Ports push starts in the Mid West

MANY Western Australian ports are either planning, negotiating or constructing additional projects and facilities with the aim of expanding their operations and improving capacity.

Perhaps the most important recent ports announcement took place last week when Premier Colin Barnett signed a long-awaited development agreement with Oakajee Port and Rail.

The agreement for the $4 billion Oakajee deepwater port and rail project (see image, right), to be located 25 kilometres north of Geraldton, includes the exclusive appointment of OPR as the infrastructure provider to design and construct a port facility and a railway linking the port with mining tenements in the Mid West region.

OPR, which is a joint venture between iron ore miner Murchison Metals and Japan's Mitsubishi Development (a subsidiary of Mitsubishi Corporation), won a tender in July last year to develop the infrastructure, beating Chinese-backed private outfit, Yilgarn Infrastructure.

However, recent reports suggest that Yilgarn may launch legal action against the state government over the decision to appoint OPR, after the company spent tens of millions of dollars working towards winning the agreement over the past few years.

Mr Barnett said the development of the port and associated infrastructure at Oakajee would be the most important project for the state over the next 50 years.

And he highlighted that, while Chinese suppliers and investors were welcome to participate in the project in one form or another, control of the port would remain in the hands of the government.

"In the development of the Mid West iron ore and other natural resources, I believe the best way of protecting our long-term interests is to make sure the port is an Australian port, (that) it is a government owned and controlled port," Mr Barnett told WA Business News.

"So we look after our interests as the owner of the natural resource and we can have Australian, Japanese, Chinese, European firms invest to develop the natural resources but we stay in control."

Murdoch University maritime economist Malcolm Tull believes the Oakajee announcement is good news for the state.

"As there are a number of projects in line or developing in that region, obviously it's important they have the transport infrastructure, that is the rail connections and the port facilities," Dr Tull said.

"In the current climate it's especially important as it sends a positive signal the state is going ahead with development and I think it's actually appropriate that ... the public has a role in the development and management of the port."

Meanwhile, the proposed development of Fremantle's outer harbour in Cockburn Sound remains unclear with nearly a decade's worth of discussions between the government and project proponents, Fremantle Ports and the Len Buckeridge-backed private consortium James Point Pty Ltd, failing to deliver a tangible result.

James Point signed an operating agreement with the government in 2000 to develop new port infrastructure known as Stage 1, a land-backed bulk facility between the BP Refinery and Alcoa that could be delivered within two years.

Stage 2 proposes a larger container facility to be developed adjacent to the BP Refinery and James Point.

Fremantle Ports investigated options under the Carpenter government including offshore and land-backed facilities (known as the Kwinana Quay Project) estimated to cost approximately $1.3 billion, some of which directly affected the James Point port proposal.

However, all parties did agree with the creation of an expert group to guide the expansion of Fremantle Port, announced earlier this month.

The Fremantle Ports Optimum Planning Group will develop recommendations for the long-term trade needs.

Also, the deepening of Fremantle inner harbour and approach channels, with associated land reclamation at Rous Head, is a major infrastructure project in Fremantle Ports' current capital works program.

The project, which is budgeted to cost $146 million, is needed to cater for deeper draft ships as the average size of container ships calling at Fremantle has increased by 85 per cent since the early 1990s.

Fremantle Ports intends to begin the harbour deepening at the end of 2009 and complete all works by the end of 2010.

Less than a fortnight ago, construction on a new multi-user bulk minerals export berth at Utah Point in the Port Hedland inner harbour began.

Environmental approval for the Utah Point project was received at the start of this month, while dredging of the 300 by 60 by 14-metre deep berth pocket was completed in May 2007 and approval of the $225 million development was received in October 2007.

In the south of the state, Albany Port Authority chief executive Brad Williamson said the $180 million Grange Southdown Iron Ore Project had been deferred in recent months due to the current economic situation.

"Who's doing what is still unclear," Mr Williamson told WA Business News.

"There's been no commitment or commercial finalisation but we feel we are close to receiving environmental approval."