Three respected industry leaders Mark Birrell, Chairman Infrastructure Partnerships Australia, Martin Stewart-Weeks, Senior Director (Public Sector), IBSG Cisco and Lance Hockridge, Managing Director and Chief Executive Officer, QR National, discuss the region’s burgeoning infrastructure program including the impact of the mining resources boom, innovative funding models and the future of digital infrastructure.
2. foreword
Welcome to the second edition of the Brisbane Economic Series, a bi-monthly
publication providing vital insights into the city’s many exciting business,
investment and growth opportunities.
Brisbane’s booming infrastructure sector is the focus of this issue which
features three industry leaders from the rail, infrastructure funding and digital
infrastructure industries.
Business leaders Lance Hockridge, Mark Birrell and Martin Stewart-Weeks
share with us their forward-thinking visions for Brisbane.
Learn first-hand how Brisbane will maximise its economic opportunity through
the continued delivery of world-class infrastructure.
With Brisbane’s population set to reach 3.9 million by 2056, I recognise
our infrastructure challenge is significant, but with continued and substantial
investment in this area, I am positive it is a challenge we are well placed to meet.
Brisbane’s position in the global digital economy is also a focus of this
edition because it is an area which will ultimately underpin the resilience and
sustainability of our economy.
Our city’s success and the future prosperity of our residents and businesses
lie in collaboration, informed planning and investment in the crucial
infrastructure sector.
Recent successful projects that demonstrate Brisbane’s capability to deliver
major infrastructure include Legacy Way, Clem 7, and the Go Between Bridge.
Through the delivery of these key infrastructure cornerstones, Brisbane is set
to thrive.
Graham Quirk
Lord Mayor of Brisbane
2 BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE CONTENTS
3. contents Issue two
04 08 12
Brisbane and Queensland’s Smarter connected: our world The booming resources sector
infrastructure challenge is is growing exponentially more lies at the heart of Brisbane’s
significant. Strategies from digital and networked. Advances unprecedented growth
the government at all levels in in infrastructure in the digital forecasts, and is driving
partnership with the private economy will contribute to substantial investment in rail
sector are vital for supporting building Brisbane’s economic infrastructure that will have
future growth. resilience and sustainability. far reaching benefits.
MARK BIRRELL Martin Stewart-Weeks L ance Hockridge
Chairman, Infr a structure Senior Director (Public Sector), Managing Director and Chief
Partnerships Austr alia IBSG, Cisco E xecutive Officer, QR National
3 BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE A C K N O W L E D G E M E N T S // C R E D I T S CONTENTS
4. Brisbane is the engine room of the
Queensland economy. In 2011 its
contribution was valued at $114 billion,
accounting for 46.7 per cent of the
entire State’s economy.
The vitally important reconstruction task in the wake
Brisbane and Queensland’s of last January’s floods understandably dominated
Queensland’s infrastructure program last year.
infrastructure challenge is But against this backdrop we saw significant progress on
significant. Strategies from a number of major infrastructure projects, including the
Sunshine Coast Hospital PPP, Gold Coast Rapid Transit
the government at all levels in and the ongoing construction of the Airportlink and
partnership with the private Legacy Way.
As we head further into 2012, the Federal and State
sector are vital for supporting governments will engage in an open debate around
the projects which will help the Sunshine State –
future growth. and in particular Brisbane – maintain its economic
competitiveness and help reverse the nationwide
MARK BIRRELL fall in productivity.
Chairman, Infr a structure Partnerships The infrastructure challenge remains significant.
Austr alia Traffic congestion, hospital waiting queues and
straining public transport networks are constant
reminders of the infrastructure task facing Australia’s
4 BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE CONTENTS
5. major cities, and Brisbane is not alone in having to
deal with a number of challenges that come from Partnerships will be particularly
booming population growth.
