Identification and investigation of future infrastructure requirements and potential locations for a Cruise Passenger Terminal east of Sydney Harbour Bridge. JANUARY 2011 PART B REPORT TO THE MINISTER FOR PLANNING, MINISTER FOR INFRASTRUCTURE, MINISTER FOR LANDS FROM THE CRUISE PASSENGER TERMINAL STEERING COMMITTEE
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Cruise Passenger Terminal Steering Committee Part B Report
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Identification and investigation of future infrastructure requirements and potential locations for a Cruise Passenger Terminal east of Sydney Harbour Bridge.
JANUARY 2011
PART B
REPORT TO THE MINISTER FOR PLANNING, MINISTER FOR INFRASTRUCTURE, MINISTER FOR LANDS FROM THE CRUISE PASSENGER TERMINAL STEERING COMMITTEE
Report to the Minister for Planning, Minister for Infrastructure, Minister for Lands from the Passenger Cruise Terminal Steering Committee
Sydney Harbour Foreshore Authority Mike Collins (Chair)
Carnival Australia Ann Sherry AO, Chief Executive Office,
John Nell, Director Shore Operations (alternate)
Tourism and Transport Forum (TTF) John Lee, Chief Executive Officer
Chris Brown, Managing Director (retired December 2010)
Royal Australian Navy Andrew Mackinnon, Director Navy Infrastructure Plans
Gerry Savvakis, Port Services Manager
NSW Maritime Tony Middleton, Deputy Chief Executive
Daniel Rath, Principle Policy Officer (alternate)
Sydney Ports Corporation Grant Gilfillan, Chief Executive Officer
Annette Woods, Executive General Manager (alternate)
Tourism NSW Lyndel Gray, Executive Director and General Manager
Alan McGuigan (alternate)
Royal Caribbean Cruises Australia Gavin Smith, Managing Director
John Richardson (alternate)
Shipping Australia Limited Llew Russell AM, Chief Executive Officer
Technical and Administrative Support to the Steering Committee was provided by:
Sydney Harbour Foreshore Authority Diana Talty – Director Strategic Developments
Nick Fterniatis – Senior Place Planner
Nicole Hudson – Administration Officer
Report to the Minister for Planning, Minister for Infrastructure, Minister for Lands from the Passenger Cruise Terminal Steering Committee
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ATTACHMENT 3 – STEERING COMMITTEE MEETINGS HELD AND SITE INSPECTIONS
Meeting Date Location:
Meeting 7, 14 January 2010 Foreshore House, 66 Harrington St, The Rocks
Meeting 8, 15 February 2010 Foreshore House, 66 Harrington St, The Rocks
Meeting 9, 26 March 2010 Foreshore House, 66 Harrington St, The Rocks
Meeting 10, 4 May 2010 Foreshore House, 66 Harrington St, The Rocks
Meeting 11, 30 June 2010 Foreshore House, 66 Harrington St, The Rocks
Meeting 12, 30 July 2010 Foreshore House, 66 Harrington St, The Rocks
Meeting 13, 16 December 2010
Meeting 14, 31 January 2011
Foreshore House, 66 Harrington St, The Rocks
Foreshore House, 66 Harrington St, The Rocks
SITE INSPECTIONS
On 30 September 2009 the Steering Committee carried out an inspection by water & land at GI
The following Steering Committee members (or delegate) attended the site inspection:
Mike Collins Sydney Harbour Foreshore Authority
Chris Brown
Grant Gilfillan
Andrew Mackinnon
Tony Middleton
Tourism & Transport Forum
Sydney Ports Corporation
Royal Australian Navy
NSW Maritime
Sandy Olsen Carnival Cruises
Report to the Minister for Planning, Minister for Infrastructure, Minister for Lands from the Passenger Cruise Terminal Steering Committee
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John Richardson Royal Caribbean Cruises
Gerry Savvakis
Gavin Smith
Royal Australian Navy
Royal Caribbean Cruises
Alan McGuigan NSW Tourism
Also in attendance were:
Di Talty Sydney Harbour Foreshore Authority
Nick Fterniatis Sydney Harbour Foreshore Authority
Nicole Hudson Sydney Harbour Foreshore Authority
Annette Woods Sydney Ports Corporation
On 15 February 2010 the Steering Committee carried out a site inspection of the Overseas
Passenger Terminal at Circular Quay.
The following Steering Committee members (or delegate) attended the site inspection:
Mike Collins Sydney Harbour Foreshore Authority
Chris Brown
Andrew Mackinnon
Tony Middleton
Tourism & Transport Forum
Royal Australian Navy
NSW Maritime
John Nell Carnival Cruises
Llew Russsell Shipping Australia Pty Ltd
Gavin Smith Royal Caribbean Cruises
Dominica Nelson Delegate for NSW Tourism
Report to the Minister for Planning, Minister for Infrastructure, Minister for Lands from the Passenger Cruise Terminal Steering Committee
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Also in attendance were:
Di Talty Sydney Harbour Foreshore Authority
Nick Fterniatis Sydney Harbour Foreshore Authority
Nicole Hudson Sydney Harbour Foreshore Authority
Annette Woods Sydney Ports Corporation
Heather Mattes Sydney Ports Corporation
Report to the Minister for Planning, Minister for Infrastructure, Minister for Lands from the Passenger Cruise Terminal Steering Committee
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ATTACHMENT 4 – FUTURE ACCOMODATION OF CRUISE SHIPS IN SYDNEY WORKING PAPER 1
This working paper was completed in June 2010. The growth projections for both vessels and
passengers noted in the body of the report have subsequently been updated to reflect the confirmed
Sydney Ports bookings for passenger vessels from 2011 to 2013.
Cruise Terminal Steering Committee
Future Accommodation of Cruise Ships in SydneyWorking Paper 1
June 2010
Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
Contents
1. Executive Summary 4
2. Introduction 8
3. Growth Prospects of World Cruise Shipping 9
3.1 Industry trends 9
3.2 Cruise Passenger Growth 9
4. The World Cruise Ship Fleet 11
4.1 Cruise Ship Fleet Characteristics 11
5. Cruise Shipping Operations in Sydney 12
6. Cruise Shipping Growth Prospects in Sydney 16
6.1 Data Sources 16
6.2 Methodology 16
6.3 Assumptions and Parameter Values 17
6.4 Vessel and Passenger Projections 21
6.5 Recommendations to the Committee on Demand Assumptions 28
Cruise Ships Fleet Prospects 33
Table IndexTable 1 Assumed Market Penetration 5Table 2 Summary Forecast 6Table 3 Calls by vessels with Air Draft Restriction 7Table 4 Projected World wide Growth of Cruise Passengers
in the Short Term 10Table 5 Market Penetration 18Table 6 Seasonal Segment – Growth Parameters 19Table 7 Round the world Segment – Growth Parameters 20Table 8 Home Port Segment – Growth Parameters 21Table 9 Summary Forecast 21Table 10 Summary by Operating Segments and Growth
Scenarios 23Table 11 Site Occupation Time by Business Segments 24Table 12 Vessels with Air Draft Restriction 26
Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
Table 13 Vessel order book 33
AppendicesA Estimated passenger growth in the medium termB Top Cruise BrandsC World Cruise Fleet CharacteristicsD References
4Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
1. Executive Summary
The passenger cruise industry is very positive regarding the prospects of future growth in the Australianmarket but is concerned about the capacity of facilities in Sydney to accommodate this growth. Aparticular concern is that the size of cruise ships visiting Sydney will increase, and a greater proportion ofvessels will be unable to pass under the Sydney Harbour Bridge, placing additional stress on facilities tothe east of the bridge.
