Port of Townsville

“Channel widening will future-proof our port by ensuring it remains competitive and viable for major shipping lines, as well as providing certainty for industry investment into the region,” says Port of Townsville Limited (POTL) CEO Ranee Crosby.

She told Lloyd’s List Australia that the recently completed business case for the $193 million Townsville Channel Capacity Upgrade (TCCU) project, which will be funded over a six-year period, demonstrates a $580 million value to the regional economy.

“Headline findings for the business case include a benefit cost ratio of 2.90 and aggregated benefit over 40 years of $380 million,” said Ms Crosby.

This project is one of a number of initiatives that will cement the port’s place in the servicing the needs of Northern Australia including plans to double its container trade capacity.

“International shipping lines (with larger ships) will call Townsville if the channel is widened, meaning more services, better transit times and less cost for North Queenslanders,” said Ms Crosby.

 In June, the Queensland government announced its investment of $75 million in the TCCU project, from $13 million in dividends and $62 million equity injection, subject to receiving all environmental approvals and securing the balance of funding through the City Deal.

The City Deal is a 15-year commitment between the three levels of government to work together to deliver “transformative outcomes for Townsville and its residents”.

It has been identified through the City Deal that import and export capacity of the port is essential for the region to attract major private investment into growth areas such as new or expanded mines, agriculture precincts and value-adding service industries.

“It is also important that people living in the north can receive the goods they need at the same time and cost as capital cities,” says Ms Crosby.

“To achieve this, Port of Townsville must widen its access channels.”

Ms Crosby said, following the QLD Government’s funding commitment, “we are now in a position to finalise full funding”.

Trade benefits

Trade in the region is forecast to treble over the next 30 years, driven by global demand for base minerals such as zinc and copper and for agricultural products including fertilisers, sugar, rice, grains and pulses.

“Fuel imports are forecast to double from one million tonnes to two million tonnes over this period both linked to population growth, expansion of mining and industry and the trend for refining exiting Australia,” said Ms Crosby.

Containerised freight is expected to grow significantly to support population and industry growth in northern Australia. Motor vehicle imports are forecast to triple from just over 15,000 units to more than 45,000 units by 2045.

Currently around 150,000 twenty-foot equivalent (TEU) containers are transported by road or rail between Townsville and capital city ports for import/export. This is because only 5% of container vessels sailing in Australian waters can access the Port of Townsville.

Therefore, freight for or from North Queensland must be road and rail transported to and from these southern capital city ports, creating additional time and cost burdens on road and rail networks.

The TCCU project will increase the size of container ship accessing Townsville from 2,500 TEU to 5-8,000 TEU ships.

The business case suggests that channel widening will deliver transit time savings of freight for customers in North Queensland of about 17 hours per leg.

“If larger ships can access Port of Townsville, it will remove up to 8,230 B-Double trucks per year off road highways between Brisbane and Townsville (25,000 TEU’s), meaning less congestion and less road accidents,” said Ms Crosby.

Dredging work for channel widening could commence in 2018, meaning the region would begin to see larger ships visiting Townsville within two years. The TCCU project will take up to six years in total with completion in 2023.

“No capital dredge material is disposed of at sea – it will be beneficially re-used through placement in a fully contained area at the port,” said Ms Crosby.

The channel will be widened using a combination of industry standard dredging equipment chosen to ensure minimal impact to the environment. The mechanical dredge is an excavator mounted onto a pontoon that digs material from the sea bed and puts it onto a waiting barge. The barge then moves the material to the reclamation area to the east of the port.

About 80% of the work to widen the channel is at the harbour entrance and Platypus Channel (close to the port), and the remaining 20% (approximately six months) is in the sea channel.

“Works to prepare the fully enclosed bunded areas to receive all the capital dredge material, and dredging will take about four and a half years,” said Ms Crosby.