Brisbane is the engine room of the Queensland important because many of the
economy. In 2011 its contribution was valued at $114 major projects needed in Brisbane
billion, accounting for 46.7 per cent of the entire
State’s economy. The Federal Government’s State of and its surrounds are simply beyond
Australian Cities report, released last year, predicted the funding capacity for any single
Brisbane’s population would increase from 2.043
million in 2010 to 2.725 million in 2027. The population government or industry alone.
across wider South East Queensland is forecast to
increase from 2.99 million in 2010 to 4.39 million by
2031 – by which time more than 15 per cent of all
Australians will live in South East Queensland.
These projected growth patterns have attracted
the attention of policymakers, who are acutely aware
of the inevitable strain on the city’s transport, utilities
and social infrastructure networks. The focus moving
forward will rightly be on innovative ways to fund the
required investments.
The State Government’s Queensland Infrastructure
Plan (QIP), released last year, identifies $134 billion Legacy Way (Artist’s Impression)
FIGURE 1: BRISBANE GROSS REGIONAL PRODUCT ESTIMATE, 2011 worth of infrastructure investment for Brisbane and and by 2031, is expected to fall to 44.1 per cent.
surrounding regions to 2031. The regionalisation of South East Queensland will
Progress will be made on the new motorways, rail hasten the need for improved transport connections to
BRISBANE networks and social assets through a joint effort from the and from Brisbane to burgeoning satellite centres such as
$114b; 9% Commonwealth, the Queensland Government, Brisbane the Gold Coast and Sunshine Coast.
City Council and the private sector. That’s why there has been a broader discussion around
Partnerships will be particularly important because the funding models needed to deliver major infrastructure
re st of qld
many of the major projects needed in Brisbane and its across South East Queensland – and farsighted dialogue
$102b; 8% surrounds are simply beyond the funding capacity for any about the projects needed over the long term to grow
re st of austr alia single government or industry alone. Brisbane and regional centres.
$1,029b; 80% And while the planned major transport projects in With the right planning, evaluation and delivery
re st of SEQ
$39b; 3%
Brisbane gain the most national attention, consideration frameworks in place, government at all levels will be well
will also be given to the regionalisation in South East placed to turn their attention to delivery of the projects
Queensland. that Queensland needs.
In 1986, nearly 47 per cent of Queenslanders lived in In the case of Brisbane, this must include investments
the capital. That proportion eased to 45.4 per cent by 2006 that will deal with the city’s urban congestion, which cost
Source: Brisbane Economic Development Plan, 2012
5 BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE CONTENTS
6. Mechanical and electrical fit-out in
Northern Busway tunnel
the city $1.8 billion last year and is expected to rise to
$1.9 billion this year. By 2020, congestion costs will reach
more than $3 billion, creating further pressures on the
city’s productivity and efficiency.
All political leaders agree that enhanced rail capacity
is a first order issue for Brisbane and Queensland.
An Environmental Impact Statement for the
proposed Cross River Rail, released last September,
stated that without additional network capacity, the
existing rail system in the inner city will reach capacity
later this decade.
The proposed Cross River Rail project would see an
18 kilometre rail line connecting Salisbury in the south
The State has submitted a proposal to Infrastructure
with Bowen Hills in the north - including 10 kilometres
Australia for stages 2b and 3 of the Eastern Busway,
of underground tunnels, four new underground stations
valued at $685 million and $140 million respectively, with
and two new surface stations; and would substantially
IA deeming it a ‘threshold’ project in its 2011 report to the
increase capacity across the metropolitan rail network.
Council of Australian Governments (COAG).
