examination.
Stage Two: Detailed analysis on case studies The purpose of this stage is to:
► Undertake detailed research and analysis of the case studies identified in Stage One and conduct a rapid cost-benefit analysis on each case study
► Drawing on the findings of the cost benefit analysis, identify the conditions under which dedicated and priority freight infrastructure would be justified
The key outputs from Stage Two are case studies in the form of rapid cost-benefit analyses, rapid financial analyses and gauging potential private sector interest in delivering the projects.
1.4 Methodology 1.4.1 Stage One
Stage One is comprised of four steps set out below, which is the basis of this Report.
Step 1: Literature Review
A literature review drawing on international and domestic literature from government, industry and academia. The focus of the review was on developing a deep understanding of the challenges facing Australia’s port and freight sectors and the market for developing infrastructure.
The findings in this review were then applied to the Australian context through an examination of Australia’s major ports.
Step 2: Stakeholder Consultation
Stakeholder consultations were undertaken with port and supply chain industry leaders and policy makers.2 The purpose of the discussions wasto establish the potential for dedicated freight
infrastructure around Australia’s major container ports and identify a list of potential case studies for Stage 2 of the study.
Step 3: Establish the principles for dedicated and priority freight infrastructure
Drawing on the research gathered in the previous steps, develop a principles-based framework for considering the conditions which justify dedicated and priority freight infrastructure. The principles-based framework considers the drivers of demand and supply for dedicated and priority freight infrastructure.
Step 4: Identify case studies for further examination
Apply the framework to the long list of potential case studies of dedicated and priority freight infrastructure to identify 2-3 case studies for further examination in Stage Two of the study.
1.4.2 Stage Two
Stage Two is comprised of five steps set out below.
2 A full list of stakeholders consulted can be found in Appendix A
Australian Government Department of Infrastructure and Regional Development A study of the potential for dedicated freight infrastructure in Australia
Step 1: Project Data Collection and Further Consultation
Working closely with state government and other project stakeholders in order to obtain relevant project data and insights.
This involved first working with stakeholders in order to understand the availability of robust data.
EY contacted the key state government transport officials to discuss the availability of data for the case studies.
Project stakeholders were cooperative in the provision of sensitive project data that has enabled detailed and rich analyses of project drivers.
Step 2: Rapid Cost-Benefit Analysis
This step sought to identify and value the cost and benefit steams associated with each of the case studies. In the case of the Melbourne case study, it involved interrogating traffic modelling and economic appraisal data already completed as part of a formal business case for the proposal. For the Brisbane case study, it involved undertaking an independent cost-benefit with available data in line with national project evaluation guidelines.
Step 3: Financial Analysis
The study assessed the commercial feasibility of the project through identifying and measuring the cost and revenue streams associated with each case study. This analysis also sets the scene for considering the types of commercial delivery models that would be suitable for the case study.
Step 4: Commercial Analysis
Based on the findings of Stage One, combined with the economic and financial assessments, the study considered the potential commercial models and governance issues for introducing dedicated and priority freight infrastructure.
Step 5: Assess Market Views
For each of the proposals, the study considered the level of market interest and demand from relevant stakeholders, and in particular with respect to contributing to its commercial delivery.
1.5 Structure of this report
This report covers the findings of Stage One of the study. It includes:
► A discussion on Freight and Port Productivity in Australia
► A review of examples of dedicated and priority freight infrastructure
► An assessment of the principles for considering dedicated and priority freight infrastructure
► An assessment of the potential need for dedicated or priority freight infrastructure at Australia’s major container ports
► An analysis of the range of potential case studies for further investigation The detailed case studies that are part of Stage Two are to be reported separately.
Australian Government Department of Infrastructure and Regional Development