I think we’re all pretty much aware that Newcastle’s seemingly benevolent (but sometimes not quite liquid) overlord, Nathan Tinkler, has plans to build a new coal loader on the former BHP Steel site.
On the face of it, it seems like a great plan. More jobs, larger capacity at what is already the world’s largest coal exporting port, things to make the whole process a lot more environmentally friendly and so on.
But the more I’m reading up about what exactly Tinkler’s Hunter Ports Group wants to do, the more questions I have regarding its feasibility and whether or not they’re telling us the whole truth.
There are a few things here that don’t quite add up.
The plan (available here as a PDF) shows a new rail corridor being built from the existing line that runs out towards the Kooragang Island terminal. The new corridor will run along the shore of the Hunter River, through the recently developed Steel River industrial park, across the One Steel site and into the BHP land where the proposed coal loader will be located.
Proposed Rail Corridor (from Hunter Ports proposal- click for full size)
The problem here is pretty obvious: there are existing businesses and buildings that are privately owned in the way.
Existing Development on the Steel River site (from NearMap.com - click for full size)
There is nothing I can find that explains how, if it’s even possible, that the Hunter Ports Group plans to acquire
this land in order to build their new rail corridor. At my estimate, there are around 8 existing buildings in the way, not to mention a number of undeveloped sites within the Steel River precinct that may or may not have already been sold by the developer (which is Mirvac).
This map, taken from the Steel River website, shows just what is currently planned. The beige lots are described as being “under offer” (naturally it doesn’t list who has made the offer), the yellow lots are still for sale and the green lots have been purchased already.
Sales Plan for Steel River site (from steelriver.com.au - click for full size)
It would appear that the lots still for sale will not be impacted by Tinkler’s proposal. But without better data (which I, sadly, don’t have any more since leaving the <FormerEmployer>
it’s hard to tell for certain. From what I can tell, Tinkler’s rail line will be located entirely on the northern side of Riverside Drive.
There’s also the question of where the funding for this massive piece of infrastructure is going to come from. Surely, Hunter Ports aren’t going to just foot the entire bill themselves. I’d be amazed if they didn’t approach one of the many regional and infrastructure development funds that are around to get some sort of grant out of them.
So there’s that.
Then there’s the question of Hunter Ports’ proposed Community Fund, under which 20 cents from the sale of every tonne of coal through the port will go to supporting the “local community” (which the cynic in my thinks will be mostly used to deliver funding to the Newcastle Knights NRL club and the Newcastle Jets football club).
Hunter Ports claims that “[o]nce the terminal is at full capacity, this will provide up to $20 million a year for community projects in Newcastle and the Hunter”.
OK. Let’s deploy a bit of basic maths. To get $20 million at 20 cents per tonne, you need to be exporting 100 million tonnes of coal per year.
100 million tonnes. That’s quite a lot. Especially when you consider that Port Waratah Coal Service (who currently operates the three existing coal loaders in Newcastle, with plans currently in progress to build a fourth), according to their data [PDF], are currently on track to export about 96 million tonnes this year, with projects that they will hit 145 million tonnes within the next few years.
So, Hunter Ports plan to build a coal load that on its own will process an amount of coal currently processed by the entire Port Waratah Coal Services operation?
Finally, there’s the question of the number of jobs that will be created should Tinkler’s coal loader be built. He claims that the number of jobs will be in the order of 1600. However, a resident’s group created to consult with Hunter Ports over the proposal has their doubts.
It was reported in the Newcastle Herald on 3 December:
“On the other hand, Hayes questioned the Tinkler claim that the terminal would create 1600 jobs – a figure Hayes said ‘‘cannot be genuine’’ given employment numbers at other Newcastle terminals.”
Now, I don’t have access to data showing just how many people are employed by Port Waratah Coal Services, so I really have nothing to back this claim up. However, I’m assuming that the group does have some idea which is why they’ve raised the question in the first place.
So while on the face of it, Tinkler and Hunter Ports Group have a grand vision to help change and improve Newcastle and its coal infrastructure, their plan isn’t perfect and really needs to be questioned as to whether or not it’s possible and that they’re telling us the full truth about it.
The proposal to realign the rail line away from residential areas, like the proposal to build a 100 million tonnes a year (mtpa) coal terminal, is at concept stage. The State Government is currently reviewing the concept.
Regarding the rail line, discussions are continuing with the Australian Rail Track Corporation (ARTC), as well as with land owners along the proposed track. Similar to the rest of the Hunter Valley rail network, it is proposed this project is owned and funded by the ARTC. As part of the normal process, this is a user-pays system and ARTC would receive access charges from users as it does from the rest of the network. While Hunter Ports has considered alternative approaches including funding the rail link as part of the port development (which also works economically), independent government ownership makes sense as the proposed rail line can service a lot more than Hunter Ports. It can be used by the Carrington Terminal and other industrial sites along the river. ARTC is the logical body to build the rail line, or take ownership of it once completed.
Realigning the rail corridor away from the residential area is an opportunity to solve a long-term problem that has known adverse social and environmental impacts in the community. It will transform the Mayfield precinct. However, the proposed rail realignment – and the benefits it will bring – will only happen if a new coal terminal is built on the former BHP site. As part of exploring the feasibility of delivering what is a significant benefit for Newcastle, Hunter Ports has proactively discussed arrangements with impacted landholders in the corridor.
The 20c/tonne Community Fund will begin when the first tonne of coal is exported through the proposed Hunter Ports terminal. It will be established by Hunter Ports to help fund important community projects that add value and make a real different to Newcastle and the Hunter region. We will discuss the administration of Community Fund with relevant local Councils and the State Government. It will have absolutely nothing to do with the sponsorship of the Newcastle Knights and Newcastle Jets.
The 1,600 jobs are both on and off site once the terminal is operational and include support services such as transport, maintenance and other services. Hunter Ports engaged independent experts Ernst & Young, through their accounting advisory arm, to model its proposal and estimate associated job and economic benefits.
The proposal is for a coal terminal that will process up to 100 million tonnes a year (mtpa) of export coal at full capacity. However, unlike current or other proposed coal terminals, the Hunter Ports terminal will incorporate state-of-the-art design features that reduce dust and noise. These include noise and wind barriers, and high density coal storage with lower exposed surface area to further minimise dust. This will raise the bar on the way export coal is handled in Newcastle.
Like anyone else in the community, you are welcome to ring 1800 252 040 or visit our website www.hunterports.com for further information.
Good article. Highlighting questions and doubt can only be helpful. I wish more public issues got similar treatment around the traps. It’ll be interesting to see how it pans out.