Port of Melbourne – Port of Choice AFIF National Conference – Friday 24 May 2019

What will be covered today? Introduction to Port of Melbourne Big ships strategy Port Development Strategy Port Rail Transformation Project

Introduction to Port of Melbourne The better the port works, the better Victoria works. And that’s better for all of us. As private manager of the port, Port of Melbourne is aligned with the commercial interests of our customers and is keen to work with industry and the State to grow the port and deliver least cost infrastructure to ensure a sustainable competitive supply chain.

Our Business One of Canada’s largest defined benefit pension funds. Leading global independent infrastructure investor A global diversified alternatives investment firm Australian sovereign wealth fund.

Our Port Operating Model Channel Wharves Land, Road & Rail Operating Contracts Leases Dredging Navigation Aids Vessel Traffic Services Harbour Master Marine Safety & Security Station Pier Marine Safety & Navigation Land and Infrastructure Assets Operations

We are growing “Forecast commodity movement will almost double by 2060” Victorian Freight Plan 2018 “7,197,297 TEU’s by 2050” Infrastructure Victoria – Deloitte Economics “8,861,425 TEU’s by 2050” Port of Melbourne Analysis By 2050 Port of Melbourne is expected to handle the following volume: 8.8 million containers across international, mainland and Tasmanian sectors 520,000 motor vehicles, including cars and transport / agricultural equipment for both the Victorian and Tasmanian markets 13.7 million cubic metres of bulk liquid products consisting of refined petroleum, crude oil, hazardous liquids and other / food grade liquids 6.6 million mass tonnes of dry bulk products with key commodities including cement, gypsum, grains and sugar 2.9 million mass tonnes of breakbulk products which includes steel, timber and project cargoes

Our Challenges COMPOUND ANNUAL GROWTH INFRASTRUCTURE INVESTMENTS Container movements have increased higher than predicted forecasts in response to economic activity. COMPOUND ANNUAL GROWTH Strong investment in significant infrastructure projects is driving economic growth, new markets and supply chain opportunities. INFRASTRUCTURE INVESTMENTS Continued development of efficiency outcomes and opportunities for city freight logistics to be integrated into city planning. SUPPLY CHAIN INNOVATIONS Changes in the shipping market are driving demand for larger ships which in turn influences how our local supply chain works. SHIP SIZE Melbourne and Victorian population growth is placing new pressures on our infrastructure and city planning. POPULATION GROWTH

Our Vision Freight is a fundamental component of the economy and a key user of the transport infrastructure network. Our Vision is to have a multimodal approach for regional, metropolitan and urban freight movements, to support: Efficient regional networks – supporting regional economies and protecting jobs in regional growth areas. Port rail shuttle network – leveraging established investment in outer metro hubs and taking trucks off inner city streets. Connecting to Inland Rail – integrating the domestic and international freight task to have a more efficient supply chain. Urban freight logistics – supporting inner city growth through innovative freight models and infrastructure. We want to take unnecessary moves out of the network, improve social amenity and ensure lowest cost investment.

Big Ships Strategy

Our Big Ship Strategy Webb Dock East Berths 4 & 5 The Victorian Ports Corporation Melbourne (VPCM) Harbour Master has advanced the phased implementation process for the deployment and handling of larger vessels into Webb Dock East Berths 4 and 5. Vessels of up to 336 metres LOA with a maximum draught of 13.25 metres can now be accepted. There are additional conditions required by the Harbour Master for the trial vessels which include: Wind and tidal stream limitation to be advised by Harbour Master Maximum 118,000mts displacement until the Berthing Aid is commissioned and the pilots trained. On completion vessels up to 140,000mts displacement can be accepted Advance notice per vessel to the Harbour Master which includes arrival condition Three tugs will be required to be in attendance for berthing

Our Big Ship Strategy Yarra River & Swanson Dock terminals Bosphorusmax vessels VPCM has approved the commencement of a staged trial to accommodate container vessels up to 315m LOA with 48.2m beam at Swanson Dock subject to the following: Maximum tidal stream for entry and departure through The Heads of 2 knots Maximum wind speed for swinging and berthing at Swanson Dock of 15 knots Three tugs, each with a minimum bollard pull of 68mts are to be used for swinging and berthing Good visibility must be maintained both ahead and astern Facility must be provided for mounting the pilots’ portable precision navigation sensors with a clear view of the sky to enable unimpeded reception of Global Navigation Satellite System (GNSS) signals The trial managed by the Harbour Master will commence with a vessel with a draught not exceeding 12.5m, which will be incrementally increased subject to assessment of a safe and successful manoeuvre. Initial trials will take place in daylight hours.

Our Big Ship Strategy Yarra River & Swanson Dock terminals Structural capacity The current 98,000 mts displacement limit for Swanson Dock berths remains in place. Port of Melbourne has commenced construction works for new 150 mts bollards to be fitted to Swanson Dock East and West on berth 3, enabling the wharf infrastructure to cater for vessels up to 140,000 mts displacement. The implementation program timing for mooring infrastructure and berthing assistants has been agreed between PoM and the Swanson Dock Terminal Operators.