The current study will assist the Cruise Terminal Steering Committee in analysing the likely futuredemand including:
future growth of cruise shipping in Sydney
the dimensions of the vessels that are likely to be deployed;
strategies for managing future demand;
the need for additional cruise shipping facilities; and
the nature of the additional facilities that will need to be provided.
The study is not intended to develop a business case for particular facilities, but rather to present anexploratory analysis that will help define the scale and type of facilities most appropriate to the futureneeds of the cruise industry in Sydney.
The forecasts presented in the working paper are based on our current understanding of the structureand drivers of demand, taking into account stakeholders’ views and the growth trends in the industry.They are provided in order to ascertain what demand assumptions should underlie future planning forcruise shipping in Sydney.
Key Factors Supporting Vessel and Passenger Growth Prospects at Sydney
The Australian cruise market has experienced consistent growth through the last decade, with 11 percent yearly average growth of passengers for the period to 2009. There is scope for continued stronggrowth as the market is regarded as relatively immature compared to the well-established NorthAmerican and European markets.
Major cruise operators such as Carnival and Royal Caribbean have experienced strong growth,especially in the Sydney market. Port calls have consistently grown since 2001 with an averageyearly growth of 6.2 per cent to 2009. Higher growth is expected for the next two years taking theoverall yearly growth for the period 2001-2012 to about 7.6 per cent per year.
The size of cruise vessels calling at Sydney has changed substantially, reflecting world trends, with asignificant increase in visits from larger vessels, particularly in the 50,000 to 70,000 GT range.However, the number of vessels over 80,000 GT is expected to grow significantly. Most of thesevessels will not be able to sail under the Sydney Harbour Bridge and would have to beaccommodated at the OPT or somewhere else on the east of the Sydney Harbour Bridge.
Internationally, cruise passenger volumes are also expected to grow across the key traditional worldmarket segments of America and Europe, but the strongest growth in the short term is anticipated inthe emerging markets grouped by Cruise Market Watch as 'Rest of the World', which includes
5Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
Australia. Short term growth (2010 to 2013) in this region from is expected to be 7.9 per cent perannum, a rate significantly higher than the anticipated global industry growth of 4.9 per cent duringthat period.
The long-term industry growth to 2020 presented by Ocean Shipping Consultants is also verypositive, with Europe and Asia leading the expected growth by cruise region, especially from EastAsia where high yearly growth is expected in China, Taiwan and South Korea. The Asia Pacificregion, which includes Australia, has been identified as an area of growth potential.
Market Penetration
Market penetration has been calculated for Australian passengers exchanged in Sydney, against the totalof Australian population including its projection to 2026. Sydney is estimated to be 60 per cent of theAustralian market, with this share of the market assumed to remain steady throughout the life of thestudy.
Industry estimates provided during stakeholder discussions suggest that a market penetration of up to 5per cent is achievable. The market penetration in Sydney for Australian passengers only for the BaseCase is calculated at 1.4 per cent in 2015, increasing to 2.4 per cent in 2020. This provides an equivalentmarket penetration in Australia of about 2.3 per cent in 2015 and 3.2 per cent in 2020, corresponding to ayearly average growth in Australian passengers of 10.0 percent to 2015 and 9.0 per cent to 2020. Afurther increase to 4.4 per cent is assumed by 2030. Details of market penetration assumption forAustralian passengers in each growth scenario are shown in the following table.
Low GrowthMarket penetration in Sydney – Australian passengers only 0.7% 1.2% 1.4% 1.5% 1.6%
Equivalent Market Penetration in Australia 1.2% 2.0% 2.4% 2.6% 2.7%Base Case
Market penetration in Sydney – Australian passengers only 0.7% 1.4% 1.9% 2.4% 2.6%Equivalent Market Penetration in Australia 1.2% 2.3% 3.2% 4.0% 4.4%
High GrowthMarket penetration in Sydney – Australian passengers only 0.7% 1.5% 2.4% 3.5% 4.1%
Equivalent Market Penetration in Australia 1.2% 2.4% 4.0% 5.8% 6.9%
Vessel and Passenger Forecasts
Cruise shipping activity in Sydney consists of three operating segments with different seasonal callingpatterns. Vessels within the Home Port segment are based in Sydney, and their calling pattern is smoothand spread across the year. Vessels within the Seasonal segment are based in Sydney for regionalcruises typically between October and April, peaking during Australia’s summer season, with morefrequent calls in the months of January and February. In the Round the World cruise segment seasonalityis more pronounced, with a strong preference for calls in the peak summer months.
6Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
In the Base Case scenario, it is anticipated there will be a yearly growth of over 15 per cent on vesselcalls and 17 per cent in passenger numbers to 2015, reflecting primarily the strong growth anticipated for2010/11 and 2011/12. Sustained growth is anticipated through the 2106-2020 period, with yearly averageexpansion rates of 6.5 per cent for vessel calls and 8.2 per cent for passengers. By 2020, marketpenetration in Australia is expected to reach 3.2% (equivalent to over 485,000 Australian passengers).Growth for vessel calls and passenger numbers is anticipated to continue at a rate of 4.1 per cent and 5.2per cent respectively per year to 2025, as there are still opportunities for increasing the marketpenetration beyond the 3.2 per cent reached in 2020. Growth is then expected to decrease reflectinggeneral world growth.
The following table provides vessel calls and passenger forecast detail under various growth scenarios.
Table 2 Summary Forecast
All Operating Segments Year ended 30 June Average Yearly GrowthGrowthScenarios
Cruise vessel calls are expected to triple by 2019/20 under the Base Case scenario compared to 2009/10results, with most growth expected across Home Port and Seasonal operating segments. Vessel calls areanticipated to remain largely dominated by Home Port calls with about 56 per cent of the total callsexpected in 2019/20, whilst Seasonal and Round-the-World segments are expected to generate 30 percent and 14 per cent of total calls respectively. The share of total calls is expected to remain fairly steadyalthough with a slight share gained by Home Port calls at the expense of the other operating segments.
Air Draft Restricted Port Calls
It is important to distinguish vessels that may have air draft restrictions and are therefore unable to sailunder the Sydney Harbour Bridge. The study assumes, as a general rule, that vessels over 80,000 GTwill have to be accommodated somewhere east of Sydney Harbour Bridge. These vessels are expectedto increase in number following the growth in vessel calls as well as the general trend of increases invessel size.
The air draft restriction issue also has the potential to affect, for the first time, vessel operations in theHome Port operating segment, when older vessels are replaced by newer, larger vessels. The followingtable provides expected vessels with air draft restrictions under various vessel growth scenarios.
7Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
Table 3 Calls by vessels with Air Draft Restriction2010 2015 2020 2025 2030
Low Growth 20 70 137 219 246
Base Case 20 78 180 324 372
High Growth 20 86 225 464 585
Recommendation to the Committee on Demand Assumptions
It is recommended that the estimates developed for each of the operating segments form the basis fordetermining what demand assumptions should underlie future planning for cruise shipping in Sydney.
Next Project Steps
Once agreed by the Steering Committee, the future demand scenarios will form the basis for theremainder of the analysis, which will be structured under three growth scenarios (low, base case, andhigh growth scenario).
The future demand for cruise ship services will be translated into a demand for port infrastructure whichwill be expected to be mediated in the first place by demand management strategies to be adopted by theport. This will include the development of a range of measures that are or could be used to manage thedemand for port infrastructure; exploring how they might be applied in the Sydney context; and making apreliminary assessment of the likely effect of each measure on demand patterns.
