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Why I oppose channel deepening for Port Phillip Bay

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The following article nicely sums up why I oppose channel deepening for Port Phillip Bay ...

By David Sharp

Andrew Warner is a naval architect. He is also knowledgeable and, if asked, informative so that conversations with him tend to be interesting. The other night over coffee proved no exception. On my request, he expounded his views on the Port Phillip Bay Channel Deepening Project. To say the least, such views were decidedly negative.

Presently the Victorian Government is pushing a proposal to deepen the shipping channels in Port Phillip Bay to accommodate the ever-growing size of container ships.

Containerisation and the giant container ship have revolutionised world trade and made it economically possible to move goods back and forth between countries several times before they are completed. This has lead to a greater division of labour and increased economic efficiency.

For a variety of reasons Melbourne presently is the nation’s largest container port, handling 40% of the trade.

On current projections, Melbourne will not be able to accommodate the larger sized vessels likely in the next few years. Already, it is claimed, ships are leaving Melbourne only partly loaded because of inadequately deep enough channels.

Many who oppose the Project do so for environmental reasons. The economic reasons for opposing it however are at least as compelling.

The cost of the Project will be great. Typically it is likely to be much more than originally costed. Moreover it is unlikely in any event that the new larger vessels will ever come to Australia. But this is due to economic factors, not physical.

Typically the major factor in whether a container ship travels fully loaded or not is stability rather than weight.

Another is for convenience purposes in loading or unloading.

The latter is largely a function of the particular circumstances of the port or ports being served. Given the shortcomings, in this regard, of the Port Phillip shore site, (which, in so far as it was possible, would require significant expenditure even partly to overcome), ships would continue, regardless, to leave Melbourne only partly loaded.

Recent expensive deepening at Geelong has not resulted in ships now loading completely there, rather than, (as a number continue to do), partly in Geelong and then completing loading at Portland.

There are other reasons than channel depth for loading at both ports.

Attempts to force the shipowners to pay extra for the costs involved in the work at Geelong have been unsuccessful and the increased fees are a deterrent to ships using the port at all.

"Build it and they will come" is an unlikely event, particularly if, as it will, the cost of deepening Port Phillip will need to be factored into the costs of using the port.

It is likely that the economics of the super ships will be such that they will exclude them visiting Australia.

Rather Australia is likely to be serviced from a few hub ports, such as Singapore, by smaller ships. The chances of an Australian port becoming a hub, given Australia’s geographical position, are remote.

In so far as there is a case for building an expanded container port in Victoria, that for Westernport (probably at Stony Point) is overwhelming.

Little or no deepening would be required. Although considerable infrastructure costs would be needed they would be a minor expense compared to the Port Phillip alternative.

Unlike the Melbourne site, Westernport provides ample room for depot and shore facility expansion. It is also far more convenient to the eastern industrial suburbs around Dandenong. After all, Westernport is a part of Victoria. Given the degree of urban sprawl one could be forgiven for describing it as part of Melbourne.

In light of the above, who then is likely to favour the Port Phillip project?

As always cui bono is a good place to start. The bureaucracy involved would be likely to experience a huge growth in funds and importance.

Also the existing duopoly of Patricks and P & O would benefit.

Their present shore facilities and supporting infrastructure would need a significant boost.

Conversely opening up Westernport would also open up the possibility of new competitors.

© 2005, David Sharp,
Reproduce with kind permission from
Laissez Faire #75, November 2005
journal of the Australian Adam Smith Club (Melbourne)