8cbc146702a517e-intermodal freight terminal feasibility study - final

Prepared for Victorian Department of Infrastructure Regional Development Victoria and City of Greater Geelong

September 2007

Geelong Intermodal Freight Terminal Feasibility Study: Final Report

Feasibility Study: Final Report

NEW SOUTH WALES VICTORIA AUSTRALIAN CAPITAL TERRITORY

Copyright This work is copyright © 2007 Meyrick Consulting Group Pty Ltd The Copyright Act 1968 permits fair dealing for study, research, news reporting, criticism or review. Selected passages, tables or diagrams may be reproduced for such purposes provided acknowledgment of the source is included. More extensive reproduction permission must be obtained from the consultant whose contact details are shown below. Disclaimer Meyrick and Associates professional advice is prepared for the exclusive use of the party or parties specified in the report (the addressee) and for the purposes specified in the report. The report is supplied in good faith and reflects the knowledge, expertise and experience of the consultants involved. Meyrick and Associates accepts no responsibility whatsoever for any loss occasioned by any person acting or refraining from action as a result of reliance on this report, other than the addressee.

For information on this document, please contact:

Jeremy Brown Senior Consultant Level 4, 12-20 Flinders Lane, Melbourne VIC 3000 Australia TEL +61 3 8643 4100 FAX +61 3 8643 4111 Email: [email protected] Mobile: 0409 964 272

Meyrick Reference: 11161

Meyrick and Associates is the trading name of Meyrick Consulting Group Pty Ltd, ABN 60 113 345 743, which is incorporated in N.S.W.


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Table of Contents EXECUTIVE SUMMARY ......................................................................................................................................... 2

Key Recommendations...................................................................................................................................................2 Suggested Forward Workplan ........................................................................................................................................3

1. INTRODUCTION .......................................................................................................................................... 4 2. DEMAND FOR AN INTERMODAL FACILITY IN THE GEELONG REGION................................................ 6

2.1 Target market identification ................................................................................................................................6 2.1.1 Dairy processors .............................................................................................................................24 2.1.2 Grain and malt.................................................................................................................................27 2.1.3 Fertiliser and quarry products .........................................................................................................34 2.1.4 Foodstuffs .......................................................................................................................................37 2.1.5 Other high potential containerised freight .......................................................................................38 2.1.6 Summary of potential freight task that could be captured by an IMT..............................................39 2.1.7 Success factors...............................................................................................................................40 2.1.8 Phasing ...........................................................................................................................................40

2.2 Bulk and break bulk potential ...........................................................................................................................41 2.2.1 Non-container freight.......................................................................................................................41 2.2.2 Victorian freight corridors ................................................................................................................41

2.3 Commodities by corridor ..................................................................................................................................42 2.4 Potential business ............................................................................................................................................44

2.4.1 Paper products................................................................................................................................44 2.4.2 Aluminium .......................................................................................................................................45 2.4.3 Brown coal based products.............................................................................................................45 2.4.4 Bulk liquids......................................................................................................................................46 2.4.5 Cement............................................................................................................................................46 2.4.6 Fertiliser ..........................................................................................................................................46 2.4.7 Foodstuffs .......................................................................................................................................46

2.5 Needs and success factors ..............................................................................................................................46 2.6 Rapid benefit cost assessment ........................................................................................................................47 2.7 Outcome of detailed supply chain analysis ......................................................................................................49

3. ASSESSMENT OF SITE OPTIONS........................................................................................................... 50 3.1 Heales Road.....................................................................................................................................................50 3.2 Gheringhap Siding............................................................................................................................................57 3.3 Oyster Cove at Lascelles Wharf precinct, Port of Geelong ..............................................................................60 3.4 GrainCorp bunker site, North Shore.................................................................................................................63 3.5 Lara Site ...........................................................................................................................................................64 3.6 Terminal design arrangements.........................................................................................................................71 3.7 Rail considerations ...........................................................................................................................................75

3.7.1 Railway operations and costs .........................................................................................................75 3.7.2 Specific Geelong to Melbourne circumstances ...............................................................................77 3.7.3 Track access...................................................................................................................................84 3.7.4 Conclusion ......................................................................................................................................85

3.8 Interim outcomes of site option assessment ....................................................................................................86 3.9 Road related heavy vehicle access considerations..........................................................................................86

3.9.1 Traffic generation ............................................................................................................................86 3.9.2 Traffic distribution............................................................................................................................88 3.9.3 Heales Road site.............................................................................................................................89 3.9.4 Gheringhap site...............................................................................................................................94 3.9.5 Lara Site..........................................................................................................................................96

3.10 Key decision making principles ......................................................................................................................100 3.10.1 Initial criteria review outcome........................................................................................................101 3.10.2 Weighting of the decision making criteria......................................................................................101 3.10.3 Outcome of initial assessment ......................................................................................................102


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3.10.4 Outcomes of considering the Lara site..........................................................................................103 4. KEY RECOMMENDATIONS .................................................................................................................... 106

4.1 Demand for an intermodal facility...................................................................................................................106 4.2 Intermodal facility site options ........................................................................................................................106 4.3 Workplan going forward .................................................................................................................................106


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EXECUTIVE SUMMARY The GHD Meyrick Alliance has been engaged by the Victorian Department of Infrastructure (DoI), Regional Development Victorian (RDV) and the City of Greater Geelong to identify the role an intermodal logistics terminal (IMT) operation would play in enhancing rail freight transport activity in the Geelong region.

The study aims to understand the true demand for and interest in using some form of an intermodal facility in the region. The brief identifies four potential sites and asks for an assessment of likely demand for each location, together with an assessment of the suitability of the sites under the criteria of commercial viability; ownership and operational arrangements; and infrastructure capability. The client wishes to identify the key regulatory, policy and infrastructure issues from the study that can be readily translated as inputs into a subsequent business case for the preferred facility.

The four sites nominated as options for development are Lascelles Wharf precinct, GrainCorp bunker site (ex Ford Casting Plant land), Heales Road and the Gheringhap Siding. (See Figure 1.)

Following the delivery of the final report, a fifth site was identified in Lara (the Lara site). We have now revised our final report to include an assessment of the Lara site against the original recommendations of the feasibility study.

This revised report outlines the major outcomes of the feasibility study. Section 2 provides an overarching assessment of the demand for an intermodal facility in the Geelong. Section 3 assesses the site options available, including the likely degree of industry support. Section 4 concludes with the key recommendations from the previous sections and outlines a workplan going forward.

Key Recommendations 1. The supply chain analysis reported in section 2 indicates that there is a demand base for an

intermodal terminal. Potential capture of the freight task is estimated to be in the order of 42,000 TEU per annum and there is potential demand for significant non-containerised freight.

2. The principal demand potential for such a terminal is based on the containerised import export freight.

3. Existing non-containerised traffics moving into and out of Geelong and regional Victoria do not justify the development of an intermodal facility; but future capability to handle these commodities requires consideration of the long-term design capacity of the facility. As these commodities have a large catchment on broad gauge, any intermodal facility built should incorporate a ‘no-regrets’ policy in terms of broad gauge access.

4. The development of an intermodal facility whose core operations incorporate a container shuttle operation between the Geelong and the port of Melbourne is expected to provide the best short term potential.

5. As discussed in section 3.7, such a shuttle option is more appropriately suited to the standard gauge network given the paucity of rail paths available on the broad gauge line between Melbourne and Geelong.

6. Following technical considerations of the sites it was determined that the Lascelles Wharf and Graincorp bunker sites are inappropriate for IMT development and were thus excluded from further analysis.


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7. Although the Gheringhap and Heales Road sites are both suitable, the decision making matrix ranks the Heales Road site above the Gheringhap option. In particular, we found that the ability to attract business to the Gheringhap site is severely constrained by current supply chains.

8. It was therefore recommended that the development of an intermodal facility be pursued at the Heales Road site.

9. However, since the delivery of the above draft recommendations an assessment of the newly identified site at Lara against the same criteria prioritises its development over Heales Road.

10. Prior to pursuing any development at Lara it is recommended that the various agencies of government determine what the deem as appropriate policy, governance, finance and access arrangement given the private ownership of the land

11. Given clarity on these matters it is recommended that the government negotiate with the owner of the land with the aim of developing an intermodal terminal site that is of mutual acceptance.

Suggested Forward Workplan We propose that the following steps be undertaken as a practical input to the business plans for the development of the final terminal site.

Confirmation of the preferred option for more detailed evaluation More detailed cost-benefit assessment of any option going forward Confirmation of the facilities to be considered critical to establishing base case (e.g., container

park/depot, land and access availability for warehousing etc.) For container depot operation, initial discussions with potential participants (including carriers,

depot operators, shipping lines etc.) to determine anchor tenancies, potential operators and users. In support of a future detailed business case, confirm the need for, and set terms of reference for,

a more comprehensive base line study of existing and potential manufacturing and freight interests (e.g., origin/destination of target freight volumes within and passing through the hinterland)


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1. INTRODUCTION The four sites identified in the original brief are identified in the following diagram (Figure 1)

FIGURE 1 SITES NOMINATED FOR INCLUSION IN THE FEASIBILITY STUDY*

*Fifth site at Lara not shown on map

The GHD Meyrick Alliance has been engaged by the Victorian Department of Infrastructure (DoI), Regional Development Victorian (RDV) and the City of Greater Geelong to identify the role an intermodal logistics terminal operation would play toward enhancing rail freight transport activity in the Geelong region.

The study aims to understand the potential demand for and interest in using some form of an intermodal facility in the region. The brief identified four potential sites (as outlined in Figure 1) and asks for an assessment of likely demand for each location, together with an assessment of the suitability of the sites under the criteria of commercial viability; ownership and operational arrangements; and infrastructure capability. The client wishes to identify the key regulatory, policy and infrastructure issues in the study report that will be readily translated as inputs into a subsequent business case for a preferred facility.


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The clients seeks to understand:

the current and future freight task for such a facility the key considerations that shippers and transport companies will take into account when

considering alternative supply chains the operational requirements for the terminal to meet or to exceed the needs of shippers, whilst

also contributing to a sustainable transport system in Victoria the road and rail transport linkages required to cost-effectively manage current and future freight

tasks the most prospective commercial and operational models for such a facility the role of different agencies and levels of governments in ensuring the sustainable future of such

a facility.

This report outlines the major outcomes of the feasibility study. It provides an overarching assessment of the demand for an intermodal facility in the Geelong area and also assesses the site options available, including the likely degree of industry support. It concludes with initial recommendations and a forward work plan.

Following the delivery of the final report, a fifth site was identified in Lara (the Lara site). We have now revised our final report to include an assessment of the Lara site against the original recommendations of the feasibility study.


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2. DEMAND FOR AN INTERMODAL FACILITY IN THE GEELONG REGION In the first stage of the study, the potential freight task that might be attracted to an intermodal freight terminal in the Geelong region was investigated. This process involved documenting the major current and future freight tasks and supply chain arrangements, as well as developing some broad volume estimates for the regional freight tasks identified.

Assessment of the volumes and routes were informed by previous work in the sector and by review of relevant strategic documents, including:

The DoI Container Origin-Destination Study The Geelong Rail Access Improvement Project Freight forecasts developed for the Geelong Strategic Land Use Plan and in strategic work carried

out for the port operator, Toll GeelongPort.

Estimates of potential volumes, based on information acquired prior to detailed discussion with industries involved were assembled. These estimates were then validated in stage two through interviews with key executives of companies surveyed. A listing of the stakeholders interviewed for this study is located in the Appendix on page 108.

2.1 Target market identification Table 2.1 presents an initial sweep of possible commodities, industries and companies that could be interested in the establishment of an intermodal terminal in the Geelong region. Table 2.2 presents an assessment of the likelihood of each as a potential user of the IMT, and the potential volume of freight each is likely to generate.


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TABLE 2.1 INDUSTRY AND COMMODITY: INITIAL SWEEP OF POTENTIAL FREIGHT AND LOGISTICS TASKS

Commodity/ industry group

Cluster location Nature of task Companies Company Location

Dairy processing South West Victoria

Other clusters:

Gippsland

Goulburn-Murray Irrigation District

Transport factory to store

Storage – dry and reefer

Pack and load out exports (containers)

Domestic distribution

MGC

Nestlé

Bonlac (Dairy Farmers)

Warrnambool Cheese & Butter

Tatura

Outside Victoria:

Dairy Farmers

Kraft Foods

Meiji

National Foods

Nestlé

Parmalat

Snow Brand

Koroit

Dennington (Warrnambool)

Cobden

Allansford (Warrnambool)

Tatura, Vic


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Forestry Central, Western and South western Victoria

Other clusters: Gippsland (harvest, processing)

Portland (storage and export)

SE of S Australia.

Harvest

Transport to plant

Processing (woodchip, sawn timber, semi finished products), by-products

Storage (woodchip, logs)

Transport to export wharf

Auspine

GTFP

Pentarch

AKD

Tasco

Midway

SPE

Timbercorp

Tarpeena, SA

Mt Gambier

Geelong and Portland (HQ South Melbourne)

Colac

Lara

North Shore (port)

North Shore (port)

Hamilton

Paper Gippsland

SE of S Australia

Import of bleached pulp for paper mills

Distribution of finished paper products

Paperlinx

Kimberley Clarke

Morwell (HO Mt Waverley)

Millicent-Mt Gambier


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Pulp manufacture SW Victoria

SE of S Australia

Harvest of raw materials (log)

Processing/manufacture

Distribution – export/domestic(?)

Protavia Heywood, Vic

Penola (Kalangadoo), SA

Fertiliser Geelong (Lara, North Shore)

Import of raw materials

Processing/blending, manufacture

Distribution (domestic)

Incitec Pivot

Hifert

Southern Fertiliser

Plants and stores - Geelong

HQs - Melbourne

Aluminium (smelter) Geelong (PointHenry)

Portland

Import of raw materials (bulk)

Smelting

Rolling mill

Storage and distribution (domestic)

Load-out for export (break bulk and container)

Alcoa consortium Pt Henry (Geelong)

Portland


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Cement Waurn Ponds

Import of raw materials (gypsum – overseas and domestic)

Distribution to domestic market

Blue Circle

Boral (?)

Waurn Ponds

S Melbourne

Altona (?)

Plasterboard Melbourne – Yarraville, S Melbourne, Altona

Import of raw materials (gypsum – overseas and domestic)

Distribution to domestic market

CSR

Boral

Lafarge

Yarraville

S Melbourne

Altona

Glass Geelong Import of sheet glass (ex Dandenong)

Manufacture of automotive glass

Distribution to domestic auto plants

Exports (Aus input to Thai build cars?)

Pilkington Geelong


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Automotive Geelong

Melbourne west – Broadmeadows and Altona

Import of steel coil

Pressing panels

Storage/distribution coil and product

Ford

Toyota

Geelong (panel plant)

Broadmeadows (assembly)

Port Melbourne (HQ)

Altona (assembly)

Carpet, textiles and fibre

Geelong Import fibre (NZ?) and componentry

Storage

Distribution to domestic (export?) market

Godfrey Hirst

Brintons

At least 15 potential companies in the western suburbs of greater Melbourne.

Geelong

Breakwater (Geelong)

Central and western suburbs, Greater Melbourne

Meat and seafood Warrnambool Processing

Storage – reefer, dry(?)

Pack and load-out, domestic and export

Midfield Group (meat)

CRF

SW Seafoods

M C Herd

Warrnambool

Colac

Port Fairy

Geelong

Manufacturers: Wine

SW Victoria

Limestone Coast (SA)

Bulk inwards and storage

Blend

Pack and load-out, domestic, export

Pettavel

Scotchmans Hill

Waurn Ponds

Drysdale


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Manufacturers: Apparel

Geelong

Ocean Road (Torquay)

Storage

Pack and load-out, domestic, export

Quicksilver

Rip Curl

North Geelong

Torquay

Manufacturers: Pharmaceuticals

Port Fairy Manufacture

Domestic distribution GlaxoSmithKline Port Fairy

Manufacturers: Mineral based

Geelong Import raw materials (bulk)

Processing

Storage and distribution

Omya North Geelong (Port)

Moolap, Geelong north Drying, processing

Storage and distribution Cheetham Salts Moolap

Wool Melbourne west – Brooklyn, Footscray, Brooklyn

Aggregation, storage, dumping and packing for export

Australian Wool Holding (AWH) and Elders

E P Robinson

Techwool

Many others…

Lara

Laverton


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Lara

Altona North

Aggregate and store grain

Pack and load-out for export (containers)

Riordan Grains

Professional Grain Services (PGS)

…others (Cargill etc.?)

Lara

Altona North Grain

Geelong Aggregate and store grain

Pack and load-out for export (bulk and container)

GrainCorp Geelong (Port)

Grain - malt Geelong

Melbourne

Aggregate and store grain

Process to malt

Store, pack and load-out for export (containers)

International Malting

Barrett Burston Geelong (Port)


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Carriers/logistics/ 3PL

Geelong

Melbourne west

Warrnambool

Road transport

Storage and distribution

Logistics (3PL etc.)

Kalari (ex Transwest) (Swire)

K & S

Amezdroz

G D Robertson

McColls

Linfox

Toll

TNT (automotive)

A&R Neil

Westvic Containers

IML (Jebsen)

Costa

Josie’s

Norlane

Norlane (HQ Mt Gambier)

Colac

Moolap

Geelong South

Melbourne

Melbourne

Altona

Colac

Warrnambool

North Shore (HQ Melbourne)


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Chemicals and lubricants

North Geelong Import raw materials (bulk liquids)

Store, process and blend

Storage and distribution (domestic)

Shell (lubricants)

Basell (chemicals)

Terminal Pty Ltd (chemicals and bio-diesel)

Axiom

Shell Refinery, North Geelong

Shell Refinery, North Geelong

North Shore (Port - Oyster Cove)

Melbourne

Agriculture/ horticulture

Golden Plains

Bellarine

Poultry

Olives

Wines

Fruit

Donnybrook

Hazeldenes

Steggles (?)

Modern Olives

Murrudoc Olives

Villa Olives

Costa (?)

Griffith

Lara

Manerim

Newtown

Retail distribution DC operation (?)

Costa


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TABLE 2.2: MAJOR TRADE POTENTIAL

Commodity group Freight task Location/supply chain Potential for IMT

Dairy Whole milk is trucked from farm to processing plant. Product, in refrigerated or dry powder form is stored, usually off-site and packed into containers for export or domestic distribution.

SW Victoria (Cobden to Koroit) is the largest cluster. Supply chain for products is mostly by road to Melbourne’s western suburbs, then in containers by truck to Swanson.

Although major processors have their own stores and distribution chain, there may be opportunity to re-jig this over time. Independents may move more quickly.

Volume known to be in excess of 30,000TEU per annum (500,000 pa plus).

Domestic distribution would also be of interest.

Major ‘industry cluster’ potential.

Forestry Logs are processed at sawmills or in-plantation.

Sawn timber is packed and distributed by road to domestic markets.

Some added value products are produced or being developed.

By products are marketed (chipped or in garden products form).

Logs and chips are trucked or railed to Geelong (or trucked to Portland).

Sawn timber and round wood products from mills in SE of South Australia, Colac, trucked to Australian east coast markets.

Logs and woodchips are moving now through the port of Geelong, requiring storage. However, neither is particularly suited to IFT type operation. Logs are messy to handle and woodchip, being a low value bulk product, relies on proximity to export wharf to maintain viability.

Industry has discussed cluster type development for added value products but little progress has been made to date. Total volume 1-2Mtpa but added value volume maybe small (50K tpa).


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Paper Major producer of toilet tissue, facial tissue and paper towel products. Also located on this site is a thermo-mechanical pulp (TMP) operation. Paper products are generated from the SE of S Australia (Kimberley Clark). Pulp is sourced locally from their own mill and from South America .

Pulp trucked Tantanoola to Millicent mill.

Products by truck to east coast centres.

Pulp trucked from Portland to the Millicent mill.

Distribution throughout the eastern seaboard is by road. Potential for consolidation at Geelong IFT, particularly if Mt Gambier/Heywood rail were restored. Could be a target but little competitive benefit over other locations so not high priority for a case study.

Trade volumes estimated at 100,000 tpa in total.

Pulp Bleached pulp Imports through Portland, Melbourne or Geelong. Stored in wharf transit sheds and thence to mill storage (Morwell).

Insufficient volume – possibly 25,000 tpa. Also supply chain shifts depending on ship calls (semi-liner – call patterns vary).


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Fertiliser Fertiliser is manufactured or blended from raw materials (rock phosphate, sulfur, urea etc.). Some is imported in finished product form.

Import of large volumes of raw materials in bulk into Geelong, Portland, decreasing amounts through Melbourne (Maribyrnong).