But the floods in January saw a revised timeline for the
By addressing the limited access to high frequency
CRR, with completion now estimated as 2020.
public transport in Brisbane’s eastern suburbs, the project
The economic arguments for a mass transit solution
is viewed as important in easing congestion and opening
are solid. The EIS states that the CRR would deliver
up opportunities for further urban consolidation. The
more than $9 billion in economic benefits to the region
State said that the Eastern Busway also meets IA’s goal of
and would boost the number of trains through the CBD
growing national productivity and transforming cities.
from 84 trains per hour to 132 trains per hour at full
The continued upgrade of the Bruce Highway is
capacity. No doubt the procurement of such a major
another key infrastructure priority. A report by the
project would be guided by the lessons learned from the
Australian Automobile Association (AAA), released in
procurement of the North West Rail Link in New South
January, found that the 1700 kilometre highway is the
Wales –the largest and most complex public transport
nation’s most dangerous road.
project in Australia. All political leaders agree that
An estimated $2.3 billion has been spent on upgrading
And while more immediate term solutions – such
as track and signalling upgrades – would help deliver
the Bruce Highway over the past five years, with the enhanced rail capacity is a first order
Bruce Highway Upgrade Strategy (Brisbane to Cairns) put
additional capacity across the rail network, a decision will issue for Brisbane and Queensland.
forward by Queensland to Infrastructure Australia as a
be needed on the long-term heavy rail requirements for
priority project last November.
Brisbane’s CBD.
A sustained investment in Queensland’s most crucial
Of course the Cross River Rail – or a similar rail
freight corridor will lead to safety improvements and
solution – will not be the panacea for the city’s congestion
better connectivity to key gateways - and also drive
concerns. The Eastern Busway project is another of the
Brisbane’s long-term productivity growth.
State’s top infrastructure priorities. Stage one of the
While progress is being made on these major
dedicated bus-only roadway - between the University of
projects others remain under consideration, with
Queensland and Buranda - has already been completed
decisions still to come on funding commitments from
and Stage 2a is under construction.
the Federal or State Governments.
6 BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE CONTENTS
7. One major project awaiting commitments from
Aerial view of major Brisbane the State and Federal Governments is the upgrade of
infrastructure under construction Kingsford Smith Drive, which links the CBD to Brisbane
Airport. Stage one of the upgrade has been completed
and Brisbane City Council has allocated $1.5 million
in this year’s budget towards further investigations for
stage two of the upgrade.
In spite of the size of the challenge, there is reason
for real optimism about the future of infrastructure
across Brisbane and Queensland. There is strong
community appetite for substantial reform and a
similarly strong commitment from governments
to engage in a rational debate around the critical
reform pathways.
But as with the other states, the delivery of major
projects will only be possible through sustained
partnerships across all levels of government. n
{
Mark Birrell is the Chairman of Infrastructure Partnerships
Australia. He is the national leader of the infrastructure group
at Minter Ellison Lawyers and serves on the statutory board
of Infrastructure Australia. He has extensive experience as a
company director and lawyer and is a fellow of the Australian
There is strong community appetite Institute of Company Directors. Previously he was Minister
for Major Projects and Government Upper House Leader
for substantial reform and a similarly in Victoria, working on successful PPPs and capital works
initiatives like CityLink and the Docklands.
strong commitment from governments
to engage in a rational debate around
the critical reform pathways.
7 BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE CONTENTS
8. What started with a focus on cost,
carbon and convenience has
turned into an engine of ‘systematic
serendipity’ that fires innovation
and creativity.
Smarter connected: our world In Amsterdam a couple of years back, a few business, across the metropolitan regions of Amsterdam, all now
government and community organisations got together to connected into a network that allows you to book online
is growing exponentially more solve a problem that is pretty familiar to cities all around space to work, a room to meet or a telepresence screen
the world. to collaborate virtually. And sometimes just to get some
digital and networked. Advances How could the city escape the congestion and work done over a cup of a coffee and a quick chat.
in infrastructure in the digital inconvenience that were increasingly the hallmarks of From the initial pilot group of 7 centres, Amsterdam
growth as people spent more and more wasted and now has a network of over 120. And interesting things are
economy will contribute to building frustrating time getting from home to work and back happening. People are using the city differently as they find
Brisbane’s economic resilience and again? And, into the bargain, how could Amsterdam more convenient, carbon-reducing and cost-saving ways
drive towards some aggressive targets to reduce carbon to work. But the new shared workspaces are sparking
sustainability for the future. emissions and make the city greener and more efficient? unexpected connections as people, almost literally, bump
The answer was a ‘smart work centre’. Think Qantas into other people with useful ideas and skills.
