Any legal action by the ACCC to reverse the anti-competitive Port of Newcastle container fee could take years, now that it has started looking into it.
That would further damage the NSW economy.
But a solution exists.
Replace all Port Botany container trucks with Newcastle container trains. With imagination and cooperation, the lessees of Botany and Newcastle can combine their resources to transfer Botany operations to Newcastle and build a rail freight bypass of Sydney – from Newcastle to Port Kembla, via Eastern Creek.
Trains become the means of transporting containers between port and intermodal terminals throughout the entire state, possibly including Victoria and southern Queensland.
Trains would replace trucks for general freight entering Sydney from regional areas and interstate.
One million container trucks a year use Port Botany. By 2040, there will be an estimated six million container trucks. If the Moorebank intermodal terminal proceeds, Port Botany container trucks will still number 4.9 million a year by 2040. Moorebank intermodal will require all of Sydney’s available rail freight capacity. This capacity, obviously, is insufficient.
It is unlikely that a container terminal will be built at Port Kembla because of the reliance on container trucks at Port Botany. Port Kembla needs to have a rail connection to the main southern line, which is accomplished by building the much awaited Maldon-Dombarton link. A rail freight bypass of Sydney from Newcastle will justify building this line. The South Coast will be connected to container ports at both Port Kembla and Port of Newcastle. The ports would operate interchangeably.
Construction would start immediately on building the section of the bypass line between Glenfield, Badgery’s Creek and Eastern Creek. This will enable existing rail freight capacity to service new intermodal terminals, but not Moorebank. The best use of Sydney’s existing rail freight capacity is increased passenger services. The Moorebank intermodal would be discontinued.
It will take around ten years to complete construction of the entire line linking Newcastle and Port Kembla.
Upon line completion, containers railed between Newcastle and intermodal terminals in outer western Sydney would be de-consolidated at the intermodal terminals and the goods transported to their end destinations in Sydney.
Export goods manufactured in Sydney would be consolidated into containers at the intermodal terminals and the containers then railed to Newcastle for export.
Empty containers would be railed from Sydney to all regional areas of NSW to be filled with export goods and the containers then railed to Newcastle for export. Currently, empty containers are NSW’s main non-bulk export.
The proposed rail freight bypass will generate investment in manufacturing for export by providing cost-effective access to a container port for the first time. Investment is not occurring at present because of the impediments to getting goods to market.
With the bypass, there would be no need to build stages 2 and 3 of the Northern Sydney Freight Corridor to provide the equivalent of a dedicated rail freight line between Newcastle and Strathfield. The cost saving is $5 billion.
There would be no need to build the Western Sydney Freight Line, between Chullora and Eastern Creek, to enable containers to be railed between Port Botany and outer western Sydney. The cost saving is $1 billion.
Freight would be removed from the Wollongong-Sydney rail line.
All of Sydney’s current rail freight capacity would be used for passenger services to provide a higher economic return than freight.
The Southern Sydney Freight Line would be used for express passenger services from southwestern Sydney growth areas, including Badgery’s Creek Airport.
All of the current rail capacity between Newcastle and Sydney would be used for passengers.
A second rail bridge would be built over the Hawkesbury River as part of the rail freight bypass.
The short parallel runway at Sydney airport could be extended from 2600 metres to 4000 metres by terminating container operations at Port Botany.
A rail freight bypass would enable Sydney firms to relocate to regional areas. In western Sydney, 5,000 hectares of land is used for industrial purposes. Many of these firms could profitably relocate to regional areas if they were able to use rail to freight goods to Sydney and ship containers through the Port of Newcastle.
It is appropriate and necessary to examine the implications to NSW of building a rail freight bypass of Sydney.
Greg Cameron is a former executive of BHP Steel and is an active proponent of the Newcastle container port.