Storage/manufacture at North Shore (adjacent to port). Also at Lara (Hifert, Southern Fert).

Distribution mainly by road throughout Victoria, Southern NSW

Large volumes involved. Geelong imports total over 1 million tpa (2005-06). There was a small export trade, ~50,000 tpa but most of the rest would constitute product for distribution.

Industry restructuring has made situation dynamic. There may be potential, particularly as Hifert, with approximately 20% of the market is already located at Lara. Incitec Pivot has focussed on North Shore, where there may be potential for Lascelles or GrainCorp sites.

Aluminium Import raw materials in bulk. Smelting and production of aluminium in slabs or ingots.

Rolling mill produces sheet, coils.

All activities at Point Henry. Slab/ingots for domestic and some export by flatbed truck to Melbourne. K&S have the contract and cart to Altona for packing in containers. Package size varies from 1.5t units to 10t slabs.

Other product unitised and shipped through Corio Quay.

There may be potential. Although K&S have this market at present, there is some rail potential. Currently interstate as far as QLD goes by taught-liner. WA not served currently.

Volumes are not known in detail but estimated at 50-100,000tpa for domestic distribution or for export to spot markets.

Issue may be that product is stored at Pt Henry and trucked/packed and shipped on just in time basis, incurring no third party storage costs.

Empty containers held in IMT depot could be a selling point.


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Cement Blue Circle dry kiln cement works at Waurn Ponds supplies eastern south eastern Australia.

Plant at Waurn Ponds produces 700,000 tpa. Imports gypsum (approx 200,000 tpa).

Distributes to Dandenong, Somerton plants by railcar and truck.

Supply chain appears to be mature with owned packing and distribution facilities in Dandenong, Somerton.

Worth asking but unlikely to be immediate prospect for IMT.

Gypsum (Plasterboard)

Import of raw material (gypsum ex S Australia) and kraft paper.

Manufacture board and distribute Victoria wide.

Gypsum is imported into Victoria by sea, currently through Maribyrnong and Geelong. ~50-100,000tpa goes to Blue Circle (Waurn Ponds) by road ex Geelong.

In Melbourne, it is unloaded by CSR at Yaraville, with up to 40% going to Boral (Port Melbourne) and 15% to Lafarge (Altona).

Supply of all gypsum via Geelong has been discussed, with distribution to Waurn Ponds, Altona, Yarraville and Port Melbourne by truck on a J.I.T. basis.

Carriers (Transwest, Kalari) have shown interest in this previously.

Disadvantage for an IFT is that it is bulk material but there is potential.

Total volume is 450-500,000 tpa.


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Glass Plate glass is trucked to Geelong and Laverton from Dandenong for treating and production of automotive glass. Product used by both new car assemblers and replacement industry.

Plate glasses in stillages Dandenong to Geelong.

Finished glass in trucks to assemblers (Broadmeadows, Altona etc.) and for replacement market.

Volumes not known. There appears to be a mature supply chain in place, with plants feeding 130 retail distributors and manufacturers Australia wide.

Possibilities for an IFT but rail mode may be difficult to sell.

Automotive Manufacture of panels at Ford’s Geelong plant, with delivery to Broadmeadows.

Possible distribution of car imports if Geelong is successful in attracting the business.

Steel sheet in coil form landed Geelong (or Melbourne at times). Distributed to Ford Geelong and to Toyota, Altona.

Distribution of panels to Ford Broadmeadows (B-triple)

There appears little possibility unless space on the wharf drives off-wharf storage. Then storage and just in time delivery may be feasible.

Toll is pursuing imported new vehicles for Geelong. Probability is that they would be stored adjacent to the wharf and either trucked out or, possibly, railed from a new rail spur into Corio Quay West.

Lascelles location becomes of interest although car imports currently planned for CQS.

Carpet, textiles Manufacture in Geelong involves both import of fibre (ex NZ?) and distribution to domestic markets and for export.

Geelong Most movement would be in containers so packing facilities and empty depot.

Not high volume but high value and specialised handling makes this a possibility.


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Meat and seafood Meat is being processed and trucked from Warrnambool for export and domestic markets.

By truck (reefer pantechs) Warrnambool to Melbourne. Some containerised at plant for export.

Potential for refrigerated storage and/or industry cluster for foodstuffs (meat, sea-foods, fruit, wine etc.)

Wine Wine from several regional wineries is being exported and distributed domestically.

Mostly by road with some export containers packed at the winery.

See above.

Manufacturers Apparel from specialised surf style companies is stored, packed and shipped out by road for export and domestic markets.

Companies are based in Torquay and Geelong.

Imports or domestic supply of textiles and componentry.

Not high volume but high value may justify a centralised approach to storage, order picking and load out.

Cluster potential.

Wool Wool is aggregated to central stores by road. Previously Geelong has been an active participant but now the cluster appears to be in the Footscray area.

Low volume currently handled in Geelong.

Geelong has lost this industry with the closure of the Wool Combers business. An IMT could attract industry back if it combined lower storage costs with the ability to source empty containers locally. It would be hard-won business.


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Grain Coarse grain is mostly handled in bulk. However, there is a relatively small but increasing trade speciality lines and several companies including GrainCorp have interest in packing in containers.

Main thrust is currently by:

PGS – Altona plant receives grain by road, stores and packs into export containers.

Riordens carry out a similar activity at Lara.

GrainCorp plan to compete also.

PGS and Riordens have their own storage, although Riorden may be space constrained at their current site.

GrainCorp will see possibilities, particularly if the IMT is located close to their North Geelong port terminal.

Worth consideration (in conjunction with malt?) as a case study. Volumes variable but could be 100,000 tpa plus.

Malt Malt is processed from barley in three plants in the Geelong area. The product, in bags or neo-bulk is distributed domestically and exported.

The maltsters receive barley in bulk by truck, or ex GrainCorp storage. The malt is put in bags or bulker bags and containerised for export.

Estimated Victorian malt production/sales

Domestic 75,000 tpa

Export 45,900 tpa

(Assuming 60% of Victorian sales is supplied by the two main Geelong maltsters)

Potential if aligned with containerised grain sales above.

Carriers/logistics Road transport, storage, container pack/unpack etc

Potential as developers or participants

Chemicals/Lubricants Mainly liquids produced from the cat cracker in refineries or from imported ingredients; much hazardous.

Storage, packaging and distribution domestically

Potential but volume is relatively small and there are risks. Not seen as a major user but possible if specialised storage developed. Removes it from land conflicts if at a remote site.


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Agricultural Major possibilities include increasing development of broiler industry around Lethbridge, plus existing processing.

Inward movement of feed (truck, now from the port of Geelong).

Refrigerated storage

Distribution domestically by road (exports?)

Possibility to target supply chain by consolidating import feed and managing product distribution (3PL) through storage at IFT, with cross docking facility.

Retail distribution Storage, order picking, load out and distribution

Potential for wholesale/retail DC operation by 3PL/4PL.

Steel (non-automotive)

Steel is imported through the port of Geelong and distributed Victoria wide.

Scrap steel is consolidated in Geelong for road move to Melbourne for domestic steel makers or export.

Transit storage on wharf (Corio S).

Distribution by road by taught-liner or flat-deck.

Scrap moves in trucks to Melbourne and beyond.


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As an outcome of the first stage of the study, it was determined that the following supply chain case studies would be the focus of investigation by the Alliance study team:

1. Dairy processors

2. Grain and malt

3. Fertiliser and quarry materials and

4. Foodstuffs.

In progressing these supply case studies the study team members have held structured interviews with key freight shippers and major transport providers in the Geelong region. In addition to developing information on which to base supply chain assessments, the interview process also provided information on other trade flows that may be of significant potential for the IMT. These traffics may provide support for the base case business.

The following sections summarise the case studies that were undertaken and also incorporate discussion of other potential freight traffic which has been identified in the course of our discussions with key stakeholders. As a result of our preliminary interviews we also incorporated the following commodities which appear suitable for transfer through a proposed terminal in the Geelong region:

Consumer goods Wool Steel

2.1.1 Dairy processors

Industry overview FIGURE 2: DAIRY PROCESSING INDUSTRY, VICTORIA – LOCATIONS AND SUPPLY CHAINS

Tatura

Dennington Cobden Allansford

Koroit

Kyabram

Darnum


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The main dairy processing cluster is in the south west of the State around Warrnambool, within other plants in the north and in Gippsland. Farm milk supplies are trucked to processing facilities where they are packed and distributed as whole milk, and as products for domestic and export markets including dry products (milk powders, whey, lactose etc.), cheese, butter, consumer packs of yoghurts etc., and drums of oils and fats.

The industry has been going through substantial change in the last few years but can be described now as reasonably stable. Milk production is generally growing. The domestic market for whole milk being slowly growing, much of the farm milk is now being processed and exports are increasing.

It is predominantly the export trade that may be seen as potential for the proposed IMT, although distribution of domestic products is substantial.

Participants

The following table summarises the main industry participants with freight tasks relating to the region.

Companies Company Location

Place in market Freight task

Murray Goulburn Cooperative Koroit Second in importance

Fonterra (ex Nestlé) Dennington Largest market share

Fonterra (ex Bonlac) Cobden

Warrnambool Cheese & Butter (WCBC)

Allansford Major independent

Tatura Tatura, Vic

Aggregation of farm milk (all)

Processing (all)

Storage and distribution to domestic and export markets (all)

Imports (Fonterra)

Supply chain analysis

Key issues:

Mature supply chain

Owned facilities (e.g., MGC – long horizon)

Heavy preponderance of road

Flexibility and service levels of road vs. rail

Reliability – meeting cut-offs etc.

Volumes, modes and routes

Total volumes flowing from the SW Victorian area (MGC and Fonterra plants) to Melbourne (Altona and the port) are estimated at approximately 250,000 tonnes or the equivalent of 13,000 TEU per annum at 18 tonnes average payload. WCBC is estimated to add a further 50,000 tonnes or 3,000 TEU.


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Destination Analysis

All imports and exports of processed dairy products noted above would be moving by container to export markets, directly from processing plants or from the distribution centres in Melbourne’s western fringes. The product moving to DCs for storage and packing into containers mainly moves in taut-liner or pantechnicon trucks, temperature controlled where necessary.

Detailed case study: Fonterra Company background

A NZ based dairy conglomerate, Fonterra acquired the assets and business of Bonlac and now operates the most diverse of the dairy processing businesses in Australia. The activities include processing of dairy products from whole milk at a range of facilities spanning Victoria. Although drought conditions have impacted on production, the growth in milk production overall and the slow growth in whole milk sales mean that exports are growing steadily. In addition, the transnational characteristic of the group has generated increasing imports, both for domestic distribution and for use in processing plants. Consumer items are also brought into the region from Western Australia. Storage is focused on the company owned facility in Altona (the Melbourne Distribution Centre or MDC), although capacity and surge requirements mean external storage also.

The result is a large (growing), complex and dynamic supply chain.

Locations and activities

FIGURE 3: FONTERRA – VICTORIAN LOCATIONS AND SUPPLY CHAINS

Dennington

Cobden

Kyabram

Darnum Allansford

MDC (Altona)

From WA


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Facility Imports (TEU) Exports (TEU)

MDC (from all plants) 7,700 10-12,000 (7,500 in 2007)

Dennington 100

Cobden 50

Kyabram 600 200

Oxford (for intermittent surge storage)

2,500

Total (excl surge storage 8,450 11,200(avg)

Movements to and from Dennington, Allansford and Cobden and the MDC are mainly undertaken by rail. All other tasks are undertaken by road, with road being approximately 15% cheaper than rail. There are thus issues regarding the impact on Warrnambool rail freight if road to a Geelong based IMT is considered.

Potential interest in the IMT

Fonterra indicates an open mind to the use of an IMT at Geelong. Although the Altona distribution centre is a large investment and works well, Fonterra indicates that its options are open for the longer term. Even in the short term there is potential – they currently store over 50,000 pallets in third party stores and are apparently prepared to review arrangements.

2.1.2 Grain and malt

The supply chain for malt and for the grain moving in containers is essentially similar. The summary below considers grain first, and then malt, and combines the two in terms of volumes and issues.

Grain production relevant to any freight terminal in the Geelong area comprises effectively the full range of varieties grown, listed by GrainCorp as wheat, barley, oats, legumes and oilseeds. Wheat is grown for both domestic use and for export, although the former understandably has priority. Barley comprises various grades, including feed grade and traditional malting barleys such as schooner and sloop. The malting grades are used in the domestic brewing industry, and exported in both grain form (particularly to China) and processed in malt form by the three Victorian maltsters. Whilst the majority of the grain has been exported in bulk form, there is a growing trend towards containerisation, both in bulk and in bags. It is this latter business that will generate interest in intermodal facilities and is the main thrust of the case study. The study looks at the industry in general terms and then details the supply chain issues for specific companies, chosen to be as representative as practicable of the industry as it is considered likely to evolve.


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Case Study 2 focuses on two aspects of the grain business, the first being grain itself, particularly that travelling in non-bulk form – i.e., containers, neo-bulk – and the second focusing on the processing of barley into malt and the storage, transport and distribution task for the bagged product, particularly for export.

This first section focuses on existing grain business centred on Geelong and the region, and the potential for increased independent packing of grain into containers for export. It will be predominantly focused on exports.

Grain overview

Grain is predominantly exported in bulk. The facilities in Geelong comprise a new grain terminal constructed by GrainCorp (then Vicgrain) on privatisation of the Port of Geelong in 1997. The Port retains the old terminal but this is now disused. Some smaller bulk shipments were made over Corio Quay but these were spasmodic and have fallen away to nothing over the last few years.

Export volumes through Geelong vary widely, influenced mainly by weather related yield factors, but also with competition from a new grain terminal developed in the port of Melbourne. Geelong can handle as much as two million tonnes in a good year, although the recent drought has seen this fall to less than 300,000 tonnes in the 2006–07 season. In view of competition discussed above, it is unlikely that the same high levels will be achieved in future although volumes in excess of one million tonnes may well occur. The long run average is approximately 900,000 tonnes per year.

Grain is received into the GrainCorp terminal by both rail and road, direct from country receival depots (silos) and from farm transport. The grain is stored in vertical silos, a large horizontal shed and, in good years, under tarpaulins at an external bunker site in Seabeach Parade, North Shore (a potential site in this study).

Bulk grain is loaded into ships through a dedicated ship-loader, fed by conveyors from the on-site storage. Some grain (barley) is also received, stored and supplied to the two neighbouring maltsters, International Malting and Barrett Burston Malting.

FIGURE 4: GRAIN AND MALT: GRAINCORP GEELONG PORT TERMINAL; IMC’S MALT PROCESSING FACILITY, GEELONG


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Grain Industry structure and participants

Previously, GrainCorp has had effectively a monopoly handling export grain in bulk. Geelong is one of its two Victorian port terminals, Portland being the other. GrainCorp has resulted from the merging of Vic Grain and the NSW based GrainCorp, who operates port terminals throughout the eastern seaboard. The occasional bulk shipments from Geelong not handled by GrainCorp have found it increasingly difficult to obtain dispensation.

The position of GrainCorp as the primary bulk-handler in Victoria has been eroded by the development of the Melbourne grain terminal, part owned by AWB. However, its long term viability is probably assured, given its large storage and load out capacity and its prominent position at Geelong, where it is arguably not constrained as badly as the Melbourne terminal by conflicting land use. Also its facilities are well depreciated. It uses part of its Geelong capacity to handle woodchips as a toll loading operation for Southern Plantation Softwoods (SPE), which has recently expanded to handle all softwood chip exports on behalf of itself and competitor, Midway. The company also trades in fertiliser, loading this out by road and into farm trucks back-loading after delivering grain.

Although AWB has had an effective monopoly on bulk exports of wheat, the predominant variety, there has been a burgeoning business packing smaller consignments in containers for export. This has been led by PGS (see below) at its Altona facility, with Lara based Riordan accelerating rapidly to become a major competitor in the last few years. Both rely on packing and delivering to the container terminal smaller consignments that have been permitted under the regime to date. With changes in the industry – not least the prospect of AWB losing its monopoly position on exports – and more players waiting to enter as the regulatory regime changes, there is likely to be an increase in this style of shipment. GrainCorp, keen to meet its competitors head-on, is looking to start this type of operation shortly (see more details below).

Currently the following companies are active in the region.

Companies Company Location Freight task Place in market

GrainCorp Geelong (port terminal)

Receive, store and export grain in bulk and, in due course, in containers.

Leader in bulk; new entrant into packaged product

Riordan Grain Services

Melbourne Road, Lara

Receive, store, pack and transport grain in containers for export via Port of Melbourne

Smaller than competitor PGS but growing. Solid local support

Professional Grain Services (PGS)

Altona Receive, store, pack and transport grain in containers for export via Port of Melbourne

Owned by ABB Ltd (Barley Board). Currently market leader in containerised grain. Will be target for GrainCorp, whose business they erode.


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Unigrain Lara Receive, store, pack and transport grain in containers for export via port of Melbourne

Similar to Riordan but smaller volume. Solid local support

Industry contacts confirmed that there are other substantial companies who may well enter the business in the short term as industry issues (i.e., export monopolies) are resolved. The view was expressed that there is existing capacity for 50,000 TEU per annum, and majors are planning entry and existing operators, expansion.



Bulk grain is delivered to port terminals (Geelong, Portland and Melbourne) predominantly by rail. A small percentage is transported in farm transport, which often backloads fertiliser from Lara and Geelong.

Containerised exports are delivered by road into packing facilities, and rail in the case of the planned packing operation at GrainCorp, Geelong.

Empty containers are trucked from the Melbourne, predominantly by B-doubles. Full containers are returned to Melbourne, either direct to the wharf or, to fit with receival windows, unloaded and held at carriers’ off-wharf depots.

Unigrain LaraRiordan Lara

PGS Altona

Riordan Ballan

Portland

ABA Terminal

Geelong port

BULK GRAIN

BULK GRAIN

BULK GRAIN

Port (container) Port (bulk) Packing facility Bulk grain


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Impact of intermodal concept

The main issues for the container movements are the supply of empty containers and the timing difficulty of delivering containers to export terminals in Melbourne within the receiving time for the nominated vessel. With the constraints of meeting Vehicle Booking System windows and achieving cut-offs, containers will be held by carriers off-wharf, and ‘bulk-runs’ into the terminal booked to avoid truck demurrage.

Major savings may be achievable if containers can be picked up and dropped off locally. Industry contacts noted that running a small number of semi-trailers between the packing facility and the IMT will be less costly than the current B-double movements via the Princes Highway.

The intermodal concept will work for this cargo provided key service aspects are met. These are primarily:

Reliable rail service to get containers from the IMT to export terminals within specific windows Empty containers available locally in export ready condition, i.e., cleaned, upgraded as necessary Flexible (24 hour) receival at the IMT.

Detailed case study: Riordan Grain Locations and activities

Operating two facilities, Riordan receive, store and pack grain for export. The main facility is at Melbourne Road, Lara, the other at Ballan. The main activity is packing bagged or bulk grain in 20′ containers.


Without constraints, the Lara facility is capable of packing two 20′ containers per hour, 24/7. This would indicate 17,472 TEU per annum given year round supply. Even if the season were only six months, Riordan alone would be shipping 8,000 plus TEUs. This will increase to at least 60 containers per day in 2008, possibly as high as 80 per day. An annual volume of at least 15,000 and possibly 20,000 plus TEUs is possible. The assumption is made that 15,000 TEUs will be the ongoing average.

It is Bill Reardon’s view that when the export of wheat is deregulated there will be a strong shift to containers. This is because the movement of empty containers out of Australia provides an opportunity to carry export cargoes at low rates for those hipping companies prepared to offer low rates. He estimates that grain can be shipped to overseas markets for as much as A$25 per tonne cheaper by container using the ‘back-load’ of empties that would otherwise have to be shipped back to Asia empty. Current local capacity to pack say 50,000 containers per year will increase as other traders (e.g., Cargill, Louis Dreyfus) enter the market.


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Impact of intermodal concept

Riordan lists several current constraints to volume that would prevent the company achieving its 60 per day target. Supply is not an issue. Riordan stresses that it can get as much grain as it needs. The first constraint is 24 hour access to Melbourne wharves and a further constraint is the lack of ‘refurbished’ containers available in the area. The company is so convinced of this that it is considering setting up a depot facility offering empty container storage, cleaning and minor repairs, painting etc. locally. If the terminal were to offer this facility, plus savings mentioned below, there would be strong interest.