Club, on steroids, in the suburbs. So what started with a focus on cost, carbon and
Martin Stewart-Weeks, The idea is simple. You fit out a building to convenience has turned into an engine of ‘systematic
Senior Director (Public Sector), IBSG, Cisco accommodate a wide range of work styles and needs serendipity’ that fires innovation and creativity.
– individuals at a computer, informal meeting spaces In Seoul, the government has announced the intention
over the coffee machine, meeting rooms large and to spread a network of 450 smart work centres. Not
small. Throw in the best available broadband-enabled, surprising when you consider the population of Seoul is
networked collaboration technologies, like high-end roughly the size of Australia. That’s what’s called taking it
telepresence video. And make sure the centre is close to to scale.
transport, shops and services, child care. Take another example. The United Nations Secretary-
The result is the rapid growth of these centres General has started a program of inter-cultural dialogue
8 BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE CONTENTS
9. and collaboration to make a contribution to reducing becoming ‘table stakes’ for cities and regions that want to
tensions across political and cultural divides. succeed in a more open and connected world.
One of the tools being developed is Dialogue Cafe Infrastructure is all about the future.
(www.dialoguecafe.org). Basically, a Dialogue Cafe is It requires often massive investments whose size and
a public space, like a cafe, that is easily accessed and focus say a lot about our collective future. If you look at
informal, with a telepresence screen that allows people to the way a company, a city, a State or a whole country
quickly and cheaply connect to other ‘Cafe’ spaces where invest in infrastructure, you’ll learn a lot about the
they can talk with others around the world. What they imagination, values and aspirations from which it is, quite
talk about can be pretty much anything – ideas for new literally, being built. In a very real sense, our collective
social change programs, artists collaborating on a piece identity is made manifest in the decisions we take about
of music, students swapping ideas and projects, social what, where and how to build the infrastructure assets
entrepreneurs looking for great new ideas to help them in that sustain resilience.
their work. Possibly the single most significant factor that has
What’s the link between these two initiatives? changed the way we think about infrastructure in the past
They are both powerful examples of the new 20 years is the increasingly central role that networked
capabilities that cities need to create so people can digital technology now plays in defining our world and its
get the most out of their engagement with the digital risks and possibilities.
economy. And those capabilities - better communication, Our world is growing inexorably more digital and
simple and effective collaboration and powerful new networked.
connections – rely on a bunch of new infrastructure Just to put that in context, Cisco estimates that, after
assets. Rising to these new infrastructure demands is increasing eight-fold in the past five years, global web
traffic will quadruple during the next five years. Three
forces are at play - mobility, connected devices and video.
By 2015, the number of devices will be twice the world’s
population, traffic from wireless devices will exceed that
from wired devices and nearly two-thirds of consumer
If you look at the way a company,
traffic will be in the form of video.
a city, a State or a whole country How well and how easily we can connect across the
invest in infrastructure, you’ll Internet or other digital platforms will make or break our
aspirations for innovation, inclusion and sustainability.
learn a lot about the imagination, And that is certainly true for Brisbane and Queensland.
values and aspirations from which Rebuilding from last year’s floods and cyclone, there is
an opportunity to match Queensland’s boundless vision
it is, quite literally, being built. and optimism for the future – growth, inclusion, innovation
– with the infrastructure of resilience and sustainability.
And central to the new demands to build resilience and
sustainability into the heart of Queensland’s cities, towns
and regions is the imperative to invest in the human and
technology fabric of the digital economy.
