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Australia – Release Of The Consultation Draft Of The Queensland Ports Strategy.

25 October, 2013

 

Legal News & Analysis – Asia Pacific – Australia – Energy & Project Finance

 

WHAT YOU NEED TO KNOW

 

  • Port development is to be concentrated at five priority port development areas (the ports of Brisbane, Gladstone, Hay Point/Mackay, Abbot Point and Townsville) with any capital dredging outside of these areas prohibited until 2024 (except in certain, limited, circumstances).
  • Master plans will be required for the five priority port development areas and will be encouraged for all the remaining Queensland ports.
  • Through detailed reviews, the Government will seek to both improve supply chain infrastructure coordination and delivery and existing port governance practices.

WHAT YOU NEED TO DO

 

  • Interested parties should review the consultation draft of the Queensland Ports Strategy and provide any submissions to the Department of State Development, Infrastructure and Planning by 13 December 2013.

 

On 17 October 2013, the Deputy Premier of Queensland, Minister for State Development, Infrastructure and Planning released for public consultation a document setting out the Government’s draft Queensland Ports Strategy (QPS). The QPS outlines the Queensland Government’s framework for port development for Queensland for the next 10 years. A full copy of the QPS can be found at the Department of State Development, Infrastructure and Planning website here, along with supporting materials here.


The Queensland Government has called for public comment on the QPS, in particular on the vision and on the proposed key actions for the future planning, regulation and management of Queensland ports. Comments received from the public will influence the Government’s development of the final QPS as well as the implementation of the key actions under the QPS.


The Queensland Ports Strategy


Background


The Queensland port network plays a vital role in the development of the State’s economy. While trade volumes across Queensland’s 20 ports have grown by 9.58 % over the past four years, there has also been calls for increased environmental protection to be afforded to the Great Barrier Reef.


To this end, in late 2012, the Queensland Government published its Great Barrier Reef Ports Strategy for public comment. The results of this public consultation process have informed the QPS, which builds on the commitments in the Great Barrier Reef Ports Strategy.


Strategic Objectives


The QPS is intended to provide the blueprint for managing and improving the efficiency and environmental management of Queensland’s port network and has a number of objectives including:

 

  • providing certainty and direction for future port planning;
  • supporting environmental protection, particularly in respect of the Great Barrier Reef;
  • supporting improvements in the management and productivity of ports;
  • enhancing supply chain connections; and
  • facilitating the strategic use of ports.

Vision And Key Actions


The Government’s vision is for ports to “drive economic growth through the efficient use and development of Queensland’s long-established major port areas, while protecting and managing Queensland’s outstanding environmental assets”.


From this vision, the Government identified the following five key actions:


1. Establishing Priority Port Development Areas 


The Government proposes to declare five priority port development areas (PPDAs) where development will be concentrated over the next decade. In total, there are already 20 ports along the Queensland coastline.
The five designated PPDAs are as follows:

 

  • Port of Brisbane;
  • Port of Gladstone;
  • Ports of Hay Point/Mackay;
  • Port of Abbot Point; and
  • Port of Townsville.

2. Concentrating Port Development


The Government proposes to introduce legislation in 2014 that prohibits capital dredging for the development of deep water port facilities outside the five PPDAs until 2024.


This proposal is informed by the UNESCO World Heritage Committee recommendation that port  development outside long-established major port areas within or adjoining the Great Barrier Reef should be restricted.


This prohibition would not prevent port development outside of the PPDAs for previously approved port projects or where capital dredging is not required or is required for safety reasons.


3. Reviewing port governance


The Government is reviewing the current governance arrangements for the Queensland port network and is assessing a range of possible options with the aim of determining which structures will best support capacity and productivity growth within the PPDAs and which will ensure that other ports continue to fulfil their strategic roles in the most efficient manner. Queensland ports are currently managed by four Government Owned Corporations (GOCs) with the exception of Port of Brisbane which is managed by a private sector operator following the privatisation of that port. The GOCs perform a number of functions including strategic port development but only Gladstone Port Corporation provides cargo handling services to producers of bulk commodities. The document setting out the draft QPS specifically notes that the Government is committed to undertaking further detailed investigation of the recommendation in the Queensland Commission of Audit Final Report that the commercial operations of Gladstone Port Corporation and Port of Townsville Limited be offered for long term lease to private operators.