Current supply chain costs

Currently all containers are trucked to Melbourne, some being held there off-wharf awaiting vessels’ receiving times. Cost is approximately $300 per TEU, including pick up from Swanson or an off-wharf depot, transport to Geelong yard (e.g., Josie’s), shuttle to Riordan for packing and transport back to wharf direct or via Melbourne depot. The cost of the double handling – unloading at the carrier’s yard and loading out – is factored into this rate.

Cost savings available

Riordan can save up to $70 if it uses its own transport to and from Josie’s yard. The indication is that the new facility would have to offer a rate better than $230 from gate to Melbourne wharf to start to provide savings.

Malt overview

Malt is processed from barley and is used predominantly in the brewing industry. Australia is a major world supplier with the majority of the product from the region going to export in bulk, bulker bags and in bags. The demand is growing.


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Industry structure and participants

There are three major malting operations in Victoria, two of which are located in Geelong on each side of the GrainCorp port terminal.

Companies Company Location Freight task

International Malting Company North Geelong Receive 85,000 tonnes annually, 50% by road from storage at Riordans, Lara, and the remainder by road and rail from country receival depots (GrainCorp). Exports by container, packed at site, trucked to Melbourne container terminals. Domestic supply by bulk trucks.

Barrett Burston North Geelong Receive 120,000 tonnes annually via conveyor from GrainCorp storage. 100,000 tonnes of malt is produced, 50% for domestic market (contracted to CUB) and 50% for export. Exports by container, packed at site, trucked to Melbourne container terminals. Domestic supply by bulk trucks.


Grain receivals already use rail to some extent, using GrainCorp’s aggregation network. Outward movement is all by road currently, with some trucked in bulk to the domestic market but most being packed into containers for export. Most containers are 20′ with 18 tonnes payload. Current capacity suggests an industry export task of around 7,800 TEU per year but IMC forecast tripling their volume if planned expansion takes place. This would suggest a potential industry annual volume of perhaps 15,000 TEU.

Grain and malt summary

There is no doubt that there is potential for conversion of both grain and malt exports, both for individual companies and for the industry. This will depend on various service elements, including reliable rail services and the facility to drop off and pick up containers within an acceptable distance from the packing facilities.

Current volumes are estimated in the table below. There is consensus among the industry contacts that volumes are set to increase and new entrants can be expected into the sector. If a rail service, empty container depot and relatively low land and/or storage costs are available, the Geelong area will be attractive.


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Company Commodity Volume (TEU) per annum Remarks

Current Forecast

Riordan Grain 12,000 15,000

Unigrain (est) Grain

GrainCorp Grain 7,500 (est) To commence 2008(?)


4,000 12,000

Barrett Burston 2,800 2,800

Total 18,800 37,800

Destination Analysis

Grain packed in containers in the Geelong region is destined for export, moving currently by road to the container terminals at Swanson Dock, some being held in carriers’ yards awaiting receival for the nominated vessel.

Of the current malt production in Geelong, most product is destined for export and is packed into containers at the malt-houses adjacent to the Port of Geelong. A small percentage, approximately 30% of the total, supplies domestic breweries in Melbourne, moving in specialised bulk trailers by road.

2.1.3 Fertiliser and quarry products

Case Study 3 covers fertiliser and the related (by product and freight task) quarry industry. The case study is split into two parts in the Final Report as they are quite discrete, apart from ostensibly requiring similar requirements of an intermodal terminal. The following section is a study of the current movement of fertiliser in the region and potential for increased trade, potential for road/rail modal shift, current supply chain and storage issues and discussion of the potential for use of intermodal facilities if they were available.

Fertiliser

Industry structure and participants

The industry has been through a period of major change and now appears to have settled. Incitec Pivot is the largest supplier in the region, followed by Hifert, previously owned by WMC but now by a joint venture including AWB and Elders. There are a number of smaller operators, including Southern, which was formed after the Incitec Pivot merger selling to disenfranchised customers of the merging companies.

The main participants are shown in the table below.


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FIGURE 5: FERTILISER FACILITIES – PIVOT STORE AT NORTH GEELONG AND PLANT AT LASCELLES

Current import of fertiliser and raw materials through Geelong is approximately 1M tonnes pa.


Esplanade, North Geelong

(adjacent to Lascelles Wharf

Receive raw materials from the wharf. Blend, process into a range of products, phosphate based and some high analysis

North Geelong (adjacent to Corio Quay)

Bulk storage for product for distribution

Incitec Pivot (IPL)

Broderick Road, Lara

Storage and distribution of blended product

Market share >70% of south-eastern region

Hifert Heales Road, Lara

(and Old Melbourne Road, now discontinuing)

Receive raw materials from the wharf. Storage and distribution of blended product

Southern Thompsons Road, North Geelong

Moderate but growth patchy

ABB Thompsons Road, North Geelong

Receive raw materials from the wharf

Small but capacity to grow

GrainCorp North Geelong (port terminal)

Store and distribute product (including back-loads to farm/rural transport)

Small but capacity to grow


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Incitec/Pivot: The major participant. IPL has invested recently in facilities in the port area but still maintains stores in Heales Road precinct. Market share is estimated at 80% indicating a freight task in the region of 800,000 tpa. Distribution is 90% by road. Rail has been trialled for interstate movements but back-loading of grain complicates the economics of the supply chain.

Hifert: Market share is estimated at 12%, which equates to about 120,000 tpa. Its main facility is at Heales Road. Product is trucked from the wharf and distributed by truck, often farm vehicles back-loading.

Southern Fertilisers: Still a minor player

Others: GrainCorp sells fertiliser but this is dependent on back-loading grain trucks. There are other minor players but mainly retailing fertiliser obtained from the majors.


Raw materials are moved from the Geelong wharf to blending plants and stores by road, with the exception of the IPL plant at North Shore, where raw materials are discharged from ships into dedicated wharf storage and moved by conveyor over the Esplanade to the plant. Most product is trucked out, much as back-load in farm and rural transport (tip trucks with dog trailers) bringing grain to storage facilities such as the GrainCorp port terminal and Riordan at Lara. There is some potential for bulk loads to regional depots but this has been a small percentage of the total distribution task.

Destination analysis

Over 1 million tonnes of raw material and fertiliser products is imported into Geelong annually (1.1 million tonnes in 2005-06), for blending and processing and distribution. The assumption is made that approximately 1 million tonnes of product is distributed. Each year, a small amount is shipped out again by sea from the port of Geelong in small bulk carriers for domestic distribution, volumes usually not exceeding 50,000 tonnes. The landside distribution is by road, serving all agricultural areas but with a focus on the west and north of Victoria

Industry potential

Overall, potential for conversion to intermodal is not seen as high, although if bulk storage facilities are provided some shift to rail may result, particularly where being handled through regional depots. However, attempts to convert this supply chain to rail in the past have not been particularly successful. As with the hub and spoke system of distributing oil products, regional depots have largely given way to direct supply by the larger road vehicles now available. Fertiliser is not seen at this stage as firm potential but we are still awaiting some detailed supply chain data that may provide some leads.

IPL has focused its activity in the port area with a major investment in storage ($20M estimated), having previously developed storage in the Heales Road precinct. Hifert is probably the best opportunity as the company is increasing capacity at Heales Road and has talked in the past of consolidating supply to western districts. Some smaller operators may be attracted if storage is available at competitive rates but this is seen as contributory business in due course, rather than base case business.


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2.1.4 Foodstuffs

Industry overview

There is a growing foodstuffs sector in the region, with the growth emphasis on the higher value sector of wines and olives. Poultry is a large scale regional industry and sea-foods are an established producer and employer in the region. The sector is characterised by specialised storage and supply chain requirements driven by short shelf life and high quality expectations. The widespread nature of the industry made it necessary to focus on a small range of companies felt representative of the freight task needs. Seafood has been excluded at this stage given the extreme needs of its supply chain.

Industries focused on Poultry: Chicken production and processing Wine: Four major producers, three with major exports, existing or planned Olives: Several sizeable growers and one major

Representative companies interviewed Bartter Steggles Pettavel Wines Scotchmans Hill Wines (initial interview only) Modern olives


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Analysis of freight task

The following summarises the views developed by interview of key contacts.

Poultry: Chicken production and processing represents a large freight task (400,000 per week at Bartter (Breakwater) alone). Live birds are aggregated to the Breakwater factory by cages in company owned vehicles. The product supply chain is driven by the need to give overnight delivery throughout the region. Feed meal is distributed from mills (located in Melbourne but now also being supplied ex wharf, Geelong). The only potential identified would be re-location of off-site surge storage currently contracted out (Corio Coldstore). IMT would need a perishable storage facility.

Wine: There are four major producers, three with exports, existing or planned, but relatively small volume. There is a possible demand for storage, which is in short supply, but would need specialised (constant temperature) facilities.

Olives: There are several sizeable growers and one major producer. Trees (ex nursery) and bottled oil constitutes the freight task. Currently it is smallish in volume and there is little potential seen.

Foodstuffs are predominantly distributed to the domestic market with wine the only major export and this only amounting to a few containers a year.

Industry potential

There appears little potential for interest in an IMT concept apart from storage. If warehousing is available, particularly specialised (temperature controlled, high turnover) there would be interest but in contributory volumes only, probably insufficient for a base case.

2.1.5 Other high potential containerised freight

Other potential freight movements have been identified that will provide business for the mooted IMT, and have the potential to reinforce other business identified in the case studies (e.g., by allowing triangulation of containers). Currently large numbers of containers are returned empty to Melbourne, crossing with even greater numbers of empty containers being trucked into the Geelong region to pack exports (grain, malt etc.). The commodities considered immediately significant are consumer goods and, potentially, wool, with steel a further possibility, which is discussed and quantified in the report.

Consumer goods

Currently significant numbers of containers are being trucked to Geelong by retailers, unpacked into store and then distributed intra- and interstate. We are focusing on a representative sample but this can be expanded.

Main potential participants identified are:

Ray’s Outdoors: The company’s policy is to bring all imports to Geelong for distribution to 40 plus retail owned and franchised outlets on the eastern seaboard and SA. The company has an interest in principle. (Interview 5 June.)

Cotton-on: An initial interview has been conducted with the GM to provide further information.


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Generally, all imports are in containers through the port of Melbourne. Distribution to stores is nationwide but the focus is often on order picking for specific stores. Volumes are significant but comprise multiple consignees, suiting the business to contracted road carriers or forwarders. This is also driven by extreme time sensitivity in most cases, particularly for perishables such as chicken.

Wool Wool is currently stored at Lara and trucked to Melbourne (Brooklyn) for packing into containers and delivery to export terminals. The product moving through Lara stores is mainly for export.

AWH has storage at Heales Road, Lara for 270,000 farm bales of wool. Currently this is trucked to its facility in Brooklyn and dumped/packed for export, a volume estimated at 4,100 TEUs per year. Key contacts indicate that, if there is a reliable rail shuttle to Port of Melbourne export terminals, they would consider relocating the dumping/packing to Geelong and liberating the capital tied up in Brooklyn.

The facility in Lara is adjacent to the existing broad gauge rail spur. The broad gauge nature of the spur and lack of connectivity means that this has no current value. If a standard gauge connection were available, the store would be well situated to load containers at the door, and potentially, still on the wagons.

An initial view is that this could be quickly converted with a phased relocation of the dump presses to Lara.

Steel

There is a significant movement in steel, both into and out of the region. As an example, regional supplies are brought by OneSteel from steel works and mills such as Whyalla by rail to Footscray, and trucked to Geelong (Lara). The product is then distributed to Ballarat, Bendigo, Horsham and Warrnambool. There is potential for the inward supplies to come direct to the proposed IMT and distributed direct from there. Other retailers (e.g., BlueScope/Lysaght) are also being canvassed but OneSteel alone accounts for approximately 10,000 tonnes per annum.

Although the import of steel through Geelong is also a potential target, it may be that the conflict with domestic supply would cut across a ‘metal exchange’ concept adjacent to the IMT, but the concept may still be considered by operators.

2.1.6 Summary of potential freight task that could be captured by an IMT

Given the findings discussed above we have determined the potential freight task as approximately 50,000 TEU per annum (as outlined in Table 2.3). Because of the inherent risks in any such forecast calculation it was considered appropriate to deflate this figure by 15% to 42,000 TEU per annum. The 42,000 TEU figure is utilised for calculations in the remainder of this report.


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TABLE 2.3 SUMMARY OF POTENTAIL FREIGHT TASK

Industry/sector Source Commodity Supply chain Volume per annum Origin Destination Mode Tonnes Containers 20 40 TEU Grain/malt Barrett Burston Malt (grain form) Geelong

Port area Domestic distribution Bulk truck 50,000 0

Malt (grain form) Geelong Port area

Export Container/B double 50,000 2,778 2,778

International Malting Malt (grain form) Geelong Port area

Export Container/B double 72,000 4,000 4,000

Riordan Grain - various Lara Export Container/B double 15,000 15,000 GrainCorp (and others...) Grain - various Geelong

Port area Export Container/B double 10,000 10,000

Dairy Foodstuffs 50 50 Various Josies Various Geelong 78,000 5,200 5,200 Grain - various Geelong 144,000 8,000 8,000 Wool AWH Wool - bales Lara Melbourne (Brooklyn) Bales - undumped 4,100 4,100 Totals 394,000 49,128 0 49,128

2.1.7 Success factors

The services and facilities identified during the interview program are summarised as follows.

Industries identify the following factors that will encourage them to move to the mooted IMT:

Reliable rail services, able to meet deadlines for receiving and vessel cut-offs to export container terminals

An availability of empty containers, capable of being upgraded to food quality etc.

Competitive costing of rail rates and terminal costs that are low enough to allow savings against current line haul road charges provided by industry representatives of approximately $250-300 per 20′, $300-350 per 40′

Warehousing for consumer and perishable goods

Long haul (interstate) trains may encourage more potential in bulk and break-bulk in the longer term.

Of these factors, the first three are considered core needs to allow development of the facility.

2.1.8 Phasing

The facility may not need to be considered as a single development but may be staged to provide initial base facilities, expanding to provide the other potential in due course. Thus it would be envisaged that a siding and hardstand will be needed immediately on commissioning, along with some empty container storage and minor repair/upgrade capability. Other development can follow, but a critical issue will be the reserving of suitable land close by, or preferably contiguous with the site.


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Some commodities (grain, malt) could be expected to convert immediately. Others such as wool, consumer goods, may need lead time to restructure supply chains. With wool in particular, it would be expected that performance would have to be proved as there are significant capital aspects but the attitude of the operator suggests that a commitment could be obtained at an early stage.

More specialised needs such as temperature controlled and high security storage, plus customs and quarantine licensing, would be attractive to potential clients in due course.

Many of the ancillary needs such as container depot operations, could well be developed and financed by private sector operators provided land and access is assured.

2.2 Bulk and break bulk potential

2.2.1 Non-container freight

The initial viability of an intermodal facility may well depend on the road/rail freight task related to the containerised cargo, particularly with export or import focus as discussed earlier in this section. However, the study also takes a view of other significant freight movements that may benefit from or contribute to the concept.

Previous studies have defined the freight task related to the various major corridors in Victoria. Some of these corridors and commodity movements have possible relevance to the proposed freight terminal through existing or potential freight movements. Whilst much of the freight concerned is related to containers and exports, there are some parts of the overall freight task that move in bulk or break-bulk form, but may gain benefit from a terminal provided it offers base requirements. While the study considers container movements as the initial base for commercial viability of an intermodal facility, there is the potential also to offer facilities and infrastructure connections that may attract these other cargoes, either in the short term or in the longer term, as add-on services when the facility develops.

This section considers the possible commodities, identifies those where a terminal in the Geelong area may be relevant, and analyses the needs and success factors to attract such business.

2.2.2 Victorian freight corridors

The main corridors are defined in the following table.

TABLE 2.4: VICTORIA - STRATEGIC FREIGHT CORRIDORS

Corridor Statistical District LGAs

Mallee Mildura, Buloke, Swan Hill, Gannawarra North West

Loddon Greater Bendigo, Loddon, Central Goldfields, Mt Alexander, Macedon Ranges

Wimmera West Wimmera, Hindmarsh, Horsham, Yarriambiack, Northern Grampians

Western

Central Highlands Ararat, Pyrenees, Hepburn, Ballarat, Moorabool


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Corridor Statistical District LGAs

Western Districts Glenelg, Southern Grampians, Moyne, Warrnambool, Corangamite

South West

Barwon Colac-Otway, Surf Coast, Golden Plains, Greater Geelong

Gippsland Latrobe, South Gippsland, Bass Coast Eastern

East Gippsland East Gippsland, Wellington, Baw Baw

Ovens-Murray Towong, Wodonga, Indigo, Wangaratta, Alpine Goulburn/Hume

Goulburn Delatite, Murrindindi, Strathbogie, Mitchell, Campaspe, Moira, Greater Shepparton

2.3 Commodities by corridor The major commodity flows are identified in Table 2.5 with the strategic freight corridors. This information is based on file information (Meyrick and Associates) derived for establishing the Victorian rail freight task in 2006. The commodities that could provide a freight task for the Geelong intermodal terminal are italicised and discussed briefly following the table. These notes will assist in understanding long term potential, and will be of assistance to future prospective terminal operators in identifying target business.

TABLE 2.5: MAJOR COMMODITY FLOWS BY CORRIDOR

Corridor Statistical District Non container commodity flows; origin and destination

Mallee Grain: Bulk grain from farms/country receival centres to Geelong port terminal (GrainCorp) and container packing points (PGS, Riordan etc.). (Already dealt with in case studies)

Foodstuffs: fresh and dried fruit from the Sunraysia (Mildura) to Melbourne. Wine for export.

North West

Loddon Forestry: Bulk logs and woodchip from plantations to Geelong

Wimmera Grain: Bulk grain from farms/country receival centres to Portland port terminal (GrainCorp)

Western

Central Highlands Forestry: Bulk logs and woodchip from plantations to Geelong

Brown coal: Potential for large volumes of brown coal based humus etc. to move to Geelong or Melbourne for shipment in bulk.


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Western Districts Forestry: Bulk logs and woodchip from plantations to Portland

Grain: Bulk grain from farms/country receival centres to Portland port terminal (GrainCorp)

Dairy: Processed and semi-processed products to western suburbs, Melbourne (Potential explored in case studies)

Meat: Processed and semi-processed products to Melbourne and eastern seaboard

Paper products: Pulp from mooted Heywood mill

Mineral sands: Bulk and break-bulk products Hamilton to Geelong, Melbourne, Portland

South West

Barwon Liquid bulk: Petroleum and chemical products from Greater Geelong for distribution, intra- and inter state

Cement: Product to regional depots intra-state and distribution

Gypsum: Imported product for cement production moving sometimes intra-state or overseas shipments into Geelong or Melbourne.

Foodstuffs: A range of foodstuffs including chicken, wine, olives, sea foods (mussels) etc.

Aluminium: Semi processed (slab and ingot) and sheet in rolls from Point Henry smelter and rolling mill, mainly by truck to Melbourne (K&S Truganina)

Gippsland Forestry: Bulk logs and woodchip from plantations to Geelong

Paper: Product from Maryvale (Paperlinx) to Melbourne (Dynon) and imports of pulp to Maryvale.

Energy: Brown coal, briquettes etc.

Eastern

East Gippsland Forestry: Bulk logs and woodchip from plantations to Geelong

Goulburn/Hume Ovens-Murray Forestry: Bulk logs and woodchip from plantations to Geelong

Rice: Rice exports via Melbourne (in the past, Geelong) from southern NSW (Murrumbidgee Irrigation Area; Leeton via Deniliquin)


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Goulburn Fruit: Canned, processed and chilled, Shepparton to Melbourne and for distribution

Dairy: Processed and semi-processed products to western suburbs, Melbourne and for export.(Potential explored in case studies)

2.4 Potential business Based on the above table, the following are the commodities and specific freight tasks that are seen to have significance for an intermodal facility in Geelong. Some of these are more likely prospects, while for others it would be a considerable ‘stretch’ to consider them prospective. The notes endeavour to quantify this and to identify factors and services necessary to attract this business to an IMT.

2.4.1 Paper products

The paper industry comprises activities at many locations around Victoria and the region, including pulp and paper mills in Gippsland, Mount Gambier (SA) and, in due course Penola (SA) and, potentially, Heywood, if plans develop.

The main freight tasks are raw materials (timber, pulp for feedstock and for blending and consumable items for production) and products, comprising a broad range of paper based consumables.

