May 2005
The Hon Craig Knowles MP
Minister for Infrastructure and Planning
Minister for Natural Resources
Dear Minister,
Proposed Port Botany Expansion
Under Section 119(l) of the Environmental Planning and Assessment Act 1979 you directed a Commission of Inquiry be held into all environmental aspects of a proposal by Sydney Ports Corporation to construct
and operate a new container terminal and associated infrastructure. Your Direction particularly
emphasised a number of environmental aspects as well as “an analysis of any potentially feasible
alternatives at Port Botany to the carrying out of the development, including the alternative proposed by
P&O Ports Limited”.
You appointed me to constitute the Commission of Inquiry and Professor Hans Westerman and Mr Tony
Wright as specialist advisers to the Commission.
Sydney Ports Corporation seeks to obtain planning approval to develop 57 hectares in Botany Bay with
1,850 metres of additional quayline sufficient for 5 berths, about 3½ hectares along the southern edge of
Penrhyn Estuary, and 2½ hectares on Foreshore Beach to provide:
§ Additional container handling capacity of 1.6 million TEUs per year;
§ Additional access points to container operations for road and rail;
§ Potential for a third stevedore to stimulate competition;
§ Enhancement of the ecological values of Penrhyn Estuary; and
§ Public recreational facilities along Foreshore Beach. It was strongly stressed by Sydney Ports Corporation that doing nothing was not an option. Solely relying
on higher intensity operations by the two existing stevedores would constrain trade growth in Sydney and
ultimately result in adverse economic outcomes including businesses relocating to other States.
The project is generally consistent with relevant government policies in that it provides port infrastructure
for economic development (Shaping our Cities), limits the length of travel by road vehicles (Action for Air), provides for increased use of rail and includes comprehensive stakeholder involvement and environmental impact assessment having regard to potential Bay-wide effects (Healthy Rivers Commission
and Towards a Strategy for Botany Bay). It is consistent with the Ports Growth Plan and Port Freight Plan and does not compromise the stated directions of the Metropolitan Strategy or the objectives of the
Metropolitan Freight Strategy. Deferral of a decision until all relevant strategies are completed and implemented as sought by a number of parties is unrealistic and not supported by the Commission.
Submissions to the Commission could generally be placed into three categories. The first category
comprised Government agencies who in general adopted a neutral position subject to adequate conditions
to control and manage residual environmental impacts. The Department of Infrastructure, Planning and
Natural Resources considered that doing nothing was not a supportable option given the economic and
social importance of maintaining a strong container trade in Sydney. The second category consisted of
industry partic ipants and associations who advocated the full proposal due to the economic benefits it
would generate. The third category were councils, community interest groups and residents who were
strongly opposed to the proposed development due to its biophysical, socio-economic and ecological
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impacts. They gave overwhelming support to development at Newcastle and Port Kembla. Some council
submissions considered a smaller staged development could be a potential option.
The Commission finds that consideration of an expansion of Port Botany on the basis of an overall
container throughput capacity of 3.2 million TEUs per year by 2025 is reasonable. The evidence before
the Commission is that strong container trade growth would continue from the current container
throughput of 1.37 million TEUs per year. Given the importance of port facilities, the planning horizon of
2025 used by Sydney Ports Corporation is supported by the Commission. Furthermore, about 85 percent
of containers passing through Port Botany have either a destination in, or are sourced from, the Sydney
metropolitan area. Containers handled through regional ports would incur higher landside transport
charges and require major road and rail infrastructure upgrade for all but very modest volumes. The
Commission finds the continued focus on Port Botany is justified at this time.
The primary matter for the Commission to resolve is whether Sydney Ports Corporation’s proposal is the
most appropriate option for providing an overall container throughput capacity at Port Botany of 3.2
million TEUs per year as assessed in the EIS. The key to resolving this issue is to initially determine the
realistic container throughput capacity of the existing Port Botany container terminals before unacceptable
levels of congestion occur, in either the waterside or landside logistics chain.
There was substantial variation as to the realistic capacity of the existing Port between estimates prepared
by Sydney Ports Corporation, Patrick and P&O Ports, and the submissions of other informed parties. The
capacity of the existing Port is highly dependent on the berth length and terminal area as well as the
equipment and management systems used by the existing stevedores, Patrick and P&O Ports. Although
Sydney Ports Corporation owns the basic berth and terminal area infrastructure, its current leases to the
stevedores do not provide it with the opportunity to set productivity levels. Nevertheless, both stevedores
have made recent firm and significant financial commitments to increasing productivity.