Our Big Ship Strategy Yarra River & Swanson Dock terminals For vessels > 300 metres LOA approval from the Harbour Master is required Container vessels > 300 metres LOA or 43 metres beam proceeding to and from Swanson Dock require access for pilots to position Global Navigation Satellite System (GNSS) receivers with a clear view of the sky on open bridge wings to enable utilisation of precision navigation equipment A maximum trim of 2.5 metres by the stern is permissible with no trim by the head For large beam vessels (> 43 metres) suitably trained Senior Pilots familiar with forward bridge vessels and using three tugs will be utilised. It is proposed that the pilotage of ships > 310 metres LOA and/or > 43 metres beam will be subject to an additional Pilot’s licence endorsement.

Port Development Strategy

2050 Port Development Strategy The Port of Melbourne (the Port) is Australia’s largest container and general cargo port Located in the heart of Melbourne the Port covers 505ha of land and 52km of shipping channels The Port: is the gateway for moving goods into and out of south-eastern Australia contributed 19,600 jobs and $6 billion to the Victorian economy in 2017-18 services around 2,700 commercial vessel visits each year handled 3.0 million TEU of containers and 360,000 new motor vehicles in 2017-18 A roadmap for the future The 2050 Port Development Strategy (PDS) is our plan to guide the Port of Melbourne’s growth and development over the long-term

How the 2050 PDS has been created Forecasts, technical assessments and analysis (second half of 2018) 2050 PDS released for comment (first half of 2019) WWW Discussion paper released to seek your feedback (August / September 2018) PoM is currently preparing the PDS with the process expected to take through to around the middle of 2019 Key current PDS activities include Discussion Paper and stakeholder engagement activities (including today) Supporting analysis and assessments look a the broad range of technical and operational which impact the growth and development of the port The above information and understandings will enable a Draft PDS to be submitted to Government by the end of 2018. Following any comments from Government it is expected that public consultation on the Draft PDS will be undertaken during the first half of 2019. This process enables multiple rounds of engagement with key stakeholders, such as yourselves, and will enable the PDS to be finalised and published during the second half of 2019. 2050 PDS prepared and submitted to Government (end 2018) Finalisation and publication the 2050 PDS (second half of 2019)

Shaping the future of the Port Stakeholders consulted included: Industry Port stevedores and tenants Melbourne based cargo interests Non-containerised trade companies Freight rail operators Port and freight industry associations Hobart and Launceston based cargo interests Sydney based shipping lines and cargo interests Government Victorian, Tasmanian and Australian government agencies and departments Local government surrounding the Port Community Local communities surrounding the Port Across the PDS Discussion Paper consultation period PoM held 19 tailored information events and drop-in sessions with 190 participants from industry, government and community

Key themes from feedback Key industry feedback themes: Support long term growth plans for the Port to provide certainty for ongoing investment activities Recognise that long term port growth plans need to respond to growth and changing nature of trade See a need for significant improvement in road and rail links into and out of the Port Would like more adequate protection of landside freight transport corridors from encroaching developments See the potential for new technology to increase productivity and efficiency Recognise the crucial role that the Port, as an inner- city port, plays in keeping Victoria a great place to live, work and do business

Port Rail Transformation Project

Our investment scope New Infrastructure INVESTMENT Construction of port rail terminals and common user infrastructure Additional investment in growth related maritime initiatives such as larger ship infrastructure Reduces cost per container as rail terminal operators don’t need to include a return on capital. Reduces handling costs due to increased on dock capability. INVESTMENT RAIL ASSET ACQUISITION Rail Asset Acquisition Acquisition of existing rail assets owned by tenants Reduces cost per container as rail terminal operators’ costs do not need to include a return on capital Port Rail Terminal Land Providing modal choice for movement of freight into and out of the port Reducing road congestion and increasing road safety Reducing last mile costs (particularly for exports) Remaining competitive with Port Botany (NSW) especially given recent rail funding announcements PORT RAIL TERMINAL LAND Acquisition by Port of Melbourne of port rail terminal land leased by tenants (i.e. becomes rent free) Reduces cost per container as rail terminal operators do not need to recover lease costs for terminal land

1 2 3 4 Key industry and supply chain needs Infrastructure Access Arrangements Cost Service Levels Infrastructure Access Arrangements Cost of Rail Service Levels Infrastructure capacity Infrastructure availability Shared users Flexibility for operations Open access arrangements Certainty of access Coordination across infrastructure access Cost comparisons to road Economies of scale Last mile costs reduced Certainty of service levels Performance monitoring Transparency of performance

Why are we proposing a Port Rail Solution? The benefits of rail 02 01 03 Community benefits Growth capacity Competition 04 Supply chain Investment is essential to realise full value of Government’s Port Rail Shuttle Network (PRSN) Initiative: Provide modal choice by improving cost competitiveness of rail relative to road Improve rail access for movement of freight into and out of the port Promote investment in, and the development of, outer metropolitan intermodal rail terminals by assuring terminal investors of efficient container handling at the port end of the journey Reduce road congestion and improve road safety around the port Reduce last mile costs (particularly for exports) Increase landside container capacity at port Support competition between rail terminal operators

Thank you Mr Jim Cooper Executive General Manager Commercial Port of Melbourne Jim.Cooper@portofmelbourne.com 24