Paper production in Victoria is centred on Gippsland and is the location for Paperlinx Maryvale Mill, which is Australia's largest integrated pulp and paper operation. It produces 538,000 tonnes of communication paper and packaging paper per annum and is undergoing major expansion. With three pulp mills and five paper machines, a combination of fine paper and packaging papers are manufactured. The freight task includes domestic distribution and exports. The main product movement west is by rail from Gippsland on dedicated trains operated by K&S Freighters, serving the container terminals through Dynon and Bass Strait via Webb Dock. Pulp is also exchanged with mills in Tasmania. The flows do not have any relevance to a facility located in Geelong.

A further major freight task is distribution of products from the Kimberley Clark Millicent (Mount Gambier) mill, which is fed by its own pulp mill at nearby Tantanoola, with output estimated at over 100,000 tonnes per annum. Although this freight does not come to Geelong, it is part of the large volume of freight which by-passes the city and could be considered target volume for a terminal operation offering warehousing and cross docking.


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Small volumes of pulp are currently imported for blending at mills but the import pathway is spasmodic. The product often arrives in multi-purpose vessels (predominantly Gear Bulk) which discharge some bulk and break-bulk cargo on the back of a contract to carry aluminium products to north Asian destinations. Because the vessels rotation on the Victorian coast varies with the cargo to be discharged, the discharge port may be Geelong, Melbourne or, occasionally, Portland. Storage either takes advantage of ‘free time’ in wharf sheds, which may be offered for longer periods as they are seldom under pressure these days. Although the current supply chain, with cargo discharged, held in sheds and progressively trucked to the Gippsland mills, appears on the surface of it to be one that could benefit from a centralised operation, the uncertainty of this supply chain precludes identifying this as base cargo.

2.4.2 Aluminium

Aluminium is produced in the smelter at Point Henry and distributed in various forms for the domestic market and export. The main freight tasks are:

Ingot/slab by flat bed truck to K&S Freighters Truganina warehouse (Altona) where it is packed into containers for export. Boxes are stored and then trucked to Swanson to suit vessel receiving and cut-off (usually overnight). (Note: Ingot is also trucked form the Portland smelter.)

Ingot/slab is also moved by flat bed truck to the Port of Geelong for shipment to North Asian destinations by sea (K&S Freighters to the wharf, Gear Bulk contract shipping).

These movements currently transit Geelong (Latrobe Terrace/Princes Highway) and could be consolidated and packed at a facility in Geelong if rail connectivity was offered. Volumes are not publicly available but may well be over 4,000 TEU per annum.

K & S Freighters are the current contracted carrier, using their facilities at Truganina. Although a terminal operation in Geelong to convert this to rail does not appear on the surface of it to be of benefit to K & S and is unlikely to attract them or their client as a user, their management has shown interest in principle in involvement with such an operation.

2.4.3 Brown coal based products

There has been long term discussion of the development of exports of various brown coal based products, notably briquettes from the Latrobe deposits and humus from the Bacchus Marsh deposits.

Briquettes have been mooted as possible export cargo for the port of Geelong as the handling and storage of these would be a specialised task with the usual issues that surround bulk cargoes. The development and marketing of these has been a very on-and-off affair and may be eventually transpire. Although the supply chain from Latrobe would be extended and Geelong may be viable, the likelihood is that storage close to the wharf will be preferred for this bulk product to a remote terminal.

Humus based products from brown coal deposits near Bacchus Marsh are being explored for export and could move in large quantities if export sales succeed. This could be potential for bulk storage facilities but, once again, proximity to the wharf may advantage the supply chain as the product would be exported in bulk.


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2.4.4 Bulk liquids

There is a significant volume of bulk liquids and gas being distributed from the region, either by pipeline or by road and rail from the Geelong refinery or from depots served by pipeline (e.g., Shell and Elgas terminals on Heales Road/McManus Road).

Shell owns this land, which would be adjacent to the mooted Heales Road site for the terminal. It is understood (CoGG information) that the land to the north of the terminals is being held for future distribution purposes. This would indicate interest in expanding the facility and rail connectivity may encourage this development, particularly if, by an exchange of land between Shell and CoGG, the mooted rail siding could be extended to accommodate intra- or inter-state trains.

2.4.5 Cement

Large quantities of cement are currently railed from the Blue Circle Waurn Ponds plant approximately 10km south of Geelong to packing facilities in eastern and western suburbs of Melbourne. Although there was no immediate interest in the proposed terminal, there may be potential to use the facility for storage, packing and distribution.

2.4.6 Fertiliser

Fertiliser companies are already well represented in the Heales Road and Lara industrial estates. The potential for rail for distribution to bulk depots in regional areas is a long term possibility if longer trains can be accommodated.

2.4.7 Foodstuffs

The specialised nature of the handling and storage of food items precluded any immediate interest, although the shortage of suitable storage in the region generated some general interest if a specialised storage facility – temperature and humidity controlled etc., – was provided.

2.5 Needs and success factors The potential business discussed above would require a range of expanded and ancillary services over and above the basic rail siding. In particular most of this business would rely on the terminal accommodating long haul intra- and inter-state trains.

Bulk movements are not necessarily suited to intermodal type facilities and may require extensive land and separation (buffers etc.). For these trades to be attracted, large areas of land would be needed close to or adjoining the terminal with direct access to rail.

For much of the distribution task for foodstuffs and consumables, land must be available to provide the range of warehousing services, including temperature and humidity controlled storage, racking and reclaim equipment (forklifts, automated storage and reclaim/delivery systems, computerised stack management with order picking capability etc.).


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2.6 Rapid benefit cost assessment Rapid appraisal is intended to be a cost-effective way of gauging whether an initiative is likely to pass a detailed appraisal… It incorporates an indicative assessment of the main benefits and costs, without expanding the resources necessary to achieve a high level of accuracy. Rapid BCA allows consideration of monetarised benefits and costs. Non-monetarised benefits and costs need to be explored at an indicative level. Australian Transport Council, National Guidelines for Transport System Management in Australia. 2007

In undertaking the rapid benefit cost assessment for a potential terminal in the Geelong region we have adopted the methodology described in the ATC National Guidelines; we have also used their externality parameter values. To estimate road damage we have utilised parametric values contained in the NTC 3rd Determination work and assumed that all transport is undertaken by B-Doubles.

To undertake such an assessment at this time it was essential to develop a generic model for the terminal based on industry advice, competitive rail shuttle and conventional site configurations.

Table 2.5 outlines the assumptions inherent in the assessment model. Further detail of the assessment is provided in the appendix to the report on page 120.


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TABLE 2.6 KEY PARAMETERS FOR RAPID BCA OF GEELONG INTERMODAL FREIGHT TERMINAL

Parameters Value Basis

TEU per annum to be captured by intermodal terminal

42,000 TEU/annum

Based on case study analysis and a competitive rail operation

Take up of intermodal option Staggered 2010-2020 TEU

25% of TEU per annum from 2010 – 10,500 TEU

50% of TEU per annum from 2015 - 21,000 TEU

100% of TEU per annum from 2020 – 42,000

Road operating costs $300 per TEU As advised by shippers as current charge and incorporating

Melbourne to Geelong haul

Transport of empty

Drop off empty

Pick up full container

Deliver to Port of Melbourne or off-wharf depot

Delivery from off-wharf storage to port.

Intermodal operating costs $223 per TEU Compiled from the following cost estimates

Terminal lifts, transport and storage $100 per TEU

Rail linehaul costs $53 (above and below rail) – approach outlined in appendix on page 115.

Port of Melbourne operational costs $70 per TEU

Distance road or rail option 75km

Capex +$13 million 73% civil and earth works particularly hardstand (59%)

26% rail related works

Pre-investment costs $0.75 million Invoice further studies and environmental assessments required prior to investment in infrastructure

Plant and equipment $184,500 Based on one stacker and four forklifts


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The rapid benefit cost assessment derives a positive benefit cost-ratio for both a 30 and 50 year time frame. The benefits from such a terminal would include:

Reduction in externality costs of approximately $250,000 per annum and Reduction road damage costs of approximately $300,000+ per annum Potential for reduced operating costs to shippers.

The key driver of this model is the assumption that total road operating costs are greater than rail costs. Therefore, the efficiency of the terminal operation – both at Geelong and the port of Melbourne - is paramount.

2.7 Outcome of detailed supply chain analysis The supply chain analysis indicates a strong level of interest and a large volume of freight that could be attracted to a Geelong Intermodal Terminal. The analysis also provided the following insights:

The current supply chain for major export volumes in containers from Geelong results in trucking empty containers from the Melbourne wharf or off-wharf depots to Geelong and back-loading full boxes.

Import containers are generally trucked full to Geelong area and returned empty to Melbourne. Triangulating containers through a depot operation at the intermodal terminal (IMT), combined

with the greater efficiency of rail to and from the export wharves (shuttles), could provide significant cost savings.

Some commodities (grain, malt) could be expected to convert immediately to an IMT option. Others such as wool and consumer goods may need lead time to restructure supply chains. With wool in particular, it would be expected that performance would have to be proved as there are significant capital aspects.

The rapid benefit cost assessment undertaken as part of this analysis derives a positive benefit cost-ratio whether the assessment is made over a 30 or 50 year time frame. The benefits to the Victorian economy from such a terminal would include:

Reduction in externality costs of approximately $250,000 per annum and Reduction road damage costs of approximately $300,000 per annum Potential for reduced operating costs to shippers.

The key driver of this model is the assumption that road operating costs are greater than rail costs. Therefore, the efficiency of the terminal operation – both at Geelong and the Port of Melbourne – is paramount.


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3. ASSESSMENT OF SITE OPTIONS As a first step in this study, the key issues and constraints of the proposed potential sites were assessed to ensure that there was sufficient evidence of viability. In particular, each site was assessed from the perspective of location, connectivity, ownership, advantages and obvious constraints. This preliminary step was intended to ensure that project resource would not be squandered in the event of an overwhelming reason why it would not be feasible, e.g., if long term plans of the current owner of the site preclude it being available. This information was generated by site visits and preliminary discussions with site owners.

3.1 Heales Road

Location FIGURE 6 HEALES ROAD IMT LOCATION MAP

Proposed location: Intermodal Terminal

Existing rail spur (Tasco)

Extension to existing rail

Line of new Geelong By-pass


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Connectivity

The Heales Road site is well located in terms of access to the surrounding arterial road network and can be conveniently accessed by transport traveling to/from Melbourne, Geelong, Midland Highway, Hamilton Highway and the Princes Highway. The site is also conveniently located to key local freight destinations. It would require some improvements to allow safe and appropriate road access to the site for heavy vehicles. As discussed below, there is no direct linkage to the Princes Highway southbound, but the traffic flows identified would be limited from that direction.

Access will also be enhanced by the development of strategic road freight link links; these are being studied by VicRoads. The link to and from the industrial precinct adjacent to the Port of Geelong is somewhat indirect.

Table 3.1 presents the proximity of the site to key freight destinations.

TABLE 3.1: HEALES ROAD LOCATION – KEY DISTANCES

DISTANCE TO KEY FREIGHT DESTINATIONS (“as the crow flies”)

Lascelles Wharf Corio Quay Geelong Bypass Princes

Highway

Port of Melbourne (via

Rail Lines)

Heales Road Site 5.7 km 6.9 km 1.6 km 2.2 km 57.2 km

The site abuts Broderick Road, which is classified as a ‘collector road’ and provides access to a number of local industrial streets and adjoining industrial land-uses. Heales Road intersects with Forest Road South in the east and with Bacchus Marsh Road in the west, both of which are VicRoads Declared Arterial Roads.

Eastbound and westbound on and off-ramps to the Geelong Bypass are currently under construction at its intersection with Bacchus Marsh Road. This connection will provide convenient access to the Geelong Bypass and the Princes Highway for vehicles traveling to/from the Heales Road site. It is noted that there is no access to/from the Geelong Bypass proposed at Forest Road South or Broderick Road.

Limited access to the Princes Highway is available via Forest Road South, with a southbound link from Forest Road South to the Princes Highway and a northbound link from the Princes Highway to Forest Road South. There is no existing link to or from the Princes Freeway (i.e. to/from the north). Accordingly, based on the existing road network, vehicles associated with the proposed site that are heading to/from the north will be required to use either Broderick Road (a local collector road) or Bacchus Marsh Road.


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Advantages Site Location

The Heales Road site is well located in terms of access to the surrounding arterial road network and can be conveniently accessed by transport traveling to Melbourne, and to/from Geelong,, Midland Highway, Hamilton Highway and the Princes Highway. The site is also conveniently located to key local freight destinations.

Under the current road configurations there are issues with direct road access to the Port of Geelong. Port management has been lobbying for improvements. VicRoads is undertaking a study to examine the feasibility of improving freight linkages from the Geelong Bypass and/or the Heales Road Industrial Estate to the Port of Geelong.

The completion of the Geelong Bypass will improve access from South Western Victoria to the Heales Road area. A full diamond interchange will be provided at Bacchus Marsh Road, while an overpass will be provided at Broderick Road. Note that there will be no access to the Bypass at Broderick Road. Operational aspects

The railway arrangements for the Heales Road site are shown in Figure 7

FIGURE 7: HEALES ROAD: NOTIONAL IMT SIDING ARRANGEMENTS

The distance from Broderick Rd to Hendy St is approximately 750m, which would be suitable for a train length of approximately 600m, allowing for clearances to the road reserves and ‘run around’ provisions for the locomotives. While a number of rail operating scenarios exist to service the site, the contiguous train length will be constrained to 600m unless Broderick Rd is reconfigured to permit shunting across the road.

750m

Proposed spur and siding extension

Existing spur


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A 600m train is suitable for approximately 50 containers. Despite its short length in traditional railway environments, it represents a length that is ideally suited to the arrangements at the port of Melbourne planned as part of the Footscray Rd railway grade separation project. The map below indicates the positions at which the 600m trains would be able to operate in the planned arrangements at the Port, which are designed to accommodate ‘shuttle trains’ from outer metropolitan hubs and inner metropolitan train assembly facilities such as that at Tottenham. At Tottenham, long interstate trains will be segmented into smaller and more manageable trains for port operations.

FIGURE 8: DYNON PORT SHUTTLE TRAIN ARRANGEMENTS

In terms of the suitability of the site for intermodal operations including train stabling, forklift and container cranes, the site is relatively flat with a fall of only five metres over 750m and therefore, although a considerable amount of fill will be required, the preliminary conclusion is that site will be appropriate. Generally, for railway operations a fall of 1 in 500 is suitable for train stabling operations to ensure train safety.

The existing spur is currently serviced by broad gauge only from the south. No connection is available for train movements to the north, to Dynon. Nevertheless, sufficient corridor is available for a northbound connection to be constructed. The ownership of the spur is unknown at this time. However, it has been established that it is used quite extensively, although harvest locations for the logs that comprise its main freight task have precluded its use in the last two years.

The spur is located to the west of the main lines Geelong to Melbourne, with the standard gauge mainline westernmost and the two broad gauge tracks east of it. The current connections from the south are enabled by the Melbourne-bound broad gauge line crossing the single standard gauge line.

600m 600m

600m Proposed rail line arrangements


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Figure 9 shows the VicTrack land boundary in blue, and the three mainlines with the spur proceeding to the VicTrack boundary. An on-site inspection indicated that the siding was currently unused but usage could be resumed at any time. However its current configuration, involving entry and exit only from the Melbourne bound (UP) broad gauge line is not conducive to the broad gauge movements, especially the high speed passenger services. Out of hours working would be highly restrictive and would prevent the terminal from operating effectively.

FIGURE 9: VICTRACK BOUNDARY ARRANGEMENTS WITH RESPEST TO HEALES ROAD SITE

A broad gauge connection to/from the North would be possible but would involve crossing the standard gauge track as well as crossing the Melbourne bound broad gauge track.

Figure 10 Mainline Connections shows the arrangements for connectivity.


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FIGURE 10: MAINLINE CONNECTIONS

In view of the increased broad gauge passenger services as well as the increased standard gauge freight services, the connection to Dynon could be based on a standard gauge connection only for the initial stage of a potential terminal. This would result in rail operational flexibility issues for the IMT, but only where a broad gauge pick up is contemplated, i.e., where a broad gauge train originating in Regional Victoria attempts to use the IMT for a pick up on its way to Dynon. Other broad gauge trains from regional Victoria could proceed directly to Dynon. Any broad gauge train entering the terminal would have a great deal of difficulty exiting, probably only out-of-hours, because it is required to exit against the flow of traffic and travel all the way down to Refinery Rd where there is a suitable crossover. This is possible but highly undesirable.

However, the existence of the broad gauge connection to Tasco’s facility is an infrastructure connection that may be difficult to sever. Also, for longer term viability of an expanded terminal for intra- and interstate rail traffic, a ‘no-regrets’ strategy may dictate either both standard and broad gauge connection, or at least the ability to provide this at a later date by incorporating that flexibility in the design.

Constraints Site Layout

The location is somewhat disadvantaged by being one-ended. That is, trains must depart as they enter. Unless tonnages require more than 8 trains per day this constraint should not detract from the terminal’s capacity, only require slightly higher operating costs for rail and limit the number of trains able to be serviced simultaneously.

From Melbourne

Broad Gauge Tracks

To Melbourne

Standard Gauge

←To Heales Road site


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Road access

Residents of Lara are very concerned about freight travelling from the Heales Road Industrial Estate through the township to access the Princes Freeway and Melbourne. This has been an issue in the past and may re-emerge if a Intermodal Freight Terminal is established.

Location of the Elgas Facility

The close proximity of the Elgas facility (Figure 6) will require consideration of appropriate buffering strategies in the case of intermodal development and ancillary activities.

Potential for expansion

The current site at Heales Road is somewhat constrained in terms of future expansion capabilities. As indicated in Figure 6 there is appropriately zoned land adjacent to the terminal and on the other side of Broderick Road (opposite Tasco and Australian Wool Holdings) which, if set aside for such purposes could mitigate this constraint.

As discussed in section 2.4.4 another option to mitigate expansion constraints could involve a land swapping arrangement with Shell whereby the land to the north of Shell’s current activities be acquired, allowing the possible extension of the rail line to accommodate longer trains.

Ownership

The land in question is owned by the City of Greater Geelong, and is being held for future use in the industrial precinct already developing around Heales Road. Land to the south of the AWH site on the rail spur is understood to be in private ownership but may be available for extending the corridor or for ancillary uses (warehousing etc.). AWH land bordering the existing rail spur could also provide for a broader corridor, as well as the potential for a siding that would allow the company to pack containers on the wagons. These issues may need to be explored further with CoGG as a more detailed evaluation is developed.


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3.2 Gheringhap Siding

Location FIGURE 11: GHERINGHAP SIDING – GENERAL LOCATION

Connectivity

The Gheringhap site would require minor improvements to be accessed safely and appropriately. It abuts the State and National Rail networks and can obtain direct access to the Midland Highway. However, it is located 15 minutes to the west of Geelong along the Midland Highway, and accordingly, the site is less conveniently located for transport travelling to/from Melbourne, Geelong, Hamilton Highway and the Princes Highway as well as to key local freight destinations.

The site is quite large, and subsequently there is adequate provision for storage facilities as well as the safe, efficient and convenient design of the internal access road layout.



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TABLE 3.2: GHERINGHAP – KEY DISTANCES


Lascelles

Wharf

Corio Quay Geelong

Bypass

Princes

Highway

Port of Melbourne

(via Rail Lines)

Gheringhap Site 13.2 km 11.7 km 8.5 km 12.0 km 76.5 km

Site Location

The Gheringhap site abuts the State and National Rail networks and can obtain direct access to the Midland Highway. It sits at a confluence of major roads, and national standard gauge and Ballarat broad gauge rail lines.

Site Size

The site is quite large, which allows adequate provision for storage facilities as well as the safe, efficient and convenient design of the internal access road layout.

Constraints Site Location

The site is located 15 minutes to the west of Geelong along the Midland Highway, and accordingly, the site is less conveniently located for transport traveling to/from Melbourne, Geelong, Hamilton Highway and the Princes Highway as well as to key local freight destinations. . Although it is often said that once cargo is on a truck, the distance driven is of less consequence, the initial reaction from industry was that the greater distance is an impediment. The possible 20 to 30 minute driving time is certainly perceived to be a disadvantage when the value to exporters and importers would be in a very short shuttle by semi trailer. (An illustration of the possible impacts is the decision by Incitec Pivot to relinquish plans for major facilities at Heales Road in favour of sites adjacent to the port of Geelong. The $18 million dollar investment was justified by reducing the $2-3 per tonne cost of trucking to Heales Road.)

Advantages Size/Length for Train Operations

While the location of an IMT has not been definitively identified, the environs of the Gheringhap Siding provide ample opportunity for the development of a large scale facility. Effectively, a two kilometre length adjacent to the Melbourne to Adelaide mainline is open for development of this kind with access to the Midland Highway to the south and the mainline to the north. Other land is available to the north of the mainline for support services. Interstate trains will operate at 1800m in length and therefore the site is well suited to interstate trains.


