Sydney Third Terminal Operator

The Port of Sydney’s two incumbent container terminal operators – Asciano (formerly Patricks) and DP World (formerly P&O Ports) – may yet get the chance to throw their hat in the ring to gain the concession for the planned third Port Botany terminal in South East Australia. The New South Wales Government had previously taken the tack of encouraging a new player to enter the stevedoring mix, with ports minister Joe Tripodi saying earlier this year: “We believe the logistics chain, particularly in Sydney, should be subject to more aggressive competition, so final consumers can benefit from that. We’re concerned about the nature of the duopoly that operates at the port. As a matter of good public policy we believe that good competition is virtuous.”

However, it seems the government has watered down its stance somewhat, after Asciano and DPW indicated they might challenge any exclusion. Asciano has also noted that the two existing operators would need to rethink their capital expenditure plans, based on current and future contracts, if additional competition was now to become a feature of the Australian terminal market.

Mr Tripodi’s office did not reply to a request from Port Strategy for a clear statement of intent. If the minister is now proposing to at least open the door to the incumbents to bid, he would be in harmony with the position expounded by the Sydney Ports Corporation, which has taken the view that any interested party should be allowed to declare their interest in the third terminal.

Interest in the Sydney bid is high, particularly after the success of Hutchison Port Holdings (HPH) in being named the preferred operator for the Port of Brisbane’s new container berths 11 and 12.

This has caused the Australian shipping community to wonder whether this would be the thin end of the wedge in undermining the country’s traditional container terminal “duopoly”. Shipping Australia was among the port user bodies that welcomed the concept of increased competition.

HPH has expressed interest in occupying berth space at Port Botany and its breakthrough in Brisbane could give it extra incentive to get a concession in a second port, in order to offer multi-port contracts to ship operators.

However, it will face vigorous competition. Sydney Ports Corp general manager commerce and logistics Simon Barnes tells Port Strategy that Brisbane received seven bidders and Sydney expects “at least something of the same”. Major contenders could include Australian International Container Terminals/ICTSI, Mediterranean Shipping Company, CMA CGM and AP Moller Terminals.

The new terminal is being built on a 60-hectare reclamation adjacent to the existing berths. It will provide 1,850 metres of additional wharf face and five extra berths with depths alongside of up to 14 metres, capable of handling 8,000 teu containerships, with dedicated road access and additional rail sidings. A design-and-construct contract is expected to be announced in the next three months and expressions of interest in the stevedoring concession declared by the second quarter of 2008.

A decision on the concession will be made in the third quarter of next year, allowing ample time for the preferred bidder to work with the construction contractor on the layout of the terminal.

One of the initiatives the port corporation is expecting from bidders will be a commitment to move more containers by rail. The port has plans to develop an intermodal logistics centre on the 60-hectare Enfield site located 18 kilometres from Port Botany and sees that as a major platform in its target of moving 40% of containers by rail to and from the port’s hinterland.

The additional berth capacity is planned to be available from 2011/2012.