national ports strategy dec2010 v2

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National

PortsStrategyInfrastructure for an economically, socially,and environmentally sustainable future

December 2010


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04Overview

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Contents

10Meeting thechallenge

Recommendations foragreement by the Councilof Australian Governments

18Recommendedactions


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This document presents a national ports strategy for Australia,for consideration by the Council of Australian Governments

Section 1 Provides an overview of the proposed national ports strategy.

Section 2 Details how the national ports strategy will address Australias port and infrastructure needs.

Section 3 Sets out what is recommended for agreement by the Council of Australian Governments.

A background paper is available on Infrastructure Australias website,www.infrastructureaustralia.gov.au

Infrastructure Australia National Ports Strategy | 3


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Overview

| Infrastructure Australia National Ports Strategy4


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O v

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There have been a number of calls for anational ports strategy for Australia, includinga Parliamentary Inquiry into Coastal Shippingin 2008. Infrastructure Australias reports to theCouncil of Australian Governments in 2008 and2009 also proposed a national ports strategyas a key element of its national infrastructuretheme, Competitive International Gateways.

In 2009, the Government announced thatInfrastructure Australia and the National Transport

Commission would develop a national portsstrategy during 2010 for consideration by theCouncil of Australian Governments.

Australias ports and related landside logisticchains face major challenges from growth intrade. Different ports face different challenges.Ensuring adequate capacity and reconcilingvarious parties interests is important for all ports.

Ports and related land-side logistics chainsare critical to the competitiveness of Australianbusinesses, which rely on them to deliverbusiness inputs and to take exports to theglobal market. Improvements to ports andrelated logistics sectors can remove barriers andtransaction costs to trade, increase competitionand contestability, and provide importantlinkages to domestic and global value chains.Consequently, the performance ports andland-side logistics chains are critical to facilitateinnovation, productivity gains and economicgrowth in Australia.

Most stakeholders also agree that a nationalports strategy is required to drive greaterefficiencies and reduced costs in Australiastrade performance. The challenge is todevelop a concrete agenda to support thisstrategic direction.

The national ports strategy has been developedby Infrastructure Australia and the NationalTransport Commission following extensiveconsultation. This has included:

one-on-one discussions with key privateand government stakeholders to identifyand refine issues

a forum to further explore issuesand potential responses

further one on one discussionswith targeted stakeholders

a wider forum to consider an exposure draft

further one-on-one discussions withstakeholders to explore matters raisedat the exposure draft forum

a draft national ports strategy released forpublic comment.

A national ports strategy

Australia needs a nationallycoordinated approach tothe future development andplanning of Australias portand freight infrastructure.

The national ports strategy covers bothbulk commodity ports and containerports, identifying:

the most effective regulatory andgovernance frameworks;

ways to improve land planning and corridorpreservation; and

the future infrastructure requirements of Australias ports, including road and rail links.

Meeting the challenge



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Australia is an island whoseplace in the internationaleconomy and whoseproductivity, living standardsand quality of life depend ontrade performance.

As a maritime nation, Australias ports are

an important gateway for goods and for ourdefence. Consequently, ports and associatedinfrastructure are of the utmost economic andsocial importance to Australia.

Australias bulk commodity exports andmetropolitan container imports are bothexpected to double in size every ten years.

Already there is evidence of rising truck queuesat some metropolitan ports and ship queues atsome commodity export ports.

Ensuring adequate capacity and reconcilingvarious parties interests is important forall ports; however, different ports also face

different challenges. For example, protectingport and land transport functionality wherethere is surrounding urban development isrelevant in cities.

Some regional bulk export ports facesignificant infrastructure challenges.

Cruise shipping is also an important contributorto the economy, and the port planning processneeds to include appropriate commercialarrangements with the tourism shippingindustry.

Ensuring safety, adequate capacity, skillsand reconciling various parties interests is

important for all ports.

The national significance of ports



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N a t i o n

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A coordinatedapproach must betaken to the future

development andplanning of Australiasmajor ports and freight

infrastructure

Ports are currently planned by state andterritory jurisdictions with the involvement of theCommonwealth and local governments, whereappropriate. Port infrastructure has a usefuleconomic life of up to 50 years, and even more inthe case of maritime access shipping channels.

