Brighton Bypass 10 November 08 - Parliament of Tasmania

PUBLIC WORKS, HOBART 10/11/08 - BRIGHTON BYPASS PROJECT (SPENCE/CANTILLON/CONLEY/DIXON)

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THE PARLIAMENTARY STANDING COMMITTEE ON PUBLIC WORKS MET IN COMMITTEE ROOM 2, PARLIAMENT HOUSE, HOBART, ON MONDAY 10 NOVEMBER 2008 INQUIRY INTO BRIGHTON BYPASS PROJECT Mr DAVID SPENCE AND Mr PHIL CANTILLON, PROJECT DIRECTORS, Mr DAVID CONLEY, PROJECT MANAGER AND Ms SELENA DIXON, SENIOR PROJECT OFFICER, BRIGHTON TRANSPORT HUB PROJECT, DIER, WERE CALLED, MADE THE STATUTORY DECLARATION AND WERE EXAMINED. CHAIR (Mr Harriss) - Thank you. We will now proceed. Mr SPENCE - We have prepared as much as we possibly can to be in the position today to

give you the information you want and to answer your questions. In that context we have noted past concerns from the committee about lack of information, so we have really done our best to give you as much as we can without overloading you with unnecessary detail. I thought I would plan to give you an overview - where the project fits in terms of the overall State transport situation and what is the rationale in that context. Then, after that, I will hand over to David Conley who will talk about the costs and the time lines and the design.

We are very enthusiastic about this project. As a general overview statement, it really is

rare that you can get an opportunity to work on a project like this that is really going to be of substantial benefit to future Tasmanian generations. So we feel pretty privileged in that regard. As we all know, freight is critical for us all. For all Tasmanians it really is the life-blood of the community. That is really what this project is all about in terms of an overview statement. It is about transport efficiency. That is the real focus from DIER's point of view. We have been looking at moving Macquarie Point now for approximately 10 years, so it is not something that has just come to the fore. The development of transport hubs on urban fringe areas is a trend that we are seeing across Australia, so it is not something that is particularly unusual for us.

In terms of an overview I think it is instructive to look at our current transport system

and to do a bit of focus in terms of where we see the transport system going. Prior to doing that it might be instructive to just give you a very quick outline of what is a transport hub. They do differ. Put simply, a transport hub is a place where goods, freight is transferred from one type of transport to another. That is simply what it is. So it may involve moving freight from one road vehicle to another road vehicle. I think out on the inspection they used the words consolidation and deconsolidation - fancy words for saying we are putting freight on and off larger trucks and onto smaller trucks, which will be an important component of the hub. I think some people think of it as just a rail facility. It will importantly cover road-to-road as well.

The second area covered is road-to-rail and rail-to-road - again, the transfer of goods.

The fourth area is road or rail to ship though obviously that is not occurring here. So their core feature is that transfer function. As well as that, other hubs can pick up other activities, for example providing for warehousing activity, providing for storage in terms


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of warehousing and providing facilities for unpacking and packing containers. So that is a quick sketch of what a transport hub is.

In terms of moving forward, I will just quickly run through the major changes occurring

in our transport system because these provide the rationale for the hub in itself. These are things that I think a number of the members of the committee will be aware of. Industrial land in southern Tasmania is in short supply and is becoming increasingly crowded. Glenorchy and Derwent Park have really reached their capacity. They are near residential areas, so there is a potential conflict situation there. In terms of the future development of southern Tasmania, available industrial land is a real issue and what we are finding is that the use of industrial land is moving further out from central Hobart and from Glenorchy and Derwent Park. A number of the businesses that you saw this morning as we drove past them are businesses that have relocated from Derwent Park and Moonah and the northern suburbs of Hobart.

The Brighton Council has really seen this happening and they are looking to cater for

industrial and commercial development in the area that we looked at this morning. That is one of the key areas.

The road link with Hobart is a key issue in terms of the Brooker Highway. The northern

part of the Brooker Highway is still relatively free-flowing and efficient and it is designed to accommodate a much larger traffic flow than is currently there. The southern end is congested so that is an issue that, as transport planners, we need to look at.

Historically, the Hobart port has really gone through a significant change over the last

two decades. As we know, the port's throughput has significantly declined, but that does not mean that freight going out and into southern Tasmanian has gone down. In actual fact the opposite has occurred. So, the freight task between southern Tasmania and northern ports has continued to increase.

Mrs NAPIER - What percentage increase would that be? Mr SPENCE - I can get those figures for you. I do not have them offhand but I will perhaps

have a look at them and I can refer to them as I get them. There certainly has been a significant decrease and, as we know, a significant decrease in terms of Hobart port's activity.

We know rail is struggling to be competitive with road. It is a situation that I think we

are all aware of. The rail upgrade package that has been funded by the State and Commonwealth governments will initiate a significant improvement in reliability and cost reduction. However the hub is going to provide a key role in terms of making rail more competitive with road. Probably the most important factor of all is freight growth which is, certainly in terms of looking forward through to 2022, looking at doubling over that period. Freight growth is going to grow significantly and container freight growth has already significantly increased over the last five years. That trend is going to continue. So again, as transport planners, we need to take that into account in term of what we are looking for.


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What do we do about these changes? We are looking at focusing on the whole system. The Government is really looking at the best way to tackle these transport issues in a system-wide approach. What is the best way to move freight in an efficient way? What is the best way for us to move freight from southern Tasmania to and from the northern ports? The way we have looked at that is in a whole-chain approach. So we are looking at in terms of the logistics chain, all the way from the northern ports to southern Tasmania. We look at where the choke points are. Where are the points where efficiency is challenged? Where are the points where the costs are most incurred? They really are at the hubs because they are the points where you are moving freight from one mode to another mode. That involves costs and time. We really need to make the hubs work as effectively as possible. The Brighton transport hub will perform a critical function there in terms of getting freight from southern Tasmania through to the northern ports.

That is really an outline of the challenges we see moving forward. In terms of looking at

our existing situation we had a good look this morning at Macquarie Point. I do not think I need to dwell on it too much apart from saying we would all agree that it is old and inefficient,

Mrs NAPIER - It is squeezy. Mr SPENCE - It is squeezy. It is in the wrong place and it adds costs to all the goods that

come into and out of southern Tasmania, which not only affects southern Tasmania but also affects the northern part of the State. In modern planning terms, location of a transport facility like this in the centre of the city is inappropriate. It compounds our traffic problems.

CHAIR - Given what we saw at Macquarie Point, that is still a transport hub of a sort? Mr SPENCE - Yes. CHAIR - You made the comment that it is in the wrong location. Is that in the context of the

modern time? At a period in time it would have been seen as an appropriate location given the proximity to the port.

Mr SPENCE - Yes, I think that is right. In terms of the proximity of the port and in terms of

urban congestion, in previous days I think it was an appropriate location. I think times have changed and you can see time has changed further in those directions. There is no doubt at an appropriate time it was the appropriate location. The other key thing we noticed today was the encroachment of residential and small business at Macquarie Point. I do not know whether Peter mentioned it to you but, for example, they have to keep that site watered constantly to keep the dust down for the local residents.

CHAIR - Is there any road-to-road transfer at that location? Mr SPENCE - There is, yes. There is quite a bit of road-to-road transfer. CHAIR - With the Toll operation?


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Mr SPENCE - Yes. One other thing certainly worth mentioning is that the rail journey between Brighton and Hobart is very slow and very inefficient. There are 21 level crossings which require very low train speed to minimise the risk of crashes. In terms of rail competitiveness and transport efficiency it would be a good thing not to have to cover that area.

CHAIR - It suggests to me on page 10 of your submission that if the travel time is to be

reduced in both directions by 80 minutes then clearly you are saying to us that it is 40 minutes from Brighton to get into Hobart because of that slow travel time.

Mr SPENCE - Yes, that is right. That is certainly what the study indicated to us and by

removing that you will directly save 80 minutes off the journey. Obviously some of that is taken up in truck travel time.

Mrs NAPIER - While we are talking about that aspect of the northern part of the Brooker

Highway, one of the issues that came up when we were looking at Macquarie Point and the logistics was the weight of the zinc that is transported. Is that section of the Brooker Highway constructed such that it could withstand the transport of zinc to the transport hub?

Mr SPENCE - I certainly think the northern section could and, indeed, the whole of the

Brooker Highway can manage that in terms of the weight. It is managing it at the moment. The real issue with products like zinc is the congestion that it is causing on the southern section. It would increase the maintenance costs of the whole.