The evidence suggests the results are worth the
investment.
9 BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE CONTENTS
10. A recent study for the UK Government estimated that
spurring an additional investment of £15 billion in the UK’s
ICT infrastructure would create approximately 700,000
In the digital and distributed future,
UK jobs. They also estimated that over half of these jobs
would be in small businesses. whether we are trying to make our
In the US, a 2007 study looked at the economic cities and towns easier to live in,
multiplier effects (increases in GDP, jobs, tax revenues)
that can be calculated from broadband investment. to start new businesses and create
It found the increase in local GDP is more than ten-fold new jobs, or to keep our water
the value of the investments in broadband infrastructure
The OECD published a report a couple of years clean and our energy sustainable,
back pointing out that broadband networks increase we’ll be ‘smarter, connected’.
the impact and efficiency of other public and private
investments. “Broadband is needed as a complementary
investment to other infrastructure,” the report
suggested, “such as buildings, roads, transportation
systems, health and electricity grids, allowing them to care of a collaboration of family, medical experts and
be ‘smart’ and save energy, assist the aging, improve community support teams, they need to find people,
safety and adapt to new ideas.” connect and talk with them easily and often work together
A 2009 study (http://reason.org/news/show/gridlock- across large distances and over long periods of time.
and-growth-the-effect) found that reducing congestion The ability to connect – what you might call ‘soft’
and increasing travel speeds enough to improve access infrastructure, becomes crucial.
by 10 percent to key employment, retail, education, and In the digital and distributed future, whether we are
population centers within a region increases production trying to make our cities and towns easier to live in, to
of goods and services by one percent. The study reported start new businesses and create new jobs, or to keep
that achieving “free-flow traffic conditions” (that is, our water clean and our energy sustainable, we’ll be
reducing congestion) around key urban and suburban ‘smarter, connected’.
destinations in eight U.S. cities–Atlanta, Charlotte, Dallas, Brisbane’s aspiration to be Australia’s ‘new world city’
Denver, Detroit, Salt Lake City, the San Francisco Bay tells us a lot about its sense of the future. And that means
Area, and Seattle–could boost the economies in those we know something of the city’s infrastructure priorities
cities alone by $135.7 billion and generate close to $9 and investments on which that future depends.
billion in new tax revenues. Some big ideas and bigger ambitions are at stake.
This is all important grist to the infrastructure How does the city provision new models of working,
investment mill. Roads, bridges, schools, hospitals, mobility, innovation and creativity? What are the new
ports, big public transport systems, new housing – all of assets and capabilities that business, large small, need to
these traditional assets are still important. invest, create jobs and develop competitive products and
But when an entrepreneur is looking for investors services? How does Brisbane create thriving places and
or partners to develop a great new product or service, lively communities that are inclusive, accountable and
when a teacher wants to connect her students to experts resilient, places where people want to make their homes
on the other wide of the world or in the next town, when and make their mark?
someone needs access to specialist health care or the Creativity, inclusion, innovation, sustainability – these
10 BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE CONTENTS
11. are increasingly the hallmarks of successful cities and
communities into the future. And reaching for the rising
standards they imply will increasingly be a function of
the confidence with which the city and its citizens master
the new demands of the digital economy. Connecting,
communicating and collaborating are the new engines
of progress. And that means investing in the necessary
infrastructure assets, capabilities and culture. This is Connecting, communicating and
now the stuff of leadership in the digital economy.
collaborating are the new engines of
For Brisbane and Queensland, the task is how
to achieve economic resilience in a connected and progress. And that means investing
competitive world, make a transition to a low-carbon in the necessary infrastructure
economy and lifestyle and make communities safe,
creative, clever and inclusive places to live. assets, capabilities and culture. This
That means investing in the digital fabric of the new is now the stuff of leadership in the
economy whose technology assets are becoming more
visual, virtual, social and mobile. digital economy.