Once a range of possible demand management measures has been identified, further discussions will beheld with industry stakeholders to obtain their views on the expected effectiveness of each managementmeasure in moderating the impact of demand growth on port infrastructure, and the likely commercialconsequences for cruise operators.
Taking into account industry feedback, we will prepare and submit to the Steering Committee a shortworking paper (Working Paper 2) outlining the available demand management alternatives, their likelyimpact on demand for port infrastructure and the likely level of industry support.
Steering Committee agreement on the demand management assumptions will underlie future analysisand the estimation of vessel calls to port facilities taking into account the proposed demand measures,including seasonality, under each demand scenario. This will lead us to the development of draftspecifications for port facilities that will be required to service the needs previously identified. This will beachieved through consultation with industry representatives in order to solicit ideas for improvement in theaccommodation concept. A draft report outlining the preliminary facility specifications will be prepared andsubmitted to the Steering Committee.
8Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
2. Introd uction
The Australian cruise industry does not exist in an isolated market place but impacted by global factorsaffecting the industry. With this in mind, the international context is examined in Sections 2 and 3 of thisreport in order to ascertain cruise industry trends, fleet characteristics, and growth prospects that mayimpact on our local market. Industry trends in vessel design and characteristics are discussed. It shouldbe noted that this is to provide an indication of world trends, which are not necessarily applicable toSydney and/or or Australia.
In Section 4, the paper discusses in detail current cruise shipping operations in Sydney, covering keyaspects such as business segments, key players, fleet characteristics, berth locations, industryseasonality and air draft restrictions.
The analysis leads to a discussion (in Section 5) of the cruise shipping growth prospects in Sydney,starting with a brief explanation on data sources, methodology and forecast model structure, modelassumptions, and parameter values used in preparing vessel and passenger forecast.
The forecasts presented are based on our current understanding of the structure and drivers of demand,taking into account stakeholders’ views, and the growth trends in the industry. They are provided inorder to ascertain what demand assumptions should underlie future planning for cruise shipping inSydney. The vessel calls forecast represents unconstrained demand for cruise shipping at the port; boththe number of calls and vessels characteristics may be modified by the physical constraints of the portfacilities and the berthing options that may be available.
Although some of the discussion is framed in terms of gross tonnage, the report acknowledges that thekey issues that may impact on port facilities are the vessels’ capacity, Length Over All (its capability to fitalong the quay line) and air draft (its capability to sail under the Sydney Harbour Bridge). However, thegross tonnage of the vessels and its trend is correlated (although not perfectly) to vessel capacity anddimensions. Changes in vessel gross tonnage will therefore, on average, be reflected in increases incarrying capacity, vessel length and air draft.
9Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
3. Growth Prospects of World Cruise Shipping
The world cruise shipping industry is experiencing strong growth. This is being driven by a number offactors including:
Increasing range of cruise types and itineraries;
Increased affordability of cruises in many key markets;
The introduction of larger cruise ships with more passenger facilities;
Continued propensity for global leisure travel;
Increasing economic wealth in populous Asian economies;
Capacity to quickly re-deploy ships in growing geographical regions and market segments.
Cruise Market Watch1 has recently released the 2010 cruise line market share and revenue projections,together with highlights for 2010 as follows:
Total worldwide cruise passenger capacity will increase to 417,000 berths, 7.0 per cent growth over2009.
Annualized total passengers carried worldwide in 2010 are estimated at 18.4 million.
The total worldwide cruise market to reach $26.8 billion in revenue, a 7.4 per cent increase from2009.
3.1 Industry trendsThe industry has continued to become more concentrated in a small number of major operators, withthe top 13 cruise lines accounting for 75 per cent in terms of passenger capacity.
New fleet additions are set to lead to increased market concentration for some of the top brands, withthe top 13 lines accounting for almost all new cruise ship capacity on order throughout the world.
The dominance of the large vessel market by the top individual lines is highlighted with the 3 majorgroups (Carnival Group, Royal Caribbean Line, Star Group) accounting for a combined 93 per cent ofall vessels with a capacity of over 1500 berths
The world’s leading cruise ports include both home ports from which individual cruise ships or linesoperate, and ports of call included in vessel’s cruise itineraries. Some ports are included in bothcategories, but in terms of passenger volumes, home-ports dominate the rankings.
3.2 Cruise Passenger GrowthCruise passenger volumes are expected to grow across the key traditional world markets segments ofAmerica and Europe, but the strongest growth in the short term is anticipated in the emerging marketsgrouped by Cruise Market Watch as 'Rest of the World'. Growth in this region through to 2013 isexpected to be almost double the growth of the North American market, as shown in the following table.
1 the official newsletter of Cruise Shipping Miami
10Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
Table 4 Projected World wide Growth of Cruise Passengers in the Short TermYearly Growth Growth 2007 to
2010Growth 2013 Vs
2010Growth 2007 to
20132008 2009 2010 Yearly Total Yearly Average Yearly
GrowthNorth America 5.6% 0.2% 7.9% 4.5% 13.5% 4.3% 4.4%
Europe 10.5% 5.3% 2.5% 6.1% 16.0% 5.1% 5.6%
Rest of the World 11.3% 11.8% 11.6% 11.5% 25.7% 7.9% 9.7%
The combination of an attractive vacation value and new ship designs is anticipated to provide theopportunity to introduce new cruises, and provide stimulus for industry growth with passenger volumesprojected to reach 21.3 million passengers by 2013, a 15.6 per cent increase from 2010.
A key industry success factor is the flexibility to move the ships to match demand, repositioning vessels towhere the best yields can be achieved. Projected passenger growth in the short term is depicted in thefollowing graph.
The global recession has had a greater effect on the American market which grew only 0.2 per cent in2009, but there are expectations of a strong recovery in 2010, providing growth for the period 2007-2013of about 4.4 per cent per year. This will be driven by shorter cruises, more local ports and moredestinations matching consumer demand. However, the Rest of the World market is anticipated to growth9.7 per cent per year over the same period, with larger growth expected from Asian markets.
The Medium Term passenger growth outlook has been articulated in some detail by Ocean ShippingConsultants (OSC) in its report “The World Cruise Shipping Industry to 2020”. Europe and Asia areleading the expected growth by cruise areas, especially from East Asia where high yearly growth isexpected mainly in China, Taiwan and South Korea. Total world cruise passenger is expected to grow 4.5per cent per year to 2015, and about 3.75 per cent per year to 2020. Details of the growth for mostregional markets, as estimated by OSC, are presented in Appendix A.
11Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
4. The World Cruise Ship Fleet
The world cruise ship fleet has previously been run by a large number of individual cruise lines. However,the industry has become increasingly concentrated in a small number of major operators over the pastdecade. This market consolidation has accelerated in recent years through mergers and take-overs, andthe cessation of operations of several smaller lines. Currently, the world cruise market is largelydominated by Carnival and to a lesser extent by Royal Caribbean, each of which operates a number ofbrands across different world markets.
Carnival is the largest cruise operator with 6 top cruise brands, comprising 25 per cent of the total cruisefleet, but with a larger share of berth capacity, estimated at 41 per cent respectively. Royal Caribbean isthe second largest group operating two brands and holding 17 per cent of berth capacity. A detail of topcruise brands is presented in Appendix B.