Mrs NAPIER - In discussion with the rail people they were saying that if zinc was to be

transported on the Midland Highway it would turn it to dust pretty quickly because of the weight. So then the question is whether it would have a similar impact upon the northern part of that Brooker Highway.

Mr SPENCE - You can ask Phil that question if it is an important one. My view is that it is

constructed to withstand those types of volumes of traffic and weight. CHAIR - Do you want to get Phil to the table, David, and we will swear him and proceed? Mr SPENCE - I think if we are looking at questions like that, then, yes. Mr PHIL CANTILLON, PROJECT DIRECTOR, BRIGHTON BYPASS PROJECT, DIER, WAS CALLED, MADE THE STATUTORY DECLARATION AND WAS EXAMINED. CHAIR - Sue, you might want to pursue that a little bit while Phil is here. Mrs NAPIER - We were talking about Macquarie Point and the Brooker Highway and the

issue that came up was the impact that the zinc that is transported currently - not shipped but transported via rail - would have a much higher wear-and-tear factor on any highway that you choose to use it on. So what are the projections for increased wear and tear on the connection of the Brighton Transport Hub?


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Mr CANTILLON - In terms of traffic, the department has done an analysis in terms of the extent of the adequacy of the highway for its current loadings et cetera and what takes place. We commit the maintenance funding to carry out the necessary work and we have programs that support those initiatives in terms of rehabilitation works. Essentially, we see it as business as usual for the moment. Everything that is being planned at this stage is consistent with the framework that we have in place to manage the highway.

Mrs NAPIER - So you are saying that you do not expect any additional wear and tear on that

northern section of the road as a function of transporting those heavy weights from the zinc works out to Brighton?

Mr CANTILLON - There were pavements built in that area in recent times and they are

designed for a 20-year pavement life and are based on a certain freight volume. How they work it out is through equivalent standard axle, which means the number of trucks et cetera that are travelling that section of highway. Any increase in impacts may have an effect, but at this stage we do not believe that they will be significant in terms of the long-term pavement asset. There are always sections of highway that these new developments occur on and our maintenance regime responds to those developments as is necessary and we do not necessarily see anything that would be untoward in terms of managing that part of the network.

Mr HALL - How many truck movements per day from the zinc works to Brighton would

there be, roughly - what is the tonnage? Mr CANTILLON - That is a level of detail that - Mr SPENCE - The tonnage at the moment is 250 000 tonnes per annum. Perhaps someone

behind me can do a quick calculation of truck numbers and one thing or another. Mr CONLEY - It is a bit less than that - 800 tonnes per day and 30 tonnes on a truck is

potentially 30 trucks, I suppose. Mr HALL - Still quite significant. Mrs NAPIER - If you compare that to the table that you have on page 31 where you are

saying that there is going to be a reduction in 163 semis and 52 rigids on the Derwent Park Road -

Mr SPENCE - No, sorry - my apologies; this diagram is a little bit hard to read. What that is

saying at the bottom of that chart is that between Derwent Park Road and Macquarie Point there will be a reduction on the Brooker Highway of those vehicles.

Mrs NAPIER - That is how I interpret it - so on that section of road that would actually

reduce. In turn, one would assume that those rigids and semis would be redirected towards Brighton.

Mr SPENCE - That is right. Mrs NAPIER - And having said that, I then started to wonder why. We have 163 that are

presumably are coming from the zinc works.


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Mr SPENCE - No, they would not all be from the zinc works; there would be others. Mrs NAPIER - So what other areas would they be from? Mr SPENCE - There would be other vehicles that are involved with Toll freight operations. Mrs NAPIER - Okay. Mr SPENCE - So some of them would not end up on the train; some of them might be

transported through on trucks and instead of those trucks coming down - and picking up what the chairman mentioned before in terms of truck-to-truck activity at Macquarie Point, they would go out to Brighton.

Mrs NAPIER - Okay, so how many trucks a day is that likely to be from the zinc works? Mr CONLEY - We thought 30 trucks. Just in the context, if we are sort of looking at 16 000

vehicles on the Midland Highway in that area, say in Brighton - it is higher as you head south, of course - 10 per cent commercial vehicles would be a broad rule of thumb of what that might carry. That is 1 600 heavy vehicles a day, and the zinc works alone adds 30, so it is not highly significant in the overall context of what the highway carries.

Mr HALL - Through you, Mr Chair, David, are you almost through your overview, because

I just want to ask some general questions? Mrs NAPIER - I am happy for him to finish. Mr SPENCE - I am nearly done with the overview, so before we actually start on the

projects I will just finish that part. Okay? Mr HALL - Yes. Mr SPENCE - The other key part of the overview that I raised previously was this

competitiveness situation with rail. A key motivation behind the hub project is to improve the competitiveness of rail. At the moment, the best turnaround time that can be achieved between Hobart and Burnie is 32 hours. As we have noted in the submission, we can knock 4 hours 40 minutes off that through putting the hub in place, which will make a huge difference to rail. Then when you combine that with the planned expenditure for the Commonwealth and State governments on rail, which is going to improve the pulling capacity of it by removing curves and improving the track, it is going to make a substantial difference.

In terms of current use of Macquarie Point, I think this morning you had the example of

the zinc, which is a very good example of a very inefficient logistics chain arrangement, where the zinc comes down to Macquarie Point and is put in a shed and then put in a container and then put back on a truck and eventually it gets its way onto the train and goes north. It is a good example of the inefficiency in terms of the logistics chain of arrangements.


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Just a couple of overall freight figures - the total freight that comes in and out of Macquarie Point at the moment with road and rail is about 680 000 tonnes, and 500 000 tonnes of that is transported by rail either north or south, so it is certainly a significant volume of freight.

In terms of the approvals and the process that we have gone through to date, we put

together a proposal to gain State and Commonwealth government funding for this project and that was approved in November 2007, so we were looking at $79 million and the Commonwealth has approved $57 million and the State -

Mrs NAPIER - $57 million or $56 million? Mr SPENCE- Actually $56 million, yes; an extra million would be nice. Prior to getting the approval for the funding we had actually started to look at sites, and

we went through an exhaustive process of looking at sites. The first thing we did was develop functional specifications for the site, which is what we wanted the site to be, and then we used that to develop criteria to assess suitable sites. The type of criteria we looked at included close proximity to Hobart; it obviously has to be close to road and rail; it has to be relatively flat, so the actual topography has to be right; it needs to be set in the right environment, and by that I mean in relation to the planning area it would sit in, so we were really looking for a site that would have absolute minimum encroachment in terms of residential areas, so the planning environment needs to be right; and we needed a large site to cater for future development.

So we went through that process pretty exhaustively and we arrived at the site that you

have seen this morning. Mr HALL - I suppose this is a question that I think is very fundamental to this whole thing,

which is predicated on rail. You have talked about the packages to upgrade the rail and everything else, but I suppose the fundamental question is what if we do not get another rail operator in the State? It is still up for grabs, isn't it, and given the current status of the world economy and the fact that we have short-haul businesses here, unfortunately rail has been very problematic, as we have seen in the past in terms of any operator to make any money at all. This is a very fundamental question I want to ask right up front: are we putting the cart before the horse here?

Mr SPENCE - We have obviously given that a great deal of thought over the last 12 months.

We really need to act on the information that we currently have and we need to look at forecasts moving forward. I have talked about the forecasts over the next 20 years or so, so we know that freight is going to increase markedly; it is going to double over the next 20 years. We know there is a need for a truck consolidation point on the northern outskirts of Hobart so, irrespective of what happens with rail, we know we are going to need that. That is going to become more important as we progress.

Based on current information that we have and forecasts, we can see that there is clearly

going to be a need for the hub. First up, we know we are going to need it for road and our view is that we are going to need it for rail. The reason we have that confidence is the Commonwealth and State governments have both provided a commitment to the future for rail, evidenced by the substantial funding that has been put aside.


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Mr HALL - But that's for the infrastructure, not for an operator or rolling stock. Mr SPENCE - No, but certainly in my mind that is going to make it more attractive for an

operator to come in. The State Government has made it clear that in a long-term sense they are behind rail. The State Government has also made statements about looking for a modal shift - let's look to shifting from trucks back onto rail. I think certainly in the planning we have looked at we see that there is a long-term need for the hub; we see there is a long-term future for rail. As transport planners, it is essential that we plan on that basis.