More smart work centres and Dialogue Cafes, for
{
example? n
Martin Stewart-Weeks has over 25 years’ experience in
organisational management and consulting in the corporate
and public sectors and with a wide range of not-for-profit
organisations.
Martin works with the Internet Business Solutions Group (IBSG)
at Cisco with a focus on the public sector. In January 2007,
Martin took up a position to lead IBSG’s public sector practice
in Asia-Pacific, leading a small team of senior consultants
working on transformation projects in government, education
and urbanisation in India, China, South-East Asia and Australia
and New Zealand. Martin writes and speaks extensively on
changes in government, service design and policy driven by
reform opportunities at the intersection of public sector reform,
technology and public and social innovation.
11 BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE CONTENTS
12. Growth will be sustained and
opportunities will emerge if we
continue reform in areas of labour,
productivity and infrastructure.
It’s little more than a year since QR National made its
The booming resources sector debut on the ASX – a momentous day for our Brisbane-
lies at the heart of Brisbane’s headquartered company with over nine thousand
employees across Australia. While the $4.6 billion float in
unprecedented growth forecasts, November 2010 was the biggest IPO in Australia in more
than a decade, equally it marked new beginnings for this
and is driving significant iconic Queensland company with a 145-year history.
investment in rail infrastructure Like many in 2011, we were confronted by the
Queensland floods. Our operations fortunately withstood
that will have far reaching benefits. the onslaught remarkably well, and we start 2012 with
renewed optimism and determination to deliver on the
L ance Hockridge changes needed for our company to support the rapid
growth forecast for the region.
Managing Director and Chief E xecutive
Officer, QR National This is against the backdrop of a strong, though patchy
Australian economy and continuing global uncertainty.
In this context, the focus is for individual businesses
and the domestic economy to be more efficient and
competitive. Growth will be sustained and opportunities
will emerge if we continue reform in areas of labour,
productivity and infrastructure.
For our part, the transport and logistics industry in
Australia should be a world-class enabler of competitive
12 BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE CONTENTS
13. and connect with regional communities. Brisbane has
a great balance of dynamism, energy and the right
The transport and logistics opportunities to help us realise our aspirations for the
region’s infrastructure development. Its world-class
industry in Australia should liveability and increasingly sophisticated social and
be a world-class enabler of cultural scenes provide an ideal platform for a company
like QR National to breathe and grow.
competitive advantage for local Home-grown enterprises and a range of leading
companies and industry. Rail can national and multi-national companies now call
‘Australia’s new world city’ home. There’s a burgeoning
make a genuine and sustaining industry of IT excellence invigorating the business
contribution to the next wave of landscape. QR National, with its national footprint is
very much at home in this city. It serves as the perfect
productivity for the Brisbane and hub from which to connect with other states, South-
Queensland economies. East Asia and further afield, with its world-class and
easily accessible domestic and international airports via
Brisbane’s Airtrain. And importantly many of our largest
customers, the resource companies with extensive
Queensland operations, are based here. This co-location
advantage for local companies and industry. Rail can make allows us to remain engaged and in touch. We also share
a genuine and sustaining contribution to the next wave of a large regional employment presence and a connection
productivity for the Brisbane and Queensland economies. with regional communities.
From a long, proud history in Queensland’s economic Like others, an emerging challenge for QR National
and social development, QR National has grown to has been the fierce competition to attract and retain
become the country’s largest rail freight company. talented people – both at the executive management level
The network carries more than $50 billion worth of and in engineering and trades. Brisbane, with its vibrancy
Australian exports each year. And now the move to a and energy, provides a positive context in which to face
publicly-listed company will help accelerate the changes these challenges. The ‘lifestyle capital’ of Australia is now
required to sharpen our performance and customer matched by unprecedented migration rates and career
service, delivering better commercial outcomes for opportunities. That I could take a CEO role in Brisbane,
industries that rely on rail freight. Continued investment in was a driving factor for me in repatriating with my family
growth projects will be a critical driver for future success from the U.S. in 2007. I know my experience is shared
for both our organisation and the region’s economy. by many executives now residing in Brisbane and the
Our business covers coal on the eastern seaboard, iron Sunshine State.