Commercial investment is needed to efficientlyprovide port infrastructure.

A nationally coordinated approach to ports

The overarching purpose of a national ports strategy is to drive the development of efficient, sustainable ports and related freight logisticsthat together balance the needs of a growing Australian community and economy with the quality of life aspirations of the Australian people.

The purpose of the national ports strategy

There are major efficiency implications for Australia if major changesare not made to our ports and related landside road and rail systemsover the coming decades.

A coordinated approach must be taken to the future development andplanning of Australias major ports and freight infrastructure. The pursuitof national objectives requires a nationally coordinated approach.



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The actions regarding planning include:

three integrated levels of planning aroundrelevant ports; jurisdictions, regionsand precincts

updates and reviews of the plans

assistance with planning and forecasting.

The actions to ensure plans can beexecuted include:

a nationally consistent environmentalmanagement regime

use of strategic and streamlinedassessment processes

use of a lead agency or coordinator generalframework in each jurisdiction

introduction of buffer strategies in policiesand plans

assessment of the effectiveness of the above.

The actions for increasing the efficiency,reliability, security and safety of containerports include:

introduction of international keyperformance indicators, to be progressedby the ports industry

some oversight of coordination withinthe container supply chain

where appropriate, introduction of

jurisdictional incentives into the supplychain, consistent with AustraliasInternational trade obligations

using some port roads as a test case for theroad reform program

use of information andcommunications technology

supply chain coordination

greater understanding of regulatory

constraints on sharing of information

research to provide a better understandingof the issues, and of the success ofvarious approaches.

The actions regarding clarity, transparency andaccountability include:

principles for the role and functions ofauthorities in control of relevant ports

principles in relation to freight corridorsand roads for these ports

achieving consistency in legislationand regulation.

The actions needed to advance the current priorities



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The ports and related supply chains arevariously networked across Australia.In some cases this involves the physicalinteroperability required by ships that visitseveral ports. In other cases private partieshave interests in several ports, often overdifferent state jurisdictions.

The national ports strategy should support andextend to other agreed national directions suchas capital city planning, the national transport

framework and the road reform program. Itshould provide a staring point for considerationof a national freight network.

There is also strong economic networkingamong ports via competing or cooperatingsupply chains, or macro-level allocationsand calls on national economic resources.

Much of the future investment and operationof the ports will rely on the private sector.The ports and freight supply chains involvelong-life assets. Optimal private investmentand use of these depends on all levels ofgovernment providing certainty of theirintentions, for example, on provision anduse of port lands, and road and rail systems.

These factors point to a need for a nationallycoordinated approach to the futuredevelopment and planning of Australias portand associated infrastructure.

A nationally coordinated approach shouldbe based on formal long term plans at the

jurisdiction, regional and port precinct l evel.The plans should be developed in consultationwith stakeholders and the community, beapproved by relevant

decision makers and be published.

Such planning is a major, difficult, but vitallyimportant exercise. The largest gains are likelyto attach to the ports with the largest tasks.

The national ports strategy suggests a focus onthese. To the extent relevant, the plans should fitin with the Council of Australian Governmentsdirections for city planning and the national freightstrategy which is currently being developed.

This may build on the regulatory reform workundertaken by governments as part of theSeamless National Economy initiative andNational Planning System principles.

The national portsstrategy will cover both

bulk commodityports and

container ports



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M e e t i n g t h e

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Demands for general purpose ports can beaffected by requirements for import of machineryand fuels. Some ports also need to deal withpassenger tasks such as cruise shipping, whileothers are important for defence purposes.

Improvements in assessing the impact of demandshould come from a more coordinated approachto forecasting, based on local variations tonational themes. In this, the Commonwealthagencies such as the Bureau of Infrastructure

Transport and Regional Economics and the Australian Bureau of Agricultural and ResourceEconomics should play a key role. As the strategymatures, this should include scenario testing.

Expected productivity levels may depend onthe quality and coordination of infrastructure,skills and the degree to which freight isaccorded unrestricted priority. Productivityperformance could be enhanced by moreintense use of assets, at more consistent and

reliable levels.Participation in internationally recognisedperformance indicator forums would be animportant advance for Australian ports.