Mr HALL - But being the devil's advocate, if a rail operator was not found, you were saying

that the transport hub would still be needed for truck movement? Why wouldn't you still use the Macquarie Point?

Mr SPENCE - It would certainly be needed for truck movements in terms of that

consolidation and de-consolidation issue. Macquarie Point would be too crowded for the truck activity and also, as I mentioned before, there is that issue in terms of encroachment on residential areas. You raise a very valid point and it is one that we have thought long and hard about.

Mr HALL - Don't get me wrong, I am not anti-rail or anything else, it is just a fundamental

question to ask. I would much rather see all the heavy stuff on rail but the point is that in changing times whether we can in fact get an operator. Does this relate to an overall strategic plan? I think it said on page 7 of your presentation that the Brighton transport hub is an integral part of a statewide plan. Where is that statewide plan? Do we have one?

Mr SPENCE - It is certainly a part of the southern investment program, which is a plan that

was put forward to the Commonwealth and State governments in terms of seeking funding, so we achieve funding through that process. In terms of a documented plan, it is really part of the principles that I have talked about, about us looking at the logistics chain and making sure that we get an efficient logistics system in place.

Mr HALL - With respect, though, your submission says that it is an integral part of a

statewide plan. I am still wondering where that statewide plan is. Where is that strategic plan for transport in Tasmania?

Mr SPENCE - It is there for the southern investment program; that is the key part of it. In

terms of a documented plan for the State, those principles are probably enunciated in election documents. That would be the best place to be looking for transport across the whole State logistics-based.

Mr HALL - I am just a bit concerned. We did ask that question of the minister at Estimates

time - I think Mr Harriss would recall that - and he was short of an answer. Mr SPENCE - There is certainly a lot of work that has been done on a transport policy,

which is being developed at the moment.


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Mr HALL - Did you compare it to any other competing projects in developing what you have here now - for example, there has been mooted a four-lane Midland Highway and all those sorts of things? There are other ways to skin a cat, aren't there?

Mr SPENCE - Certainly for us the case was pretty clear, as we have all agreed, in terms of

the need for rail. The case is very clear in terms of the fact that Macquarie Point is inadequate and inefficient so they are the types of issues we were looking at in terms of its standing above other projects.

Mr HALL - I can see from that site just down there that is a difficult area to be working on, I

would not deny that. I suppose the other question is how much money do we throw at rail to try to make it competitive and does that detract from other infrastructure upgrades or spending that we should be doing, as I think Mrs Napier talked about - that we have a lot of roads around the State that are under a lot of pressure and all of those things come into the melting pot, don't they?

Mr SPENCE - I totally agree with that and I think this decision is part of the Commonwealth

and State governments commitment to rail. That is what it is. Mr HALL - It was part of the election promise, wasn't it, at the time of the Federal election. Mr SPENCE - Yes, it was, and it is part of a bigger bucket of money so it is not all going on

rail. The Brighton bypass project as we all know is substantial. Mr HALL - Yes. I will get to that in a moment. I know normally when we have these

hearings - and today we have your four good selves from the department - we do have somebody in; if it is a project, we have a private consultancy, somebody who is in from that side of the fence who is giving evidence as well. Maunsell did quite a bit of the engineering work on this, I understand, but did you have a recognised independent transport consultant, economist, to have a look at this whole scenario? Has that been looked at and, if so, is there a report?

Mr SPENCE - In terms of the design of the hub and the costing, David from Pitt and Sherry

has played a key role. Mr HALL - I appreciate that those things are there but has a business case been done? Has a

transport economist looked at it? Mr SPENCE - There has been a vast range of studies done. A number of them have been

done in terms of looking at which is the most appropriate site but prior to that we did a number of studies. For example, there is a couple that are referred to in the report that we have done for you.

We got Monash University to have a look at the economic effects of the Brighton

railhead and the port container centralisation. That is a study that was done back in October 2007. We have done a number of studies that look at the financial and economic impacts in terms of the transfer of freight from road to rail or rail to road.

We have done a study by a company which is also referred to in the document we have

given you on rail operating costs. We did two or three other studies, and Mr Hall


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mentioned the one by Maunsell. We have done studies in terms of looking at appropriate sites and appropriate site designs. So there has been a vast range of studies that we have done over the last year or so that have led us to where we have got to.

Mrs NAPIER - On page 30 you have made a reference to contestable freight and an analysis

of contestable freight for the 2005-06 survey indicates there would be a switch of current road freight to rail if the cost and reliability of rail is enhanced so you have this improvement of four hours forty for a round trip turnaround and then you have provided us with some figures about how much that would save. As I understand, it goes from $302 - I think that would have to be per tonne, wouldn't it?

Mr SPENCE - No, it is per trip. Mrs NAPIER - Per trip - $302 per trip down to $187. What input have you got that that

would actually be sufficient at a critical point at which you would get that switch of road freight over the rail?

Mr SPENCE - Our analysis has shown that the costs for a TEU from Burnie to Hobart by

road is somewhere between $245 and $260 a tonne and you have just quoted the figures for rail so that gives us quite considerable comfort that if we could achieve that turnaround time change that would involve -

Mrs NAPIER - Do you reckon you could get it down to $187? Mr SPENCE - That is certainly what this expert's study has told us. That is not all through

the hub, that is really through some of the rail improvements as well so that is getting that turnaround time down to 24 hours.

Mrs NAPIER - It seems to me that you have reduced the turnaround time by almost five

hours but this seems to suggest that this brings about almost a halving of the cost factor and I found that a fairly big jump. The study shows that we have chopped five hours off a 32-hour turnaround time?

Mr SPENCE - No, this study is broader than the hub but it looks at reducing the turnaround

time to 24 hours. As I say, it is not all attributable to the hub. Mrs NAPIER - It is currently about 32? Mr SPENCE - It is currently 32 but the train ends up sitting there so it actually is 48. Mrs NAPIER - Because of the logistics of the yard. Mr SPENCE - Yes, so it actually sits there. This report looks at bringing it fully down to

24 hours and this is their estimate of the savings that would be achieved. We have done some detailed studies on contestable freight. One thing that gives us

comfort is a lot of the freight that rail has lost we believe could be won back. We have looked across all freight classes and what could be potentially shifted back from road to rail and we are as confident as we can be with market situations in terms of that freight


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coming back onto rail. Certainly, our estimate is that there will be 500 000 tonnes that could come back to rail if rail were on a competitive footing.

Mrs NAPIER - You are saying that we should not just judge it by the turnaround time - Mr SPENCE - No. Mrs NAPIER - because I thought the turnaround time included the amount of time that the

train ends up sitting and waiting. Mr SPENCE - It does. Part of the problem with rail at the moment is its efficiency, not only

in terms of time but also its reliability to get to its destination intact and on time. Mr HALL - David, if private enterprise were to look at this scenario and develop a business

case do you think they would have built it? Mr SPENCE - Once you take public good into account, without a doubt. It has happened all

around Australia. Mr HALL - Basically the catalyst for this is an election promise from the Feds and a chip in

from the State as well. I suppose you could argue it could have been a PPP - a public-private partnership in this case. Is private enterprise putting any money in or is there none at all?

Mr SPENCE - No. There certainly would not be that attraction up-front for private

enterprise to put the initial capital funding in. We are not envisaging that there will be a commercial return on the full capital value of it. There is a significant component of public good in this.

Mr CONLEY - We have also had discussions with Toll transport and that is sensitive - there

are deals they want. One of the things that they said to us is, 'We need to get a good outcome here otherwise we will build our own'. They wave that as a big stick in front of us. To answer your question, Greg, the private sector do see some benefit in this kind of modern state-of-the-art facility and they would almost say, 'Unless we get the outcome we want from Government we can do our own thing with warehousing and different facilities'.

Mr HALL - I suppose you could turn that argument around and let them do it, they are a

national company, they are a big company, and then you would have more taxpayers' dollars to do something else with.

Mr CONLEY - Yes, but then I guess they lock out all the other users and use their market

power. Mr HALL - They would not do that, would they? Laughter. Mr CONLEY - I think it might put the community at significant risk.


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Mrs NAPIER - I want to jump in on that issue while you are dealing with it. What you are saying is that you have some confidence in this 2007 study that would make you fairly confident about being able to deliver some real competition with road?