4.1 Cruise Ship Fleet CharacteristicsMost of the key fleet analysis presented in this Working Paper is related to vessel’s gross tonnage (GT).Although our area of interest is more aligned with other characteristics such as vessel length over all(LOA) or air draft, information on gross tonnage is more comprehensively and consistently available.Gross tonnage has therefore been used as the initial indicator of trends in vessel size. However, despitesignificant variation between vessels, vessels with a higher gross tonnage will, on average, have greaterberth capacity. They will also tend to be longer and to have a greater air draft. For instance, most vesselsover 80,000 GT would have an air draft close to or exceeding 50 metres (a limiting factor for sailing underSydney’s Harbour Bridge).
The world cruise fleet presents the following key characteristics:
Most vessels added to the current fleet in the last four years, are over 60,000 gross tonnage, withmany vessels over 100,000 GT.
Passenger capacity is strongly correlated to vessel size and, because vessel size has beenincreasing steadily, with vessel age. Thus, most of older vessels within the fleet (that is, those over 20years old) have a capacity of less than 999 passengers (83% of vessels in this age bracket).Consistent with increase in size and new vessel design, passenger capacity has increasedsubstantially especially in the last decade with most fleet additions above the 60,000 GT mark, havingover 2000 berths per vessel
The trend for larger vessels with increasing passenger capacity has strengthened in the last fewyears, and is expected to continue, at least in the short term. There is no clear evidence, at this stage,of vessels reaching maximum or ideal capacity with respect to economies of scale. However, vesseldesign may be constrained by the availability of adequate port facilities at key world ports. Thus,larger vessels may be designed primarily to serve specific market niches.
Details of world cruise fleet including information on vessels by year of built; number of vessels by sizegroup and age; fleet by passenger capacity; and cruise ship fleet prospects are provided in Appendix C.
12Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
5. Cruise Shipping Operations in Sydney
Australia and the South Pacific market represent less than 4 per cent of the global cruise market.However, the Australian cruise industry market has experienced consistent growth through the lastdecade. There is scope for continued strong growth, as the market is regarded as relatively immaturecompared to well established North American and European markets.
The cruise industry has experienced strong growth in the Sydney market in the period 2000/01 to2008/09, with an average yearly growth of 11 per cent in passenger numbers and 6.2 per cent growth invessel visits. During the same period, vessels deployed to serve this market have been increasing in size,consistent with world trends, with 14 per cent average yearly growth of GT deployed.
Graph 1 Historical Passenger numbers, Gross Tonnage and Vessel Visits
0
50,000
100,000
150,000
200,000
250,000
2001 2002 2003 2004 2005 2006 2007 2008 2009
To 30 June
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
Passengers (Left Axis) Gross Tonnage (Right Axis)
0
20
40
60
80
100
120
140
2001 2002 2003 2004 2005 2006 2007 2008 2009
To 30 June
Vess
el C
alls
Operationally, there are three broad cruise ship operating segments2:
Home port vessels: these ships are based in Sydney and most of their passengers join and leave thecruises in Sydney. These vessels carry a mix of locally-based passengers and passengers who fly ordrive to Sydney to join the cruise.
Seasonal vessels: these ships are based in Sydney for between 3-6 months during peak season.During this time they operate full exchanges using an operating structure similar to the Home Portvessels. Operationally, the key difference between Home Port and Seasonal vessel call type is themajority of Seasonal vessels are not able to sail under the Sydney Harbour Bridge, therefore theymust operate from OPT at Circular Quay.
Round-the-World cruises: these vessels operate more or less continuously on a round the worlditinerary. Passengers may join the cruise for a segment of the journey. For instance, they may join thecruise in Los Angeles and disembark in Sydney; or they may book for a full trip. In almost all cases
2 Operators disaggregate the market in different ways for the purposes of market analysis and product development. We havetherefore used the term operating segments, rather than market segments, to distinguish the different operational patterns thathave commonly been used in discussion of the cruise industry in Sydney.
13Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
the Sydney call will involve some level of passenger exchange (i.e. some embarking, somedisembarking).
The Home Port calls segment is the largest cruise segment in Sydney, with calls representing 50 per centof total cruise calls. Round the World and Seasonal calls are equally divided, representing 25 per centeach of current cruise calls.
The following graph depicts historical cruise shipping calls in Sydney by operational segment.
Graph 2 Cruise Shipping Calls in Sydney
0
10
20
30
40
50
60
To 30 June
Vess
el Cal
ls
Home Port 40 37 38 38 30 42 43 56 59
Round-The-World 28 17 37 32 32 43 40 30 30
Seasonal 5 5 15 10 5 5 5 12 29
2001 2002 2003 2004 2005 2006 2007 2008 2009
Typically, Home Port calls are mostly made to berths west of the Sydney Harbour Bridge. Currently thereis no air draft restriction to any Home Port vessel and there is also no restriction applied to any Home Portvessel scheduled for calling into Sydney under the current Sydney Ports’ Vessel Booking system.
Graph 3 Vessel Calls by Berthing location
0
20
40
60
80
100
120
to 30 June
Vess
el Calls
S - West of Bridge 4 4 9 4 0 0 0 0 4
S - East of Bridge 1 1 6 6 5 5 5 12 25
R - West of Bridge 13 8 20 21 19 22 16 11 5
R - East of Bridge 15 9 17 11 13 21 24 19 25
H - West of Bridge 37 34 34 38 28 40 40 51 54
H - East of Bridge 3 3 4 0 2 2 3 5 5
2001 2002 2003 2004 2005 2006 2007 2008 2009
Seasonal vessels are primarily calling at east of Sydney Harbour Bridge, whilst Round–the-World vesselshave been calling at berths both east and west of the Bridge. Since 2001 air-draft restrictions haveapplied to some vessels in this segment. The increasing number of vessels over 80,000 Gross Tons thathave been recently added to the fleet makes it likely that there will be an increased frequency of calls to
14Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
Sydney by larger vessels. These vessels will be restricted to use the OPT or another facility east of theSydney Harbour Bridge. The following graph depicts historical vessel calls to Sydney with air draftrestriction.
Graph 4 Ship Calls with Air Draft Restrictions
3 3 3 42
3 4 4
9
3 45 5
12
22
3 3 3
76
89
16
31
0
5
10
15
20
25
30
35
2001 2002 2003 2004 2005 2006 2007 2008 2009
To 30 June
Ves
sel C
alls
Round-the-World Seasonal Total
The GT range of cruise vessels calling at Sydney has changed substantially during the period 2001-2009,as shown in the graph below. The number of cruise vessels less than 50,000 Gross Tons has decreasedsubstantially since 2007, with a significant increase of calls from larger vessels, particularly vessels in the50,000 to 70,000 GT range. These vessels do not have restrictions for sailing under the Sydney HarbourBridge. Restrictions can apply to vessels close to or in excess of 80,000 Gross Tons, but this depends ontides, weather, air draft, vessel design, and other conditions that the Harbour Master and ShippingManager take into account.
The 80,000 plus vessel GT ranges are expected to have significant growth in the future. In general anyvessel on the 80k GT range and over would have to be accommodated at the OPT or somewhere on theeast of the Sydney Harbour Bridge.
