The $1.64 billion question: WHY?


As anyone who regularly passes by or through the Port will have noticed – there are never many ships there!

If you are interested in seeing what ships are at which berths at any time, click here.

Port of townsville
18 January 2017: Another quiet day at the port

Berth occupancy

As the Port noted in its 2016 Additional Environmental Impact Statement (AEIS), over the last 18 years the Port has reached the Australian definition of a ‘full port’ (ships at berth 80% of the time), as defined by the Bureau of International Trade, Transport and Regional Economics (BITRE) in Canberra, less than 50% of the time!

The Port uses the AEIS to challenge the official BITRE definition, and reveals that it has derived its own criteria for ‘optimum berth occupancy’ for each of its berths.

However, over the past 18 years, the Port has met these – its own – definitions only 20% of the time! 1AEIS Chapter 21, Table 21.1

The Port is relying on some unknown demand – even as it struggles to cope with the loss of its biggest user, Queensland Nickel (QNI) – to justify the proposed massive expansion.

In 2015, QNI represented 56% by volume of the Port’s imports. In early 2016 this fell to zero.

port of townsville
The port on 1 February
townsville port
The Port on 4 February

Rationale for the expansion

Like almost everything associated with the proposed port expansion, the rationale given for the proposal is a moving feast.

In the 2013 EIS, it was all about coal, magnetite and nickel ore. (See EIS Section B19, Economic Development (pdf) Figure B.19.1). By 2025, coal was expected to account for 24% of the Port’s trade, nickel also 24% and magnetite 16.5%, with all three expected to grow up until 2040. This was based on ‘expert’ analysis.

However, just 30 months later, in the AEIS (AEIS, 21.2.5), the Port had ditched nickel, magnetite and coal, and was betting on container ships, fuel carriers, car-carriers and cruise ships. It appears to be sticking with these – so far.

The Port is currently boasting about the increased number of cruise ships that will visit Townsville over the next five years. All of these ships can access the Port as it is now.

The Asia/Australia Consortium, which is planning to rationalise marine traffic between Asia and Australia (Townsville’s biggest marine trading area), is buying ships that will already fit into the Port. Sure, some ships are getting bigger, but Townsville cannot keep expanding (see Big Enough Already!) just because there are some massive ships being built (such as Triple Es and bigger).

Townsville must recognise that its wonderful, natural location constrains the size of ships that can be catered for, and recognise that the demand from those large ships to use Townsville as a port is small – we just don’t have the population to make it worthwhile for them.

tugs in Townsville Port
Do tugs get bored, waiting so long for something to do?

Servicing the north

The Port of Townsville appears to be concerned that Brisbane Port constantly and increasingly outstrips Townsville in terms of shipping and trade.

It claims (correctly) that it is cheaper for northerners if, for example, cars are imported directly into Townsville than if they are imported into Brisbane and then transported by rail or road to Townsville. This is essentially true both in financial and environmental terms.

However, if we (generously) define the Townsville Port hinterland as all of the regions of Cairns, Townsville, and Mackay/Isaac/Whitsundays, plus half of Central Queensland and half of outback Queensland, the population in mid 2015, according to the Queensland Government Statistician’s Office, was 751,600  compared with 4,778,900 in the whole State. In other words, Townsville port hinterland represents about 16% of the population of the State. To compete with Brisbane for traffic would not be economically rational.

The issue of minimising land transport of imported goods is best addressed by arranging for ships to have multiple ports of call along the coast. Queensland ports should be working collaboratively on this rather than each striving to outdo the others.

There appears to be no clear reason as to why tax payers should fork out $1.64 billion (according to the Qld Department of State Development) for the proposed expansion of the Port of Townsville.

References   [ + ]

1. AEIS Chapter 21, Table 21.1