Mr SPENCE - Yes, exactly. Mrs NAPIER - I will now move to page 31 and go back to the table that we were talking

about. We talked about the Derwent Park Road issue and travel to Macquarie Point, the increase in cars presumably would be because of work force issues?

Mr SPENCE - That is right. Toll are going to employ about 250 people out at Brighton. Mrs NAPIER - Are they going to close their one at Macquarie Point? Mr SPENCE - Yes. Mrs NAPIER - And move it out there. There seems to be a huge increase in the rigids. How

do you explain that one? Mr SPENCE - The rigids are the smaller trucks so in terms of that consolidation and

deconsolidation, there will be a large - Mrs NAPIER - It is the decanter effect, is it? Mr SPENCE - Yes. The smaller trucks - which are the rigids - will be taking the freight to

Brighton to be placed on the trains to go north and vice versa coming south. In terms of congestion they are much more manoeuvrable, quicker, much better at easing any congestion.

Mrs NAPIER - Will this help overcome the kind of load that we have on Davey and

Macquarie streets, or is that a totally separate exercise? Mr SPENCE - No, I think that is a separate exercise. There will be fewer larger trucks in

central Hobart, so there will be a small impact on Davey and Macquarie in that respect. The real impact is on the southern end of the Brooker, for the vehicles coming into it. A huge volume of vehicles comes in and out of Macquarie Point. It is quite substantial.

Mrs NAPIER - My other question is in relation to the costings that are provided. According

to 14, the costings do not actually include money for road access and, given that the report refers to the fact that to some extent this will be relied on for bringing forward the Brighton bypass - I am not aware that a commitment has been made about that. How does this -

Mr SPENCE - Road access is not funded by this project. It is important for that to be clear.

This project starts at the boundary of the hub, the actual roundabout at the northern end and the interchanges at the northern and southern end.

Mr CONLEY - Pretty much the white area is the extent of the road works for the hub and

the grey area is works associated with the bypass.


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Mrs NAPIER - Okay. It says, 'it is important to note, the project does not include the road access arrangements at the north and south of the hub site'.

Mr CONLEY - Meaning, I guess, that roundabout and this connection which would be

necessary to get vehicles back into Brighton and the existing industrial areas. Mrs NAPIER - If there were a delay to the Brighton bypass - remembering that when I was a

minister in 1995 we were walking potential routes to it in hope - and given that this road is not going to be constructed until we get some Federal funding, where will the access to this area have to come from?

Mr SPENCE - We will be looking at a temporary arrangement until the bypass is in place. Mrs NAPIER - What, a dirt track or something? Mr SPENCE - No, it will be a lot better than a dirt track. David, you might want to talk on

this but I suspect we will be looking it up. We have talked about upgrading the current intersection that we went on today, if we cannot get an arrangement in place.

Mr CONLEY - We are very close to the highway anyway so we would most likely put - Mrs NAPIER - This is a new road here. Mr CONLEY - This is new and it is all part of the hub funding to that point. If we had to

make some kind of temporary junction or something there that - Mrs NAPIER - So you might, as an interim arrangement, go to the northern end? Mr SPENCE - We could do both. Mrs NAPIER - You could do both? Mr SPENCE - Yes, because this is reasonably easily done at this end. We would have to

make sure we created a safe intersection here. This is the road that we took today. Mr CONLEY - That is the existing road which does have problems with trucks accessing it.

They cannot turn right to head north because of the gradient, but we could construct something temporary that would be better. It would serve our purpose.

Mrs NAPIER - Although, with those kind of connections, you would basically have traffic

turning right and having to deal with oncoming northern traffic. Mr SPENCE - Yes, you would need to make sure it was safe, basically. You would need

either to upgrade the current intersection or, as David mentioned, move further north. The current intersection works. It is not particularly good, but we would need to look at a safe arrangement as a temporary arrangement.

Mrs NAPIER - How many truck movements per day are we talking about coming into and

out of this area?


14

Mr CONLEY - TEUs - if you say that is a container in effect - that would be 2 000 a week, so it is 300 truck movements per day - that sort of order.

Mrs NAPIER - Under national standards what would you normally have as an intersection

for that kind of movement? Mr CONLEY - For that kind of turning, again a standard, at-grade junction would not be

totally out of the question. You really have to look at the detail of it but they are not massive volumes.

Mrs NAPIER - So you would not be required to have a roundabout. Mr CONLEY - You might have a roundabout but you would normally expect something like

300 vehicles a day is not a massive number of vehicles to cater for in a conventional right or left-turn situation. It does not warrant great separation or anything like that. You can happily accommodate several thousand vehicles in turning movements and you would need to get a fair bit higher before it became a traffic light situation, but again, depending on the mix of traffic and the times when it came in. If was spread throughout the day that might change it but if it was all coming in at peak periods you might want to look at other control measures.

Mrs NAPIER - You are coming into a two-lane highway, aren't you, with major traffic

throughput and it is usually at a high traffic rate. Mr SPENCE - Yes. Mr CONLEY - I have to say we are confident that the new arrangements are going to be in

place but that does not mean we do not have the contingency plan. Mrs NAPIER - You wanted to have this up and open for 2010? Mr SPENCE - Mid 2010. Mrs NAPIER - 2010. So you are likely to have the bypass actually constructed by that time? Mr CANTILLON - We have been in detailed negotiations with the Commonwealth

Government for some months and we submitted, I think it was back in April or May this year, the strategic merit tests of the Brighton bypass. That was followed in October, I think, by a detailed project bid for accessing the Brighton bypass lanes for the entire length, improving their understanding of what was included as part of the bypass and what was not, the demarcation, I suppose, if you want to use that language -

Mrs NAPIER - Who pays for what. Mr CANTILLON - Yes - is very clear and explicit within it. In terms of the status, the

negotiations have been very favourable so far. We are hopeful that we may actually see its approval to a revised cash flow arrangement in the next few weeks, sufficient to give -

Mrs NAPIER - So it is part of the national infrastructure project?


15

Mr CANTILLON - Yes, part of the national infrastructure. Mrs NAPIER - This would have to be one of the top priorities, wouldn't it? Mr CANTILLON - It is indeed. Mrs NAPIER - It has been sitting around for ages. Mr CANTILLON - From a State point of view the hub is our top priority and the bypass is

next in terms of making sure that we have that connectivity to it to make sure it works, and everything that we have been developing around the Brighton bypass is about making sure that we have the right time sequencing to ensure that the hub is operational and effective in the earliest possible time commensurate with the time that it is needed. We are working on having the bypass fully operational by 2010. You will progressively see critical infrastructure that will be delivered for those two junctions to meet those time lines that are necessary for the hub.

Mrs NAPIER - So you are hoping that the two might connect. Mr CANTILLON - They will connect. They are demarcated but they are very clear in terms

of their connectivity. We have spent an awful lot of time over the last six months making sure that the connections are in the form that they need to be to make sure that the hub is effective and operational from the critical date that we have put in there for 2010.

Mrs NAPIER - So if, in the context of the unknown in terms of the current financial

circumstances, I hope that is what happens. If things get worse internationally or otherwise and something causes some of that money to be redirected elsewhere because there are not as many jobs in direct construction of road and rail as there might be in other kinds of projects, are you telling the committee that, should there be a delay on the Brighton bypass, safe intersections could be developed as part of the project to meet national safety standards?

Mr CANTILLON - Yes. Mr HALL - In regard to Hobart Port on page 6, we know that it has significantly declined as

a port itself but it was a presentation given by Polar Networks just very recently. I think in the last financial year there was an increase in movement through the port itself and they are hoping for further movement increases. In your view, is that likely and would that have any effect on what is happening here? Or do you think that the northern ports will still be the main shipping ports?

Mr SPENCE - Certainly in terms of our transport planning, the northern ports will continue

to be the most-used ports in Tasmania, with the cost of shipping. I do not have the figures on the Polar situation but I suspect it is probably a fairly small but important market and a critically important aspect for Hobart. There is certainly an indication that that will continue. But, no, certainly the continuing focus will be on the northern ports for the bulk freight transport.

Mr CONLEY - Again, we were talking to Toll last week and their view was that freight

would go into Melbourne on ships. It is an extra 14 hours steam into Hobart and back.


16

All the freight will go into Melbourne and operators like Toll will run smaller ships that will take it across from Melbourne to Bell Bay. That is the thinking of how things will develop.