Graph 5 Ship calls by GT range
0
20
40
60
80
100
120
2001 2002 2003 2004 2005 2006 2007 2008 2009
To 30 June
Vess
el C
alls
< 30k >30 < 60k >60k < 80k > 80k < 100k >100k < 120 k > 120 k
15Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
The three operating segments have different seasonal calling patterns. Vessels within the Home Portsegment call at Sydney all year round, so their calling pattern is smooth and spread across the year.Vessels within the Seasonal segment are based in Sydney for regional cruises typically between Octoberand April, peaking during Australia’s summer season, with more frequent calls in the months of Januaryand February. Seasonality is more pronounced for vessels operating in the Round the World cruisesegment, with a strong preference for callings in the peak summer months. The following graph depictsthe average historical seasonality of cruise passenger calls by operating segment.
Graph 6 Call Frequency Pattern by Cruise Passenger Segments
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
July Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Home Port Round The World Seasonal
Changes in the fleet composition through the period 2001 to 2009 have followed world trends, withvessels calling at Sydney increasing in size and berth capacity. As previously mentioned, passengernumbers grew at a yearly average of 11 per cent, while vessel calls grew by a yearly average of 6.2 percent. The increase in passengers has therefore been managed by a combination of larger vesselsservicing the market, and by an increase in vessel visits. The average number of passengers per cruisevessel depicted in the following graph shows a steady increase since 2005, which has been intensified bychanges in the Home Port fleet.
Graph 7 Average Number of Passengers per Cruise Vessel
1,300
1,400
1,500
1,600
1,700
1,800
1,900
2001
2002
2003
2004
2005
2006
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16Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
6. Cruise Shipping Growth Prospects in Sydney
This section deals with the growth prospects for the cruise shipping industry in Sydney. It is divided intothree major parts. The first part explains the data sources used for the preparation of demandprojections; in the second part, the methodology underlying the projections is explained, followed by adiscussion on the assumptions and parameter values used for the forecasts; and in the third part, theresulting projections are presented.
The demand projections presented in this paper are based on our current understanding of the structureand drivers of demand, taking into account growth trends in the industry. The projections are provided inorder to ascertain what demand assumptions should underlie future planning for cruise shipping inSydney. The vessel calls projection represent the unconstrained demand for cruise shipping at the portof Sydney; both the number of calls and vessels characteristics may be modified by the physicalconstraints of the port facilities and the berthing options provided to the industry.
As with the discussion of trends in the world fleet, because data is more comprehensive and reliable,some of the discussion is framed in terms of the growth in vessels’ gross tonnage. The key issues thatmay impact on port facilities are the vessel's passenger capacity, Length Over All (its capability to fitalong the quay line) and air draft (its capability to sail under the Sydney Harbour Bridge). However, thegross tonnage of the vessels and its trend is correlated (although not perfectly) to vessel dimension andcarrying capacity. For the purpose of the analysis, a proxy of 80,000 GT has been used to indicate themaximum air draft limit for vessels able to sail under the Sydney Harbour Bridge.
6.1 Data SourcesThe primary source of data comprises an excel-based data from Sydney Ports Corporation, of passengervessels visiting Sydney for the periods 2000/01 to 2009/10 together with current and expected calls forthe FY 2009/10 and firm bookings for 2010/11 and 2011/12. The data set contains details of each vesselcall including, among other things, vessel name, GT, berth, arrival/departure dates and (in some cases)passenger exchanges.
Carnival has provided an industry forecast under various growth scenarios. The data was especiallyvaluable for completing and improving the data field related to passenger exchanges per vessel call, andestimation of future fleet replacement.
Passenger growth prospects have been selectively sourced from “Cruise Market Watch” for the short-term outlook, whilst the long-term outlook has been partially based on passenger growth prospectssourced from Ocean Shipping Consultants. Also, following consultation with the Steering Committee,further upwards adjustment has been made to the high growth scenario, addressing stakeholder’sexpectation of potential strong growth. These growth rates will be presented in detail in the followingsections.
Current and projected Australian population is based on ABS data.
6.2 MethodologyThe key driver of the demand projections is passenger growth, which has been split into two growth rates,one for Australian passengers, and one for non-Australian passengers. This split applies to each of the
17Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
three key operating segments (Home Port, Seasonal, and Round-the-World). The growth rates arestructured as ‘average growth rate” for a 5 year period until 2030.
The passenger vessel data has been structured in the three operating segments and split by variousgross tonnage ranges. For each gross tonnage under each operating segment, three data fields havebeen calculated: number of vessel visits, total passenger exchange, and the average passengerexchange per vessel.
Input tables are used for growth rates for passengers mix (Australians and Non-Australians) and forassigning percentage growth rates for the scenarios of low growth, base case, and high growth acrossthe three operating segments.
Within each operating segment and GT range, the passenger growth rate interacts with the totalpassenger exchange and the calculated average number of passengers per vessel for each GT range.The result of this interaction is the number of vessel calls.
The composition of current and future fleet deployment has been built into the model, taking intoconsideration expected changes in vessel size serving the Sydney market following world trends as wellas expected fleet replacements.
The demand projections are unconstrained: they do not reflect possible impacts on the choice of vesselsfrom operating constraints within the port. In practice, vessel deployment will be strongly influenced bythe physical constraints of the port facilities at the time.
6.3 Assumptions and Parameter ValuesAlthough it is understood that, for market analysis purposes, the cruise passenger industry uses adifferent segmentation, for practical reasons the assumptions and parameter values have been structuredunder the operating segment concept. The key trend drivers are applied in a similar way to the threeoperating segments, as explained in the following sub-sections.
6.3.1 Market Penetration
Market penetration has been calculated against the total of Australian Population including its projectionto 2026, which has been sourced from Australian Bureau of statistics. The ABS data assumes 1.4 percent yearly growth in population.
Industry estimates provided during stakeholder discussions suggest that an Australian market penetrationof up to 5 per cent is achievable. The market penetration in Sydney for Australian passengers only for theBase Case is calculated at 1.4 per cent in 2015, increasing to 2.4 per cent in 2020This provides anequivalent market penetration in Australia of about 2.3 per cent in 2015 and 3.2 per cent in 2020,corresponding to a yearly average growth in Australian passengers of 10.0 percent to 2015 and 9.0 percent to 2020. A further increase to 4.4 per cent is assumed by 2030. Details of market penetrationassumption for Australian passengers in each growth scenario are shown in the following table.
18Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
A detail of market penetration for Australian passengers3 is shown in the following table.
Australian Population (million) 22.475 23.420 25.083 26.865 28.774
Low GrowthAustralian Passengers only 155,570 281,798 359,145 416,069 470,442
Average Yearly Growth 6.0% 5.0% 3.0% 2.5%Market penetration in Sydney – Australian passengers only 0.7% 1.2% 1.4% 1.5% 1.6%
Equivalent Market Penetration in Australia 1.2% 2.0% 2.4% 2.6% 2.7%
Base CaseAustralian Passengers only 155,570 316,351 485,863 649,115 752,503
Average Yearly Growth 10.0% 9.0% 6.0% 3.0%Market penetration in Sydney – Australian passengers only 0.7% 1.4% 1.9% 2.4% 2.6%
Equivalent Market Penetration in Australia 1.2% 2.3% 3.2% 4.0% 4.4%
High GrowthAustralian Passengers only 155,570 343,901 604,580 928,761 1,185,004
Average Yearly Growth 12.9% 11.9% 9.0% 5.0%Market penetration in Sydney – Australian passengers only 0.7% 1.5% 2.4% 3.5% 4.1%
Equivalent Market Penetration in Australia 1.2% 2.4% 4.0% 5.8% 6.9%
6.3.2 Seasonal Operating Segment
This operating segment is represented by both Carnival and Royal Caribbean. Carnival passengers inthis segment are typically Australians, whilst Royal Caribbean’s are mostly international passengers, withmany flying to Sydney to join the cruises.
