Freight and Logistics Council – 27 June 2013
Presenter:
Michal Frydrych
Chief Executive
Presenter: Shayne Flanagan
– CEO Officer
Date:
13 May 2011
Esperance Region – Exports
EPSL Exports
Grain
Other
Iron Ore
TOTAL EXPORTS
Tonnes per Annum
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
Iron Ore
1
2
3
4
5
6
7
8
9
10
11
12
1,636,825
2,546,692
4,177,294
4,205,182
5,107,886
5,374,973
5,998,309
7,572,075
7,435,699
7,392,929
9,211,331
8,807,994
Other
199,028
248,791
304,124
266,247
260,771
221,936
299,372
253,389
231,201
338,389
325,769
298,577
Grain
1,247,508
1,119,474
1,278,762
1,106,859
1,560,923
1,797,246
1,646,154
1,625,550
1,559,536
1,722,346
1,360,251
1,607,665
TOTAL EXPORTS
3,083,361
3,914,957
5,760,180
5,578,288
6,929,580
7,394,155
7,943,835
9,451,014
9,226,436
9,453,664
10,897,351 10,714,269
Financial Year
Growth in use of containers
Number
EPSL Container Trade
16000
14000
12000
10000
8000
6000
4000
2000
0
Container Imports
Container Exports
2008 2009 2010 2011 2012
Financial Year
Predominately Nickel Concentrate (Xstrata Nickel and
Western Areas) and Nickel Hydroxide (FQM)
Repositioning the Port
Financial analysis completed and implemented during 2012:
– Financial systems and structures
– Compliance and reporting
– Financial modelling specific to activities and lines of business
Assessment of infrastructure – future capex and opex funding
requirements over the next 5 completed.
Assessment of commercial and lease arrangements – pricing and
contractual obligations – completed.
Asset Management
Implementation of key infrastructure upgrades being / to be
undertaken at the Port to ensure capacity for all Port Users
including:
– Rail Maintenance (within the Port)
– Maintenance Dredging
– Hughes Road Upgrade
– Development of additional container hardstand area
– Progressive upgrade of maritime assets underway
Port Planning
Outline of current port transport planning process:
– Traffic Management process in relation to the Esperance Port
Access Corridor
– Maintaining access Berths 1 and 2
– Development of container handling capacity at Berth 2
– Multi User Iron Ore Facility (MUIOF)
Multi User Iron Ore Facility
In January 2012, the WA Government announced:
Esperance Port is the preferred gateway for the Yilgarn Iron Ore
Province.
Additional capacity needs to be privately funded and provide for
multiple users.
A proponent will be sought through a competitive tender process.
Level of expansion will be contingent on verifiable bankable
demand.
Multi User Iron Ore Facility
A Market Sounding process was undertaken during 2012 and
aimed to identify the extent pf private sector interest in
developing the additional capacity.
More then 50 companies participated:
– Mining companies
– Potential financiers
– Port facilities managers
– Infrastructure providers and
– Major engineering companies.
Prospective equity and debt investors shared their views about
the best way forward in developing and operating the planned
MUIOF facility.
Multi User Iron Ore Facility
Bankable demand was shown to be between 10 and 20 million
tonnes per annum.
Responses were positive in terms of financiers indicating a clear
appetite to invest.
Based on the Market Sounding findings a business case was
prepared for consideration by the Minister for Transport during
January 2013.
Approval was given to proceed to procurement late in January 2013.
Multi User Iron Ore Facility
Invitations for Registrations of Interest and Prequalification (ROIP)
were called in February – closing on the 15 March 2013.
Over 30 responses were received.
From these responses a short list of proponents were selected:
– Qube Bulk Pty Ltd and Brookfield Infrastructure (Australia) Pty Ltd;
– Yilgarn Esperance Solution (YES) consortium. YES consortium comprises
McConnell Dowell Constructors (Aust) Pty Ltd, Asciano and Marubeni
Corporation Ltd.
These will proceed to a formal Request for Proposal (RFP) from
which a preferred proponent will be selected.
It is expected that the RFP will be released in July 2013.
Multi User Iron Ore Facility
The RFP process proposed has been designed having regard to the following
considerations:
– The complexity of the Project and the fact that, while at this stage there appears
to be a market for the MUIOF, the market will ultimately be determined by private
investors who will rely on secure take or pay agreements to underwrite their
investment.
– Designing a process which does not burden Respondents with excessive RFP
response costs due to the uncertainties around demand, and thereby deterring
Respondents who may otherwise be very credible (i.e. avoiding the “it’s all too
hard” argument from Shortlisted Respondents) .
– Designing a process which allows the Port to put forward its preferred contractual
and commercial positions and ensuring sufficient competitive tension to maintain
these positions.
– Designing a process that, having regard to the above, still provides sufficient
robustness to meet probity requirements and allows EPSL to select a Preferred
Proponent which it believes is capable of delivering the Project Objectives.
– Designing a process with sufficient flexibility to incorporate contractual or other
mechanisms to ensure the Preferred Proponent progresses the construction of
the MUIOF.
Multi User Iron Ore Facility
Performance obligations / Work plan / CPs / Bonding
Implementation
Agreement
Governs process immediately after selection of
Preferred Proponent
Construction Works
Lease & Licence
Operating Lease &
Licence
Default / termination /
Damages
Third Party Access
Regime
Management &
Reporting
Side Deeds
Term
Term
Operations strategy
Finance side deed
Lease / Site Access
Lease / Site Access
Application for capacity
Construction side deed
Design / Approvals
Maintenance
Pricing & Charges
…
Defects
Guarantees
Port charges / Services
Capacity management
Stakeholder interface
Right to rail siding
Dispute Resolution
Environmental / Port
obligations
Environmental / Port
obligations / Licences
Review and Amendment
Risk allocation / Step in
Risk allocation / Step in
Handling Services
Other side deeds as
required
Contract / Subcontract
Management
12
Multi User Iron Ore Facility
A reference design of the proposed facility has also been developed
as part of the RFP documentation – however proponents will be
provided with the opportunity to submit their own designs.
The aim is to deliver near term capacity which will provide a least
cost pathway to market.
It is planned to complete evaluation of proposals and selection of the
preferred proponent in early 2014, with contractual and financial
close achieved in early Q3 2014.