Mr HALL - I do not have anything more, Mr Chairman, except a lot of questions on smaller

issues which will wait. CHAIR - It is always contended that rail is viable and attractive for long-haul heavy freight

and Greg touched on it earlier, that Tasmania can hardly be categorised into the long-haul frame. How do I get my mind around that, the fact that in the real sense Tasmania is never going to be long-haul?

Mr SPENCE - It is interesting because, while that is a generalised statement of fact, for

example, under the current rail network one of the most profitable lines they have is the cement line, which is extremely short. What we are looking at there is a bulk commodity that just goes a short distance, backwards and forwards.

Mrs NAPIER - With one operator? Mr SPENCE - Yes. One operator and one customer. Mr HALL - That is from Goliath, from Railton to Devonport Port? Mr SPENCE - Yes and that is certainly one of the profitable parts of the current rail

network. I think, in terms of the current situation for rail, there is sufficient length if they can get the right commodities on rail from Hobart through to Burnie. What is it, 200 to 300 kilometres? I think there is sufficient length for that situation with the right commodities. Certainly in terms of competitiveness for rail over long distances it becomes more competitive when you look at the iron ore and coal shipments on the mainland. The advice we have looked at and the analysis we have done is that it can be competitive on the Hobart to Bell Bay, Hobart to Burnie routes. It is of sufficient length with the right product.

CHAIR - David, you made a comment earlier that you would hope to attract commodities

back onto rail that have been lost over a period of time. What products are you talking about?

Mr SPENCE - I would probably have to come back to you with specific advice on what

specifically they have lost. CHAIR - Coal is one that springs to mind immediately? Mr SPENCE - Coal certainly coming south would be one that you would be hopeful that

could come back onto rail. They have only recently lost that. That was only eight months or so ago I think.

CHAIR - Was that due entirely to cost, do you know? Mr SPENCE - My understanding is that is was. Cost was a significant factor. I think if we

get a new rail operator in place and if we spend the infrastructure funding that we are


17

talking about spending, it really is going to rejuvenate rail. We shouldn't underestimate the infrastructure funding that is looking to be spent at the moment in terms of assisting rail. We need that new operator in place to show an interest in rejuvenating it.

CHAIR - Greg has challenged you on that issue, as to the transport mode. Should we be

expending substantial funds on rejuvenating rail or accept that in a place such as Tasmania a better road network would be more attractive? We have just heard that coal was lost, as best you can recall, because of the cost. That is without any decent road network along the Midland Highway. If that was better, maybe the costs would be more attractive for road transport.

Mr SPENCE - The studies we have shown is that there will be a significant cost to the

community if it all shifted to road. That is really what the basis of the State and Commonwealth governments funding commitments to rail are at the moment, which is substantial. There is a lot of money going towards the rail infrastructure.

CHAIR - That takes me again to Greg's challenge earlier about strategic planning in the

event that we don't get a rail operator or if there is a major problem with rail. What is the strategic planning to ensure that transport capacity in this State is well taken care of?

Mr SPENCE - That is something that is out of my province. My direction is the hub at the

moment, so I really can't answer that question. CHAIR - Who could? Mr SPENCE - The minister. Mr HALL - It is a fundamental point that I have quite a bit of concern with, particularly if

you look at long-distance rail in New South Wales and Victoria. Just recently some lines have been closed - flat topography out of the grain belts and they're not making money so they have closed them off. That is why we are asking the question of you. They are very fundamental questions which are of concern. This whole project is hung off that particular premise.

Mr SPENCE - There is still the need for that transport hub to look after trucks. We have to

get out of Macquarie Point. It really isn't a suitable transport facility. In terms of rail, all State governments around Australia have shown a commitment to rail. Most of them have targets of modal shift and most of them are looking at intermodal hubs on the outskirts to get truck traffic out of the centre of cities. For example, a couple of weeks ago we went to Sydney and had a look at a new hub that is going to be built there at Enfield. One of the prime motivations is the congestion issue, as well as assisting rail. I would like to emphasise the point that this isn't looked at solely as a rail project, it is looked at broadly as a transport efficiency thing.

Mrs NAPIER - While we are on these overall issues, on page 28 there is a reference to the

project funding - and I accept what Phil is saying in relation to being able to get Brighton bypass funding - and presumably this is the November 2007 moneys of $56 million committed by the Commonwealth and $23 million by the State?

Mr SPENCE - Yes.


18

Mrs NAPIER - My understanding is that it is being proposed that the State Government will

fund all of this - Mr SPENCE - Yes. Mrs NAPIER - to give it certainty so that this can at least go ahead regardless on the premise

that the State Government's commitment of part-contribution - the 20 per cent or whatever it is going to be - to the Brighton bypass will be absorbed within the $56 million. Is that the way it is going to work?

Mr CANTILLON - It is essentially that the Australian Government's commitment is

reallocated to offset State funding and other Australian Government projects that are jointly funded. The transport hub is one that is off the network in a sense and so the Australian Government historically in the past has funded projects that are on the network. I am not aware of any hubs of this nature being funded.

Mr SPENCE - I do not think that the Commonwealth funded another one. So this is really

outside their area of expertise. Mr CANTILLON - And essentially that is one of the rationales for the split. Mr SPENCE - One of the real rationales was so that we could get the project up and moving

quickly. Mrs NAPIER - I understand that. So in a sense you are saying that we will fund this but that

is all the more reason why you should bring forward the Brighton bypass. Is that what that is about?

Mr CANTILLON - The intention was always to bring forward the Brighton bypass as

quickly as we could. Essentially we are going through a step process at the moment to realise that and that would also tie in with the delivery of the hub. We have done a lot of things in that regard to make sure that they, hopefully, fall into place as quickly as they can.

Mrs NAPIER - So what does this do to the other famous project of the bridge? That was

always complicated by the State's contribution, as I understand it, towards rail - the rail component of that - which caused the design issues of how high the bridge had to be, or how tall ships or boats could be to be able to go under it. Where does that project fit with what we are doing here?

Mr CANTILLON - There is again a strategic merit test. It is all framed in the vernacular

that the Australian Government expect to receive project in. I think there was nationally $6 million available for carrying out preliminary planning, predevelopment type activities associated with the broader corridor. We submitted, I think it was last week or the week before, a bid to the Australian Government to access that funding. To access it this financial year to make a start and it would be done over this financial year, next and part of the following one for the purposes of actually cementing how the rest of the corridor is actually dealt with in terms of the Bagdad Bypass and also the Bridgewater Bridge.


19

So getting those projects back on the agenda to bring forward as much of the

infrastructure in that corridor as quickly as we can and consistent with what we would be delivering at this location.

Mrs NAPIER - So what was discussed a couple of years ago, about what the bridge would

look like and the issues associated with height et cetera, that is back into the melting pot given the decision to go ahead with this and basically move rail north of the river?

Mr CANTILLON - No, I think that the strategic merit test is about having a look at where

we have got to so far. Contextually what has occurred in recent times with projects like the Brighton Transport Hub and actually consolidating that and moving on in the direction that we need to. So the Brighton Transport Hub is a key step. The strategic merit test is to look at where you have got to in that next step and how you keep moving along and take into account any changes that may occur along the way.

Mrs NAPIER - Wasn't there $70 million identified for the bridge by the Feds? Is this

$53 million some of that $70 million that has been carried forward or what? Mr SPENCE - No, this is totally separate funding. Mr CANTILLON - It is part of an overall amount -I think that it is half a billion dollars of

Australian Government funding that is on the table. Mrs NAPIER - I was just trying to get a picture of the Southern Strategic Plan in terms of

this project, which is obviously quite integral to a number of decisions that are being made about transport links, and from the committee's point of view to understand what it means about the bridge, right through to Bagdad and where it comes out at Bagdad.

Mr SPENCE - That is certainly best addressed in what we call the Southern Tasmania

National Transport Network Investment Program where it details all those projects and where they sit.

Mr CANTILLON - And those priorities as well. So this is consistent with those priorities

that you see. Mrs NAPIER - So this fits within that plan? Would it be possible to ask, I have not

personally got a copy of that, it might be useful? Mr SPENCE - It is on the Internet. It is on our web site. Mrs NAPIER - Is it? That will be fine, I can look it up there. I had some more general

questions. I wonder, for the record, if we could have a discussion about whether the rail link should be a loop or whether it should be a hook which is basically what we have got. As I indicated earlier I must admit I got a bit of a surprise when I was reading these designs on the weekend. I must say thank you very much for the level of detail and the way in which it is presented. I found this relatively easy to read. There is good detail available in terms of finance, time lines and so on.


