2.1
The Department of Infrastructure, Regional Development and Cities (the Department) seeks approval to proceed with the replacement of the wharf crane and mooring systems on Christmas Island in Australia’s Indian Ocean Territories (IOT).
2.2
Christmas Island is a non-self-governing territory located 1,550 kilometres north-west of the Australian mainland, for which the Australian Government fulfils the role of both Commonwealth and State Government. The Department is responsible for the provision, management and operation of the port facilities on Christmas Island on behalf of the Australian Government.
2.3
The Department states that this proposal will address ‘identified safety and operational concerns’ with the existing wharf crane and mooring systems, and will:
Ensure the Port can continue to operate with a higher level of safety and with increased reliability;
Provide greater capacity and increased operational flexibility into the future; and
Reduce the escalating ongoing repair costs.
2.4
The estimated cost of the project is $26.2 million (excluding GST).
2.5
The project was referred to the Committee on 25 October 2018.
Conduct of the inquiry
2.6
Following referral, the inquiry was publicised on the Committee’s website and via media release.
2.7
The Committee received one submission and two confidential submissions. A list of submissions can be found at Appendix A.
2.8
On 7 December 2018, the Committee conducted a site inspection by presentation, public and in-camera hearings. A transcript of the public hearing is available on the Committee’s website.
Background
2.9
According to the Department, the IOT ‘are heavily dependent upon reliable Port facilities for deliveries ‘of essential supplies by sea-freight’. The Department stated that:
The Australian Government owns all of the IOT Port’s onshore assets (fixed and mobile) and a number of offshore assets and vessels. The assets are maintained on behalf of the Australia Government, by Linx Stevedoring Pty Ltd, under a service delivery contract with the Department for the provision of Port facilities management services.
2.10
In its submission, the Department outlined the port facilities on Christmas Island:
Currently there are two wharf cranes (one operational and one non-operational) and six mooring berths (five operational and one non-operational) located across the three sites utilised, as follows:
a.
Wharf crane – a Favelle Favco M760 wharf-mounted tower crane.
b.
Mooring systems – comprising an outer mooring system and an inner mooring system, with shared componentry, which services the Rock and Crane Berths.
i.
Rock Berth – a six-point mooring for vessels loading phosphate via two cantilever loaders that are owned and operated by the local phosphate mine.
ii.
Crane Berth – a six-point mooring for freight and bagged phosphate vessels.
a.
Tanker One Berth – a five-point mooring.
b.
Tanker Two Berth – a three-point mooring.
c.
Passenger Berth – a two-point/two heading mooring (or a single point mooring between the span extensions for large cruise ships).
3
Norris Point (Nui Nui):
a.
Wharf crane – a Favelle Favco M440 tower crane (non-operational).
b.
Nui Nui Berth – a two point/two head mooring (non-operational).
2.11
The Department told the Committee that 179 vessels berthed at the Christmas Island port facilities in 2017. Of these, 51 per cent moored at Smith Point, 34 per cent moored at the Rock Berth in Flying Fish Cove, and 15 per cent moored at the Crane Berth. The Department further stated that 48 per cent of the vessels were Royal Australian Navy or Australian Border Force, 42 per cent were vessels servicing the phosphate mine operated by Phosphate Resources Ltd, seven per cent were general cargo vessels, and three per cent were fuel tankers.
Need for the works
2.12
The Department advised that:
Technical investigation and ongoing consultation with major users of the Port have identified a range of concerns regarding the safety, capability and adequacy of key elements of the existing infrastructure.
2.13
Furthermore, in addition to these concerns the Department noted that:
The wharf crane and mooring systems in Flying Fish Cove both recently experienced critical failures, requiring costly emergency repairs, and disrupting Port operations. Without immediate replacement, these ageing assets will continue to fail and severely impact Port operations, which support Australia’s strategic capability in the region, and ensure the sustainability of this isolated island community.
Flying Fish Cove
2.14
In its submission, the Department outlined the specific concerns identified in the existing crane and mooring infrastructure at Flying Fish Cove. In regard to the wharf crane at Flying Fish Cove, the Department stated that:
The existing Favelle Favco M760D wharf-mounted tower crane at Flying Fish Cove, which is the primary freight-handling crane for the Port, was not built specifically for marine purposes and operates in an exposed and harsh marine environment.
The existing crane’s limited reach also constrains vessel size and Port operations, and introduces risk due to vessels being required to be moored close to the cliff face and the potential for swell at the rock face.
To minimise risk, ships’ captains position vessels at the limit of the crane capacity for each lift. This practice, whilst reducing the operational risks to vessels, increases the forces on the crane structure and reduces its life.
2.15
The Department argued that replacing the existing crane with an upgraded marine crane will:
…provide a safer solution with regard to vessel and crane operation, reduce the number of lifts at full capacity, reduce ongoing maintenance costs, and provide greater operational reliability and increased flexibility with regard to reach and load capacity.
2.16
According to the Department:
Flying Fish Cove is the main cargo facility on Christmas Island and comprises two mooring systems: an outer mooring system and an inner mooring system, with shared componentry, which services the Rock and Crane Berths.
