2. Contents
1. InfraNomics – an example
2. A different approach to planning
3. The economic benefits from building the outer harbour
4. Special Economic Zone - Kwinana
5. Agricultural and resource secondary processing
6. What we need to do?
2
3. InfraNomics – an example
• Founded in Perth post the election in March 2017
• Profitable from day one
• Private company with Australian and a minority Swiss shareholder
• Proof that WA is one of the best entrepreneurial environments in the world. Very
supportive network.
• Independent
• Business focus - Only economic infrastructure (positive cashflows).
• Infrastructure development, advisory and financing
• Aim to say what you need to hear and can justify it
Power, water, transport, ports, fuel terminals, renewable energy, industrial parks, downstream
processing, train stations, pipelines, supply chains
Strategy, business plans, commercialisation, value improvement, implementation, financing
We respect other people’s opinions when they can justify them
3
4. Traditional approach to planning
Current approach
4
Government gets
the costs and often
others get the
profits. Usually far
more expensive as
always retrofitting.
5. Maximise the economic benefits then financing
Approach elsewhere
5
Developers and government
share the benefits. More jobs.
Proper investment discipline.
Cheaper. More bang for each
buck.
6. Permanent jobs
Est 11,000 +
Est 7,265 +
= 500 jobs
= Higher paying jobs
Current Fremantle Port South Quay development Outer harbour development
Approx 2,000
Source: Fremantle Port Authority, Kwinana Industries Council, City of Fremantle, SKM Jacobs, InfraNomics
6
Outer harbour impact - Permanent employment
7. Revenues – actual
and estimated
Source: Fremantle Port Authority, Kwinana Industries Council, City of Fremantle, SKM Jacobs, Urbis, Ferrier Hodgson, InfraNomics &
comparable international projects
Est.
A$ 1,750mil
(New revenues)
Outer harbour impact - Economic contribution per year
Current Fremantle Port
2016/2017
South Quay development
Est. $ PV
Outer harbour development
Est. $ PV
A$ 214mil
Actual
Est.*
A$ 1,192 mil
(New
Revenues)
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Est.
A$ 2,086 mil
(New
Revenues)
Estimates are
between 8% - 14%
of current WTC
revenues. Potential
to be significantly
higher with
continued
development.
Based on Annual
revenues per M2.
Retail, commercial,
residential, leisure
Range based on
configuration
Est.
A$ 2,000 mil
8. Industrial land
available for
development
Source: Fremantle Port Authority, Kwinana Industries Council, City of Kwinana, InfraNomics
Outer harbour impact – Land for industrial development
Current Fremantle Port Outer harbour
Minimal
Up to
4,000 Hec
There is minimal amount of industrial land available for development in Fremantle. Existing land is allocated.
The Western Trade Coast generates direct sales of $14.7 billion per annum, employs 11,362 people directly, of which 64% live
locally within Cockburn, Kwinana or Rockingham. Indirect inter-industry flow-on effects are estimated to be $10.3 billion in
production and 18,274 indirect jobs. There is up to 4,000Hec of land available for development.
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9. Where is all this growth going to come from??
It is already happening in energy minerals, agriculture and construction products.
Containers
• Proteins – chilled and frozen
• Live trees, plants
• Fruits and vegetables
• Cereals & diary preparations
• Processed foods
• Wood and animal products
• Manufactured products, currently 9% - potential for more
Value adding
• Defence – drones, munitions
• Lithium/ Energy metals/ Power storage
• High value, specialised refining i.e. Titanium Dioxide, Lithium products
• Agricultural & resource processing
• Chemicals and industrial processing
• Industrial ceramics
• Industrial glasses
• Refractory products
• Recycling
However, needs the right industrial environment and an internationally competitive supply chain.
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10. Future trade forecasts – export focused
TEU
-
100
200
300
400
500
600
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Possible
Probable
Proven
Current exports forecast
Compound annual growth rate (“CAGR”)
– resources/ agribusiness
Ref : Industry interviews, Dept of primary industries, InfraNomics 2017. Dependent on outer harbour timings
Fremantle containers exports (excl empties)
Potential flatting
of exports if WA
continues to lose
market share and
international
competitiveness.