20

I had always thought of the rail loop being exactly that, so that it would be able to pick up rail coming to and from Boyer and similarly coming to and from the north. I just wonder if you could run us through the decision as to why a loop is not considered possible?

Mr CONLEY - Essentially, the main line continues on so whatever requirements into the

future - Mrs NAPIER - And that is a double line? Mr CONLEY - It is not double; it is single for most of this with additional sidings we saw at

Rogerville. Mrs NAPIER - So it is single. Mr CONLEY - Yes. The Y will continue on into Hobart and the line will be there into the

future, so that function, whatever demand is needed on that line, is there. Mrs NAPIER - Depending on what we do with the bridge. Mr CONLEY - Yes. Mr SPENCE - It has been clearly stated by the Government that the rail corridor will be

retained all the way to the port. Mrs NAPIER - Right. Mr CONLEY - This is a freight handling terminal. It is like a siding where you bring freight

in and take it out, so then the question is: if we bring things from Boyer or somewhere else on the southern part of the line and they have to be loaded in there, how do you do it? We had a meeting about a week-and-a-half ago with rail stakeholders and a number of rail experts and this matter was debated at length. The need for it was questioned. The view that came out of that discussion was that it is not necessary. Trains can be brought in. One train a day can come in from Boyer under this set-up now. It would mean the train would have to come along and it would have to back up the line. All the rail operations up here are what they call 'shunting operations'. It is under what they call a 'shunting regime' from this point forward, which means it is all slow speed.

The fallback, if there was a greater demand, would be to construct a Y here, an additional

loop. That will give you even more functionality, so then a train could come around and swing in there and it also gives you a provision to turn locomotives. At the moment that need to turn locomotives in that manner is not necessary here because there is an existing facility at Bridgewater. There is a Y at Bridgewater and it would not be normal on the volumes we have for that to be only a couple of kilometres down the road. It would not be necessary to duplicate that facility but should things change into the future at Bridgewater then this Y would give you essentially the same functionality as continuing the loop.

I guess the other issue was impacts on existing businesses. We looked at the business

there and there is one there as well and both of those would probably be under some sort of threat.


21

I guess operationally it was felt that for the demand out of Boyer and elsewhere we have

a facility which enables us to do what is necessary, so that is really how the decision has been reached.

Mrs NAPIER - Who owns the hill that was referred to as the knoll? Mr CONLEY - This land is all Toll land. We are in discussion with them about acquisition

there. Mr SPENCE - We are still talking to them about purchasing that land. We are talking to

them about the actual quantity of land, as we are with the other landowners. Mrs NAPIER - So in terms of the project that we're being asked to approved, does it include

ensuring right of access for that loop to be created on the northern end that was just described to accommodate that change if you get an increase in demand from freight coming from the south, most likely from Norske Skog?

Mr SPENCE - At the moment it's not on the list of things to be built. If you said, 'Well,

what have you really allowed for in here?', it’s not on that list. Mrs NAPIER - Not in the costings? Mr SPENCE - Not in the costings. We’re just looking at planning for it and deciding what

future provision we should make. There are a number of things. We had this rail meeting a week and a half ago and there were a number of features that might be desirable, and some of this is debateable as to whether they should be provided by a rail operator or should be provided by the Crown.

Mrs NAPIER - What would the rail operators prefer? Mr SPENCE - In terms of having this Y? Mrs NAPIER - Yes. Mr CONLEY - I guess if you were an operator you'd want everything you could get if it's

not coming out of your pocket. They put a number of things on the table. Mr SPENCE - They'd prefer the Y. The real issue is whether it's operationally justified in

terms of the cost. At the moment, as we know, it's one train a day and it doesn't pick up extra wagons every day. I think the important thing is that in terms of longer-term planning the capacity is there to do it.

Mrs NAPIER - As long as we can ensure right of access. I suppose it would be compulsory

acquisition anyhow. Mr SPENCE - Yes, it would be. Mr CONLEY - It could, as long as we ensure that, firstly, we acquire that land now or we

put a provision that it couldn't be developed, and acquire it later. We are just working


22

through that process at the moment. It might drive a greater amount of acquisition discussion at the moment.

Mrs NAPIER - Relative to the line or the road access and the rail line through there. Mr CONLEY - Yes, but we could consider proclaiming that or setting it aside for the future. Mrs NAPIER - That would seem sensible if the decision has been made that you're not going

to go through with the loop because of the impact it might have on businesses. You could argue for forward planning that it's better to make the decision now than to do it later.

Mr CONLEY - It wasn't just the impact on the businesses; it was whether there was a

sustainable case for doing it, notwithstanding $79 million. It only goes so far. We got the overwhelming view from the discussion was that it wasn't necessary. It might be a nice-to-have feature but it wasn't an essential feature.

Mrs NAPIER - What are we talking about as extra millions to do that loop? Mr CONLEY - We haven't costed it in detail. There is extra rail track, and rail track comes

at about $1 million a kilometre. So you've got at least a kilometre of track, a set of points to connect, controls, land purchase and so on. It would have to be of the order of $4 million to $5 million, very broadly, depending on the value of the properties.

Mrs NAPIER - Of the property you had to go through. Mr SPENCE - The important thing is to really look at the operational needs and whether

there's going to be future growth in terms of trains coming in there. We can't see it at the moment; it's not there. They call it the 'paper train' because that's about all it carries.

Mrs NAPIER - Yes. I noticed you had a table of consultations and with whom those

consultations have been. Are you indicating to us that the rail operators are indicating that they are quite satisfied with this arrangement?

Mr SPENCE - Yes. As David said, there's a wish list of things that they are always going to

want. We have gone through a length process with them on this and they're satisfied with the design.

Mr CONLEY - There are varying schools of thought about where you locate tracks and so

on, whether you have all the tracks together or whether you have them apart. The consensus was that they should be in this layout as we have two tracks here and one track there, which facilitates loading and unloading operations. We had some advice from one of our consultants who said you can save money by putting these things closer together and reduce the width of the hard stand, but that probably comes at a trade off with efficiency and -

Mrs NAPIER - Or safety, as we saw down at Macquarie Point.


23

Mr CONLEY - Yes, safety is the other issue. The clear message that came from our discussion with the rail parties and particularly the current rail operator was that this was the layout, so we are happy to take that forward and that is reflected in this design.

Mr HALL - David, did I understand you to say that if this hub is built then the existing track

through to the Macquarie wharf will stay? Mr SPENCE - Yes, retained. That was certainly a strong view of our department that it

should stay there and the Government has certainly picked that up. For long-term planning we do not know where we might be in two or three generations, and once you have lost it then you have lost it, so it is critical that you retain it.

Mr HALL - I concur with that. Mr SPENCE - The other thing the department is looking at is light rail. Mr HALL - In terms of funding, on page 28 it says that whilst the Commonwealth has

indicated in-principle support, final approval has not been received to date. Given the fact that the Federal budget may well be going into deficit soon, and I would suspect that Mr Swan will be looking to cut and shut, is there some danger that this might not get a guernsey in terms of funding?

Mr SPENCE - What that sentence is referring to is the final approval for the proposal that we

have put to them about the fund sharing. Regarding the actual funds, I would be astounded if they reneged on the election promise and said that they were not going to provide it. All the indications are that it is there.

Mr CANTILLON - I would echo that as well. Some of the aspects that are going on are the

AusLink 2 negotiations, which will happen over the next couple of months. That is about securing the back-end cash flows to the timings that we actually need to see the delivery of the infrastructure. There are keen negotiations going on, bids going up to the Commonwealth, a lot of meetings going on about securing the money in the timing that we need.

Mr HALL - You have put a contingency in there of something like 30 per cent for the whole

project? Mr SPENCE - Approximately, yes. Mr HALL - There is obviously some land acquisition to go. Is there potential for this to

blow-out quite a bit further than what we think? Mr SPENCE - I think we have been very conservative in costing. Part of the standard

practice you referred to, the 30 per cent, is built onto the elements of the project where there is risk in terms of costing. Land acquisition is based on what the Valuer-General has told us. I really think it is a conservative costing and I am confident that it is going to be met.

Mr CANTILLON - The way the estimate has been prepared is in accordance with what the

Australian Government expects to their standards following the review of best cost


24

estimation practice across Australia. So the standard is that we have actually documented the estimate. Contingency levels and things of that nature are consistent with that framework so it is the best possible estimate that we could provide for the infrastructure.