2.17
While the outer mooring system is ‘used predominantly for bulk phosphate operations’, the inner mooring systems ‘is used for both bagged phosphate operations and vessels coming alongside for general cargo supply’.
2.18
The Department noted that while the mooring systems are ‘currently serviceable’, they have required urgent repairs on at least four occasions since 2016. Additionally:
…the existing components and configuration no longer meet the current or future operational requirements of the Port users, and the outer mooring system is now four years beyond its six-year design life (having been due for replacement in 2014).
2.19
The Department told the Committee that, following the wreck of the MV Tycoon, the inner mooring system was replaced in 2013 and is approaching the end of its design life. Further:
If, as proposed, the existing Flying Fish Cove wharf crane is replaced by a crane with greater reach and lifting capacity, the mooring layout will also require reconfiguration to suit.
Smith Point
2.20
In its submission, the Department outlined the role of the port facilities at Smith Point:
The Smith Point mooring system supports fuel bunkering and large vessel refuelling, handling bulk distillate and medium fuel oil for both power generation and the operations of Phosphate Resources Ltd.
2.21
The Department noted that:
In 2009, driven by a need to diversify the island’s economy, the Smith Point mooring system was reconfigured to accommodate cruise ships up to the size of the Pacific Sun (approximately 47,000 tonne and passenger capacity of 1,500). At the time, it was intended that the cruise ships would moor at Smith Point, with passengers being transferred to and from the ship via a tender vessel to the jetty in Flying Fish Cove. However, only three cruise ships have moored at Smith Point in that time, mainly due to the cruise ships visiting during the swell season, making it challenging to safely access and/or approach Christmas Island.
2.22
According to the Department:
The 2009 alterations to the Smith Point mooring system inadvertently resulted in less safe berthing operations for vessels off-loading or refuelling, due to the repositioning of the buoys. Further, the type of breast buoys installed during the reconfiguration have proven not to be sufficiently robust to withstand the onset of north-westerly swells; and have insufficient deck surface area to facilitate safe buoy jumping operations to catch and release mooring lines.
Nui Nui wharf crane and mooring systems
2.23
This facility was constructed in 2004 to off-load fuel and support the now defunct Asia-Pacific Space Centre project. It was intended that Niu Niu be used as an emergency off-loading facility for fuel and cargo following the closure of the Asia-Pacific Space Centre.
2.24
The Department noted that the mooring system at Nui Nui has been used only four times since its construction, and further that:
…the intended purpose of the system as an emergency off-loading facility is now largely redundant, due to the Department putting in place measures to reduce the risk of running low on aviation fuel supplies and perishable food stocks.
2.25
In its submission, the Department also discussed several concerns with the crane and mooring facilities at Nui Nui:
In 2014, the Nui Nui moorings failed after being impacted by severe weather and damaging swell conditions associated with Cyclone Gillian; effectively rendering the system non-operational. To prevent further damage to the system, three buoys were removed from the water in early 2015. At present, the Nui Nui mooring system remains inoperable.
The Favelle Favco M440D wharf-mounted tower crane installed at Nui Nui is now 25 years old. Following an inspection undertaken in May 2016, the manufacturer recommended the crane not be operated in its current state.
While the Port operator continues to undertake routine inspections of the crane as required under the agreed maintenance schedule, there are no financially viable repair options available to reinstate the crane into operation.
2.26
As a result of these concerns and the operational changes implemented to stockpiling on Christmas Island, the Department is proposing that:
Removal and off-island disposal of the crane and remaining mooring system componentry will relieve the Australian Government of the ongoing maintenance liability for these assets, and remove the potential for unauthorised and high-risk use of remaining mooring componentry.
2.27
The Committee is satisfied that the need for the works exists.
Options considered
2.28
The Department considered a range of options to replace the existing crane at Flying Fish Cove in 2015. This assessment determined that the replacement needed, at minimum, to meet the following criteria:
Lift capacity of 45 tonne at a reach of 45 metres to provide flexibility and options for vessel orientation;
Hoist speed greater than 25 metres per minute; and
Designed for marine operations.
2.29
In its submission, the Department also outlined the three options examined for the Flying Fish Cove crane foundations. The Department stated that, although it did include the option of doing nothing, the proposed new crane will ‘impose substantially larger loads on its supporting foundation’, and that as such ‘a more robust foundation is required’.
Upgrading the existing crane foundation;
Constructing a new piled foundation offshore from the existing cliffline; and
The construction of a new landward foundation across the existing wharf space, including the installation of 16 rock anchors around the concrete foundation perimeter.
2.31
The Department told the Committee that upgrading the existing foundation was determined to represent the best value of money solution as it ‘meets the operational requirements while minimising construction related risks’, including ‘geotechnical constructability risks, potential environmental impact and impact on wharf operations’.