ore in Western Australia, intermodal freight and a range In terms of infrastructure investment and growth,
of rail-related products such as heavy-engineering and Queensland’s capital IS in the box seat.
track maintenance and construction. The Deloitte Access Economics Investment Monitor
QR National’s heritage and heartland are in released in February identifies planned or committed
Queensland, so Brisbane is the logical HQ for the projects in Australia totalling more than $900 billion.
company. From here, we can efficiently and effectively Unsurprisingly, mining accounts for almost half of
run our operations, stay in touch with major customers investment activity. Around 40 % of these projects are
13 BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE CONTENTS
14. slated for the resource rich states of WA and Queensland.
For QR National, which is 80% leveraged to the
resources sector, and other Brisbane based companies
servicing the resources sector, we see great growth
opportunities in these type of numbers.
Rail is a major player in Australia’s resource supply
chains where bulk commodities account for nearly 90
percent of total rail freight tonnages in this country.
Coal and iron ore make up about 75 percent of this,
primarily in coal on the eastern seaboard and iron ore in
the west.
The challenge here for the transport QR National’s focus is on supporting a strong and
and logistics infrastructure industry growing export market where Australian resources
remain highly-competitive globally. We know that
is to align with the demand curve Australian resource supply chains are among the best
for Australian resources and to in the world but the pressure is on for accelerated
improvement. The challenge here for the transport
continue to exploit all the benefits and logistics infrastructure industry is to align with the
that technology and operational demand curve for Australian resources and to continue
to exploit all the benefits that technology and operational
excellence offer. excellence offer.
While Korea and Japan traditionally are the biggest
consumers of Australian coal – about 54 per cent for
FY 2011 - the emergence of the Chinese and Indian
economies will underpin the next phase of growth.
We’re also seeing a strong direct investment from
these countries as they seek to create vertically
integrated supply chains to lock in supply and price
over coming decades.
In Queensland, thermal coal reserves in the Galilee
and Surat Basins will come into play, building on the
continuing growth of high-quality metallurgical coal
exports from the Bowen Basin to international markets.
Coal infrastructure supply chains in Queensland and
New South Wales are about to embark on their next
phase of growth. Current nameplate capacity of coal
ports stretching from Port Kembla to Bowen is around
425 million tonnes per annum.
Projects already announced would add another
780 million tonnes, taking the total to more than
1.2 billion tonnes. The value of these projects will
14 BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE CONTENTS
15. run to tens of billions of dollars. Obviously these The first component of the $1.1 billion GAP Expansion In terms of infrastructure investment
will not all progress along the same approval and was opened to rail traffic in December 2011. When
commissioning path, however it does underscore the completed in June 2012, the project will take to 50 million and growth, Queensland’s capital
scale of growth anticipated. tonnes, the annual capacity on the Newlands system to IS in the box seat.
Here in Queensland, the current rail infrastructure Abbot Point Coal Terminal. It’s a project underwritten by
and port capacity is in the order of 200 million tonnes five foundation customers - BMA, Rio Tinto Coal, QCoal,
across QR National’s network and into ports at Macarthur Coal and Lake Vermont Resources.