Mr HALL - One of the major capex items was $11 million for a coolstore. Would

somebody explain to me the rationale for spending $11 million on a coolstore, where will it be located and who are going to be the principal users?

CHAIR - Does that embrace the relocation from Macquarie Point of the existing coolstore? Mr SPENCE - This is that relocation; that is exactly what this is. This is funding to allow

TasPorts to relocated their coolstore. Mrs NAPIER - So it will be owned by TasPorts? Mr SPENCE - Yes, it will be owned by TasPorts. Mr HALL - That clarifies it. What commodities are TasPorts putting in that coolstore at the

moment? Mr SPENCE - There is a lot of fish product. I think that is the main product. Mr CONLEY - All the stuff you see on supermarket shelves you also see down there at

Macquarie Point in that coolstore, coming in on containers. Mrs NAPIER - That is the one as you come around the corner and it is on your left-hand

side there? Mr SPENCE - Yes. We went around the back of it today. Mr CONLEY - So a lot of the product that comes into the State before it is shipped. It is a

storage place there, and it may sit there for - Mr HALL - Are we talking about frozen? Mr CONLEY - It is perishables and frozen. Mr SPENCE - So it is a coolstore and a coldstore. TasPorts described the difference to me.

It relates to whether it is frozen. Mr CONLEY - A lot of the product sits in the coolstore waiting for transport. Mr HALL - How bit is the utilisation of that coolstore? Mr CONLEY - It is pretty big - if you go in there it is fairly full. I was down there about

three weeks ago. It has stackers. Mr HALL - Are you aware that, for example, the two major supermarkets, Coles and

Woolworths, now establish their own DCs, distribution centres, and there is a proposal


25

for also independent State wholesalers and Woolworths to put quite a large DC, I think what is called a translink development, near the Launceston airport?

Mr SPENCE - At Western Junction. Yes, I understood that too. Mr HALL - And so anything that comes from local producers goes into that DC and

anything that comes in from the Melbourne markets goes into that DC and from there they take it straight to their store.

Mr SPENCE - Supermarkets, yes. Mr HALL - They bypass. There is no point in going through another facility like this. I am

wondering whether you might be overtaken by some events there. Having been in that business for a while myself, with fresh produce out of the Coal River Valley and the Huon, major growers could consolidate their stuff in those coolstores; they do not want to transport them from one coolstore to another coolstore, they go straight to the northern ports.

Mr SPENCE - That is certainly an issue for TasPorts to consider, and they will be looking at

that in terms of the size of the coolstore that they might build. My understanding is that the bulk of the freight they are involved with at the moment is fish.

Mrs NAPIER - That is because of the Macquarie Wharf operation? Mr SPENCE - Yes. But certainly I was aware of what Woollies were thinking about doing,

and that is certainly a consideration that we would be taking into account in terms of the size of this coolstore and where TasPorts see it going. It is a TasPorts facility.

Mr HALL - It is the dynamics of that - some of those dynamics change quite frequently.

They build a white elephant and store a lot of ice-cream in it. Mrs NAPIER - So just looking at who is owning what, the coolstore is in effect a

replacement for TasPorts. That is described as hub stage 1 in the summary on page 7. That is going to be negotiated with the new rail operator and they will take it on as a lease or something like that. Would TasPorts necessarily take on the bulk goods yard, or is that likely to be renegotiated with pulp mill operators?

Mr SPENCE - There is a short reference in the document to the fact that we will very shortly

be going out to a competitive selection process to decide who is going to manage the hub. The manager of the hub will be determined through that process, and if you look interstate, occasionally it is a port authority, or a rail company or a transport logistics company, so we think there are a lot of advantages in going out to the market and seeing -

Mrs NAPIER - Who would like to run this? Mr SPENCE - Yes, who would like to run it and particularly the potential return to the

Government and what sort of innovative uses they could make of it. There is a lot of land out there and it really needs someone who is going to attract some businesses there as well.


26

Mr HALL - It does say that it is estimated the hub will be cash-flow positive for the

Government. How positive are you about that statement? Mr SPENCE - We are quite positive about that. In terms of looking at the demand for

industrial land at that site, it is substantial, and that cash-flow statement really refers not to the central hub itself, it refers more to the warehousing and businesses that will be developed around it.

Mr HALL - It does say regarding the operations of the hub in your report, so that it the way I

interpret it. Mr SPENCE - I mean the hub as a whole facility - the actual exchange, the actual intermodal

part of it, the change of goods there. There will not be a lot of return from that in the short run, I believe, but there certainly will be in the commercial development. If we get a smart operator out there they will do pretty well.

Mrs NAPIER - Following on from that, we had some discussions on site about reuse and

recycling of stormwater as to what the potential might be. It does not seem to be built in as part of the design of the industrial estate. For the record, could you give an indication of your thoughts about the potential to establish a positive standard in terms of water collection, reuse and recycling?

Mr SPENCE - As I said on site, we will require detention basins there simply because the

downstream capacity is limited to what is already underneath the railway line. It is quite a high embankment and it would be difficult to augment the size of that culvert, and the same applies through the highway here - there is already a crossing underneath the deep fill. I guess the sheer size of that hard stand will generate excess run-off so the solution to that is stormwater detention basins and that would create an opportunity for beneficial reuse of stormwater.

Having said all that, I am not sure how often it will fill up. You can do all these things

based on current designs for stormwater, based on 100 years of history but probably not the last 10 years when it has been exceptionally dry. You simply may not be able to hold water in them; you may not get enough water. You could fill them up and use them in one or two months and then find they may not fill up for another few months.

Mrs NAPIER - Given that you have the responsibility for building at this stage, the coolstore

has quite a large collection area for potentially fresh, useable potable water. Is there a commitment to ensuring that this is an energy-friendly and sustainable site overall?

Mr SPENCE - There are a lot of sustainability issues coming into design today and

principles that would apply. In a broad sense, whether we have a hard-stand area that is concrete or we have a building that sits on top of it with a hard roof on it, the amount of run-off is not substantially altered. It is clearly when we change from a greenfield site that it will absorb a fair bit of run-off to a hard surface. That is what generates a lot more water.

At this stage, other than the detention basins to control the flow, it has not been taken

further to see what potential uses there might be for that water.


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Mrs NAPIER - Consistent with what the Premier has been saying about climate change and

design - and I think we all agree in the portfolio area I am usually in of Education - he said all schools need to maximise their sustainability characteristics. It seemed to me that this is a greenfield site and I could not find anything in here that talked about what steps were being taken to maximise the sustainability of the site in terms of water, energy and so on. With the kinds of things that you are talking about being there, and even in the context of the surrounding businesses, it seems to me there has to be some spin-offs here.

Mr CANTILLON - Part of the approach that we are taking with the Brighton bypass is the

development of a sustainability management system. The construction of the bypass deals with the construction of the hub and other buildings. We are basically in progress, it has broken new ground for it, and we are building it up in layers as we understand more. We are having a lot of dialogue with whole of government and councils and stakeholders. It covers a whole series of areas. Part of that is typically in environmental areas - water management, noise levels, air qualities and resource use are taken into account as much as can use, and the type of materials, what we usually do with the water that is derived on site. We are building up a framework. We hope to have a framework unpacked to the next level over the next couple of weeks and then once we get a contractor on board the next step would be to work with him for developing the framework after further consultation with the broader body. So we do recognise that it is very important to have a sustainability management framework and typically, what we do with a large project is bring a lot of the initiatives that we develop as part of these large jobs back into the general business. There are a lot of things we are doing at the moment but we see this as a really good opportunity to extend the way we do our business.

Mrs NAPIER - If you look at the wind factor out there, I do not know if there is anything

possible you can do with that, but it blows hard enough. But also the other side of drought is the fact that there is a reasonable amount of sun, so if you look at the expanses that are likely to be covered by buildings in terms of the new solar panel technology systems, maybe you could run part of your coolstore based on solar energy.

Mr CANTILLON - They are perhaps elements that are more to do with the construction of

the building and what happens there. But certainly in terms of everything that is built from the ground up to the top of pad and the detention basins and all of those things, they will factor in those considerations and there is probably something to be done in respect of what we can achieve with the coolstores.

Mr SPENCE - I think that chart there will show you the work that Phil's area is doing in

terms of sustainability. The reason you do not see it in the submission is that it is at the construction stage.