Sydney Ports Corporation considers the capacity of the existing Port is limited by berth length but would
ultimately rise to 1.8 million TEUs per year with moderate productivity improvements. The two
stevedores consider the Port’s capacity could be in excess of 3 million TEUs per year and other informed
parties consider the capacity could be up to 2.6 million TEUs per year. Sydney Ports Corporation’s high
productivity scenario overlaps the latter container capacity estimate.
The Commission has considered all evidence in detail and has concluded that the container throughput
capacity of the existing port footprint, with realistic productivity improvements, is between 2.2 and 2.5
million TEUs per year. Consequently, an expansion would only need to provide additional capacity of up
to 1 million TEUs per year to achieve an overall container throughput of 3.2 million TEUs per year.
This conclusion is consistent with the recent approval for upgrading the Patrick terminal and empirical
evidence of current container throughput at Port Botany. In this regard Patrick has recently received
approval for a container throughput capacity of 1.3 million TEUs per year. P&O Ports’ current throughput
is about 700,000 TEUs per year, it has recently rec eived approval for a seventh quay crane, and plans to
purchase up to four more quay cranes. P&O Ports’ container throughput capacity is not limited by its
current consent. Presently, total container throughput at Port Botany is about 1.37 million TEUs per year
with berth occupancy at both existing stevedores between 45 and 50 percent using Sydney Ports
Corporation’s estimates. An upper limit of 60 to 65 percent with the existing berth lengths, while still
managing congestion to acceptable levels, is feasible. Clearly, the number of quay cranes and the hours
they operate as well as the terminal area and its associated logistics are significant determinants in
maintaining berth occupancy at acceptable levels.
The Commission finds that the proposal by Sydney Ports Corporation (Option 1) to provide a further 60
hectares of land at Port Botany for an additional container throughput of 1.6 million TEUs per year is an
overdevelopment, and is not warranted at this time. The weight of evidence is that the assessed overall
container throughput of 3.2 million TEUs per year predicted by 2025 could be achieved with a smaller and
possibly staged development. A smaller development would also minimise residual environmental
impacts on the local community relating to air quality, noise amenity, traffic and hazard and risk, would
not adversely affect water quality or shorebird access in Penrhyn Estuary, and would allow the
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continuation of recreational activities along the full length of Foreshore Beach. Although potentially more
expensive per unit of quayline and terminal area, a smaller development at this time could provide a more
cost effective overall solution in the medium term, as terminal equipment would be more highly utilised
while maintaining an efficient Port operation with acceptable levels of congestion. Some smaller
development alternatives would not provide an additional road access point to the terminal area from
Foreshore Road but traffic could still be effectively managed.
Option 8, as suggested by the Department of Infrastructure, Planning and Natural Resources, is not
supported by the Commission. Option 8 would provide for significantly more than 1 million TEUs per
year additional capacity and would thus be able to handle a volume which has not been environmentally
assessed. This option would also restrict flushing of Penrhyn Estuary and physically confine the Estuary,
but to a slightly lesser extent than Sydney Ports Corporation’s preferred option. Option 8 would have
potential environmental impacts relating to excavation at the eastern end of Brotherson Dock South which
would need to be fully investigated and assessed.
The desirability of increased competition at Port Botany was a significant issue emphasised by Sydney
Ports Corporation and provision for a third major stevedore was a key factor in its justification of a major
increase in quayline and terminal area from the outset. However, Sydney Ports Corporation did not
conclusively demonstrate that marginally increased competition, of its own, would result in reduced
container stevedoring costs. Furthermore, Sydney Ports Corporation’s preferred option allows for
inequalities in quayline and terminal area to occur which, on evidence before the Commission, could result
in important advantages for one stevedore, together with inefficiencies in berth occupancy for the others.
While smaller development alternatives only provide for the introduction of a third, minor stevedoring
operation in the medium term, they leave open the opportunity for a major stevedoring operation in the
longer term as well as providing for an equitable competitive situation between Patrick and P&O Ports in
the meantime.
Allowing congestion to constrain container throughput is not a viable proposition if NSW is to maintain a
strong economy, an important part of which is the import and export of goods in containers. Some port
development needs to be commissioned in the next 6 to 8 years to ensure efficient handling of Sydney’s
container trade and to limit congestion to an acceptable level, given the long-term projected growth in
container volumes. The Commission is adamant that the do nothing option would not be a responsible
plan. The Commission supports an initial expansion of the container facilities at Port Botany which is
smaller than both Option 1 and Option 8 to cater for the assessed trade demand of 3.2 million TEUs per
year by 2025.
