Kwinana port - jobs & economic development

Kambarang - Wildflower season (season of birth) 2017

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What is WA’s economic goal? A suggestion maybe...

Imports = spending money Exports = earning money

And the profits we earn allow us to implement WA’s social strategies.

WA’s goal is delivering premium quality raw and processed goods reliably and sustainably to global customers at internationally competitive

prices

Fremantle is a stranded asset Limited weekday mornings and afternoon operations over Fremantle bridge due to passenger trains. Freight traffic restricted over shared section. Need double dual gauge freight rail.

Urban encroachment. Voluntary reduction in night operations. Noise and residential issues.

Long single track section needs replacing with double dual gauge heavy freight line. Remove congestion.

Department of Transport Perth Freight Transport Network Plan Transport @ 3.5 Million

Tourist areas, level crossings, historical zone

Transport •  The rail and road links are suboptimal. Only expensive

band aid solutions. •  Imports/ exports expensive and slow. Congestion.

Limited options to improve. Double handling and additional costs.

Land •  No industrial land for businesses to expand. •  Urban encroachment. Pressure to remove pollution,

dangerous goods, animals, noise, trains, trucks etc •  Need economic diversification to create new jobs and

transition to a modern supply chain. This can only happen in Kwinana.

Industry •  Needs major investment in infrastructure & systems.

Currently stopped due to uncertainty about outer harbour transition.

•  Industry is elsewhere. Not enough scale for international trade. No longer internationally competitive. Primarily an import port.

•  No growth opportunities. Expected job losses. Focus on keeping existing jobs.

Heavy traffic. Capacity constraints.. Voluntary reduction of night time operations.

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Current and future products – container exports Product 2017

TEU 2017 % of total TEU

Empty containers 132,428* 38%

Hay, chaff, fodder 36,011 10%

Waste paper 20,364 6%

Scrap metals 12,153 3%

Cereals and cereal preparation

11,458 3%

Malt 10,731 3%

Oats 10,647 3%

Chemicals & related products

10,600 3%

Titanium dioxide 9,817 3%

Fresh fruits and vegetables

8,841 3%

The future target products

Containers Proteins – chilled and frozen Live trees, plants Fruits and vegetables Cereals & diary preparations Processed foods Wood and animal products Manufactured products, currently 9%

Value adding High value, specialised refining i.e. Titanium Dioxide, Lithium products Agricultural & resource processing Chemicals and industrial processing Industrial ceramics Industrial glasses Refractory products Defence – drones, munitions *Imported 25,557 empty TEU in 2017, mostly REEFER

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Outer harbour •  cc

Current WA main export trading partners

> 50,000 TEU per year

> 20,000 < 50,000 TEU per year

> 10,000 < 20,000 TEU per year

Est growth > 5%

Est growth > 2% < 5%

Est growth < 2%

IMF 2018 forecast – (Jan 2017) FPA Aug 2017

One Belt One Road Sea route Land route

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Future trade forecasts – export focused TEU

-

100

200

300

400

500

600

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Possible

Probable

Proven

Currentexportsforecast

Compound annual growth rate (“CAGR”) – resources/ agribusiness

Ref : Industry interviews, Dept of primary industries, InfraNomics 2017. Dependent on outer harbour timings

Fremantle containers exports (excl empties)

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Potential flatting of exports if WA continues to lose market share and international competitiveness.

Kwinana : the solution to jobs and diversification New jobs

•  The region will boom and create new jobs and new industries will be created that haven’t been considered yet

•  In other port developments dock workers were retrained then transitioned & new staff hired

•  Develops on the back of existing region

Economic diversification

•  A modern, efficient and integrated port can only be developed in Kwinana

•  Provides the space and infrastructure and scale which means being internationally competitive

•  Diversifies the economy. Increases our security

•  The freight logistics and supply chains can be upgraded

•  Special Control Area can avoid the problems in Fremantle and protect industry and the port from urban encroachment for future generations

•  A bigger more powerful version of the AMC

•  ‘Plug and play’ industrial park for foreign companies. Speeds up investment

•  Develop a Special Economic Zone to stimulate economic growth and exports

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Special Economic Zone - Kwinana •  Special Economic Zone or Free Trade Port

– allows imports, storage, exhibit, assemble or manufacture without customs entry procedures and duties.

•  This will incentivize local WA for manufacturing and processing. Currently WA generally resources for other countries to process.

•  International power economic clusters. Properly developed can be spectacularly successful and huge wealth generators

•  Successful examples include New Orleans (US), Shenzhen (CN), DMCC Dubai (AE), Tanger Med Zones (MA), Mauritius Freeport (MU), Shannon Free Zone (IR), Katowice (PL)

•  Kwinana would be an ideal location for a Special Economic Zone in the Indian Ocean

Increased •  Economic activity •  International competitiveness •  Manufacturing and jobs •  Diversity & synergies •  Quality infrastructure access •  Productivity •  Integrated transport

Reduced •  Regulation •  Costs (Op costs 10-20% lower) •  Bureaucratic interference •  Approval times •  Urban encroachment •  Pollution (rail & electrification)

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Selected categories Area of interest Fremantle is a stranded asset