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The location is ideally positioned for both standard gauge and broad gauge rail traffic being on the confluence of the two networks. The mainline and loop at the site a both dual gauge. Any other tracks to be constructed adjacent to those tracks could be dual gauge as well. This position enables both standard and broad gauge trains to load containers and proceed to Dynon or any other terminal in the Nation and with train lengths that are efficient in a mainline sense. This contrasts with the Heales Road site which is suitable, within current site constraints, only for smaller ‘shuttle’ type trains.

Gheringhap also has the advantage of being double ended permitting arriving and departing trains to remain in-tact where the locomotives can remain attached to the train.

FIGURE 12: GHERINGHAP - SITE AND NOTIONAL SIDING LOCATION

Intermodal Operations

In terms of the suitability of the site for intermodal operations including train stabling, forklift and container cranes, the site is relatively flat but with some need to flatten the site out over the two kilometre length. While the earthworks will be significant they are not expected to be prohibitive, particularly as the width of the site is progressively developed.

Ownership

Ownership is understood to be in private hands but only a few owners involved. The Golden Plains Shire has been canvassing interest for industrial development at the site and, whilst land aggregation is not expected to cause major difficulty, there will be an awareness of the potential value of the site.

Golden Plains Shire has apparently not considered options for ownership/operating models.

2km for IMT

Existing train loop


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3.3 Oyster Cove at Lascelles Wharf precinct, Port of Geelong

Location FIGURE 13: LASCELLES WHARF AND GRAINCORP SITES

The Lascelles Wharf (Oyster Cove) site is well located in terms of access to the surrounding arterial road network and provides reasonably convenient access for transport traveling to/from Melbourne, Geelong, Midland Highway, Hamilton Highway and the Princes Highway see Figure 13. The site is excellently located to key local freight destinations and has high connectivity with port precincts, particularly Lascelles Wharf.


TABLE 3.3: LASCELLES WHARF SITE – KEY DISTANCES


Lascelles

Wharf

Corio Quay Geelong

Bypass

Princes

Highway

Port of Melbourne

(via Rail Lines)

Lascelles Wharf Site 0.9 km 2.7 km 3.3 km 1.9 km 61.2 km


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Road access to the site is provided at the eastern end of St Georges Road. West of Seabeach Parade, St Georges Road is a VicRoads Declared Arterial Road. St Georges Road intersects with Princes Highway, at an intersection with Bacchus Marsh Road and Cox Road.

The nearest connection to the Geelong Bypass for traffic associated with the Lascelles Wharf site is provided at Anakie Road, which is accessed via Cox Road. Cox Road is a VicRoads Declared Arterial Road, while Anakie Road is a local collector road. Residential land uses and a number of schools exist along Cox Road. An additional access to The Geelong Bypass is located at Bacchus Marsh Road. Accordingly, these connections will provide reasonably convenient access to the Geelong Bypass for vehicles traveling to/from the Lascelles Wharf site.

It is expected that freight vehicles heading to/from Princes Freeway (i.e. to/from the north) will use either the St Georges Road (and possibly Station Street)/Princes Highway route or the Lowe Street/Wharf Road/Shell Parade route.

St Georges Road and Station Street are both VicRoads Declared Arterial Roads. Freight vehicles using this route are most likely to use St Georges Road, or Station Street (north of St Georges Road1), which provides a direct connection to Princes Highway. It is noted that some residential land uses exist along this route.

The Lowe Street/Wharf Road/Shell Parade route (all VicRoads Declared Arterial Roads) passes heavy industrial land uses, the Geelong Grammar School and rural land uses. Direct access to/from Princes Freeway is available via this route and the route does not pass any existing residential land uses although the Geelong Grammar School has raised objections to the increasing heavy goods vehicle traffic on Shell Parade on the grounds of amenity for its campus, safety and noise pollution (school accommodation is located within 250m of the round-about on the junction of School Road and Shell Parade).

Apart from the school’s issues, with respect to connectivity, either of the above routes is suitable for freight transport to access the Princes Highway/Freeway.

Ownership

Ownership of the land is vested in the consortium set up to own the port of Geelong following privatisation in 1996, and is managed by Toll GeelongPort on behalf of the owning body. The land is held freehold.

Advantages

The site is excellently located to key local freight destinations, with the Lascelles Wharf and Corio Quay located within 2.7km of the site.

1 It is noted that a truck curfew exists on Station Street, between St Georges Road and North Shore Road, from 9pm to 6am, 7 days a week. However this section of Station Street is unlikely to be used by freight vehicles associated with the proposed Lascelles Wharf site.


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To access the site from the arterial road network, freight vehicles are required to travel through residential areas (e.g. east-west routes via St Georges Road, Cox Road, Separation Street). Although it is acknowledged that these roads are typically VicRoads Declared Arterial Roads, there are land use conflict issues, not the least being the presence in these streets of community facilities such as schools, aquatic centres etc. Furthermore, road improvements would be required to ensure safe and appropriate road access.

The siting to the east of the main road/rail corridor forms something of a hurdle as it effectively cuts off the facility from the traffic from the west and southwest except where it uses the east-west connecting roads discussed above.

Site Size

The size of the site may present some constraints in providing an internal road network that is efficient and convenient.

Connectivity and site suitability

Currently rail does not access the area under discussion, although a rail link from the north into the Lascelles Wharf precinct has been discussed for some time. However, it is understood that this project, to which the State Government was to contribute, is now all but abandoned. The plan had included the rail line passing through the proposed site, although the shape of the site and radius/radii required would constrain the provision of straight runs of line preferred for IMTs.

Also of note is significant environmental degradation of the site from previous use as landfill.


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3.4 GrainCorp bunker site, North Shore

Location

See Figure 13 above.

The Graincorp Bunker site is well located in terms of access to the surrounding arterial road network and provides reasonably convenient access for transport traveling to/from Melbourne, Geelong, Midland Highway, Hamilton Highway and the Princes Highway. The site is excellently located to key local freight destinations.


TABLE 3.4: GRAINCORP SITE – KEY DISTANCES


Lascelles

Wharf

Corio Quay Geelong

Bypass

Princes

Highway

Port of Melbourne

(via Rail Lines)

Graincorp Bunker Site 1.0 km 1.9 km 3.6 km 1.3 km 61.3 km

The site abuts Seabeach Parade, which is a VicRoads Declared Arterial Road and provides access to a number of local industrial roads and adjoining industrial land-uses. Seabeach Parade intersects with St Georges Road in the north and links with Bayside Road in the south, both of which are VicRoads Declared Arterial Roads.

The expected typical routes to and from the site will generally be the same as for the Lascelles Wharf site, with vehicles using:

• the St Georges Road/Cox Road/Anakie Road route to access the Geelong Bypass, and

• St Georges Road (and possibly Station Street, north of St Georges Road), or the Lowe Street/Wharf Road/Shell Parade route to access Princes Highway/Freeway,

Some traffic heading to/from the south may use Bayside Road and Corio Quay Road to access the Princes Highway. These roads are VicRoads Declared Arterial Roads, and accordingly, this route is appropriate.

Ownership

GrainCorp owns the land, which has been used as external bunker storage for grain. Low harvest this year means that it has not been used this season. Whilst there is no indication that GrainCorp will not resume use of this land for bunker storage as grain volumes recover, there was initial interest in conceptual terms as GrainCorp, taking advantage of the changing export monopolies and responding to competition, is planning to commence packing grain into containers. The concept of a local rail receival and availability of empties (depot) was therefore met with guarded enthusiasm.

The site adjoins the Melbourne-Geelong railway line.


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To access the site from the arterial road network, freight vehicles are required to travel through residential areas (e.g. St Georges Road, Cox Road). Although it is acknowledged that these roads are typically VicRoads Declared Arterial Roads. Furthermore, road improvements would be required to ensure safe and appropriate road access. The issues here are similar to those relating to the Lascelles Wharf site above

Site Size

The size of the site may present some constraints in providing an internal road network that is efficient and convenient. An initial view was that it may be too square, without sufficient length for sidings.

3.5 Lara Site FIGURE 14 LARA SITE


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Location

The site is located to the south of the Melbourne–Geelong rail line and is bordered on the south edge by Old Melbourne Road (see Figure 14). Avalon Airport is directly opposite the site. The port of Geelong is approximately 8 km south by both road and rail. The land is also adjacent to the Speedway, quarry and commercial nurseries. The port of Melbourne is approximately 60 km by rail from the site.

The land is currently used for hobby farming. Zoning amendments would be required prior to industrial development of this site.

The site as it stands has a 4 km interface with the rail lines between Melbourne and Geelong and 3 km of existing road frontage on the Old Melbourne Road. A site concept designed by the proponents incorporates 670 hectares of site.

Ownership

According to information sourced from interviews, the land is currently owned by a development and investment organisation, Buildev Group, which is keen to work with all levels of government to develop the site. Some of the benefits of the site that the Buildev Group have highlighted include:

The lack of traffic and residential conflicts at and surrounding the site The potential for the site to operate 24 hours per day The level land, which makes it immediately suitable for intermodal terminal use The limited residential and agricultural potential of the site given its close proximity to the

Avalon Airport Operational Airspace.

Road Connections

Although not directly on the Princes Freeway there is an existing multi-direction interchange at Beach Road, which could be utilised to provide freeway access.

Rail Characteristics

The rail corridor runs north to south at the western boundary of the site.

At this point in the corridor, the rail configuration consists of three running lines: the eastern two being the broad gauge (BG) intrastate lines servicing mainly passenger trains to Geelong; the third western line being the standard gauge(SG) single bi-directional intrastate line. This configuration is shown in Figure 15.


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FIGURE 15 RAIL CONFIGURATION AT THE PRIVATE SITE

Advantages

The commercial characteristics of this site are essentially similar to those of the Heales Road site. It is similarly located to the Geelong hinterland and has similar access from the west and southwest of the State.

The location is seen to have long-term potential through its proximity to the Avalon airport complex and easy access via the Beach Road interchange. The likelihood of further industrial development south of the airport, also easily accessed, builds further on its long term potential.

Constraints

The two issues that may be said to impact negatively, are the site’s greater distance from cargo sources within Geelong, and less direct access to and from the site to rail, being on the eastern side of the rail corridor and thus separated from the standard gauge ‘freight’ track. The additional five kilometres to access the site via the Beach Road intersection, compared to the Heales Road location, will be a cost factor for users. However, the distance is still smaller than other locations and is at least in the ‘right’ direction for Melbourne bound freight. Therefore the additional distance is not considered likely to be critical.

The only major potential downside for freight potential may be that the direct rail connection to Australian Wool Holdings, a feature of the Heales Road site, would no longer be achieved, and thus there is a possibility at least that this potential volume may not eventuate. However, the facility itself, with potential empty container storage and a reliable rail service to meet shipping cut-offs, may still be sufficient to attract the business.

Rail Layouts for Terminal

Two primary conceptual options exist for a site of this size, given its length and width. The extent to which these concepts are used will rely on the overall configuration of the terminal with regard to the positioning of the various functions that will be undertaken. These include warehousing, distribution, light manufacturing, container park services and others.

Private Site

To Melbourne To Geelong

N

BG

SG


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The two conceptual arrangements consist of a parallel alignment of the rail facilities with the mainline corridor, or a transverse alignment. A combination of these is also possible. The two alignments are shown in Figure 16

FIGURE 16 RAIL CONCEPTUAL ALIGNMENTS

The “parallel” alignment’s attributes include that:

it can be connected to the mainline railway corridor at both ends (double ended), potentially improving rail operations efficiency

being at the boundary, the siding corridor is one sided to the terminal, potentially minimising “rail” activity disruption through isolation from the remainder of the terminal

being “one-sided” requires trucks to cross railway lines if it is double ended. (The configuration can accommodate two hardstands on either side.)

The “transverse” alignment’s attributes include that:

it is accessible from both sides so that road vehicles would not need to cross railway tracks it is potentially disruptive by separating one part of the terminal from another being single ended, trains must arrive and depart using at least a portion of the same track.

Mainline Connection Configuration

Notwithstanding the actual terminal siding track layout as discussed, the connection to the mainline requires similar consideration, albeit the “parallel” alignment may be double ended and therefore can operate as the entry and exit to Melbourne and Geelong.

N

Rail Corridor

“Parallel” Alignment

“Transverse” Alignment


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The alignment configurations for access to the mainlines are as outlined in Figure 17.

FIGURE 17 ACCESS TO THE BROAD GAUGE NETWORK

The red circles in Figure 17 indicate the potential conflict with rail traffic where a train arriving or departing will require a “train path” on the adjacent and opposite direction line where the connection is at grade. In periods of high density passenger train operations, this conflict may preclude access. Grade separated solutions are conceivable but at a very high cost.

Alternatively, trains entering and departing the terminal could always enter from Melbourne and depart to Geelong, and then be required to “turn around” at Geelong, although this operation would be operationally inefficient.

FIGURE 18 ACCESS TO THE STANDARD GAUGE NETWORK

The red circles in Figure 17 indicate the potential conflict with rail traffic on the broad gauge lines operating passenger services to and from Geelong and Melbourne.

From Geelong From

Melbourne

To Geelong

To Melbourne

Standard Gauge Line

Standard Gauge Line

To/from Adelaide

To/from Melbourne


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For at-grade operations, this is quite disruptive and it is likely that for a large part of the day access would be restricted.

Grade separated solutions are conceivable and may be worthwhile as the rail task for the standard gauge network increases.

Appropriateness of Rail Access

An appropriate rail solution for this terminal relies essentially on the rail task envisaged, its volume and its origin/destination. The following section looks at each mainline connection alternative and its appropriateness.

Where the terminal will operate to “process” cargo to and from Melbourne (port shuttle), Gippsland or Shepparton, access is reasonably available using the broad gauge network. It is possible some parts of the day may be difficult to obtain train paths departing from the terminal because of the conflict with passenger (and freight) services operating on the line to Geelong.

Similarly, where the terminal will operate to “process” cargo to and from Geelong, Warrnambool or Ballarat, access is reasonably available using the broad gauge network. It is possible that during some parts of the day it may be difficult to obtain train paths entering the terminal because of passenger (and freight) services operating on the line to Geelong.

Access to the broad gauge network also needs to take into account the fact that train paths are narrow, in that the “Fast Rail” passenger trains easily catch up with slow freight trains. Therefore train controllers require a large gap between passenger trains before permitting a freight train on the same track. This compounds the issue of conflict arising in the crossing of tracks at grade.

Where the terminal will operate to “process” cargo to and from Sydney, Wodonga, Adelaide, Brisbane or Perth (the interstate network) the access is highly problematic.

Access will be restricted during the hours of operation of the passenger service to and from Geelong especially during peak hours, if an at-grade solution is contemplated. An “out-of-hours” operation may be appropriate for a minor or “start-up” task.

A grade-separated solution may be warranted when traffic task is large enough.

Mainline Connection Costs

The costs associated with connecting any terminal tracks with the mainline are dependent on the actual configuration required which is dependent on traffic task projections and origin/destination requirements.

Generically, it is possible to estimate each of the connection types for budget purposes as follows.

Connection to broad gauge mainlines to and from Melbourne only - $2m Connection to broad gauge mainlines to and from Geelong only - $2m Connection to standard gauge mainline from Melbourne only - $3m Connection to standard gauge mainline from Geelong only - $3m

Some economies of scale are available where multiple connections are envisaged.


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The costs relate to the supply and delivery of the turnouts and crossovers, which are a relatively minor cost compared to the signalling required which needs to accommodate the “conflicts” that arise when crossing tracks at grade.

Quite apart from the costs there is a non-trivial task associated with gaining approval from the various stakeholders for a connection.

Terminal Rail Costs

Given the size of the site and the options associated with rail terminal configuration, only generic budget costs can be provided. The two conceptual options will be dealt with simultaneously because the basic layout provides for two trains per day operating as a shuttle with only one train at a time being serviced. For the purposes a task of 50,000 TEUs will be assumed to align this terminal with others considered as part of this review.

The configuration consists of a basic layout involving two tracks of 800 m length, one being for loading / unloading and the other for locomotive “run around”, single ended as in Figure 19.

FIGURE 19 "PARALLEL" OPTION SINGLE ENDED

The cost for this simple layout, not including land cost, specific drainage or service relocation, if there is any, is approximately $5m. Mainline connection is separate.

Other options include the double end option interfacing with the broad gauge network and the standard gauge options. In these cases extra costs could be expected from an extension of the siding arrangements, noting that the connection costs to the mainlines have been previously estimated.

Long Term Rail Configuration

It is understood the long term plan for the standard gauge track controlled by ARTC is to add a significant number of passing loops to their bi-directional single line. Ultimately double track is contemplated. These plans only serve to make connection into the proposed terminal more difficult because further “conflict” at-grade potentially arises as the standard gauge lines are on the opposite side of the corridor to the broad gauge lines.

There is no known future enhancement to the broad gauge double track currently existing.

To Melbourne

Unloading Hardstand

Dead End


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3.6 Terminal design arrangements Prospective concept designs for each of the five sites put forward for consideration are outlined in the appendix to this report. GHD developed the conceptual layouts for the original four sites and the proponent developed the initial layout for the Lara site design

In developing the conceptual designs the four sites in the original feasibility study, GHD focussed on the following critical success factors.

1. Providing reliable and efficient links to export wharves to meet deadlines

2. Sufficient space on-site for container depot activities and, potentially, warehousing

3. Rail and terminal costs being competitive compared to road haul

4. Potential for expansion to accommodate interstate and bulk goods trains

5. Sufficient space for container storage Daily Container Storage requirement allow for 120 TEUs per day, = approx. 4,800m2 of

container storage space required per day (assuming each container has a footprint of 40m2) Surplus Container Storage: Assume 3,000 TEUs require storage at any one time,

= 120,000m2 (assuming container footprint of 40m2), = approx. 60,000m2 if containers are stacked 2 high;

6. Sufficient rail siding adjacent to or within the site to provide hardstand areas for the efficient loading/unloading of trains;

120 TEUs per day = 60 wagons (assuming 2 TEUs per wagon), = 450m per train (assuming 2 trains per day and 15m per wagon). Conservatively adopt 600m as minimum train length (allows for wagons with no or empty containers or for times when longer trains are required).

When considering the design layout put forward by the private proponent the same critical success factors were reviewed.

Table 3.5 provides a summary of the key features, benefits and constraints of the concept layouts considered for the Geelong Intermodal Freight Terminal making reference to the above selection criteria.


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TABLE 3.5 KEY FEATURES, BENEFITS AND CONSTRAINTS

GrainCorp Oyster Cove Gheringhap Heales Road Lara

Total Site Area 12.56 ha 10.48 ha 65.04 ha 32.12 ha 670 ha

Number and Length of Hardstands

1 hardstand (300m long x 30m wide)

2 hardstands (each approx 430m long x 30m wide)

3 hardstands (1,335m, 1,045m and 1,000m long; each 30m wide)

3 hardstands (2 x 615m long x 30m wide and 1 x 500m long x 30m wide)

3+ hardstands exceeding dimensions of other sites

Area available for Container Storage, Warehouses and Other Buildings

88,535m2 53,030m2 394,000m2 175,219m2 >200,000m2


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Key Benefits Has existing frontage to rail reserve.

Has direct access to the arterial road network.

Well located to Geelong export wharf.

12m wide internal two-way road allows for convenient movement of vehicles within the site.

Has direct access to the arterial road network.

Well located to Geelong export wharf.

Very large site with large frontage to rail reserve.

There is space to provide additional hardstands if required in the future.

There is space to provide additional rail for storage/maintenance of wagons/locomotives if required.

Has direct access to Midland Highway.

There is space available to provide other mixed-use developments along the Midland Highway frontage if desired.


Could accommodate interstate trains

Large site area, sufficient for container storage and additional warehouses and other buildings.

Relatively well located to Geelong export wharf.


Vehicle access to arterial road network is via industrial streets only.

Largest site area more than sufficient for intermodal operations

Large frontage to rail reserve

Close to direct access to Princes Highway


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Key Constraints Located on broad gauge side of rail line.

Only 300m frontage to rail reserve (i.e. trains longer than 300m must be loaded in segments).

Unable to provide rail siding within site.

Limited area on-site for warehousing or other buildings.

Located on broad gauge side of rail line.

No existing rail within or adjacent to site.

New rail line within site would be curved.

Only able to provide 430m long hardstand within site (i.e. trains longer than 430m must be loaded in segments).

Insufficient land area to provide 60,000m2 container storage and 2 hardstands. Could remove one hardstand, however the efficiency of the operation would be significantly reduced.

