Port of Melbourne

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Riverina International Trade Network

8 August 2017

TRADE UPDATE Jason Price – Executive General Manager Business Services

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OUR Shareholders

OMERS

Founded in 1962,

OMERS is one of

Canada’s largest

defined benefit

pension plans. It

invests and

administers pensions

for members from

municipalities, school

boards, emergency

services and local

agencies across the

province of Ontario.

Global

Infrastructure

Partners (GIP)

Global Infrastructure

Partners (GIP) is a

leading global

independent

infrastructure investor

combining specialist

industry experience

with best practice

operational and

financial

management.

QIC

QIC is a global

diversified

alternatives

investment firm

headquartered in

Brisbane, Australia

offering infrastructure,

real estate, private

equity, liquid

strategies and multi-

asset investment

services to

institutional clients.

Future Fund

Established in 2006.

the Future Fund is

Australia’s sovereign

wealth fund

responsible for

investing for the

benefit of future

generations of

Australians.

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What does privatisation mean?

• 50 year view - provides

certainty

• Total supply chain efficiency

• Focus on value creation with

shared benefits

• Engagement & industry

partnerships

• Investment for future

capacity

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Port of Melbourne - our principles

Collaborative

engagement

Supply chain

productivity

efficiency

Value creation

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2016-17 Trade Performance

CONTAINERS 2.7 million TEU

AUTOMOTIVE 435,904 UNITS

LIQUID BULK 6.3 million revenue tonnes DRY BULK 4.6 million revenue tonnes

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2016-17 Container Trade

2.4% CONTAINERS

2.7 million TEU

• Retail and industrial imports

• Strong exports in grains and agriculture commodities

TEU % Change

Imports 1,142,666 3.0

Exports 698,766 8.0

Empty 435,779 -5.3

Coastal 420,062 -0.3

Containers

(TEU) 2015-16 2016-17

TEU

Increase

%

Increase

Wheat 36,500 50,400 13,900 38%

Barley 5,700 18,600 12,900 226%

Cereal 7,221 9,305 2,084 29%

Veg Processed 10,000 22,500 12,500 125%

Total 59,421 100,805 41,384 70%

RAIL ACCESS STRATEGY (RAS) Michael Turner – Project Manager - RAS

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The need for rail

More than 2.6 million containers (TEU) are moved through the port of Melbourne each year

More than 90 per cent of these are transported by trucks

Around 5,000 trucks enter and leave the port on a typical week day

These trucks contribute to congestion on inner metropolitan roads and adversely impact the

amenity of residents living close to these roads – 87% imports to destinations within 50km

Freight volumes are predicted to grow significantly in the next 20 years

Where it is feasible and competitive, as an alternative to trucks, trains could also transport

containers to and from the port

Trains are already used for transporting the majority of regional Victoria and Interstate export

cargo containers

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History of rail at the port

We need to turn this around

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Our Obligations

The Port Management Act and Port Lease Transaction, requires PoM to prepare a Rail Access

Strategy (RAS):

Must be prepared within 3 years of the first lease being granted (October 2019)

Set out options for the improved movement of freight to and from the port by rail

One of the options must be the development of a port rail shuttle

Infrastructure options must be capable of being implemented within 5 years

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RAS objectives and principles

The key objectives of the RAS are to :

Minimise costs across the end-to-end supply chain

Enhance productivity across each element in the supply chain

Deliver required outcomes with efficient use of all resources

Generate sufficient demand to deliver commercially viable

investments

Encourage stakeholder collaboration and partnerships

RAIL ACCESS

PRINCIPLES

COMMERCIAL VIABILITY TO FACILITATE INVESTMENT

ACCESS & BROAD PARTICIPATION

SCALABILITY FOR VOLUME INCREASES OVER TIME

RELIABILITY & CERTAINTY

ABILITY TO ACHIEVE CRITICAL MASS

MINIMISE COSTS TO THE SUPPLY CHAIN

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Our Approach

RAIL ACCESS STRATEGY

- FINAL

Detailed RAS that includes

Rail Infrastructure Options

with business case

Clear recommendations and

delivery program

RAIL ACCESS STRATEGY

- UPDATE

Update on rail system vision

with specific deliverables

Preliminary Rail

Infrastructure Options with

high level business case

PRELIMINARY RAIL

ACCESS STRATEGY

High level vision

Position on operating

systems and commercial

framework

Early recommendations to

Government on quick wins

2017 2018 2019

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Regional & interstate port rail network

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Port Botany

Merbein

Dooen

Warnambool

Wagga Wagga

Griffith

Deniliquin

Tocumwal

Sunraysia

Riverina Southern NSW

Gippsland

Western Victoria

Region sizes are indicative and not to scale

Metro

Standard Gauge

Broad Gauge

Maryvale

Port Adelaide

South Australia

Wimmera

Goulburn Valley

Mooropna

Port of Melbourne

Source: PoM

```

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70%

30%

TEU Rail Share

Rail

Road

Commodities on rail

Paper

Grains

Rice

Wine

Oils (edible and industrial)

Food Retail

Cotton – recently started

Southern New South Wales Rail

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Potential for rail

2050 – FULL IMPORT CONTAINERS (TEU)

Beveridge

WIFT

Altona

Somerton

Lyndhurst

Altona North

Altona/WIFT catchment

Somerton/Beveridge catchment

Lyndhurst catchment

Source: PoM

Legend:

20% of postcodes

within each band

Approx. 10 km

Altona/WIFT

catchment includes:

• Laverton North

• Altona

• Sunshine

• Tarneit

• Werribee

Somerton/Beveridge

catchment includes:

• Campbellfield

• Somerton

• Craigieburn

Lyndhurst catchment

includes:

• Dandenong

• Clayton

• Braeside

• Hallam

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Future rail concept

Regional and interstate Rail Rail supports the movement of full and empty containers to and from regional Victoria and interstate intermodal terminals over the national and Victorian freight rail network, through the provision of suitable on-port, Dynon and outer metropolitan rail terminals.

Metropolitan rail

Shuttle trains run between on-dock rail terminals and outer metropolitan freight hubs providing support for HPFVs in the transport of containers.

Source: PoM

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Indicative Port Development Strategy - Timeline

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Year 2 Year 1 Year 3

New PDS

RAS

Working Draft PDS PDS Finalisation &

Issue

Stakeholder & Public

Engagement

Initial RAS Further RAS Development

and Engagement RAS Finalisation & Issue

1 Nov 16 1 Nov 17 1 Nov 18 1 Nov 19

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RAS Progress – Where are we up to?

We are making good progress in developing our Preliminary Rail Access Strategy:

Reviewed work done on rail “over the years” and held internal workshops within Port of

Melbourne to develop our RAS approach and challenge thinking (independent reference group)

Held a RAS Forum organised by ARA/APSA in June – good attendance with strong commitment

by stakeholders across the supply chain “working together”

Commenced a series of “one on one” meetings with supply chain stakeholders – first phase will

complete in early August (subsequent phases through to October) – listening to inform the RAS

Aiming to draw our initial thinking on the Preliminary RAS through September

Timeline – aiming to finalise our Preliminary RAS by the end of the year

Next stage of RAS will align with our Port Development Strategy development which is scheduled

to be published in late 2018

QUESTIONS

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