New port & supply chain

Jobs Construction jobs ✗✗✗ ✓✓

Long term industrial & highly paid jobs ✗✗✗ ✓✓✓

Develop new jobs in new fields ✗✗✗ ✓✓✓

Industrial development Develop local companies ✗✗✗ ✓✓✓

Develop new industries ✗✗✗ ✓✓✓

Long term benefits WA ✗✗✗ ✓✓✓

Lower operating costs ✗✗ ✓✓✓

Increases opportunities to generate export cash ✗ ✓✓✓

Security and redundancy ✗ ✓✓✓

Logistics Logistics freight and rail access ✗✗ ✓✓✓

Interconnectivity with intermodal hubs ✗✗ ✓✓✓

Land development Space to expand ✗✗✗ ✓✓✓

Cash from surrounding land sales N/A ✓✓✓

Attracting external finance ✗ ✓✓✓

Kwinana, not Fremantle is where the money is

Jobs to be lost and created

Permanent jobs

* Estimated job losses industry trade publications such as Maritime Professional. Also FPA annual report page 54 flags the need for new cranes. ** Source: State Ministers, City of Fremantle and marine engineering firm (confidential), InfraNomics

11,000**

7,265**

= 500 jobs

Outer harbour – stage 1 + Industrial park

Fremantle waterfront

Construction jobs

4,294 3,000 \

Fremantle inner harbour (no change)

400 – 1,000*

Fremantle deserves world class facilities

Cardiff Millennium Centre

Singapore Esplanade Theatre

Hamburg Elbphilharmonie Royal Danish Playhouse

Rejuvenation of other sailing port cities have resulted in transformational projects like theatres and cultural centers, which are more appropriate to the Fremantle of today. Why? Because it boosts people density and commercial/

social and cultural attractiveness of the area.

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Modules for the outer harbour

Facilities

1 Dry bulks – coal, iron ore, sulphur, cement clinker, Alumina, silica sands etc (KBT at capacity)

2 Specialised grain terminal (new)

3 Liquid bulks (KBJ at capacity)

4 Containers

5 Livestock (Bunbury?)

6 Automotive & Roll on Roll off (RoRo)

7 Cold storage – proteins (new)

8 Defence (new)

9 Gas – LNG, LPG (new)

10 Building materials (new)

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Some of these berths can be developed/ upgraded immediately and don’t need to be delayed any longer.

The two choices are clear

Continue inner harbour

•  24 hour port - Fremantle •  Increased automation - Reduction in jobs •  Higher costs – road freight •  Economic development stunted •  Land development slowed •  Benefits non-WA logistics companies •  New industries restricted. No diversification. •  Truck pollution increases. More trucks. •  Dangerous goods through metro increases •  Doesn’t solve import/ export bottleneck •  Incremental Fremantle tourism growth •  Minimal cash benefits to the State •  Limited 3rd party funding – mostly Government

Fremantle waterfront & outer harbour development

•  24 hour port - Kwinana •  Increased automation – More jobs around the

port •  Lower costs – higher volumes & trains •  Economic development stimulus •  Land development encouraged •  Benefits WA companies •  Allows new industries to develop. Diversification •  Truck pollution decreases. More trains. •  Dangerous goods transferred to Kwinana •  Solves import/ export bottleneck •  Major Fremantle tourism stimulus •  Maximises cash benefits to the State •  3rd party funding – Government controlled

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Planning and development

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DoT approach Doesn’t consider that some parts of the outer harbour can and needs to be developed now

Westport Taskforce Development entity Operations and

management

2 years Estimate 3-7 years Ongoing 7 years+

Proposed approach Allows development to occur within a developing planning framework. No delays.

Westport Taskforce

Development entity Operations and

management

Allows berths and precincts to be upgraded & development in parallel

Proposed development entity - 1 of 2 Economic development commission Establish a Western Trade Coast Development Commission - a statutory authority of the government of Western Australia

Mandate could evolve from the Australian Maritime Complex mandate with professional management dedicated to economic development and job creation.

Objectives •  Maximise job creation and improve career opportunities; •  Develop and broaden the economic base of the region; •  Identify infrastructure services to promote economic and social development; •  Provide information and advice to promote business development; •  Seek to ensure that the general standard of government services and access to those

services in the region is comparable to that which applies in the metropolitan area; and •  Actively promote, facilitate and monitor the economic development of the region. •  Proactively identify and encourage international companies to open businesses in the

Western Trade Coast

Proposed development entity – 2 of 2 Western Trade Coast Development Commission

Functions •  Promote the region; •  Facilitate coordination between relevant statutory bodies and State Government agencies; •  Cooperate with representatives of industry and commerce, employer and employee

organisations, education and training institutions and other sections of the community within the region;

•  Identify the opportunities for investment in the region and encourage that investment; •  Identify the infrastructure needs of the region, and encourage the provision of that

infrastructure in the region; •  Cooperate with: Departments of the Public Service of the State and the Commonwealth,

and other agencies, instrumentalities and statutory bodies of the State and the Commonwealth; and local government authorities, in order to promote equitable delivery of services within the region.

Transition has been happening for decades

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Economic and social benefits

Outer harbour •  Estimated new employment - 11,000 direct jobs •  NPV $13.9bil estimated in Gross Regional Product over 20 years. Dependent upon the size.

Fremantle waterfront development (Victoria & South Quay only) •  Estimated new employment - 7,265 direct jobs •  NPV $4.8bil estimated in Gross Regional Product over 20 years.

Reference – Previous economic studies, Indian Ocean Gateway, City of Fremantle, InfraNomics