SIGN OF THE TIMES

8 The proposed phased development of VICT, vessels in the 10,500 – 13,000TEU range with a length of up to 300+m, and it is clear that there is a desire among key lines to introduce the next generation of 15,000TEU to 18,000TEU vessels with LOAs in the range 360m to 400m. Herein lies one of the inherent strengths of the ICTSI proposal – the phased development of VICT incorporating a continuous quay line that will ultimately offer four container berths able to service vessels of up to 367m in length with an overall capacity of 14,000TEU.

Key Fact

This is one of the main influential factors – the maximisation of terminal capacity incorporating a continuous quay line – upon which ICTSI has built and delivered a highly competitive proposal for consideration by the Port of Melbourne Pty Ltd and State Government of Victoria. It is a proposal that, ICTSI underlines, offers the lowest cost per TEU, provides for increased throughput across the quay from 3.3mTEU to 3.7mTEU, reduces environmental risk and has diverse operational benefits including for interfacing transport service providers.

Cost parameters are another major attraction. ICTSI has engaged multiple global firms to assess the merits of its proposal in comparison to current expansion designs for the Port of Melbourne. Jacobs Engineering undertook a detailed technical assessment, including estimates of construction costs, while Boston Consulting Group focused on market and economic assessments.

The external reports conclude that ICTSI’s proposal can deliver cost savings of more than AUD240 million (USD165 million) and spread the timing of spend over a longer time period while introducing significant capacity into the market sooner.

Wider Context

The timing of the ICTSI submission can be seen to be appropriate in a wider context. The last decade has seen a rationalisation of the container terminal sector – the absorption of smaller entities as the preference for larger operating platforms has emerged. Similarly, the development of new larger container terminal facilities, including along secondary trade lanes, is rapidly becoming the established norm. A prime example today is in the port of Santos, Brazil where ANTAQ, Brazil’s national waterway and maritime transport authority, is preparing to offer a new concession – STS 10 –for a 46-hectare container facility with a 1200m berthing line and a design capacity to handle a volume of 1.9mTEU/year.

The ICTSI proposal effectively concurs with today’s development norms and aligned with this the requirements of independent industry bodies such as Australia’s Freight & Trade Alliance which continually voices the need for more cost competitive shipping systems to be introduced in Australia. Furthermore, the approach itself – an unsolicited bid – is not so unusual in that while this is for a larger than usual slice of new terminal capacity, terminal expansion is regularly achieved by agreement with the host port authority which in any case always has the opportunity to market test any such proposals.