The historical passenger data numbers in this segment shows significant positive and negative passengervariations, with substantial increases expected for 2010/11 and 2011/12 resulting from large callincreases in Royal Caribbean cruises. Passenger growth is expected to be significant for both Australiansand Non-Australian passengers.
Thus, the Base Case growth scenario for Australian passengers for the period to 2015 is set at 10 percent growth, which is consistent with the 8 year historical growth trend to FY 2008/09. This assumption isalso consistent with the perceived immaturity of the local market and the increased preference for leisuretravel. Passenger growth is maintained at 9 per cent yearly average growth until 2020, which is higherthan the expansion rate suggested by Ocean Shipping Consultants (OSC) for most regions, but isconsistent with growth expectations of the local industry.
3 Australia’s market penetration is calculated based on the assumption that Australian passengers exchanged in Sydney represent60% of the total market.
19Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
Beyond 2020, the expansion rate for the Base Case for Australian passengers is anticipated to decreaseto 6 per cent per year as the maturation of the market slows down the yearly expansion rate. The BaseCase is to a great extent equidistant to the upper and lower growth scenarios, with the low growthreflecting a potential detrimental impact due to unforseen world events, while the high growth scenarioreflects a larger and prolonged expansionary effect due to a combination of favourable economic andother variables coming into play.
The Base Case Growth scenario for Non-Australian passengers for the short term to 2015 has been setat 7.9 per cent which is consistent with the expected growth for the “Rest of the World” in the passengergrowth prospect released by “Cruise Industry Watch”. The demand projection suggest a 6.5 per centincrease to 2020, which is above most OSC forecast for all regions, except China, reflecting theattractiveness of Australia as tourist destination and the Asia Pacific region. The longer term demandprojection anticipates a slowdown in growth as the market matures and competing destinationsproliferate. The upper and lower growth scenarios reflect similar variables as explained for Australians.
The Round-the-World segment is comprised of about 14 cruise lines averaging 30 cruises per year, withabout 30 per cent of the cruises attributed to Carnival. The majority of passengers are Non-Australian.
Although the number of cruises has been static for a few years, passenger numbers increased at a rate of7.7 per cent per annum between 2000/01 and 2008/09. Vessel data for the current financial year and thevessel bookings for the next two years do not show any increase in the number of cruises, but it isreasonable to expect additional vessel bookings for 2011/12. The base case growth for Australians andNon-Australians has been set at 7.9 per cent to 2015, which is the growth rate for “Rest of the World” asper the cruise growth forecast from “Cruise Market Watch”. The growth maintains momentum to 2020,
20Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
with an expected average growth of 6.5 per cent, and then slows down within the long-term outlook,consistent with OSC long-term forecasts for the global market growth. The upper and lower growthscenarios reflect both favourable and less favourable outlooks.
Table 7 Round the world Segment – Growth ParametersPassenger Mix
Home Port calls are at present made only by Carnival and serve mostly Australian passengers. Theperformance of this sector has been strong over the last 10 years, with vessel calls growing at 5 per centper annum and passengers growing at 8 per cent per annum over the period 2001/02 to 2008/09. Thegrowth rates are even more significant for the period 2009/10 to 2011/12, supporting the view of afavourable economic environment, increasing preference for leisure travelling, and the current relative lowpenetration in the local cruise passenger market.
The Base Case for Australian passengers has been set within the expectation of continuing high growthper annum based at historical trend growth which is expected to be maintained almost at the same leveluntil 2020. From then on, it is anticipated there will be a slowing down in the market penetration, althoughstill with a growth of 6 per cent per annum to 2025, easing towards a more conservative 3 per cent growthuntil 2030. The upper and lower scenarios reflect the potential favourable and unfavourable events thatmay impact the industry, similar to those previously described for other operating segments.
Non-Australian passengers represent only 15 per cent of this segment, and this is expected to remainsteady during the analysis period. Although it is a relative small share of the business segment, it isimportant to measure its impact and degree of significance at various growth scenarios. Growth for theBase Case is set at 7.9 per cent, which is the growth expected for “Rest of the World” as per CruiseMarket Watch short term forecast. Growth for the period 2016-2020 remains high at 6.5 per cent aboveOSC’s growth rates expected for most regions, but slightly below the 7 per cent expected for East Asia(mostly China), and well above the OSC’s 3.8 per cent growth for the total world cruise passenger.
21Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
Table 8 Home Port Segment – Growth ParametersPassenger Mix
Australians 90%Non- Australians 10%Total 100%
2013 to 2015 to 2020 to 2025 to 2030
AustraliansLow Growth 6.0% 5.0% 3.0% 2.5%
Base Case 10.0% 9.0% 6.0% 3.0%High Growth 13.0% 12.0% 9.0% 5.0%
6.4 Vessel and Passenger ProjectionsThere is a consistent growth expected across the three operating segments under the three growthscenarios. For instance, in the Base Case scenario, it is anticipated there will be a yearly growth of over15 per cent on vessel calls and 17 per cent in passenger numbers to 2015, reflecting the strong growthanticipated for 2010/11 and 2011/12, which is also reflected in Sydney Ports’ Vessel Booking system.Growth for 2012/13 and 2014/15 are projected as per growth parameters described in previous section.Growth is expected to keep momentum until 2020, when some market maturity is reached, calculated atabout 3.2 per cent of market penetration in Australia (over 485,000 Australian passengers). Growth forvessel calls and passenger numbers is anticipated to continue at a rate of over 4.1 per cent and 5.2 percent per year respectively to 2025, as there are still opportunities for increasing the market penetrationbeyond the 3.2 per cent reached in 2020. Growth is then expected to decrease reflecting general worldtrends.
The following table provides vessel calls and passenger numbers under various growth scenarios.
Table 9 Summary Forecast
All Operating Segments Year ended 30 June Average Yearly GrowthGrowthScenarios
22Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
Cruise vessel calls are expected to triple by 2019/20 under the Base Case scenario compared to 2009/10results, with most growth expected across Home Port and Seasonal operating segments. Vessel calls areanticipated to remain largely dominated by Home Port calls with about 56 per cent of the total callsexpected in 2019/20, whilst Seasonal and Round-the-World segments are expected to generate 30 percent and 14 per cent of total calls respectively. The share of total calls is expected to remain fairly steadyalthough with a slight share gained by Home Port calls at the expense of the other operating segments.
Projected vessel calls under the three growth scenarios are presented in the following graph.
Graph 8 Passenger Vessel Calls
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In the financial year 2019-20, 68 per cent of passenger exchanges will be generated by the Home Portsegment, whilst the Seasonal segment is expected to generate 29 per cent, and Round-the-Worldgenerating 7 per cent, with fairly similar share maintained across the analysis period. Overall, cruisepassengers are expected to triple by 2020, compared to 2009/10 results. The following graph depictspassenger numbers under various growth scenarios to 2030.
The consolidated projection by operating segment is presented in the following table, which provides asummary of vessel calls and passenger numbers under the Low Growth, Base Case and High Growth
23Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
scenarios. The projection is the product of the interaction of the data base with a set of parameter valuesdiscussed in detail in the previous section.