Mrs NAPIER - Although when you go out to tender I would hope that that would be a high

level in your criteria. Mr CANTILLON - It is. Mr HALL - I have another issue I wish to raise whilst we are talking about energy

efficiency. You talk about rail as the safest and most environmentally-friendly form of lands transport - this is on page 17 - and nearly 50 per cent more energy intensive than


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rail, that is comparing road to rail, and you go through the equations stacking rail up against road transport in terms of the carbon footprint. Could I put it to you that when the new BOC plant is built at Westbury, and there is a conversion, I would suspect, to LNG for most of our heavy transport trucks on the road, that equation might well change and rail might not be as emission-friendly.

Mr SPENCE - Certainly with developments the comparison could change. Mr HALL - Yes. I do not know if you can run trains on LNG. Maybe you can, I do not

know. Mr SPENCE - I do not know the answer to that one. Mr CONLEY - If you can run big diesel engines that go in trucks on it, why couldn't you run

a train? Mr HALL - They're diesel-electric, aren't they? So there might be a difference there in the

technology. Mr CONLEY - Yes, but the electrics are there just for traction, as I understand it, to get you

started; that is how it works, I believe. They are electric traction motors that start your train in lieu of a gearbox.

Mr HALL - I think you are right. CHAIR - Members, we have some time constraints with other commitments at 3 p.m. It

seems to me that there is a lot more evidence which we need to receive in terms of your presentation, David. We have gone through the overview at this stage and there have been a lot of questions flowing from that. I am just thinking that the committee should adjourn and pick up again at this point as soon as we can. We cannot advise you as a delegation just as to when that might be. We are conscious of the time frames which the submission puts before us that you were keen to commence the tender processes in December and finalise all of that through May; in fact you have construction to commence during March, but it seems to me with other commitments which we cannot avoid for the rest of the day that Greg and I have with another select committee, that right now might be an appropriate time to adjourn.

Mrs NAPIER - I must admit that I do not have too many more questions. Mr HALL - I am running down too in that respect. CHAIR - Do you want to proceed until 2.30 p.m. and see how we go? Mr HALL - I suggest that we do need to knock off soon because there are some things that I

need to do. Mrs NAPIER - Let us see where we can get to by 2.30 p.m. because we might find that we

have it covered.


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CHAIR - Okay. Back to you, David, for a continuation. You have done the overview and we have probably touched on some of the detailed issues related to the site as we have progressed with questions.

Mr SPENCE - I am really in the hands of the committee on which areas you might like more

detail on. Mr HALL - In my view, having on-site inspections is always useful, as is having the

submission I think I've covered off on basically most of those other small questions I need to ask at this stage.

Mrs NAPIER - You have identified that one of the issues, as part of the consultations that

you were doing, was dealing with dust and how you thought that might be managed with some of the proximate nearby businesses. The other was the reference to ongoing works that are being done with the Aboriginal community in dealing with sites. They were my two main questions.

Mr SPENCE - Certainly dust in the construction phase is something we are thinking hard

about and there will be measures put in place to ameliorate any problems that occur through that.

In terms of the Aboriginal heritage issue, that is an issue that we treat very seriously. We

have undertaken initial surveys on the site of Aboriginal heritage in terms of what is there at the moment. At the moment we are going through a process of archaeological surveys of the site and once we have done that we will look at what needs to be done in terms of effectively managing what has been found. There have been some areas of significant Aboriginal heritage found so once we have done additional work on that, which involves digging and finding out what is below the surface, a report will be presented and we will be going to the State minister who is involved with issuing a permit to construct with the evidence we have collected and the mitigation measures that we might look at putting in place and seeking the Regulator's agreement to construct. So it is a significant issue for us, but it is one where we will be going through the proper processes rigorously.

Mrs NAPIER - If you want to start by March next year, are you likely to have completed

that by then? Mr SPENCE - We are confident that we will, yes. That is certainly what we are planning

on. We are planning to finish our archaeological surveys before the end of the year and then put together a proposal for the State Government minister.

Mrs NAPIER - There seems to be a broader issue here. According to the notes it says that

Tasmanian Aboriginal Land and Sea Council, the Heritage Office and Parks, Heritage and Arts have said that there should be a greater understanding of all sites west of the industrial estate. That sounds like pretty big exercise to me.

Mr SPENCE - We are obviously only focusing on the hub site and any elements of the site

that may impact on Aboriginal heritage. I think that is what that reference is to.


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Mrs NAPIER - There are two issues. One is controlling construction time, which is always an issue. The other one we had some discussion about, which was the bulk site and the potential issue of dust if you are dealing with gravel or coal or timber. I think the discussion we had out there is that you are probably going to need a big shed.

Mr SPENCE - We are going to need something to mitigate the effects on businesses that are

right behind it to ensure that the impact on them is minimal. That is something we are continuing to work on.

Mrs NAPIER - What have they asked for? Mr SPENCE - They have just asked to be protected from any adverse effects. They have not

asked for anything specifically. So we would need to establish the extent of the problem and then have a look at what we are going to do to ameliorate it as much as we can.

Mrs NAPIER - I do not have any other significant question. There is a lot of good detail

here in the report, which means a lot of the things I might have asked about are covered off, which is useful.

CHAIR - David, were you wanting to run that fly-over for us? Mr SPENCE - We would like you to see it. We think it gives a good depiction of what the

hub is going to look like. CHAIR - Shall we do that now? Mr SPENCE - It only lasts three minutes. So really what you see up there at the moment is

the site that you saw this morning. If you have good eyes you can see a train there, I think it is red, on the bottom rail going around the hub, and you can pick up where the road accesses and the rail accesses are coming in at both ends. The rail access we are talking about and the roundabout with the road access here and the rail access coming into the hub itself. We did not talk a lot about the actual warehousing that is going to be adjacent to the hub. One of the key things in terms of the success of them is the capacity to get the freight out of the warehouses, or into the warehouses and off the trains. There is going to be a very close link between the hub itself and the warehousing. As I mentioned before, there are about 10.5 hectares of potential warehousing capacity.

That is an overview of the way the hub is going to look and I think there is a short

presentation on looking at it as you fly around it. Mrs NAPIER - Would you be basically trying to move as much of that under cover as

possible? Mr SPENCE - Yes, you would. There will be a contained storage area where the containers

can sit, but apart from that it would be under storage or it would be moved out of the site pretty quickly. Again, you can see the facility I was talking about before. You probably remember the gas works we saw this morning. We have really produced this to give the community an idea of what it is going to look like so we plan to use it for a number of community presentations. It is quite amazing when you look at it and you can see, for example, the extent of the ravine. It gives you a good depiction of the lie of the land.


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Mrs NAPIER - Those trees are not there at the moment. Mr SPENCE - No, they will be. We plan to put them in. Landscaping will be a key issue. Mrs NAPIER - That is what you could use all the stormwater for. Mr HALL - Are you going to get some water into the Jordan River out of that? Mr SPENCE - I reckon we might. There is going to be a lot of run-off, as Mrs Napier has

identified. Certainly, landscaping is something that we have talked to the local communities about in terms of the way it is going to look. This is the beauty of starting at a greenfield site. You can do it properly.

CHAIR - The current site was greenfield once. Mr SPENCE - Yes. It was probably proper for a while. Mrs NAPIER - Are rail and trucking operators pretty happy with the configuration of the

sheds? Mr SPENCE - We are in discussions with them. They are all pretty keen to get the closest

shed to the rail. The new manager of the hub is going to need to negotiate a way through that. They have given us some good ideas in terms of the design of it, though.

Mrs NAPIER - That is what I meant. Mr SPENCE - In terms of the design, yes. That want as direct access as they can possibly

get to the rail which again affects the competitiveness of rail. Mr HALL - This is a bypass finishing nowhere. Mr SPENCE - Yes. Down behind the hill. That is it. CHAIR - David, anything you need to add? Mr SPENCE - No, just to thank the committee for their time and I hope we have been able to

answer your questions. CHAIR - Thanks very much and thanks for facilitating the site visit to the rail yards this

morning, the greenfield site. Being able to see the expanse of what is proposed there is valuable but I think of more value right at this stage was to see the constraints under which you operate at Macquarie Point. We appreciate that and your written submission and the verbal submission that you provided for us today, as well. Thank you.

THE WITNESSES WITHDREW

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Brighton Bypass 10 November 08 - Parliament of Tasmania

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