Trucks are required to turnaround at the end of the internal access road.

Poor location relative to Geelong export wharf.

No existing rail within or adjacent to site.

Requires the extension of the rail line through private property.

Requires a new level crossing on Broderick Road (although this can be mitigated by closing Broderick Road for the length of the eastern site boundary and providing a new connection road along the northern property boundary to connect Broderick Road and Hendy Street).

Located on broad gauge side of rail line


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3.7 Rail considerations

3.7.1 Railway operations and costs

The logistic chain involving rail, particularly where an IMT is used, consists of a number of discrete components, the sum total of which in cost terms must be able to compete with road.

While the direct haul costs of rail are very likely to be cheaper than those of road, the other costs associated with rail transport could negate the benefits of the line haul savings. These supplementary costs are:

Loading and unloading to road transport to service the origin and destination (In some cases the origin and/or the destination are directly on a rail head, but this is often not the case where an IMT is involved)

Road costs associated with distribution to and from the IMT Time costs, where the door to door time of rail is longer than with road

In general, these supplementary costs of rail can be offset in longer travel distances because the proportion of these supplementary costs reduces compared to the total costs.

Cost Strategy Background

For the Geelong to Melbourne supply chain, the haul distance is relatively short. Therefore, a number of railway operations costs, terminal costs and distribution road costs need to be minimised and the following strategies help to achieve this outcome. Not all strategies are mutually cooperative and combinations are required to optimise a particular transit situation. These strategies are outlined in Table 3.6.


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TABLE 3.6: INTERMODAL TERMINAL COST STRATEGIES

Strategy Typical Tactics 1. Maximise Train Length – this strategy is designed

to distribute the “fixed” costs of train operation over the largest payload. Typical “fixed” costs of operation include:

Train driver cost Locomotive capital Access pathway cost (a flagfall or cost per train

applies to track access)(This strategy assumes a reasonable optimisation of locomotive power to trailing load)

2. Match Terminal Characteristics at Origin & Destination – this strategy is designed to ensure that the train is optimally sized and that the load is concurrent with the terminal operations at both ends.

Siding lengths are similar at both origin and destination

Hardstand areas are sized for the load in either direction

Storage areas are sized appropriately

3. Reduce Train Cycle Time – this strategy is designed to reduce the cost of capital per unit transported associated with the use of the capital intensive rollingstock.

Use trains lengths that don’t require trains to be broken into smaller units at the terminals

Negotiate train paths with the access provider to result in unencumbered running

Use trains that are powered at both the front and the rear so that the locomotive is not required to detach

Operate train paths that don’t require the locomotives to be switched from one end to the other during transit

Reduce terminal time, see below 4. Reduce Train Terminal Time – this strategy is a

subset of the reduction of train cycle time and assists with maximising train asset utilisation.

Unloading from train to ground and subsequently loading to road truck

Loading from ground to train (These two methods reduce the standing time of the train because the time is not dependent on road truck arrivals)

Maximise loading/unloading equipment 5. Maximise Use of Terminal Equipment – this

strategy is designed to minimise the terminal equipment capital cost per unit transported.

Operate the terminal equipment as a 24/7 operation (The success of this tactic is dependent on the total task and the time distribution of the task on a daily, weekly, monthly and yearly basis)

Use the minimum amount of equipment to service the trains

Service standard container units only Pave rubber tyred terminal equipment areas

6. Minimise the Hardstand Area and Costs – this

strategy is designed to minimise the capital cost per unit transported of the hardstand/storage area.

Load and unload direct from train to road and road to train

Eliminate storage services Delay pavement construction where possible

7. Reduce Road Truck Terminal Time – this strategy is designed to ensure the road truck spends as little time as possible at the terminal.

Maximise terminal equipment availability Load and unload to ground Pave truck transit areas


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Strategy Typical Tactics 8. Align train departures/arrival to destination

terminal receiving/despatch windows Short term storage for enough export containers to

build train loads to meet windows/cutoffs Short term storage for import containers to allow

unloading and holding prior to pick up by consignee.

All of these strategies will need to operate in the dynamic environment of fluctuating but (hopefully) slowly increasing task. Therefore, various parameters determined for the start-up operation could be expected to alter as the task increases. The development of the terminal could be expected to occur in parallel with the increase in task and the terminal services being developed in front of the increase in task in order to attract new business.

3.7.2 Specific Geelong to Melbourne circumstances

Existing Railway Configuration

The Geelong area is characterised in railway terms by:

A frequent high speed “interurban” passenger rail service between Melbourne and Geelong on a broad gauge double track.

An interstate railway on standard gauge, separated but parallel to the high speed passenger service operating to the west of the passenger railway between Geelong and Melbourne on a single track.

The interstate railway operating in tandem with a regional freight railway from Gheringhap to Geelong as a single line (dual gauged).

The affect of this configuration is that the use of the infrastructure associated with the high speed passenger service for freight operations is restrictive for three reasons:

1. the passenger service itself enjoys legislated unfettered priority under any circumstance thereby introducing a fair amount of uncertainty into the reliability of a freight operation in the short term due to daily disturbances and in the long term due to the increasing passenger service

2. the passenger railway infrastructure is double tracked, uni-directional and therefore the entry to the system involves the crossing of at least one of the tracks which results in the occupation of one train path in both directions

3. Although it is unlikely that additional mainline infrastructure would be required for an increased freight task on the passenger railway, the cost of connecting infrastructure off the mainline for any access into and out of the terminal would be substantial

For more detail refer to Box 3-1.


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BOX 3-1 HIGH SPEED PASSENGER RAILWAY (BROAD GAUGE) ACCESS

The passenger service between Melbourne and Geelong operates on the double broad gauge tracks on the eastern side of the railway corridor adjacent to the western placed standard gauge interstate freight line.

Regional broad gauge freight trains also use the passenger lines albeit at freight train speeds, typically maximum 80 kmph.

The “dominant” traffic on the lines is the 160 kmph passenger trains and the paths created by these trains form the “base” operating pattern. All train paths are formulated with the characteristics of the high speed lines forming the base. Hence an 80 kmph freight train occupies more “base train” paths than the high speed passenger train, typically 3 to 4 paths. That is, in a time distance dimension the freight trains occupy 3 to 4 times more “space” than the high speed passenger train.

Consequently, freight train path availability is restricted to periods of the day when passenger trains are infrequent or not running.

The crossing of a high speed line, to obtain at-grade access to the Melbourne bound (Up) track from the eastern side of the corridor for example, will also occupy paths, typically one path for a crossing. Access from the eastern side of the corridor to the Melbourne bound line will always involve the crossing of the Geelong bound (Down) line because there is no grade separated infrastructure to permit the movement except via the North Geelong Yard and involving two reversals of train.

Access to the high speed passenger railway infrastructure from the eastern side of the corridor will therefore be expensive and restrictive.

Similarly, access to the high speed infrastructure from the western side of the corridor involves the crossing of the interstate freight line as well as the crossing of one of the high speed passenger lines.

Therefore the use of the high speed passenger infrastructure from an IMT on either side of the corridor for any of the options considered for siting is inconvenient, expensive and restrictive and will create inefficiencies in train and terminal asset utilisation.

The use of the interstate railway from the east involves the crossing of the passenger rail infrastructure and this can occur in two ways. Either the train could cross the passenger lines at grade resulting in the use of 3 paths, two passenger paths and one freight path of the interstate railway or the train could cross the passenger lines grade separated but involves train movements to the south of any IMT option, thereby adding to the trip length and involving a change of ends for the locomotive

The use of the interstate railway from the west involves a single connection which would operate in both directions. The extra task brought to the single line interstate railway could require other mainline infrastructure between Geelong and Melbourne such as a passing loop

The use of the railway between Gheringhap and Geelong, being a single bi-direction line using both gauges (broad and standard) provides for two options, broad and standard gauge trains. In addition to the restrictions in using the broad gauge line between Geelong and Melbourne on account of the High Speed Passenger Services, the broad gauge connection requires transit via the North Geelong Yard. The standard gauge connection is more straightforward and is addressed in Figure 28.


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Interstate Freight Railway (Standard Gauge)

The interstate freight service operating between locations west of Gheringhap and Melbourne uses a bi-directional single mainline with passing loops sited on the western side of the corridor between Melbourne and Geelong. It runs parallel to the high speed passenger lines.

Access to the interstate freight line from the eastern side of the corridor could occur by crossing the high speed passenger lines at-grade but at high disruption for the reasons indicated with any crossing of those tracks.

Access from the eastern side of the corridor to the interstate mainline could occur as a grade separation via the grain loop at Geelong but would involve the reversal of the train with locomotives swapping ends in the West Geelong vicinity.

Access from the western side of the interstate line is straightforward with a simple connection to a suitable siding.

These alternatives are shown diagrammatically in Figures 1 to 6.

Access Options FIGURE 20 EASTERN ACCESS TO PASSENGER LINES


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FIGURE 21 EASTERN IMT VIA NORTH GEELONG YARD ACCESS TO PASSENGER LINES

FIGURE 22 AT-GRADE EASTERN ACCESS TO INTERSTATE LINE


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FIGURE 23 GRADE SEPARATED ACCESS FROM EASTERN TO INTERSTATE LINE

FIGURE 24 AT GRADE WESTERN ACCESS TO PASSENGER LINES


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FIGURE 25 WESTERN ACCESS TO INTERSTATE LINE

Gheringhap

In the vicinity of Gheringhap the interstate freight line and the regional broad gauge line come together to create a single dual gauge line to Geelong.

The Gheringhap Loop is a passing loop on the interstate freight line but there is also a broad gauge siding. The layout is as in Figure 26 and shows the complete separation of the broad and standard gauge lines until the lines coalesce at the Geelong end of the Gheringhap Loop.

FIGURE 26 TRACK LAYOUT AT GHERINGHAP


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In order for the Broad Gauge line to be used to and from Melbourne, Figure 27 depicts the operation. The Broad Gauge train is required to travel via North Geelong Yard as there is no direct passage to or from Melbourne.

FIGURE 27 BROAD GAUGE TRANSIT FROM GHERINGHAP TO MELBOURNE

FIGURE 28 STANDARD GAUGE TRANSIT FROM GHERINGHAP TO MELBOURNE

Figure 28 shows that the standard gauge operation is straightforward and that the IMT could be placed on either side of the mainline.


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3.7.3 Track access

V/Line Access

The previous section discussed the issues associated with actually positioning the train for gain access to V/Line’s Passenger Lines and indicated that these lines are very difficult to access in the Geelong area. Notwithstanding those reservations this section will look at the actual time available on the mainline assuming access was possible.

The main issue to be overcome is obtaining an appropriate path during times of the day when high speed passenger services are not running or for which the freight path required will not jeopardise the passenger service.

The VLine timetables were accessed at http://www.vline.com.au/pdf/timetables/geelong.pdf and http://www.vline.com.au/pdf/timetables/warrnambool.pdf. These timetables indicate a total of 62 trains operating per week between 6am and midnight at a frequency of approximately one per hour. The travel time for the trains between North Geelong2 and Footscray is approximately 50 minutes with shorter times for express services.

The issue with operating on these lines is that the slower freight train could be easily “overtaken” by the high speed passenger train, effectively slowing the passenger train down. Therefore it is vital that entry onto the network is timed so that the maximum possible opening is utilised.

Over the 75 km distance the shuttle train should be able to maintain an average speed of 50 kmph but will depend on locomotive power. Therefore the train will travel the distance in approximately 1 hour and 30 minutes. About 453 minutes after the freight train has departed, the next high speed passenger train will depart the location of the IMT connection, which is north of Geelong. It will “catch” the freight shuttle just at Footscray.

Therefore it can be concluded that the use of the broad gauge passenger lines is fraught with dangers during daytime hours, especially where express services are operating. On the other hand, at night, after midnight, no passenger trains are operating and the opportunity exists at that time if the terminals can manage the loading.

ARTC Access

The ARTC path availability is posted on the ARTC website at http://www.artc.com.au/docs/accessSeeker/pdf/access_2.4/ARTC_CUSTOMER_COMMITMENT_CHART.pdf. The chart is reproduced below in Figure 29 and shows the whole week for the railway between Kalgoorlie and Melbourne with sloping lines representing the time distance trajectory of trains. Some trains are “non-contracted” meaning paths are available for ad-hoc use. 2 The location as far south as the IMT or IMT connection 3 The freight train shuttle can’t depart immediately after the preceding passenger train, 5 minute gap.


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FIGURE 29 ARTC CURRENT CUSTOMER COMMITMENT INDICATING AVAILABLE PATHS

In Figure 30 the section around Geelong and Melbourne has been expanded for the early part of the week. There are approximately 13 trains per day in total operating along that route. There are large gaps in the trains around midnight and noon but also smaller gaps, which should enable a path at many other times of the day. The characteristics of the other trains operating on the route and their destinations are similar to the freight shuttle. Geelong is shown as the red line. The current interstate strategy involves overnight services to and from Adelaide so that a concentration of trains occurs around the beginning and end of the working day.

A very critical parameter will be the ability of the Port to handle the train, as it would be unacceptable that a train depart Geelong only to find it can’t enter the Port and would need to wait on the mainline for clearance. It is understood the new arrangements at the Port with the Dynon Port Link will permit much higher volumes of traffic to enter that precinct.

FIGURE 30 ARTC COMMITTED PATHS AROUND GEELONG AND MELBOURNE

3.7.4 Conclusion

In light of the difficulties of accessing any of the existing lines between Geelong and Melbourne from the eastern side of the corridor, and the severe restriction placed on train access on the Broad Gauge Passenger Lines both in terms of connection and in running, the use of the Standard Gauge Line from the western side is the preferred alternative.

Geelong


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3.8 Interim outcomes of site option assessment As outlined in section 3.5, an engineering assessment regarding the key features, benefits and constraints of the four original concept layouts indicates that the Gheringhap and Heales Roads sites have the most potential as intermodal facilities which could contribute to long-term the cost competitiveness of an intermodal option. The Gheringhap and Heales Road sites are also favourable in terms of their rail access as discussed in section 3.7.

In agreement with the clients it was determined that any further analysis of sites would be limited to the two sites, Gheringhap and Heales Road deemed as technically feasible of handling an intermodal operations.

Note that following the identification of the Lara site, the number of sites being considered for further analysis increases from two to three.

3.9 Road related heavy vehicle access considerations

3.9.1 Traffic generation

The traffic (particularly heavy vehicles) generated by the Inter-Modal Terminal (IMT) will be heavily dependant upon the operation and use of the facility. In addition, the proposed phased development of the IMT will mean that traffic movements generated by the site will grow gradually dependant upon the stage of development.

For the purposes of this preliminary traffic analysis a ‘worse case scenario’ has been adopted (i.e. full operation of facility). As such the following assumptions have been made for the operation of the IMT:

Two train services (Geelong – Melbourne) each day departing the IMT at 8:00 and 20:00; Each train departs and arrives at the IMT fully loaded (with containers); Each train carries 60 TEUs; Semi-trailers carrying 2 TEUs each are used to transport containers to/from the IMT; All trucks have a ‘dead-run’ component to their trip (either from or to the site); All direct loading and unloading trucks arrive on site within the 3 hour periods of 6:00-9:00 and

18:00-21:00; and On-site container storage facilities will be available and will attract a steady pickup flow

throughout the day (e.g. the pick-up of empty containers).

Based on the above assumptions the expected truck movements to/from the IMT for each train service are as presented in Table 3.7.

Table 3.7: Expected Truck Volumes To/From the IMT per Train Service

Unloading trucks per train 30 trucks

Loading trucks per train 30 trucks

Total trucks per train 60 trucks


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Unloading trucks per train 30 trucks

Total truck movements (to and from site) 120 trip ends

Duration of loading/unloading operation 3 hours

As stated above, the assumed duration of the arrival/departure of trucks associated with the loading/unloading of each train is 3 hours (between 6:00-9:00 in the morning and 18:00-21:00 in the evening). The arrival rate of trucks is expected to be the highest at a time between the arrival time and departure time of the train. It is also likely that the arrival patterns of the loading and unloading trucks would differ somewhat.

In addition to the direct loading/unloading trucks (from either the train or the hardstand), the container storage facilities on site are expected to generate vehicular trips throughout the day. As such, an approximation of the expected arrival profile of heavy vehicles to the site is presented in Figure 31.

FIGURE 31 ESTIMATED TRUCK ARRIVAL PROFILE

Estimated Truck Profile

02468

10121416

0:00

2:00

4:00

6:00

8:00

10:00

12:00

14:00

16:00

18:00

20:00

22:00 0:0

0

Time of Day

No.

of T

ruck

s (p

er 3

0 m

ins)

Unloading Trucks Loading Trucks Storage Pickup Total

Based upon the approximate truck arrival profile (presented in Figure 31), the peak hour truck volumes shown in Table 3.8 would be expected at the IMT site

Table 3.8 IMT Peak Heavy Vehicle Movement Periods

Peak Period Peak Hour Truck Arrivals Total Truck Movements

AM Peak 6:00 – 7:00 28 56


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Peak Period Peak Hour Truck Arrivals Total Truck Movements

PM Peak 18:00 – 19:00 28 56

It should be noted that the assumptions made above represent a ‘worse case scenario’. In reality, it is likely that the IMT would operate in a more efficient manner, in that trucks would aim to minimise dead-running. It is expected that a proportion of trucks would unload (either directly onto the waiting train or onto the hardstand) and then reload prior to exiting the site. As such, this would reduce the number of truck trips generated by the site.

3.9.2 Traffic distribution

The forecasted users of the proposed IMT have been identified, which has enabled the distribution of heavy vehicles to and from the site to be determined. The locations (and hence origins and destinations of truck movements) of suppliers and manufacturers have also been identified in Table 3.9.

Table 3.9 Demand by Origin/Destination

Demand (TEU's per year) Origin/Destination

Import Export

%

Geelong Industrial Area

2,800 17,000 46.5%

South of Geelong 700 50 1.8%

Lara - 22,000 51.7%

TOTAL 3,500 39,050 100%

It should be noted that the precise TEU quantities and industries expected to use the IMT facility are largely unknown and have been heavily based on assumptions.

Error! Not a valid bookmark self-reference. outlines the industry groups likely to use the IMT and the proportion of TEU’s to be transported from the various locations.

Table 3.10 Expected IMT Users and Origins

Demand (TEUs per year)

Industry Import (to Geelong)

Export (from Geelong) Origin/Destination %

Grain/Malt - 17,000 Geelong Industrial Area 40.0% - 10,000* Lara 23.5% Food Stuffs - 50 South of Geelong 0.1% Fertiliser - 9,000* Lara 21.2% Wool - 3,000* Lara 7.1% Consumer 2,800 - Geelong Industrial Area 6.6%


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Goods 700 - South of Geelong 1.5% Grain/Malt - 17,000 Geelong Industrial Area 40.0%

TOTAL 3,500 39,050 - 100%

*Assumed 2/3 of Lara production to go to IMT

3.9.3 Heales Road site

Existing Volumes

Traffic data for a number of key roads in the vicinity of the Heales Road site has been sourced from VicRoads. This data was analysed in an attempt to gain an understanding of the current operating conditions of some of the roads that are likely to be affected by traffic generated by the Heales Road IMT site. Most of the data was recorded during 2006, however one data set (for Forest Road South) was recorded in 2001. The averaged volumes during the critical IMT peak hours is presented in Figure 32.

FIGURE 32 TRAFFIC VOLUMES IN THE VICINITY OF THE HEALES ROAD IMT SITE

All volumes presented in Figure 32 are considered relatively low and within the theoretical capacity of the respective roads.


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Traffic Distribution

The locations (and hence origins and destinations of truck movements) of suppliers and manufacturers expected to use the IMT site are presented in. The likely trucking routes to and from the Heales Road IMT site have been determined and are presented in The locations (and hence origins and destinations of truck movements) of suppliers and manufacturers expected to use the IMT site are presented in Section 0. The likely trucking routes to and from the Heales Road IMT site have been determined and are presented in Table 3.11.

Table 3.11 Expected Distribution To/From Heales Road Site

Industry Origin/Destination Expected Route % TEUs No. HV

(per day)

Geelong Industrial Area Station St, Princes Hwy 40.0% 17,000 8,500

Forest Rd South 11.4% 5,000 2,500

Grain/Malt

Lara

Princes Hwy 11.4% 5,000 2,500

Food Stuffs South of Geelong

Pacific Hwy and Geelong Bypass 0.1% 50 25

Forest Rd South 10.6% 4,500 2,250 Fertiliser Lara

Princes Hwy 10.6% 4,500 2,250

Wool Lara Forest Rd South 7.1% 3,000 1,500

Geelong Industrial Area Station St, Princes Hwy 6.6% 2,800 1,400

Consumer Goods

South of Geelong Geelong Bypass 1.6% 700 350

TOTAL - - 100% 42,550 21,275

Based on the data presented in Table 3.11 the likely truck distributions in the immediate vicinity of the IMT site have been determined. These distributions are presented in Figure 33.