Gladstone, Mackay and Bowen. Our capital program Importantly, the project has been designed to allow
is growing this network capacity in alignment with significant future expansion - from 50 to 100 to potentially
customer and industry needs and in a manner which is 200 million tonnes as customer demand dictates.
operationally efficient and commercially sensible. Similarly, the $900 m Wiggins Island Rail Project,
QR National is currently delivering a 30% step-change announced in September 2011, is leveraging our existing
increase in this system capacity with more than 70 infrastructure to deliver a 30 % boost to coal exports from
million tonnes per annum being added from now through the southern end of the Bowen Basin to meet increasing
to 2015. This will take total system capacity to around 300 demand from Asia and beyond.
million tonnes. It will deliver 27 million tonnes of extra capacity per
Major projects, comprising more than $2 billion of year through the proposed new terminal at Wiggins
investment, include: Island, at the Port of Gladstone. Wiggins is being
• Goonyella to Abbot Point Expansion developed by a consortium of eight mining companies
(adding an extra 34mt) – the same companies with whom QR National struck a
• Wiggins Island Rail Project (27mt extra) commercial agreement on the project’s rail component.
• Hay Point Expansion (11mt extra)
15 BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE CONTENTS
16. These companies are Xstrata Coal, Aquila Resources, As the ASX’s second largest Brisbane-based company,
Bandanna Energy, Caledon Resources, Northern Energy QR National looks forward to continuing to invest and
Corporation, Yancoal Australia, Wesfarmers Curragh and grow our business nationally, delivering benefits for
Cockatoo Coal. customers, communities and the broader Brisbane and
First railings are scheduled for mid-2014 with Queensland economies. n
{
completion by March 2015, subject to the project’s
approval by the Queensland Competition Authority.
Future expansions for Wiggins Island contemplate
Lance Hockridge became Managing Director & CEO of QR
construction of the Surat Basin Rail – or so-called National after its structural separation from QR Limited in
‘Southern Missing Link’ – to tap into Xstrata’s massive July 2010.
Wandoan mine and others in the region. QR National Lance joined QR as Chief Executive Officer in November 2007
is part of the consortium for the Surat Basin Rail with with more than 30 years’ experience in transportation and
heavy industrial sectors in Australia and the United States with
Xstrata and ATEC. BHP and BlueScope Steel.
The industry contemplates Wiggins Island terminal In QR, and now in QR National, he has led a transformation
going to more than 80 million tonnes and our rail program aimed at delivering world-class safety, customer
service excellence and superior commercial capability.
network is well-positioned and capable of expanding to
Lance played a leading role in QR National’s preparations for
meet that future demand. We can use the existing 2,300 the IPO, overseeing structural separation and the company
kilometre Central Queensland coal network to support through the transition from government to private ownership.
this on-going growth for existing customers.
There’s tremendous opportunity to leverage the
existing network in combination with greenfield railway
for emerging markets. This is the position we are
advocating in the Galilee Basin where we believe a
consolidated industry approach will allow an earlier path
to market.
While Galilee is a significant growth opportunity for
our company, we’re equally focussed on the next phase
of Bowen Basin expansion. The Bowen Basin remains
one of the world’s most outstanding reserves of coking
coal and already has established supply chains from
mines to ports.
One of our committed projects is the $185 million
Hay Point Expansion that supports growth of 11 million
tonnes per annum on the Goonyella network feeding
into the Hay Point Coal terminal. This project is well
underway and scheduled for completion in 2014.
Likewise, the $195 million Blackwater electrical
system upgrade is designed to cater for the growing coal
export demand in the region by increasing the electrical
capacity of the system. It is on track for completion in
June 2012, six months ahead of schedule.
16 BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE CONTENTS
17. acknowledgments
SPECIA L THANKS
Brisbane Marketing is indebted to our special contributors for their generous involvement
with the Brisbane Economic Series, namely:
Mark Birrell, Chairman, Infrastructure Partnerships Australia.
Martin Stewart-Weeks, Senior Director (Public Sector), IBSG, Cisco.
Lance Hockridge, Managing Director and Chief Executive Officer, QR National.
IMAGE CREDITS
Smart work centre images: Matthijs Borghgraef - http://www.kwikzilver.nl/
Airportlink images: Courtesy of Thiess John Holland
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17 BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE CONTENTS