Ports provide planning predicament

23/04/2008 - 22:00

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Many in Western Australia think we are lucky because our ports have largely been free of the issues that have confronted the east coast.

Ports provide planning predicament

Many in Western Australia think we are lucky because our ports have largely been free of the issues that have confronted the east coast.

The most dramatic case is that of Dalrymple Bay in Queensland, where dozens of ships have had to queue for weeks to get coal shipments loaded.

Over here on the west coast, problems of that magnitude are a rarity.

Many believe this is because the biggest export ports – those on the Pilbara coast – are largely privately owned and operated, ensuring the infrastructure for shipping has kept up with growth in production.

That’s a rosy picture and one that may mask the reality of what is happening at several key ports on the state’s west coast.

Without wanting to be alarmist, there is a problem bubbling away beneath the surface at several critical export points that ought to be dealt with quickly, before real threats to business or the state emerge.

There are three ports to my knowledge that have issues. All are long running and none of them looks anywhere near being sorted out.

From Bunbury in the South West, to Kwinana and right up to Geraldton, there are major problems, each distinctly different but all having the effect of pinching business or thwarting strategic planning.

That’s not to say the state government is necessarily to be blamed for all of this, however it will inevitably be considered responsible if exporters can’t get their product to market.

In Bunbury, there’s been a long-running dispute regarding the incompatibility of coal and woodchips. There are plans to move the existing woodchip operations but the government has been seeking a contribution from the coal industry for that, even though, presumably, it would earn a royalty from exported coal.

Coal producer Griffin, for one, has simply exported out of Kwinana, which is hardly opportune given the issues facing the outer harbour there.

There are, from what I hear, growing problems in Cockburn Sound, as Fremantle Ports’ facilities reach capacity.

At both these ports, the state government has to deal with building magnate Len Buckeridge. At Kwinana, the government has stopped his consortium getting on with its port plans, while at Bunbury it is trying to resume his land to expand the operations there.

From what Mr Buckeridge says, they’ll have a fight on their hands.

This is all very ironic. The state is standing in the way of private port development in the south while at the same time seeking a private development at Okajee, north of Geraldton.

What seemed like a good idea at the time, restricting the right to build a new port to the two consortiums involved in mining in the area, is swiftly devolving into farce.

The Midwest Corporation Ltd-linked proposal has been thrown into doubt because its major partner, Chinese-based Sinosteel, launched a hostile takeover bid.

Things are tetchy between the groups to say the least.

There is also the issue of foreign investment, with many in the state wary of China Inc’s desire to control resources from the mine to their factories.

That is yet another massive hurdle to overcome.

Murchison Metals Ltd and its partner Mitsubishi look in the box seat as a result, but they have weaknesses too. Without a bankable feasibility study, the Murchison proposal will remain laden with conditions, assuming it meets the May 9 deadline, as would Mid west’s if that consortium can find enough common ground to make a bid.

That could leave the state’s two-horse race looking pretty lacklustre. Expect red faces all round if we get one conditional bid on the table.

This is at a time when Geraldton’s port is also nearing capacity.

We’ve mucked around with Okajee for more than 10 years and there’s every possibility we’ll have nothing to show for it.

This is a big challenge for the state.

This infrastructure is important and the timing of its development is becoming ever more critical, with delays said to be rising at ports like Geraldton.

The answer would have been to settle at the outset what the ideology is that governs our ports.

At Okajee, the state has embraced the idea of a private port but opted to restrict entry, resulting in two relatively weak competitors – one of whom could end up being the Chinese government in the guise of a commercial operator. At Kwinana and Bunbury, it seems, we can’t have a private port or any element of private operation.

These are confusing signals to the market.

The result has been a lack of investment to solve the issues that are mounting.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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