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FIGURE 33 ESTIMATED TRUCK DISTRIBUTIONS FOR HEALES ROAD SITE

Traffic Impacts

The following list details a preliminary assessment of the key traffic issues and impacts along each of the main routes to/from an IMT at Heales Road.

Route to/from Lara (via Heales Road and Forest Road South): Land-use along Forest Road South includes residential land-uses and a primary school. However,

Forest Road South is a VicRoads Declared Arterial Road, which has the movement of heavy vehicles as a key function, and accordingly is a suitable route to/from the proposed IMT;

A roundabout is located at the intersection of Forest Road South and Canterbury Road. This roundabout has been designed to accommodate the movements of a bus (it is noted that Geelong Regional Bus Route 12 operates along Forest Road South), however a review of design plans may be required to ensure that it can accommodate the movements of B-Doubles;

From a long-term planning perspective, it may be beneficial to identify an alterative arterial road route that bypasses Lara. This may require identifying existing local roads that could be upgraded to arterial roads to provide a route that bypasses existing/proposed residential land-uses in Lara (it is noted that such a route is not considered necessary at this stage);


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Improvements may be required at the intersection of Heales Road and Forest Road South to cater for the expected truck movements (i.e. left turn out of Heales Road and right turn into Heales Road). Improvements may include channelisation of the intersection, signalisation, a roundabout, or other forms of control. It is noted that the Heales Road IMT would not be the only contributor to an increase in heavy vehicle movements at this intersection (proposed Heales Road Industrial Estate will also contribute to truck movements) and accordingly should not be required to primarily fund improvement works at this location. A turning movement count will be required at this intersection to determine the existing traffic volumes at the intersection and to identify the most appropriate intersection treatment, based on up-to-date traffic volumes.

Route to/from Lara (via Heales Road, Broderick Road and Princes Highway): Broderick Road is a local road. Adjoining land-uses include Beckley Park and an Aldi store.

There are few residential properties that front Broderick Road. Accordingly, Broderick Road is considered to be a suitable route;

The intersection of Broderick Road and Princes Highway appears to be capable of accommodating the expected traffic movements, however a detailed intersection analysis should be undertaken to determine the impact and if any improvement works are required (e.g. increase in turn lane storage lengths). This should include the collection of turning movement count surveys and an intersection capacity analysis;

Route to/from Geelong Bypass (via Heales Road and Bacchus Marsh Road): Adjoining land-use between the proposed IMT and the Geelong Bypass is predominantly

industrial and vacant land (currently zoned Rural Living and Industry 2). Accordingly this route is suitable.

From a long-term planning perspective, it may be beneficial to ensure that the land-use adjoining this route remains suitable for the type and volume of traffic that is expected to use this route;

A roundabout has recently been constructed at the intersection of Heales Road and Bacchus Marsh Road. It is a single lane roundabout that has been designed to accommodate the movements of B-doubles.

A full diamond interchange is being constructed at the intersection of the Geelong Bypass with Bacchus Marsh Road.

Route to/from Geelong Industrial Area (via Heales Road, Forest Road South (or Broderick Road), Princes Highway and Station Street): With the exception of Broderick Road, all roads along this identified route are VicRoads Declared

Arterial Roads. As indicated above, Broderick Road is an acceptable route for the expected traffic generated by the IMT. Accordingly, these routes are considered acceptable. This route is depicted in Figure 34 below;

As identified above, improvements may be required at the intersection of Heales Road and Forest Road South to cater for the expected truck movements (i.e. right turn out of Heales Road and left turn into Heales Road).


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FIGURE 34 RECOMMENDED TRUCK ROUTES BETWEEN IMT AND GEELONG INDUSTRIAL AREA

Based on the above key traffic issues and impacts, a detailed analysis will be required at a number of intersections on the route to/from the IMT. A detailed analysis should include (as a minimum) the collection of up-to-date traffic data (i.e. 12 hour turning movement count), an intersection capacity analysis, a review of safety at the intersection, and the appropriate intersection treatment for the volume, class of vehicles and type of movements at the intersection.

A detailed analysis should be undertaken at the following intersections to determine the full extent of the impact of the IMT on key intersections:

Heales Road and Broderick Road; Heales Road and Forest Road South; Broderick Road and Princes Highway; and Hendy Street and Heales Road.


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An intersection assessment may also be required at the following intersections, although it is not considered imperative at this stage as either the additional volumes will be relatively low or the intersections appear to be capable of accommodating the additional traffic:

Forest Road South and Princes Highway; Heales Road and Bacchus Marsh Road; and Bacchus Marsh Road and Geelong Bypass.

The above impacts should be investigated in detail at the planning application stage should this site be selected for the Geelong IMT.

3.9.4 Gheringhap site

Existing Volumes

Some traffic volume data for Midland Highway has been sourced from VicRoads. This data was analysed in an attempt to gain an understanding of the current operating conditions of Midland Highway in the vicinity of the Gheringhap IMT site. The data was recorded during December 2006. The averaged volumes during the critical IMT peak hours is presented in Figure 35.

FIGURE 35 MIDLAND HIGHWAY TRAFFIC VOLUMES

The volumes indicated in Figure 35 are considered relatively low and are well below the traffic carrying capacity of the Midland Highway (estimated to be in the order of 2,800 vehicles per hour (two-way)).


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It should be noted that although the volumes indicated in Figure 35 represent those during the peak IMT times, the peak periods for Midland Highway traffic were as follows:

AM Peak hour – 7:00-8:00; and PM Peak hour – 16:00-17:00.

Traffic Distribution

As described in Section 0 the likely origins/destinations of goods utilising the IMT facility have been identified. All such locations are within and around the Geelong area, with no product coming from northern or western Victoria. As such, all heavy vehicle demands at the Gheringhap site would utilise the Midland Highway and approach/depart the site to/from the east. Hence the expected truck routes in the immediate vicinity of the IMT site would be as indicated in Figure 36.

FIGURE 36 ESTIMATED TRUCK DISTRIBUTIONS FOR GHERINGHAP SITE

Traffic Impacts The additional vehicles generated by the IMT facility would not adversely affect the operation or performance of Midland Highway. There is currently spare capacity on this roadway, and the addition of approximately 28 heavy vehicles (arriving and exiting during the highlighted morning and afternoon peak periods) would not be expected to hinder the operating characteristics of the Highway.

The intersection at the entrance location of the site would likely require some treatment. At this preliminary analysis stage the most likely treatment for this site would be the construction of a Type CHR Rural Intersection (Guide to Traffic Engineering Practice – Part 5: Intersections at Grade). However, a detailed intersection analysis would need to be conducted to fully assess the implications


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for this site entrance location, particularly given the implications of the high volume of trucks entering and exiting the site and to determine storage lengths of the auxiliary turn lanes.

3.9.5 Lara Site

Existing Volumes and Traffic Distribution

The primary access to the site is likely to be via Old Melbourne Road and Beach Road to access the Princes Highway.

Existing traffic data for Old Melbourne Road and Beach Road has not been collected or collated to date.

Old Melbourne Road provides a link road between Little River and Lara. Land-use adjacent to Old Melbourne Road, including the proposed site, is generally zoned “Farming” and includes open land. Residential land-uses exist at the Little River and Lara ends of Old Melbourne Road and are zoned “Rural Living”.

Accordingly, the use of Old Melbourne Road as a key route between the proposed IMT and the Princes Highway is considered appropriate.

A full diamond interchange is provided at the intersection of Beach Road and Princes Highway that allows convenient access to the proposed IMT site.

Given the convenient access to Princes Highway, it is expected that all truck movements to/from Geelong and surrounding areas will travel via the Princes Highway and access the site via Beach Road and Old Melbourne Road.

The vehicles that have an origin or destination in Lara and surrounds, are likely to access the site via Old Melbourne Road (to the south) and either McIntyre Road or McClelland Avenue.

Table 3.12 details the expected distribution of truck movements to and from the proposed IMT site at Lara, while Figure 37 presents the expected transport routes.


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Table 3.12 Expected Distribution To/From Lara Site

Industry Origin/Destination Expected Route % TEUs No. HV

(per day)


Old Melbourne Rd, Beach Rd, Princes Hwy 40.0% 17,000 8,500

Grain/Malt

Lara Old Melbourne Rd, McClelland Ave 22.3% 10,000 5,000

Food Stuffs South of Geelong

Old Melbourne Rd, Princes Hwy and Geelong Bypass 0.1% 50 25

Fertiliser Lara Old Melbourne Rd, McClelland Ave 21.2% 9,000 4,500

Wool Lara Old Melbourne Rd, McClelland Ave 7.1% 3,000 1,500


Old Melbourne Rd, Beach Rd, Princes Hwy 6.6% 2,800 1,400

Consumer Goods

South of Geelong

Old Melbourne Rd, Princes Hwy and Geelong Bypass 1.6% 700 350

TOTAL - - 100% 42,550 21,275


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FIGURE 37 ESTIMATED TRUCK DISTRIBUTIONS FOR PRIVATE DEVELOPMENT SITE (LARA)

A preliminary site layout has been prepared by the proponent of the proposed private development site at Lara. It includes an internal road network that provides access to a number of different areas within the site. The proposed layout provides vehicular access to Old Melbourne Road in 4 locations. The eastern and western-most access provide accesses to land designated as "Transitional Rural Residential". The remaining two accesses provide access to the "General Industrial" component of the site (i.e. to the main operations of the IMT).

At the Planning Permit application stage, further review of access will be required to determine the most appropriate intersection treatment for these entries to the site to ensure they provide for safe and efficient movements of through-traffic and vehicles accessing the site (including B-double movements). However at this early stage some issues have been identified.

Traffic Impacts

The following list details a preliminary assessment of the key traffic issues and impacts along each of the main routes to/from an IMT at Lara.


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Route to/from Geelong (via Old Melbourne Road, Beach Road and Princes Highway): Land-use adjacent to Old Melbourne Road (between the site and Beach Road) and Beach Road

are ‘farming’ uses. Accordingly, the use of this route is appropriate; A detailed intersection assessment will be required at the intersection of Old Melbourne Road and

Beach Road to determine the extent of any improvement works that may be required at the intersection. This should include the collection of detailed traffic movement survey data at the intersection.

Route to/from Lara (via Old Melbourne Road, McIntyre Road or McClelland Avenue): Vehicles travelling along this route will travel via Old Melbourne Road (south of the proposed

site entry only) and then either McIntyre Road or McClelland Avenue; Land-use adjacent to Old Melbourne Road is predominantly ‘farming’ uses, with residential uses

(i.e. Rural Living Zone) at the southern end of Old Melbourne Road. Land-use adjacent to McIntyre Road is predominantly low-density residential. While land-use adjacent to McClelland Avenue is also residential it is at a higher density compared to McIntyre Road.

Neither McClelland Avenue nor McIntyre Road are VicRoads Declared Arterial Roads, however McClelland Avenue is situated in a Road Zone Category 2 under the Greater Geelong Planning Scheme, while McIntyre Avenue has no such zoning.

Based on the existing zoning of the land, it would be more appropriate for McClelland Avenue to be the main east-west route to Old Melbourne Road. However, based on the existing density of the existing land-use adjacent to McIntyre Road and McClelland Avenue, it would be more appropriate for McIntyre Road to be the main east-west route to Old Melbourne Road;

A detailed intersection assessment will be required at the intersection of Old Melbourne Road and McClellend Avenue (and/or McIntyre Road) to determine the extent of any improvement works that may be required at the intersection. This should include the collection of detailed traffic movement survey data at the intersection.

Based on the above key traffic issues and impacts, a detailed analysis will be required at a number of intersections on the route to/from the IMT. A detailed analysis should include (as a minimum) the collection of up-to-date traffic data (i.e. 12 hour turning movement count), an intersection capacity analysis, a review of safety at the intersection, and the appropriate intersection treatment for the volume, class of vehicles and type of movements at the intersection.

A detailed analysis should be undertaken at the following intersections to determine the full extent of the impact of the IMT on key intersections:

Old Melbourne Road and Beach Road; and Old Melbourne Road and McClelland Avenue (and/or Old Melbourne Road and McIntyre Road).

The above impacts should be investigated in detail at the planning application stage should this site be selected for the Geelong IMT.


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3.10 Key decision making principles At the outset of this study a decision making framework was devised by the clients in order to assess the relative merit of the options being analysed. This framework is replicated in Box 3-2.

BOX 3-2 DECISION MAKING FRAMEWORK

1. Robustness against statutory requirements 2. Capacity to deliver agreed strategic outcomes for the DOI and VicTrack, including projected

growth in containerised freight movements to and from the Geelong area, to and from the Port of Melbourne and implications for road and passenger train traffic

3. Conformance with land use planning and constraints. 4. Minimisation of environmental impacts and other potential conflicts eg. Road transport amenity. 5. Acceptability to stakeholders 6. Capacity to deliver integrated infrastructure outcomes 7. Ability to gain “buy-in” of key players, develop options for investment partnerships and offer

significant economic advantages 8. Capacity and suitability of the existing and proposed road networks i.e. Melbourne/Geelong

Freeway 9. Capacity and suitability of the existing and proposed rail infrastructure 10. Ability for the site to provide for efficient and expanded freight operations (as predicted – eg.

value added services) Mention needs to be made clear if the site will be efficient without the expected value add services i.e. if it is viable just operating with lift-ons and lift-offs.

On review with the client it was determined that a number of these criteria were considered ‘make or break’ in that without achieving a relative positive outcome when considered against the criteria a site or option being put forward would not achieve a sustainable commercial, economic or social policy outcome. These criteria are described below.

A. Capacity to deliver agreed strategic outcomes

It was agreed that this criteria pertains to the many objectives of the State Government which pertain to rail transport. These objectives include:

Sustainable management of the growth in the freight movements – both containerised and bulk – to and from the Geelong region

Achieving the aim of increasing the amount of freight into and out of the Victorian ports on rail to thirty percent.

Ensuring that the negative implications for road and passenger train traffic as a result of the freight task are minimised.

Ensuring the sustainable and appropriate commercial use of the intrastate broad gauge network Ensuring consistency with key federal, state and local government documents including


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Port of Geelong: Draft Port Land Use Strategy (Toll GeelongPort and Department of Infrastructure)

Draft Geelong Port Structure Plan (City of Greater Geelong) AusLink Melbourne-Geelong Corridor Study (Commonwealth Department of Transport and

Regional Services and Department of Infrastructure) Local Government Planning Documents including the Golden Plains Shire Southeast Land

Use Planning Review

B. Acceptability to stakeholders

In discussions with the client it was determined that this criteria relates to the community and government stakeholders of relevance to the project. These stakeholders include the Geelong community, the community surrounding the Port of Melbourne as well as Government interests such as VicTrack, the Department of Infrastructure, Regional Development Victoria, the City of Greater Geelong, V/Line and the passenger community which utilise the Geelong-Melbourne rail passenger line

C. Ability to gain “buy-in” of key players

Whilst the previous criteria pertains to social and policy outcomes in the majority, this criteria is related to the economic and commercial sustainability of options put forward. Although there may well be non-commercial imperatives for government and communities to advocate for a certain outcome (some of these imperatives are listed under the capacity to deliver strategic outcomes), the commercial and economic imperative to develop an intermodal facility is attractive to private interest and can offer strategic economic advantages.

D. Ability for the site to provide for efficient and expanded freight operations

As a result of the analysis of supply chains undertaken throughout this study it has been determined that the basis of a terminal at any site requires a value add operation to attract shippers, service providers and anchor tenants and no site would provide for efficient and expanded freight operations as just a lift-on lift-off model.

3.10.1 Initial criteria review outcome

As a result of this initial review of the decision making framework it was determined that the above four criteria would be weighted higher in the review of options. It was also determined that the Graincorp and Lascelles Wharf sites did not ‘pass’ these make or break criteria. They are thus not assessed further against the other criteria

3.10.2 Weighting of the decision making criteria

In discussion with DoI and RDV it was determined that the criteria should be weighted in accordance to their impact on whether a site option should be put forward. The criteria and weightings applied are outlined in Table 3.13


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TABLE 3.13 CRITERIA AND WEIGHTINGS

Criteria Weighting (1-10)

Robustness against statutory requirements 1 Capacity to deliver agreed strategic outcomes for the DOI and VicTrack, including projected growth in containerised freight movements to and from the Geelong area, to and from the Port of Melbourne and implications for road and passenger train traffic

9

Conformance with land use planning and constraints. 4

Minimisation of environmental impacts and other potential conflicts eg. Road transport amenity.

5

Acceptability to stakeholders 9

Capacity to deliver integrated infrastructure outcomes 8 Ability to gain “buy-in” of key players, develop options for investment partnerships and offer significant economic advantages

9

Capacity and suitability of the existing and proposed road networks i.e. Melbourne/Geelong Freeway

3

Capacity and suitability of the existing and proposed rail infrastructure 5 Ability for the site to provide for efficient and expanded freight operations (as predicted – eg. value added services)

9

3.10.3 Outcome of initial assessment

In review and discussion with DoI and RDV representatives the Heales Road and Gheringhap sites were assessed against the criteria. The outcomes of this collective assessment are detailed in Table 3.12. This assessment indicates that whilst both sites are feasible and score relatively highly against most criteria, it is the Heales Road site which is likely to offer a more commercial, social, economic and sustainable solution.


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TABLE 3.14: ASSESSMENT OF HEALES ROAD AND GHERINGHAP SITES AGAINST DECISION MAKING CRITERIA

Raw Assessment Weighted Assessment Criteria Heales

Road Gheringhap Heales

Road Gheringhap

Robustness against statutory requirements 8 8 8 8

Capacity to deliver agreed strategic outcomes for the DOI and VicTrack, including projected growth in containerised freight movements to and from the Geelong area, to and from the Port of Melbourne and implications for road and passenger train traffic

9 7 81 63

Conformance with land use planning and constraints. 7 7 28 28

Minimisation of environmental impacts and other potential conflicts eg. Road transport amenity. 7 8 35 40

Acceptability to stakeholders 10 6 90 54

Capacity to deliver integrated infrastructure outcomes 5 7 40 56

Ability to gain “buy-in” of key players, develop options for investment partnerships and offer significant economic advantages

9 4 81 36


8 6 24 18

Capacity and suitability of the existing and proposed rail infrastructure 7 9 35 45

Ability for the site to provide for efficient and expanded freight operations (as predicted – eg. value added services)

7 10 63 90

Scores 77 72 485 438

3.10.4 Outcomes of considering the Lara site

The inclusion of the Lara site in the assessment of sites in this study is summarised at Table 3.15. The Lara site displaces the Heales road site as the favoured site using the same assessment guidelines as in the original study.


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TABLE 3.15 ASSESSMENT OF HEALES ROAD AND LARA SITES AGAINST DECISION MAKING CRITERIA

Raw Assessment Weighted AssessmentCriteria Heales

Road Lara Heales

Road Lara

Robustness against statutory requirements 8 8 8 8 Capacity to deliver agreed strategic outcomes for the DOI and VicTrack, including projected growth in containerised freight movements to and from the Geelong area, to and from the Port of Melbourne and implications for road and passenger train traffic

9 9 81 81

Conformance with land use planning and constraints. 7 7 28 28

Minimisation of environmental impacts and other potential conflicts eg. Road transport amenity.

7 7 35 35

Acceptability to stakeholders 10 8 90 72

Capacity to deliver integrated infrastructure outcomes 5 9 40 72 Ability to gain “buy-in” of key players, develop options for investment partnerships and offer significant economic advantages

9 10 81 90


8 9 24 27

Capacity and suitability of the existing and proposed rail infrastructure

7 7 35 35

Ability for the site to provide for efficient and expanded freight operations (as predicted – eg. value added services)

7 10 63 90

77 84 485 538

Ownership and Governance issues

The City of Greater Geelong owns the Heales road site. This provides them with leverage to establish an appropriate management and access regime consistent with the broad strategic requirements for a sustainable intermodal terminal system in Victoria. These include such matters as open access to the site and multi user terminals.