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11. Special Economic Zone - Kwinana
• Special Economic Zone or Free Trade
Port – allows imports, storage, exhibit,
assemble or manufacture without customs
entry procedures and duties.
• This will incentivize local WA for
manufacturing and processing. Currently
WA exports resources for other countries
to process. Sometimes 1 cent in the $.
• Properly developed can be spectacularly
successful and huge wealth generators
• Successful examples include New Orleans
(US), Shenzhen (CN), DMCC Dubai (AE),
Tanger Med Zones (MA), Mauritius
Freeport (MU), Shannon Free Zone (IR),
Katowice (PL)
• Kwinana would be an ideal location for an
Indian Ocean focused Special Economic
Zone
Increased
• Economic activity
• International competitiveness
• Manufacturing and jobs
• Diversity & synergies
• Quality infrastructure access
• Productivity
• Integrated transport
Reduced
• Regulation
• Costs (Op costs 10-20% lower)
• Bureaucratic interference
• Approval times
• Urban encroachment
• Pollution (rail & electrification)
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12. Special Economic Zone – The Golden Goose
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Economic diversification
• A modern, efficient and integrated port can only
be developed in Kwinana
• Provides the space and infrastructure and scale
which means being internationally competitive
• Diversifies the economy. Increases our security
• The freight logistics and supply chains can be
upgraded
• A bigger more powerful version of the AMC
• ‘Plug and play’ industrial park for foreign
companies. Speeds up investment
• Develop a Special Economic Zone to stimulate
economic growth and exports. Can avoid the
problems in Fremantle and protect industry and
the port from urban encroachment for future
generations
• Pre approvals for building and development
13. Competitiveness gap - Avocados
0
0.5
1
1.5
2
2.5
3
3.5
4
Australia New
Zealand
USA Spain Chile Mexico Peru Israel Dom. Rep South africa Kenya
Competitiveness gap - Avocados
Average US$/kg Export price CIF (2012)
WA doesn’t have to become the
world’s lowest priced producer of
avocados – it just needs to get down
to a price where it can capture
market share from some of those
who are currently lower – for
example, NZ, USA and Spain
Competitiveness gap
Coriolis, Department of Primary Industries, InfraNomics13
14. WA network
• Integrated freight network from Geraldton
to Busselton
• Port unloading to feeder terminals
• Integrate all ports, airports and rail into
one supply system
• More intensive
Biggest issues
• Scale
• Water
• Logistics
Potential 2nd airport
Truck feeder terminal
Port
Airport
Bullsbrook
Kewdale
Mundijong
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15. What we need to do?
1. Kwinana Bulk Terminal and Kwinana Bulk Jetty
Offer a concession to Australian superfunds for Kwinana Bulk Terminal and Kwinana Bulk Jetty + plus
adjacent LandCorp land in large parcels for development. Minimum 30 years. Could be a joint venture so
that the Government also benefits.
2. Focus on the outer harbour
Stop throwing good money after bad in Fremantle. Begin the regeneration planning for Fremantle. Move
vehicles (RoRo) to Kwinana. The focus on the development of the outer harbour. Either the ‘incumbents’ are
committed to the Labor government policy or they are not. Either they have the capability and competence to
develop the outer harbour or they don’t.
3. Special Economic Zone
Zone the entire Western Trade Coast as a Special Economic Zone with professional dedicated management,
like the Australia Marine Complex, to provide continuous proactive business development. Perhaps break
the WTC into 2 large parcels of land within the SEZ.
4. Recycle water for industry and agriculture
Prohibit WaterCorp pumping sodium reduced water out to sea. Reuse, recycle and reduce. This water is
essential for industry and agriculture. Perhaps deregulate waste water. Properly charge a price for water.
5. Plan B and C
Considering the inability of various governments and the citizens of Perth to progress an outer harbour over
decades, potentially start planning for a plan B and C. Upgrade the supply chain between Bunbury and
Geraldton/ Oakajee so that if the outer harbour continues to be delayed then Bunbury or Geraldton/
Oakajee has the potential to develop into WA’s main cargo port. This would have profound implications for
the development of WA.
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16. Thank you for your
time.
Be bold, audacious and daring
Contact:
Cameron Edwards
cameron@infranomics.com.au
043471437716