Minimising the impact of container transport within Sydney is essential given the continuing strong growth
in trade. In this regard achieving 40 percent rail mode share or above for container transport from and to
the Port is strongly supported by the Commission. The Commission is satisfied 40 percent of containers
could be transported by rail but this will depend on the timely design of the metropolitan intermodal
terminal network according to the Port Freight Plan, and then development of the individual terminals. However, an important issue with respect to substantially increased rail freight movement is the early
mitigation of noise impacts at residential and sensitive land uses along the Botany freight line as referred to
in this Report. While rail noise is a matter for final resolution during the future proposed upgrading of the
Botany freight line, it is potentially a quite significant issue.
Truck traffic would also increase significantly with an overall Port throughput of 3.2 million TEUs per
year but traffic impacts would be manageable both locally and in the region. Port truck traffic would be a
significant, but other than in the immediate area of the Port, a relatively small part of the substantial overall
volume of truck and small vehicle traffic in the region, at both 40 percent and 20 percent rail mode share.
It will be essential that intersections in the vicinity of the Port area are monitored and upgraded as necessary
to ensure their satisfactory operation is maintained.
The Commission is satisfied that an expansion in total container throughput capacity to 3.2 million TEUs
per year at Port Botany could be operated to consistently comply with accepted environmental guidelines
and criteria. Although exceedances could occur infrequently they would be relatively minor in respect to
acoustic amenity and air quality. Hazard and risk levels would not exceed accepted criteria. Port security
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and operational safety at Sydney Airport would be maintained to the appropriate standards. There would
be little impact on groundwater, especially when compared with the groundwater interception works along
Foreshore Road, for options other than those which include excavation of the eastern end of Brotherson
Dock South. The Commission recommends measures to ensure residual biophysical environmental
impacts are minimised, monitored and managed.
Major ecological and recreational impacts on Penrhyn Estuary and Foreshore Beach respectively would
result from Sydney Ports Corporation’s preferred option. Sydney Ports Corporation proposes extensive
enhancement works to compensate for these impacts. Nevertheless, water quality in the Estuary would
decline and there remains significant uncertainty as to whether the Estuary’s ecological value for
shorebirds would be maintained as well as whether seagrasses could be effectively transplanted and
established. The proposed boat ramp and carpark would sever Foreshore Beach and the new terminal
would dominate views across Botany Bay from Foreshore Beach and Sir Joseph Banks Park Lookout. The
Commission finds the proposed recreational and ecological enhancement works essential if Sydney Ports
Corporation’s preferred option were to be approved. If this were to be the case the Commission considers
it likely the present ecological values of the Estuary could be substantially and permanently reduced due to
declining water quality as well as the restricted access for shorebirds and the enclosing nature of the
proposed Port expansion.
The Commission recommends that:
§ Sydney Ports Corporation’s proposed development at Port Botany not be approved; and
§ A smaller expansion of container handling facilities at Port Botany be approved. The Commission recommends an initial smaller development provid ing 30 to 35 hectares of land to the
west of Brotherson Dock North and along the southern side of Penrhyn Estuary. The evidence from the
analysis of potentially feasible alternatives is that such development could provide up to 800,000 TEUs per
year additional capacity depending on its configuration, for an overall container throughput capacity at
Port Botany of between 3.0 and 3.3 million TEUs per year. It would fit within the footprint of Sydney
Ports Corporation’s preferred option and would not preclude that option in the longer term, including
provision for a third major stevedore, subject to further rigorous environmental impact assessment. In the
meantime it would provide for a small third stevedoring operation. It would not require a boat ramp and
car park to be constructed on Foreshore Beach as these facilities could be included in the new terminal
area. This approach would also assist in maintaining the ecological values of Penrhyn Estuary as well as
minimising the visual impact on views across the Bay from public areas.
Concurrently, a comprehensive independent investigation should be undertaken to determine whether
extensions to either or both the eastern and western ends of Brotherson Dock South, including relocation of
the bulk liquids berth, are feasible and viable. If so, extension of Brotherson Dock South could provide
further capacity in a timely manner, subject to comprehensive environmental assessment which would
need to have particular regard to groundwater, acoustic amenity, and hazard and risk. Extension of this
Dock would also provide an equitable basis for competition between the two current stevedores.
KEVIN CLELAND
Deputy Chairperson
lyrical
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