Road and rail infrastructure requirementsdepend on port and other users. In some cases,other users dominate, for example passengervehicles dominate on some roads and railwaylines. At certain levels of demand, it may beworth considering infrastructure which isdedicated to freight.

The Council of Australian Governments roadreform agenda is relevant to ports. It would bedesirable to have a trial of freight infrastructure

pricing and freight priority on the most heavilytrucked major roads that potentially compete withrail lines. Freight infrastructure pricing shouldbe accompanied by freight priority. Corridorreservation is important to this.

The initiation of a national ports strategyrequires oversight, monitoring and review,however, a one size fits all approach is notappropriate. Oversight by a panel of expertstakeholders would encourage cooperation and

shared learnings.



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Recommendations for agreement by the Councilof Australian Governments

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This section sets out what isrecommended for agreementby the Council of AustralianGovernments.

It is recommended that the Council of Australian Governments:

1. Recognises the critical importance of trade to Australias ability to develop a more productiveand fairer society, more able to meet thechallenges of the future.

2. Recognises the central role of ports and relatedfreight supply chains to trade and thus to

Australias future.

3. Agrees that Australia adopt a national portsstrategy as part of a nationally coordinatedapproach to the future development andplanning of Australias economic port andfreight infrastructure.

4. Agrees that the national ports strategy be apublic document, which includes:

Purpose:The overarching purpose of the national portsstrategy is to drive the development of efficient,sustainable and safe ports and related freightlogistics, that together balance the needs of agrowing Australian community and economy,with the quality of life aspirations of the

Australian people.

Objectives:To improve the efficiency of port related freightmovements across infrastructure networks,minimise externalities associated with suchfreight movements and influence policy makingin areas relevant to freight. At the same timebeing mindful that other national goals, includingsecurity and safety, are also important.

Priorities at this time are:1. planning for relevant ports and related

infrastructure

2. ensuring plans can be executed

3. improving landside efficiency, reliability,security and safety

4. clarity, transparency and accountabil ity.

Actions on these priorit ies are described in thetables at the end of this section.

1. Agrees that the Minister for Infrastructureand Transport will report to the Council of

Australian Governments on the work beingundertaken by Infrastructure Australia and theNational Transport Commission to overseeimplementation of the national ports strategy.Infrastructure Australia and the National

Transport Commission will make regularreports to the Minister and jurisdictions,including the Commonwealth, on progresswith implementation.

2. Agrees to establish a small independent panel,including end users, of people with significantprior private sector leadership experience inport and freight logistics, including in the major

sectors such as bulk commodities and generalfreight, to assist Infrastructure Australia andthe National Transport Commission to overseeimplementation of the strategy.

3. Agrees that Infrastructure Australia and the

National Transport Commission establish asteering committee to guide the panel, overseeimplementation of the national ports strategyand make regular reports to jurisdictions,including the Commonwealth, on progresswith implementation.

4. Agrees to review the national ports strategywithin three years, with a view to making anynecessary changes.

Agrees that there be development of furtherstrands of a national freight policy:

a national freight network plan to bedrafted by Infrastructure Australia and theNational Transport Commission;

jurisdictional freight network plans to bedrafted by jurisdictions; and

an overarching national freight strategyto be drafted by Infrastructure Australiaand the National Transport Commission inconsultation with the jurisdictions.

5. Governments note the economic focus of thenational ports strategy.

6. Governments note the importance of continuedattention to critical national interest mattersincluding defence and national security, skills,health, safety, customs, biosecurity andtourism. The proposed port planning regimewill address these important areas.



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Table 1: Planning for relevant ports and infrastructure

Recommendation Responsibility Timing

Agreeing the relevant ports1.1 Criteria for the relevant ports is economic and productivity significance. Immediate

1.2 Identify the relevant ports .

Jurisdiction in whichrelevant ports are located.Infrastructure Australiaand the National TransportCommission to recommendto Council of AustralianGovernments.

Immediate

1.3 Identify potential future relevant ports. Jurisdictions to nominate Immediate, with an update

each year

1.4 Identify and list the relevant maritime spaces, including sea channels andlandside spaces that are to be treated as part of the relevant ports.

