A joint venture between freight and logistics operator Toll Group and stevedore DP World could see more freight moved in and out of Port Botany by rail.
The partners announced the proposed 50/50 venture on Tuesday morning.
Under the deal, a dedicated container staging port at Port Botany will be connected to an intermodal freight terminal in Villawood, 25km west of Sydney.
A Toll spokesperson said most of the infrastructure was already in place to execute the joint venture. “There’s some things we’ll need to do,” he said, noting the rail alignment at handling sites would need to be changed slightly. “But [the infrastructure] is already in place,” he said.
DP World Australia’s chief strategy and new enterprise officer Brian Gillespie told ABHR sister publication, Lloyd’s List Australia, the project could see between 180,000 and 200,000 teus* moved between Port Botany and Villawood by rail, every year.
He said the project would not be possible without the Sydney Southern Freight Line, the dedicated freight rail line completed in 2013.
“Direct connection to the Sydney Southern Freight Line is one of Villawood’s biggest advantages and means almost unlimited capacity,” he said.
“Rail shuttles can go in and out without disrupting transport.”
Gillespie said some rail construction would be required at Villawood, including three new rail tracks through the middle of the site and realigning some curved tracks. Very little construction would be required at Port Botany.
Current talks are centred on a minimum of six shuttles a day travelling to and from each of the sites.
With the average truck travelling to or from Port Botany with around 1.5 teu in containers on board, Toll boss Brian Kruger was confident the project could have a big impact on road congestion around the port.
“A rail shuttle running between Port Botany and Villawood on the Southern Sydney Freight Line will remove around 100,000-plus truck movements off Sydney’s roads each year,” Kruger explained.
“That’s 100,000 less trucks on the already-congested roads around the port and Sydney Airport.”
Toll Group was acquired by Japan Post in a $6.5 billion deal in May. Toll’s partner in this joint venture, Dubai-listed DP World, is one of the biggest port operators on the planet, with 65 container terminals around the world.
At Port Botany, DP World competes with two other terminal operators: Patrick, a subsidiary of ASX-listed Asciano; and Sydney International Container Terminals, owned by global giant Hutchison Port Holdings.
DP World Australia’s managing director Paul Scurrah said utilising the experience and resources of both joint venture partners would see a new quality of end-to-end service for customers.
“By using the expertise and existing assets of DP World Australia and Toll, this proposed joint venture will create new efficiencies and competition in the Sydney import-export supply chain,” Scurrah said.
“Importantly, the introduction of a new multi-user intermodal terminal in Western Sydney with a direct rail connection to DP World Australia’s staging facility next to the wharf will increase freight transport options for local importers and regional exporters.”
The partners said their proposed joint venture will leverage DP World Australia’s capability in container handling, and Toll’s capability in warehousing, delivery and end to end customer solutions.
Expanding the joint venture into other markets will be investigated, “if sensible opportunities arise over time,” they added.
The project is planned to start operations in 2017.
*A twenty-foot equivalent unit (teu) refers to a twenty-foot shipping container, or the equivalent of one twenty-foot container. A forty-foot container therefore counts as 2 teu.