After 12 years of regulatory and legal battles, building magnate Len Buckeridge is getting ready to proceed with a private port at Cockburn Sound, with potential benefits for many industries.
After 12 years of regulatory and legal battles, building magnate Len Buckeridge is getting ready to proceed with a private port at Cockburn Sound, with potential benefits for many industries.
If all goes to plan for James Point chairman Chris Whittaker, construction of a new private port at Cockburn Sound will start in a few months and operations will kick off in two years’ time.
A former director-general of Western Australia’s transport department and boss of Melbourne Ports, Mr Whittaker has been quietly and methodically progressing plans for the James Point port, which is owned by Len Buckeridge’s BGC group.
On the surface, the project is still mired in legal and political disputes, after Mr Buckeridge started a $1 billion damages claim against the state government in the Supreme Court in 2011.
But behind the scenes there have been big changes, including a new legal tack last October.
The Supreme Court case focused originally on the issue of ‘specific performance’, based on the state government’s alleged failure to abide by the terms of an agreement it signed with James Point Pty Ltd in 2000.
“With the knowledge of the government, we changed the plea entirely,” Mr Whittaker told Business News.
“Our view is we have a valid agreement, government has repudiated it, we accept that repudiation and we formally terminate the contract, and we’re suing for damages.
“I think it was a realisation that, more than a decade after the agreement was signed, it had become very difficult to implement.
“In discussion with government, we decided to see whether a new agreement could be reached.
“If we reach a new agreement, it would be in settlement of the legal case. Beyond that we are sworn to secrecy.”
The agreement in 2000 gave James Point the right to build a multi-purpose port; pursuant to that, the company has been trying to develop both a general cargo port and a container port in competition with the Fremantle port authority.
Both Labor and Liberal governments have staunchly opposed its plans, partly out of concern they would compromise the port authority’s intention to build its own container port at Cockburn Sound.
Premier Colin Barnett has previously made it clear he would accept a new bulk facility but is opposed to James Point’s container port.
The problem for James Point was that the more lucrative returns were expected to come from its proposed container port.
Business News understands that negotiations with the government are focused on ensuring James Point’s general cargo port is configured so that it is commercially viable.
Negotiations are also understood to include the ‘Landcorp’ land at Kwinana that would be needed for the James Point port.
Construction plans
In the meantime, Mr Whittaker is preparing to start work later this year on the staged development of a new port.
“We’re aiming to be in the field in September this year and starting dredging in May next year,” he said.
“We will finish the dredging program by the end of September (2014) and that gives us nine months to fit out the port.”
“The first ships will come into the port in July 2015.”
James Point is in the process of spending $15 million to ensure construction work can start as soon as possible.
“Last year, Len (Buckeridge) committed $15 million, which we are quite busy spending.
“Some people can’t understand why we have committed to a big spend when we have the legal action.
“What Len didn’t want, was for negotiations to conclude and then face 12 months of studies before he could start construction.”
The current work program includes detailed design and geotechnical studies.
James Point is also satisfying all of the conditions attached to its environmental approval. For instance, it is preparing a detailed management plan for its dredging program.
The company is also obtaining some final planning approvals, including for a construction camp.
Road and rail access to the planned port is another issue the company is working on.
The main road access point would be via Beard Street, while rail access will be aided by the demolition, currently under way, of Rio Tinto’s HIsmelt plant.
“We are having active and good discussions with the Department of Transport on road and rail access into the port, for both standard gauge and narrow gauge,” he said.
“We’ve also had discussions with Brookfield Rail and the government about the possibility of putting a grain siding into the existing rail corridor, and then we would use a conveyor to the berth.”
Potential customers
James Point is targeting at least six different industry groups as customers of its planned port, including iron ore exporters, wheat farmers, livestock exporters and local manufacturers.
BGC plans to use the wharf to import supplies for its building materials business and Mr Whittaker sees vehicle imports as another possibility.
Livestock exporters have publicly supported James Point for many years, arguing the easier road access and distance from residential areas makes it a better port than Fremantle.
“We are designing the port to be capable of handling livestock ships,” Mr Whittaker said.
“At the end of the day, it will be a decision of industry and the government and we’re saying we will be ready to take that trade.
“The other one that is really interesting, there is a huge head of steam in the grains industry to set up competition to CBH.
“We ran a formal process last year to select a grain terminal operator and developer.
“We had a very encouraging response. All the big names you would expect are there and some other very interesting names.”
Mr Whittaker said James Point had selected a shortlist of potential developers and had frozen the process while negotiations continued.
“We will reactivate the process the moment we have certainty from government that this thing is going ahead, with a view to finalising an agreement within three months,” he said.
Mr Whittaker said grain traders were “pretty confident” they could secure at least 1 million tonnes of grain per year, which would make a big dent in CBH’s business.
“This will be the first time in the Kwinana catchment, which is the big one, where there will be real competition,” he said.
It follows plans by Bunge to open a grain export terminal in Bunbury, while a Chinese group is planning a similar development at Albany.
In the mining sector, James Point sees aspiring iron ore miners in the Yilgarn as potential customers.
Currently, the miners are pushing for an expansion of Esperance port but have criticised the slow progress.
Mineral Resources already exports iron ore from the Kwinana bulk terminal, after investing $40 million in a major upgrade.
Another longer-term possibility is importing new cars through James Point.
“It’s crazy to use land at Victoria Quay as a giant car park,” Mr Whittaker said.
He believes land at the Latitude 32 industrial estate, located two kilometres from James Point, would provide a “beautiful solution.
“I can say that roll-on, roll-off trade is being factored into our design.
“Another area we’ve identified as under-serviced at the moment is project cargo. I’m talking about the big, heavy-lift stuff.
“It’s all going through Henderson at the moment and there is no competition; there is a need for more capacity.”
Mr Whittaker said planning for James Point included provision for heavy-lift facilities and that the adjacent road was part of the ‘high wide load’ network.
Mining equipment that is manufactured in Perth and exported could also use James Point.
“There is quite a lot of prefab stuff that is destined for Africa and its currently going through the inner harbour,” he said.
“That’s not easy but James Point would be beautiful for them.
“Everything we have said, this is good for the state’s economy.”
Outer harbour planning
The development of James Point’s general cargo port will be just one factor in the future of the ‘outer harbour’.
The WA Planning Commission has appointed Hyder Consulting, working in conjunction with Parsons Brinckerhoff, to undertake a review of project proposals that had previously been prepared by the Fremantle port authority.
These included two proposals for a giant island harbour in Cockburn Sound, connected to the coast by a causeway.
The Planning Assessment of Future Port and Industry Development – Naval Base to James Point is scheduled for completion in December 2013 (seven months later than the original schedule).
The WAPC has deferred any Metropolitan Region Scheme amendments in the relevant area until the findings of the assessment are presented to government.
