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More Moorebank madness

Moorebank Intermodal Terminal Artist Impression 400

The chairwoman of Moorebank Intermodal Company (MIC) Dr Kerry Schott has announced MIC intends to begin negotiation with Qube and Aurizon (together the Sydney Intermodal Terminal Alliance, SIMTA) – about the development and operation of the Moorebank intermodal terminal.

The decision was made by MIC’s Board of Directors after an evaluation of interest from potential operators and developers of the terminal. Expressions of interest received were assessed against the Australian Government’s objectives, in particular that the terminal must handle import-export (IMEX) and interstate freight, be open access for rail operators and other users, minimise impacts on the environment and community, and minimise any Government support.

“The response from SIMTA was so strong in comparison to the other respondents that it warrants a period of direct negotiation” Dr Schott said. “This would determine whether suitable terms for the development and operation of the terminal can be agreed. SIMTA’s proposal included development of both IMEX and interstate terminals as soon as possible, significant capital investment by SIMTA, and a willingness to take risk on the freight volumes that would use the terminal. Any arrangement reached must meet the government’s objectives, including in particular common-user open access.”

The negotiations will be subject to controls to ensure that any agreement reached maximises the value of the Government land being used for the terminal and any other support provided. The highest levels of probity will be maintained.

If a detailed agreement with SIMTA cannot be reached within six months, MIC will consider other options. Two other respondents to the request for expression of interest have been asked by MIC to remain on standby.

Bu it doesn’t add up

Industry analyst Greg Cameron has long been a critic of the Moorebank development and has raised a number of salient questions that undermine the wisdom of the project.

“Moorebank’s proposed intermodal terminal will have IMPEX capacity of 1.2 million TEU per year because that is the maximum available rail capacity from Port Botany after servicing the existing terminals at Minto, Yennora and Enfield,” Mr Cameron noted.

“Both the NSW and Australian Governments decline to reveal the total capacity of the Port Botany rail freight line, which is managed by Australian Rail Track Corporation. However, the NSW Government is continuing to claim that there will be a ‘significant increase’ in the proportion of containers carried by rail. At present, 0.3 million TEU, or 15 per cent, of Port Botany containers are carried by rail, the rest by truck.

“It is unknown what the ‘significant increase’ in rail will amount to,” he said.

The intermodal terminals at Minto, Yennora and Enfield have combined capacity of 0.6 million TEU. Judging by the above, this suggests that the capacity of the Port Botany rail freight line is 1.8 million TEU.

“In 2030, Port Botany’s throughput is expected to reach 7 million TEU. If the rail freight line’s capacity is 1.8 million TEU, the proportion railed will be 26 per cent.

In 2030, the number of container truck movements between Port Botany and western Sydney will increase to 2.6 million from 0.85 million now. A container truck using the M5East westbound tunnel is the equivalent of six passenger cars. 2.6 million container trucks will require about 25% of the tunnel’s capacity.

“Eighty per cent of containers railed to Moorebank will be trucked to the final destination. On average, a container-carrying truck serving MIC’s proposed facility will carry 1.7 TEU. The Moorebank intermodal terminal will add 564,000 truck movements a year to local roads, excluding interstate transfers.

“Moorebank simply does not have adequate road capacity,” Mr Cameron said.

Servicing Moorebank from Port Botany by rail will require investment in rail and road infrastructure of $7 billion.

Building stages 2 and 3 of the Northern Sydney Freight corridor by 2028 will cost $4.4 billion (in present value terms). Building the Western Sydney Freight Line to Eastern Creek will cost around $1 billion. Building the Maldon-Dombarton rail line will cost around $600 million (the line is needed for Port Kembla after Port Botany reaches capacity). Connecting Port Botany to WestConnex for container trucks will cost around $1 billion.

“Who is paying $7 billion to maintain container terminal operations at Port Botany?

“If the $7 billion investment is not made, what will be the increase in road freight transport in Sydney?” Mr Cameron asked.

Moorebank IMT map

Background

(Provided by the Moorebank Intermodal Company.)

Moorebank Intermodal Company was established in December 2012 to develop an intermodal terminal at Moorebank. MIC is wholly owned by the Commonwealth Government.

The proposed Moorebank intermodal terminal will manage freight containers carried by rail to and from Port Botany as well as freight containers carried on the interstate rail network. The proposal is intended to increase the proportion of containerised freight carried by rail, in comparison to containers carried by truck.

Once fully developed, the Moorebank Intermodal Terminal will handle around 1.2 million TEU of IMPEX freight and 0.5 million TEU of interstate freight each year. The terminal will enable more freight to be carried by rail, which will ease the pressure on Sydney’s roads.

The government land that will be used for the development is currently used by the Department of Defence School of Military Engineering, which will vacate the site in 2015. It is located next to a smaller site owned by SIMTA. A ‘whole of precinct’ approach is expected to be more efficient and will provide more space for onsite warehousing and other related terminal facilities.

Development of the terminal will include actions to reduce any negative impact of the terminal on the local community and environment. Job opportunities for local employees will be provided. NSW and Commonwealth environmental and planning approvals are required before the terminal can be built.

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