2.32
In considering the best approach for replacing the moorings at Flying Fish Cove, the Department examined three options:
Option 1: Simultaneous Mooring Configuration. This option involved separate mooring systems for the Rock and Crane Berths, to allow mooring of vessels at the Rock Berth and Crane Berth simultaneously. This option generally required new mooring elements to be installed, with use of existing elements where practicable. While this option is preferred by a key user of the Port, simultaneous mooring of vessels at the Rock and Crane Berths is not deemed critical to achieving the project objectives, and introduces additional operational safety risks.
Option 2: Shared Mooring Configuration (Single Vessel Mooring) – Adaptive re-use of existing mooring components. This option primarily utilised existing mooring components at the Crane and Rock Berths, and involved only minimal new mooring componentry while allowing for berthing of a 200 metre vessel at Rock berth, or a 110 metre vessel at the Crane Berth.
Option 3: Shared Mooring Configuration (Single Vessel Mooring) – Combination of New and Adaptive Re-use. This option involved utilising a combination of new and existing mooring componentry across the Rock and Crane Berths. This option is similar to Option 2, however involved a greater amount of new componentry (versus re-use of existing componentry), and providing greater operational flexibility as it also enables berthing of a 130 metre vessel at Rock Berth.
2.33
The Department took the view that Option 3 represented the best value for money, as it met user requirements while ‘minimising operational safety risks and impact on Port operations’.
2.34
To replace the mooring facilities at Smith Point, the Department considered two options:
Option 1 – Parallel berthing. A six-point mooring system which facilitates mooring of a 150 metre tanker or 150 metre cruise ship to the shore.
Option 2 – Parallel or perpendicular berthing. A six-point mooring system which facilitates mooring of a 150 metre cruise ship or 150 metre tanker parallel to the shore, or mooring of a 150 metre tanker perpendicular to the shore (using a four-point mooring configuration). Providing the perpendicular mooring functionality improves the operational safety of fuel bunkering and vessel refuelling operations, particularly during adverse weather conditions.
2.35
Following an analysis of these options, the Department determined that Option 2 represents the best value for money, as it addressed ‘operational safety risks’ and facilitates ‘year-round access to the fuel facility’.
2.36
The Department told the Committee that it undertook an ‘options assessment for the Nui Nui moorings system’ in December 2016, which considered:
The current condition of the residual moorings componentry which is not operational; and
The reduced need for an ‘emergency off-loading facility’ on Christmas Island (as a result of the Department’s recent ‘Fuel Consolidation Project’, which increased the bulk quantity of aviation fuel maintained at the airport).
2.37
According to the Department, this assessment ‘recommended that the remaining salvageable mooring componentry be removed and disposed of (off island)’.
Scope of the works
2.38
The Department split the proposed works into three project elements.
2.39
Project Element 1 is proposed to take place at Flying Fish Cove, and involves the following works:
Replacement and upgrade of the existing wharf crane to meet operational requirements, including:
Decommissioning and off-island disposal of the existing crane;
Upgraded crane foundation; and
Installation of a new wharf crane.
Upgrade of the Flying Fish Cove Moorings System to increase capacity (to safely accommodate larger vessel sizes) and align with upgraded wharf crane, including:
Installation of new componentry for outer mooring system;
Combination of new mooring components and adaptive re-use of existing components for inner mooring system; and
Decommissioning and off-island disposal of the existing mooring components (where not suitable for re-use within the new system).
2.40
Project Element 2 proposes to reconfigure ‘mooring systems and ensure safe fuel bunkering and vessel refuelling’ at Smith Point, and includes the following works:
Replacement, upgrade and reconfiguration of the existing mooring system; and
Decommissioning and off-island disposal of the existing components no longer required as part of the upgraded mooring system.
2.41
Project Element 3 is proposed to take place at Nui Nui, and includes the following works:
Decommissioning and off-island disposal of the existing wharf crane; and
Removal and off-island disposal of the remaining components of the Nui Nui mooring system.
2.42
The Committee finds that the proposed scope of works is suitable for the works to meet its purpose.
Cost of the works
2.43
The project has a budget of $26.2 million, exclusive of GST. It includes the cost of construction, management and design fees, contingencies and an escalation allowance.
2.44
The Department provided further detail on project costings in its confidential submission and during an in camera hearing.
2.45
The Committee is satisfied that the costings for the project provided to it have been adequately assessed by the proponent entity.
Committee comment
2.46
The Committee did not identify any issues of concern with the proposal and is satisfied that the project has merit in terms of need, scope and cost.
2.47
Having regard to its role and responsibilities contained in the Public Works Committee Act 1969, the Committee is of the view that this project signifies value for money for the Commonwealth and constitutes a project which is fit for purpose, having regard to the established need.
2.48
The Committee recommends that the House of Representatives resolve, pursuant to Section 18(7) of the Public Works Committee Act 1969, that it is expedient to carry out the following proposed works: replacement of the wharf crane and mooring systems, Christmas Island.
2.49
Proponent entities must notify the Committee of any changes to the project scope, time, cost, function or design. The Committee also requires that a post-implementation report be provided within three months of a project completion. A report template can be found on the Committee’s website.