Jurisdiction in whichrelevant ports are tobe located

Immediate

1.5Identify the landside access routes of strategic importance to the efficientfunction of the system of the relevant port and designate these as nationalport freight corridors.


Immediate with an updateeach year

1.6Identify for each metropolitan area the inland intermodal terminals, industrial / warehousing lands or other nodes that generate substantial amounts of portrelated freight traffic.


Immediate with an updateeach year

1.7 Note that certain national interests may arise regarding ports including

for defence or national security purposes.Commonwealth Immediate with an update

as relevant



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Planning

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The plan documentation at the jurisdictional level should: be consistent with a jurisdictional level transport strategy

refer to all relevant ports that are proposed to be created or developed in the jurisdictionwithin the outlook timeframe

identify forecasts by task, commodity and cargo type for each of the relevant ports

identify and assign responsibilities for execution of aspects of this level of the plan.

Jurisdiction End 2011

1.13

The plan documentation at the regional level should: be consistent with the jurisdictional level of the plan provide clear guidance at a strategic level on how the development and operation of the

port and the freight corridors serving it will be integrated into the future development ofthe region or city in which the port is located

in the case of ports serving or within metropolitan areas, be placed within the city plansought by the Council of Australian Governments.


1.14

The plan documentation at the precinct level should: be consistent with the regional level of the plan incorporate a clear program for the future physical development of the port, including

where relevant trigger points for additional capacity identify and assign responsibilities for execution of aspects of this level of the plan in the case of any approvals, and conditions that need to be satisfied prior to the

execution of aspects of this level of the plan, identify the responsibilities, criteria andtimeframes for such approvals

deal with critical matters such as security by design and operational practices.


1.15 Following community consultation, the planning documentation should be approved by

the relevant jurisdiction.Jurisdiction End 2011



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Planning

1.16

The planning documentation approved by the jurisdiction should be assessed bythe Council of Australian Governments. Assessment criteria should include: conformity with the above recommendations

sustainability of plans

the degree to which the plan presents information at a sufficient level to enablestakeholders to determine, understand, and make financial investments against the futureplans for each relevant port.

Council of AustralianGovernmentsReform Council andInfrastructure Australia/ National TransportCommission/panel ofexperts

End 2011

1.17

The planning documentation should be updated within a 5 year period and, in the interim,significant amendments to a plan or its treatment will be presented for the assessment ofthe Council of Australian Governments by the relevant jurisdiction when such amendmentor treatment is made.

Jurisdiction / Council of Australian Governments

Reform Council andInfrastructure Australia/ National TransportCommission/panel ofexperts

End 2011

1.18Independent monitoring and reporting of the execution of each plan and level, and of freightand cargo volumes in comparison with forecasts for each plan, should be reported to theCouncil of Australian Governments, and be published annually.

Council of AustralianGovernmentsReform Council andInfrastructure Australia/ National TransportCommission/panel ofexperts

End 2011

1.19Ports should participate in forums regarding international performance indicators, includingthose related to port and landside freight productivity, environment, health and safety issues,and participate in performance reviews based on international best practice.

Ports Ongoing

1.20 The Council of Australian Governments should appoint advisers to provide guidance to assist jurisdictions in conforming to these recommendations.Council of AustralianGovernments Immediate



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2.1

The Commonwealth should lead the development and application of anationally consistent environmental management regime building whereverpossible on existing legislation and processes, using both bilateralCommonwealth/state agreements and Commonwealth legislation whereapplicable, and the strategic assessment process which better streamlinesapprovals.

Commonwealth End 2011

2.2

Major projects in or related to the relevant ports or freight corridors shouldbe nominated for economic strategic assessment, to facilitate for example,streamlined environmental impact approvals processes for individualdevelopment projects, giving due weight to economic significance.

Jurisdictions Mid 2011

2.3Jurisdictions should apply a Lead Agency Framework or coordinator generalframework to assist the planning approvals and environmental impactassessment processes for all relevant ports and freight corridors.

Jurisdictions From 2010

2.4

Policies and planning schemes (and controls) at all relevant levels ofgovernment should include buffer strategies for the relevant ports and freightcorridors and other related places to: ensure the continued ability to conduct the freight and related activities

identified in the plans

minimise impacts on communities of these activities.