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The Lara site is currently in private ownership and thus a guaranteed position with respect to access and multi user status can not be presumed. The beneficial owner is Buildev P/L and whilst we consider their reputation as solid in all ways, it does present some different governance challenges for the site. The Government may wish to consider an early treaty with the owner on outcomes for any facility at this site. For instance common access terminals and multi user land side access to rail might be two requirements. The imprimatur of government planning backing and in principle support would in itself be an influential trade off for some consideration along these lines by a developer. In addition, we note that the site has a strategic location as a corridor between the railway line and the Avalon airport. This may also be a useful corridor for future passenger rail options. All in all there are significant advantages of the Lara site and it seems a rich opportunity for joint outcomes to be negotiated by governments and the developer.

The matter would be one for negotiation between governments and the developers. Issues that would arise in any such negotiation would include:

Would government objectives be adequately achieved with a private siding and/or non-open access?

Does the government (either state or local) want to or need to own the land on which the intermodal terminal is established?

Would it be possible to excise a small parcel of the land in the case of the Lara site for government ownership or joint control? Would this be a sensible strategy?

Whose role is it to fund the capex required to develop a private site into an intermodal terminal?

Whilst the most appropriate site in our assessment is in private ownership this does not preclude government achieving all of the government objectives for an IMT through proper negotiations. In our view, the developers of the site are very keen to work with government in order to have their site “ordained” as the most appropriate for development. It is not unreasonable to anticipate some accommodation of each others position in reaching this point.

We therefore suggest the following steps as a recommended way forward in terms of developing an intermodal site at Lara:

1. Determine the appropriate access and ownership arrangements for the site;

2. Identify the planning and land tenure arrangements that would best suit governmental objectives;

3. Work with the developer to see whether or not these arrangements can be accommodated at the Lara site;

4. Agree to protect the Heales road site as a back up if the outcomes for the Lara site can not be suitable negotiated.


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4. KEY RECOMMENDATIONS

4.1 Demand for an intermodal facility 1. The supply chain analysis undertaken in section 2 indicates that there is a demand base

for an intermodal terminal. Potential capture of freight task is in the order of 42,000 TEU per annum as well as significant non-containerised tasks

2. The main demand potential for such a terminal is based on the container import export freight task.

3. Non-containerised task alone moving into and out of Geelong and the region from within Victoria currently does not justify the development of an intermodal facility but requires consideration of the long-term capacity of the facility. Therefore, any intermodal facility built should incorporate a no-regrets policy in terms of broad gauge access

4. The development of an intermodal facility whose core operations involves a container shuttle operation between the Geelong and the Port of Melbourne has the most potential in the short term

5. As discussed in section 3.7 such a shuttle option is more appropriately suited to the standard gauge network given the paucity of rail paths available on the broad gauge line between Melbourne and Geelong

4.2 Intermodal facility site options 1. Following technical considerations of the sites it was determined that the Lascelles

Wharf and Graincorp bunker sites are inappropriate for IMT development and were thus excluded from further analysis.

2. Although the Gheringhap and Heales Road sites are both positive the decision making matrix ranks the Heales Road site more positively than the Gheringhap option. In particular the ability to attract business to the Gheringhap site is severely constrained by current supply chains.

3. It was therefore recommended that the development of an intermodal facility be pursued at the Heales Road site.

4. However, since the delivery of the above draft recommendations an assessment of the newly identified site at Lara against the same criteria prioritises its development over Heales Road.

5. Prior to pursuing any development at Lara it is recommended that the various agencies of government determine what the deem as appropriate policy, governance, finance and access arrangement given the private ownership of the land

6. Given clarity on these matters it is recommended that the government negotiate with the owner of the land with the aim of developing an intermodal terminal site that is of mutual acceptance.

4.3 Workplan going forward Confirmation of the preferred option(s) for more detailed evaluation More detailed cost-benefit assessment of any option going forward Confirmation of the facilities to be considered critical to establishing base case (e.g., container

park/depot, land and access availability for warehousing etc.)


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For container depot operation, initial discussions with potential participants (including carriers, depot operators, shipping lines etc.) to determine anchor tenancies, potential operators and users.

In support of a future detailed business case, confirm the need for, and set terms of reference for, a more comprehensive base line study of existing and potential manufacturing and freight interests (e.g., origin/destination of target freight volumes within and passing through the hinterland)


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A. STAKEHOLDER CONTACT LIST Company/organisation Contact Position Commodity/ industry group

Dave Lockett Geelong Manager K & S Freighters

Steve Fanning General manager

Road carriers; contracted to carry aluminium (Alcoa)

Blue Circle Cement Ian Duncan Distribution Manager Quarry operators; cement manufacturers

John Douglas Executive General Manager Boral

Paul Hillyer Transport Manager

Quarry operators

Murray Goulburn (MGC)

Phil Sanders National Storage and Distribution Manager

Dairy processors

Jim Riordan MD Riordan Grains

Ian MacDonald CFO

Grain storage, packing

Tatura Milk Mark Corbury Manager, Warehousing and Distribution

Dairy processors

Fonterra Mike Robbins National Logistics Manager

Christian Norgard

Manager Supply and Distribution


Murray Boyd Financial Controller

Malt manufacture and export

Barrett Burston Kevin Mitchell Manager, Geelong Maltings Malt manufacture and export

Josie’s Transport Mike Motika General manager Road carrier, container depot

GrainCorp Shaun Williams Manager, Geelong Terminal Bulk-handlers: Grain, fertiliser, meal.

(Also own/operate potential site)

Pettavel Winery Peter Flewellyn Winemaker Winery: Wine - domestic and exports

Bartter (Steggles) David Clare Logistics Manager Foodstuffs processing


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Company/organisation Contact Position Commodity/ industry group

Rays Outdoors (Harbin)

John Begg Logistics Manager Import and distribution

OneSteel Metaland Harry Long Location Manager - Geelong Steel storage and distribution

Australian Wool Holdings

Bruce Harper State Manager - Victoria Wool storage and export packing

City of Greater Geelong

Anton Mayer Manager – Economic Development

Stakeholder and site owner/proponent

Golden Plains Shire David Spear Manager – Executive Projects Site proponent

Modern Olives Norma Aballa Logistics officer Foodstuffs: Olive, oils and nursery

Patrick Ports/GeelongPort

Lindsay Ward General Manager Port operator; site proponent

G21 – Geelong Regional Alliance

Chris Balaam (and members ‘transport pillar’)

Executive Officer Industry and community alliance

Scotchmans Hill Matthew Brown General Manager Foodstuffs: Wine – domestic and export

Glenn Keast Group Distribution Manager Cotton On

John Oxley Shipping Coordinator

Clothing: Import and distribution; store owners nationwide


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B. TERMINAL DESIGN LAYOUTS FIGURE 38 GRAINCORP BUNKER SITE – POTENTIAL CONCEPTUAL LAYOUT


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FIGURE 39 OYSTER COVE – POTENTIAL CONCEPTUAL LAYOUT


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FIGURE 40 GHERINGHAP SIDING – POTENTIAL CONCEPTUAL LAYOUT


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FIGURE 41 HEALES ROAD – POTENTIAL CONCEPTUAL LAYOUT


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FIGURE 42 LARA SITE


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C. CALACULATING RAILWAY LINEHAUL COSTS

C.1. Background The costs of a railway operation involving shuttle trains carrying containers to and from the Port of Melbourne from the Geelong area comprises a component relating to the train referred to as “above-rail” (AR) and a component relating to use of the track referred to as “below-rail” (BR).

In Victoria, as with all jurisdictions in Australia, the BR costs are regulated and in Victoria the Essential Services Commission regulates the regional railways including the country network and the suburban network where freight is involved and is the broad gauge network, while the ACCC regulates the interstate line which is Standard Gauge.

The ESC and ACCC have set caps on the charges for accessing the track by a train operator.

C.2. Cost Drivers In comparative terms it was earlier noted that the Geelong to Melbourne haul was short for a railway operation. Inherently railways provide a more cost effective service where the costs of ancillary services such as terminal costs can be diluted over a large distance.

In any railway operation the AR costs will be more sensitive to the impact of distance than the BR costs because a large part of the BR costs are distance related, particularly maintenance and capital costs.

However, many of the AR costs are time related and the efficient use of that time is the key to operating an efficient service. The utilisation of the AR capital and labour resources is paramount in this context and the costs associated with AR train operation will vary with the degree of utilisation.

Earlier it was indicated that fast cycle time of the operation would assist with this utilisation but that the cycle time depended on many factors such as terminal unloading time and reasonable access to the track.

C.3. Below Rail Costs

C.3.1. Victorian Broad Gauge Network Including the Geelong to Melbourne Passenger Lines

The ESC has handed down Decisions relating to the capped cost of access. The access provider can decide what charges they wish to levy below that price provided they treat each operator equitably.


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In Item C of Appendix 1 to the Commission’s “ACCESS ARRANGEMENT 29 June 2006 made by ESSENTIAL SERVICES COMMISSION VICTORIA (“ESC”) in respect of PACIFIC NATIONAL (VICTORIA) LIMITED” the Flagfall charge is capped at $5.51 per train kilometre plus $8.64 per ‘000 Gross Tonne Kilometres (GTK). This is the most recent decision by the ESC. However, the then owner4 Pacific National released its own price schedule which indicated price less than the Commission’s cap. The release came in the form of a letter to ESC quoting "Southern NSW ARTC rates" on August 31st 2006. This reference is not now available because of the change of role of PN in regard to network ownership and the status of the actual charges in unknown at this time.

Following the transfer of ownership4 of the regional network of Victoria to V/Line Passenger in May 2007, the arrangements for access prices are somewhat fluid but it could be inferred that for the interim the charges would be “grandfathered” and that the rates indicated in PN’s letter to ESC would be applicable. These charges were approximately one half of the ESC’s caps.

At the ESC cap rate the access charge would be approximately 1.3c/GTK. This is equivalent to approximately 2.6c/Nett Tonne Kilometre (NTK) assuming a reasonable loading arrangement5.

These costs apply to the mainline and in addition to these costs will be the costs associated with the provision of the rail spur and the connection to the mainline. These could be substantial depending on the chosen location and the configuration changes to the mainline for the connection. In the case of a standard gauge operation a very real prospect is that with only a modest task a new standard gauge passing loop will need to be constructed at an indicative cost of $5m.

C.3.2. Interstate Mainline Access Charges

The Interstate Line, which is standard gauge, is controlled by ARTC. ARTC provide posted prices for access to that track at http://www.artc.com.au/about/reference.htm.

For the Adelaide to Melbourne sector the indicative6 access price is $1,606.59 flagfall for a train plus $2.646 per ‘000 GTK for a “high”7 performing train which is typical of the container trains on that corridor.

The two part price reflects the fact that a train will occupy capacity regardless of its length and therefore train operators seek to maximise the length of their train within other boundary parameters such as terminal track length. The lengthening of trains is also used as a strategy to reduce AR costs.

Assuming a 600m train carrying 60 TEUs, each with 10t load, the access cost per GTK from the Geelong area to Melbourne will be approximately 2.1c/GTK or 4.1c/NTK. In this calculation the flagfall accounts for 87% of the charge.

4 Controller of the asset, but leased from the government 5That is where there is not a gross imbalance in loading to tare. GTK to NTK ratios can be as high as 3 6 The final price is dependent upon the actual location and network entry requirements 7 Max train speed 110kph / Max Axle Loading up to 21T / Length up to corridor standard max


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The lower ESC rate indicates the basis upon which a flagfall is charged in their Decision, being on the number of Train Kilometres, rather than for ARTC as a flat rate. In addition, the ESC rate does not attempt to recover any past capital expenses of the infrastructure, the Victorian government treating those costs as sunk, a situation that is unsustainable in the longer term. ARTC also operate to not recover the full economic cost of their infrastructure, which is represented by the Ceiling Costs and instead set prices its access somewhere between the Floor and Ceiling to “reach an appropriate balance”8 of various matters.

The ARTC rate is most likely negotiable on the basis of the particular haul in their network and a reasonable indication for the purposes of this paper is that the direct linehaul BR access price would not be significantly different between either the Broad Gauge Network and the Standard Gauge Network.

The major differences in Network related costs are those associated with connection and train operation, neither of which has been considered here.

Therefore it is concluded that a reasonable estimate of the appropriate BR access costs for the linehaul component of the task will be approximately 1.5c/GTK or 3c/NTK ($22.50 per TEU)9.

C.4. Above Rail Costs While the calculation of AR costs is problematic for the general case because so much of the AR operation’s efficiency is dependent on many factors, some benchmarks are available for comparative purposes.

In a submission10 by Worley Parsons and Booz Allen Hamilton consulting firms, an analysis of the AR costs associated with the grain network in Victoria was undertaken. In that analysis a reasonably efficient regime at the loading and unloading points was assumed and a “free running” mainline operation at moderate speeds was assumed.

That analysis concluded that AR costs could be11 approximately 3.67c/NTK. Various operators indicated in feedback to the ESC12 that they believed that cost to underestimate the real costs. However, the operators were providing their view of actual costs incurred which may or may not have inefficiencies incorporated.

Another benchmark for AR costs occurs at near to the most efficient railway operation in Australia, the QR Coal Network in Queensland. One would expect that in this case the track and rollingstock to be highly utilised, thereby diluting the impact of capital charges and that the variable costs of AR operation would dominate the AR costs.

8 “ACCESS UNDERTAKING” dated 1 May 2002, Clause 1.2 c. 9 For a 75km haul 10 “Above Rail Costs for Grain Transport on the Regional Network in Victoria” 11 As long as efficient practices were used 12 “Victorian intra-state country rail network affordability – Information Paper” Essential Services Commission, June 2006


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In Table 2.1 of Working Paper 6, ABOVE AND BELOW RAIL COSTS REVIEW OF QR PROCEDURES 1998/99, of the QCA Draft Decision 1999, an analysis of QR’s total cost indicate that “Train Running” and energy costs dominate the expenditure such that for Working Expenses the AR costs are approximately twice the BR Costs. There are some dangers in directly comparing the Victorian and Queensland jurisdictions however, because each body treats capital for both BR and AR differently. Nevertheless, it is reasonable to conclude that AR costs are higher than BR costs.

Using these benchmarks it is estimated that the linehaul AR costs will be approximately 4c/NTK. ($30 per TEU)

C.4.1. Zero Base Estimation

A zero base estimation can be undertaken for AR costs which however requires many assumptions about the actual operation. A model has been produced with the following main assumptions:

Demand: 120 TEU’s per day (42,000 per year over 350 days) Train Length 470m 75km haul Cycles per day 2, 350 days per year Locomotive Capital Cost $5m Wagon Capital Cost $150,000 each

This is a generous set of assumptions and would represent the upper limit for the linehaul costs. Therefore it is concluded that a reasonable estimate of the appropriate AR costs for the linehaul component of the task will be approximately 4.28c/NTK or $32.13 per TEU

The breakdown percentage of the cost components is shown in Figure 43.


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Above Rail Cost for Shuttle

Loco capital interest charge19%

Loco depreciation9%

R/S Capital interest charge17%

R/S Depreciation4%

Driver cost24%

Fuel14%

Loco Maint8%

Wagon Maint5%

C.5. Total Railway Linehaul Costs The combination of AR and BR Costs is approximately 7c/NTK ($52.50 per TEU) using the parameters and assumptions detailed.

C.5.1. Sensitivities

Clearly some of the parameters used in the AR analysis are generous and strategies as outlined earlier could be used to bring those costs down. Longer trains and more cycles per day will assist in this regard.

If the demand was 200 TEUs per day, again using 2 cycles with a train 770m long, the AR cost would come down to 2.89c/NTK ($21.68 per TEU) and the total cost reduce to 5.89c/NTK. ($44.18 per TEU). Other methods of reducing AR cost are available such as using single driver operation, written down locomotive and wagon capital as well as increasing the number of cycles for much greater tasks.

It is unlikely however that the AR cost would be below 2c/NTK or $15 per TEU, with total railway linehaul costs approximately 5c/NTK or $37.50 per TEU.

FIGURE 43 BREAKDOWN OF ABOVE RAIL COSTS


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D. BENEFIT COST ASSESSMENT

D.1. Parameters Assumptions related to tonnage increase Total Number of Containers Captured per annum 42000 Other freight task tonnes 0 Proportion of traffic for shuttle 100% Take up rate 2010 25% Take up rate 2015 25% Take up rate 2020 50% Conversion factors for road damage

Conversion Factor tonnes/Teu incorporating empties 10 Conversion factor containers to truck numbers 1.5 Assumptions related to road/rail distances Average Road Distance 74 Rail Distance (Geelong Centre to Swanson) 75 Rail Distance (Gehringhap Centre to Swanson) 85 Road Damage costs Unit Parameter Arterial Vehicle Kilometres Travelled (c/km) 1.57 Passenger Car Units (c/PCU-km) 0.31 Equivalent Standard Axles (c/ESA-km) 3.22 Average Gross Mass (c/tonne-km) 0.12 Non-attributable costs (c/km) 2.27 Note: these unit costs are taken direct from NTC model (Option 1: Base Case) Vehicle Paramaters Proportion of all container traffic B-Doubles 1 B-Double PCU 4 B-Double esa 1.9 B-Double Agm 39 Note: 'B-Double utilised is as defined in NTC charging work as <9 axle Rail Construction Costs Investment Costs $750,000 Other rail and terminal capex $13,591,148 plant and equipment $184,500


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Externality Values heavy vehicle c/ntk rail c/ntk urban rural urban only air pollution 0.97 0.01 0.33greenhouse/climate change 0.07 0.07 0.03noise 0.26 0.026 0.14water 0.1 0.06 0.001nature and landscape 0.26 0.11 0.08urban separation 0.22 0 0.08Note these unit costs are taken direct from ATC Transport Management guidelines volume 3 p9. 101-102 Road operating Costs $300 Rail operating costs $223 Discount Rate 6%


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Unit Quantity Rate Cost

Contingency

% Total Cost Rail Siding Lay Track Formation Capping sqm 18,000 $12.50 225,000 30% $292,500 Siding+Runaround metre 1,500 $560 840,000 30% $1,092,000 Future Siding metre 0 $560 30% Crossing Works Main Line Turnouts no 2 $120,000 240,000 30% $312,000 Siding Turnouts no 2 $100,000 200,000 30% $260,000 Catch Point no 2 $25,000 50,000 30% $65,000 Signalling item 1 $500,000 500,000 30% $650,000

Rail work outside terminal and level

crossing work item 1 $700,000 700,000 30% $910,000 Site Preparation Earthworks Clear Site sqm 0 $0.50 0 30% $0 Cut/Fill cubm 12,000 $30 360,000 30% $468,000 Civil Works Access Road sqm 400 $25 10,000 30% $13,000 Fencing metre 1,450 $50 72,500 30% $94,250 Gates no 3 $1,025 3,075 30% $3,998 Hardstand sqm 51,900 $120 6,228,000 30% $8,096,400 Building sqm 250 $1,000 250,000 30% $325,000 Access road upgrades item 1 $750,000 750,000 10% $825,000 Landscaping item 1 $15,000 15,000 0% $15,000


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Unit Quantity Rate Cost

Contingency

% Total Cost Service Infrastructure to Site Water Sewerage Electicity Natural Gas Telephone Other item 1 $130,000 130,000 30% $169,000 $10,573,575 $13,591,148

Plant & Equipment -Current Cost Nos continge

ncy total cost Trailers $20,000 0 30% $0 Prime Movers $58,000 0 30% $0 Ferrari-Reef Stacker $285,000 1 30% $85,500 Belotti-Reef Stacker $130,000 1 30% $39,000 Hyster-Forklift $120,000 1 30% $36,000 Hyster-Forklift $40,000 1 30% $12,000 Forklifts $20,000 2 30% $12,000 $184,500


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D.2. Summary of benefit cost assessment 2008 2009 2010 2015 2020 Costs to Government

Investment Costs $750,000 $ - $ - $ - $ - Rail and Terminal Capex 0 $13,591,148 $ - $ - $ - Plant and Equipment 0 $184,500 $ - $ - $ -

Total Costs $ 750,000 $ 13,775,648 $ - $ - $ - PV Costs $ 842,700 $ 13,775,648 $ - $ - $ - NPV costs to 2058 $ 14,618,348 NPV costs to 2038 $ 14,618,348

Benefits Reduced Road Damage $ - $ - $ 82,179 $ 164,359 $ 328,718 Reduced operating costs $ - $ - $ 813,750 $ 1,627,500 $3,255,000 Reduced expernality impact $ - $ - $ 80,730 $ 161,461 $ 322,921 Total Benefits $ - $ - $ 976,660 $ 1,953,320 $3,906,639 PV Benefits $ - $ - $ 976,660 $1,459,634 $2,181,447

NPV Benefits to 2058 $ 45,882,454 NPV Benefits to 2038 $ 36,679,598

BCR (2058) 3.1 BCR (2038) 2.5