Table 10 Summary by Operating Segments and Growth ScenariosYear ended 30 June Average Yearly Growth
GrowthScenarios 2010 to 2015 to 2020 to 2025 to 2030 to
2015To
2020To
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Seasonal Segment
Low Growth 24 63 75 86 96 21.3% 3.5% 2.8% 2.2%
Base Case 24 70 98 121 138 23.9% 7.0% 4.3% 2.7%VesselCalls
Note – larger growth expected in the Seasonal segment for the period 2010-15 is mostly the result of strong vessel bookings from
Royal Caribbean Line
Site Occupation Time and Seasonality
Site time has been calculated on the basis of historical average vessel site occupation time for eachbusiness segment, and it is assumed that the average site time per vessel in each segment will remainconstant during the analysis period (10 hours for Home Port vessels, 20 hours for Seasonal vessels and29 hours for Round-the-World vessels). Site time will interact with the vessels’ frequency call pattern(seasonality) and designated berth in order to determine berth occupancy. This may in turn be influencedby demand management measures: an assessment of the potential use of these measures will be
24Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
undertaken in the next stage of the project, once agreement has been reached on the deamndassumptions to be used.
Table 11 Site Occupation Time by Business SegmentsSite Time (Hrs.) 2010 2015 2020 2025 2030SeasonalLow Growth 480 1,260 1,500 1,720 1,920
Base Case 480 1,400 1,960 2,420 2,760
High Growth 480 1,540 2,460 3,500 4,380
Round-the-World
Low Growth 696 812 928 957 986
Base Case 696 986 1,276 1,479 1,566
High Growth 696 1131 1,566 2,059 2,378
Home PortLow Growth 680 1,190 1,350 1,460 1,610
Base Case 680 1,320 1,810 2,230 2,530
High Growth 680 1,430 2,240 3,190 3,970
Grand TotalLow Growth 1,856 3,262 3,778 4,137 4,516
Base Case 1,856 3,706 5,046 6,129 6,856
High Growth 1,856 4,101 6,266 8,749 10,728
Vessels’ Call Frequency Pattern
The current seasonal call pattern for each operating segment has been applied to the projections of futureship calls in order to show low and high periods where cruise calls would require port facilities. Peakperiods are between the months of October to April, peaking in our summer season. The following threegraphs depicts expected vessels’ call frequency pattern under the three growth scenarios.
Graph 10 Vessels’ Calls Frequency Pattern – Low Growth Scenario
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25Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
Graph 11 Vessels’ Call Frequency Pattern - Base Case Growth Scenario
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Graph 12 Vessels’ Call Frequency Pattern - High Growth Scenario
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Vessel Calls with Air Draft Restriction
It is important to distinguish vessels that may have air draft restrictions and are therefore unable to sailunder the Sydney Harbour Bridge. The study assumes, as a general rule, that vessels over 80,000 GTwill have to be accommodated somewhere east of Sydney Harbour Bridge. These vessels are expectedto increase in number following the growth in vessel calls as well as the general trend of increases invessel size.
Other vessels just under 80K Gross tons have also been identified as unable to sail under the SydneyHarbour Bridge (e.g. Rhapsody of the Seas, Celebrity Century). The projection assumes that this will be aconsistent pattern that may increase in correlation with the expected yearly vessel calls growth.
Air draft restriction also has the potential to affect other vessels such as those within the Home Portoperating segment. For instance, Carnival plans to introduce to the Home Port fleet two vessels over100,000 gross tons (Sapphire Princess and Grand Princess), as well as the Golden Princess (althoughfor one year only). These vessels have air draft restrictions and would only be able to operate east ofSydney Harbour Bridge.
The following table provides a summary detail for vessels with air draft restrictions under various vesselgrowth scenarios.
26Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
Table 12 Vessels with Air Draft Restriction2010 2015 2020 2025 2030
Seasonal
Low Growth 16 48 57 66 75
Base Case 16 53 74 90 104
High Growth 16 58 92 130 164
Round-the-WorldLow Growth 4 4 7 7 10
Base Case 4 5 8 11 15
High Growth 4 7 11 15 24
Home PortLow Growth 0 18 73 146 161Base Case 0 20 98 223 253
High Growth 0 21 122 319 397
Grand Total
Low Growth 20 70 137 219 246
Base Case 20 78 180 324 372
High Growth 20 86 225 464 585
The following graph provides a yearly detail of vessels that would have to be accommodated east of theHarbour Bridge.
Graph 13 Vessel Calls with Air Draft Restriction
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There is possibly a slight conservative bias in these numbers, as they may underestimate the number oflarger vessels (over 100K GT) that may opportunistically call to Sydney in the future — mostly within theRound-the-World segment. Also, some vessels may be replaced (due to age or strategic issues) byvessels with larger tonnages, which may result in more vessel replacements than those assumed withinthe operating segments. However, it is worth noting that shipping lines will make these future strategicdecisions taking into account the physical constraints at Sydney at a particular point in time , as well as
27Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
any other limitations that may exists at other ports within the intended port rotations. The following threegrafts depict vessels with air draft restriction under the three growth scenarios according to their callfrequency pattern. These vessels would need to be serviced somewhere east of the Sydney HarbourBridge.
Graph 14 Vessels with Air Draft Restriction in the Low Growth Scenario
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Graph 15 Vessels with Air Draft Restriction in the Base Case Scenario
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Graph 16 Vessels with Air Draft Restriction in the High Growth Scenario
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28Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
Highlights of growth projections
Short term growth is driven primarily by increased vessel deployment across the Home Port andSeasonal operating segments.
Long term growth driven by favourable economic environment, increased consumer preference forleisure travelling, relative immaturity of the Australian cruising market, and shipping lines’development of the local market.
Cruise sector activity for both vessel calls and passengers are anticipated to growth strongly to 2015under the Base Case scenario, followed by expected yearly growth of 6.5 per cent in vessels callsand 8.2 per cent in passengers for the period 2016-2020.
Vessel calls and passenger exchanges are expected to triple by 2019-20 compared to 2009-10.
Home Port business segment will continue to lead the expansion, representing 56 per cent and 68per cent of total vessel calls and total passenger exchanges respectively in 2019-20.
Increased frequency of larger vessels calling Sydney which will be affected by air draft restrictions,unable to sail under the Bridge.
Greater market penetration, increasing from the current 1.2 per cent to 3.2 per cent in 2019-20 for theBase Case.
6.5 Recommendations to the Committee on Demand AssumptionsIt is recommended that the estimates developed for each of the operating segments form the basis fordetermining what demand assumptions should underlie future planning for cruise shipping in Sydney.
29Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
Appendix A
Estimated passenger growth in the medium term
America – the demand moving to the mass market (away from the 60+ years age bracket) 4.4 mpassengers in mid 1990, to 7m passengers in 2000, 8.2m in 2003, 11-12.2m in 2010, 12.8-15.7m by2015, and 14-20 m by 2020 (most likely 12m by 2010, 14.5m by 2015, 17.2m by 2020).This isequivalent to an annual average expansion rate of 4.25% per year. It is worth noting that this expectedgrowth is consistent with the short term outlook presented by Market Watch.
Germany – passenger growth 10% growth to 2010, 7% to 2015, 4.25% to 2020.
France – passenger growth of about 4% per year to 2020.
Spain – passenger growth of about 5% per year to 2020.
Europe – about 5.25% passenger growth per year to 2020. However, a low and high forecast band of4.0% and 7.25% respectively is also estimated for this period.
Japan – passenger growth of about 3.25% per year to 2020.
East Asia - passenger growth of about 7% per year to 2020 (mainly for China, Taiwan and SouthKorea)
SE Asia - passenger growth of about 5% per year to 2020
Asia Pacific region (including Australia) – perceived growth potential for Australia and India
Total World Cruise Passenger – after expanding from 5.0m in 1995 to 10m in 2000, and about 13.6 min 2005, is expected to reach 18m by 2010, 22.6m by 2015 and 27m by 2020. This represents anexpansion of about 5.75% per year to 2010, about 4.5% per year between 2010 to 2015, and about3.75% per year between 2015 to 2020.