The draft QPS also states that the Government will facilitate future commercial arrangements that support access to port infrastructure by multiple users so that strategic infrastructure assets are utilised to the greatest extent possible. It says
that this could be facilitated through commercial arrangements tailored to the circumstances of each port location and notes that Port of Brisbane has such provisions drafted into its leasing arrangements. It is clear that the Government will require private owners of port or individual terminal facilities to embrace some form of open access arrangement to prevent capacity hoarding by a single user.


4. Improving supply chain infrastructure coordination and delivery


The Government is committed to investigating and promoting productivity growth through improving logistics practices to optimise existing supply chain infrastructure (for example, through pricing mechanisms that encourage off-peak use or attracting more road freight to rail networks).


It is expressly noted that the improvement of existing supply chain infrastructure is not limited to land based infrastructure, with the Department of Transport and Main Roads developing a Sea Freight Action Plan which will review existing port infrastructure capabilities and consider options for coastal shipping.

 

Where it is identified that supply chains need to be improved or new infrastructure needs to be delivered, the Government states that it will seek to maximise the use of existing transport corridors so as to limit the numbers of transport corridors required.


5. Developing a statutory master planning guideline


In broad alignment with the National Ports Strategy, the Government has proposed that master plans be required for the PPDAs and encouraged for non-PPDA ports. Such master planning would take into account areas beyond the port’s boundaries, such as port facilities, strategic port land as well as supply chain connections and surrounding land use.


The Government will develop a statutory guideline so that master plans address all appropriate matters (such as land use, strategic objectives, supply chains and marine matters).


Comments


The QPS, unsurprisingly, has clear emphasis on environmental protection and management and sees this best done through the master planning concept (which importantly accords with approaches advocated nationally) with individual port master plans being required to conform to a statutory guideline which will be developed. Shipping management, a big issue recently along Queensland’s coast, is to be a “key consideration” for port master plans.

 

There is at least one interesting hint in the paper that compliance of master plans with the statutory guidelines will “position ports for regulatory streamlining benefits with the Australia Government”, presumably a reference to the Federal Government’s currently proposed “One-Stop-Shop” approach to remove duplication of state and federal environmental approvals.


Of course environmental issues associated with the Great Barrier Reef were a key driver behind the very fundamentals of the strategy, leading to the commitments in the strategy (to be cemented in place via legislation) to consolidate PPDAs to a “small number of long-established” major port areas.


The strategy is stated to be consistent with the National Ports Strategy and by integrating plans across ports is designed to improve port and freight infrastructure productivity and attract greater private sector investment. The strategy is part of a wider framework to improve supply chain coordination in the State and follows other recent initiatives such as the establishment of the North Queensland Resources Supply Chain which, amongst other things, considers the establishment of a supply chain coordinator for the supply chain corridor between Mt Isa and Townsville.


The strategy which confines development to the five key ports should also facilitate privatisations of the Port of Townsville and Port of Gladstone recommended by the Queensland Commission of Audit Final Report. The Audit Commission also recommended that Queensland Rail’s Mt Isa to Townsville rail line be transferred to Port of Townsville Ltd to integrate the Mt Isa to Townsville supply chain under a single owner prior to privatisation of the integrated business.


Next Steps


All stakeholders and industry participants should review the QPS and its implications. Submissions can be made to the Department of State Development, Infrastructure and Planning, or via its online survey available here until 13 December 2013.


The new legislation requiring improved master planning for the major ports and prohibiting capital dredging for the development of deep water port facilities outside the PPDAs will be enacted in 2014. The implementation of the remaining keys actions of the QPS (namely, reviewing port governance, improving supply chain infrastructure coordination and delivery and developing a statutory master plan guideline) will be informed by the consultation on the QPS.

 

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For further information, please contact:

 

David Mason, Partner, Ashurst
david.mason@ashurst.com


John Briggs, Partner, Ashurst
john.briggs@ashurst.com


Paul Newman, Partner, Ashurst
paul.newman@ashurst.com


Jamie Ng, Partner, Ashurst
jamie.ng@ashurst.com


Shane Bosma, Ashurst
shane.bosma@ashurst.com

 

Nerida Cooley, Ashurst
nerida.cooley@ashurst.com


David Morgans, Ashurst
david.morgans@ashurst.com

 

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