Jurisdictions Immediate

2.5 Approvals that are related to relevant ports or freight corridors should extend toat least the outlook horizon for the plan of the relevant port. Jurisdictions Mid 2011

Table 2: Ensuring plans can be executed



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2.6

A report should be made each second year to the Council of AustralianGovernments on those matters for which further approvals are required duringthe time horizon of the plan of each relevant port, including matters that maynot be within the control of the relevant port authority, eg roads.

Relevant ports From end 2011

2.7Each second year there should be an independent assessment and publicreport on the implementation and effectiveness of the above matters in terms ofprotection of land and activities identified in relevant plans.

Infrastructure Australiaand National TransportCommission SteeringCommittee and Panel

From end 2011



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Table 3: Improving landside efficiency, reliability, security and safety


3.1

For each metropolitan area, a person should be nominated with responsibilityto examine and advise on improved efficiency and reliability of port relatedcontainer and other freight, consistent with the meeting of pre-existingcommercial arrangements, with a focus on identified freight corridors. Thismight be based on arrangements for the Hunter Valley Coal Chain.

Jurisdictions Mid 2011

3.2

Policies and incentives should be introduced to encourage the greaterspreading of urban national port-related freight traffic into off-peak andweekend periods, induce higher levels of truck and train loading, and securethe shift in modal shares that is advocated in government announcements.

Jurisdictions From mid 2011

3.3Relevant ports should consider including incentives in any new leases thatwould improve performance of relevant land transport systems, including forcargo movement and for information sharing and provision.

Relevant port authori ties Immediate

3.4

The Council of Australian Governments Road Reform Program should, as partof a long term commitment to appropriate investment in and use of roads: include a focus on implementation of a market-based system for roads

involving port freight priority in exchange for freight access pricing for portfreight corridors

identify and agree with jurisdictions which of the port freight corridorsshould be used as a trial for this market-based system.

Road Reform Program,Jurisdictions Immediate



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3.5

The National Transport Commission should advise the Australian TransportCouncil, and the Council should decide on the adoption of technologicalopportunities to improve real-time information systems for container ports andassociated land transport. These are to: allow more reliable movement of freight within ports, among ports and on

land transport systems

include port community systems that increase the scope of informationexchange across a wider variety of transactions

include consideration of impediments to early completion of regulatoryformalities by traders

allow compatibility with international trading partners

incorporate empty-container parks and intermodal terminals intothe systems

achieve interoperability across Australian container ports

conform with relevant regulatory provisions

consider whole-of-port business continuity.

National TransportCommission / Australian

Transport Council

Report mid 2011

3.6

More information should be provided to the port and related logisticscommunity on information sharing and logistics cooperation practices relevantto ports and port freight corridors which are legally acceptable, or that wouldrequire authorisation under the Trade Practices Act.

Commonwealth From end 2010



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4.3

For identified port freight corridors: any direct infrastructure freight pricing arrangements should include ensuring the

adequacy of capacity for (port) freight priority, and the use of generated funds for thebenefit of freight, freight operators or for preservation of community amenity

any introduction of competitively neutral road freight infrastructure pricing shouldinclude applying the principles in 4.1 and 4.2 to authorities in control of identified portfreight corridors.

Commonwealth,Jurisdictions Immediate

4.4

There should be a jurisdictional review of legislation and regulations regardinggovernment-owned organisations that control a relevant port by ownership or lease.The review should cover: the objects, functions of the organisation responsibility of the Board and management ability of the organisation to take actions necessary to discharge safety and

environmental obligations, especially with regard to facilities under the management ofthird parties

responsibility and authority of the organisation for a leadership role in the coordinationand integration of maritime-related supply chains

ability of the organisation to make investments in off-precinct infrastructure where thisis appropriate

ability of the organisation to collaborate with other organisations including other portsand road and rail infrastructure organisations

ability of the organisation to fulfil appropriate recommendations of this strategy,

including in relation to information provision and exchange ability of the organisation to undertake master planning and act as a consent or

approvals authority for developments made on land it controls constraints on the ability of the organisation to conduct its own affairs.

Commonwealth End 2011

4.5 All legislation and regulations pertaining to ports should follow best practice principles. Jurisdictions Ongoing

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