Source: Ocean Shipping Consultants, “The World Cruise Shipping Industry to 2020”
30Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
Appendix B
Top Cruise Brands
Brand Group Ships GT ('000) BerthsCarnival Cruise Lines Carnival 22 7% 1,922 13% 52,366 14%Royal Caribbean Royal
Note - smaller brands that may belong to groups such Carnival are included in “other” category
31Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
Appendix C
World Cruise Fleet Characteristics
World Cruise Fleet by Year of Built
As at September 2009 there were 67 vessels in the world cruise fleet that were made before 1980,representing 20 per cent of the total fleet but only 0.3 per cent of the total fleet’s gross tonnage. Mostvessels added to the current fleet in the last four years are over 60,000 gross tonnage, with many vesselsover 100,000 gross tonnage.
Graph 17 Current Fleet by Year of Built and GT Composition
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<10,000 10,000 - 59,999 60,000 - 99,999 > 100,000
Key Characteristics of the passenger cruise fleet as at September 2009 are:
A steady segment representing vessels less than 10,000 gross tonnage, comprising about 3 per centof the total fleet.
Aggregate gross tonnage of vessels over 10,000 gross tonnage and less than 60,000 gross tonnagehas remained steady at around 6 million gross tonnes in 2009. However, the share of total fleettonnage accounted for by vessels in this range has declined from 55 per cent in 1998 to 27 per centin 2009.
32Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
Tonnage in the 60,000 to 99,999 gross tonnage range has been increasing every year, but the rate ofincrease has declined from a 24 per cent increase in 1999, to only a 3 per cent increase in 2009.Vessels in this size range represent 42 per cent of the total fleet tonnage.
Total tonnage of vessels of over 100,000 GT has been growing strongly across most years, with 16per cent growth in 2007, 17 per cent growth in 2008 and 22 per cent growth in 2009. The share of thetotal fleet tonnage comprised of vessels in this size range has also increased consistently, rising from20 per cent in 2005, to an estimated 29 per cent in 2009.
The following graph shows the fleet development by year of built by GT range.
Passenger capacity is strongly correlated to vessel size and, because vessel size has been increasingsteadily, with vessel age. Thus, most of older vessels within the fleet (that is, those over 20 years old)have a capacity of less than 999 passengers (83% of vessels in this age bracket). Consistent withincrease in size and new vessel design, passenger capacity has increased substantially especially in thelast decade with most fleet additions above the 60,000 gross tonnage mark, having over 2000 berths pervessel. The following graph depicts the passenger capacity by vessel age.
33Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
Graph 19 Fleet by Vessel Age and Passenger Capacity
Cruise Ships Fleet ProspectsApproximately 91 per cent of all vessels on order in 2005 were above 1,500 berth capacity.
The trend for larger vessels with increasing passenger capacity has strengthened in the last few years,and is expected to continue, at least in the short term. There is no clear evidence, at this stage, of vesselsreaching maximum or ideal capacity with respect to economies of scale. However, vessel design may beconstrained by the availability of adequate port facilities at key world ports. Thus, larger vessels may bedesigned primarily to serve specific market niches.
The latest vessel order book confirms this trend Royal Caribbean Line has recently received the “Oasis ofthe Seas”, a 225,282 GT vessel with 5,400 passenger capacity, and has another with similar size andvessel capacity (“Allure of the Seas”) to be delivered in 2010. Most vessels on order for 2010 and the nexttwo years have passenger capacity exceeding 2000 berths, which may equate to vessels exceeding80,000 GTs. The following table shows the current vessel order book until 2012.
34Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
2010 2011 2012
Cruise Line Vessel Name PassengerCapacity
Vessel Name PassengerCapacity
Vessel Name PassengerCapacity
NCL Norwegian Epic 4,200
Oceania Cruises Marina 1,260 unnamed 1,260
P&O Cruises Azura 3,076
Pearl Seas Cruises Pearl Mist 210
Ponant Cruises Le Boreal 264 L’Austral 264
RCL Allure of theSeas 5,400
Seabourn Cruise Line SeabournSojourn 450 unnamed 450
Total 13 28,886 9 18,712 4 10,536
Avg. Number ofberths 2,222 2,079 2,634
35Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
Appendix D
References
World cruise shipping trends was researched through international publications including ClarksonResearch Services, Cruise shipping Miami, and Ocean Shipping Consultants (“The World Cruise shippingIndustry to 2020”). The latter report has been widely used to understand world industry trends and longterm growth, while Clarkson Research Services has been primarily used obtain the industry’s lateststatistical information (as at September 2009) on vessel numbers and key characteristics of the cruiseship fleet. This data has also completed by the most recent information released by Market Watch, apublication arm of Cruise Shipping Miami.
Other sources of Information:
Access Economics, The Australian Cruise Sector, Report for Carnival Australia, December 2009
AECgroup, Economic Assessment of the
Australian Bureau of Statistics, Australian population projections, catalogue 3222.0
Australian Government, Department of Resources, Energy and Tourism
Carnival – Passenger vessel data for Sydney
Crown Project Services, Cruise Passenger Terminal – Location Options Report for West of SydneyHarbour Bridge, Commissioned by Sydney Harbour Foreshore Authority, November 2009
Cruise Line International Association (CLIA)
International Cruise Council Australasia (ICCA)
Thompson Clarke Shipping Pty Ltd, NSW Cruise Industry Growth Trends Study, April 2008, TourismNSW
Sydney Ports Corporation – Passenger vessels data for the period 2000-01 to 2011-12
World Tourism Organisation
Future Accomodation of Cruise Ships in SydneyCruise Passenger Industry
GHD
133 Castlereagh St Sydney NSW 2000-T: 2 9239 7100 F: 2 9239 7199 E: [email protected]
The document may only be used for the purpose for which it was commissioned and in accordance withthe Terms of Engagement for the commission. Unauthorised use of this document in any formwhatsoever is prohibited.
Document Status
Reviewer Approved for IssueRevNo. Author
Name Signature Name Signature Date
1 G Gomez S Meyrick S Meyrick 15/4/2010
2 G Gomez S Meyrick S Meyrick 20/4/2010
3 G Gomez S Meyrick S Meyrick 08/06/10
Report to the Minister for Planning, Minister for Infrastructure, Minister for Lands from the Passenger Cruise Terminal Steering Committee
Part B
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ATTACHMENT 5 – STUDY ON THE OPERATIONAL AND PHYSICAL CONSTRAINTS OF THE OPT
Part B Report‐ Study on the operational and physical constraints of the OPT
1
REFERENCE DOCUMENT FOR PART B REPORT IDENTIFICATION AND INVESTIGATION OF FUTURE INFRASTRUCTURE REQUIREMENTS AND POTENTIAL LOCATIONS FOR A CRUISE PASSENGER TERMINAL EAST OF THE SYDNEY HARBOUR BRIDGE
STUDY ON THE OPERATIONAL AND PHYSICAL CONSTRAINTS OF THE OPT
Part B Report‐ Study on the operational and physical constraints of the OPT
It is recommended a review of the lease conditions be undertaken to determine the various options
available for Sydney Ports Corporation. If it is decided that there is a requirement to expand or modify
the terminal prior to lease expiry dates the financial impact to Sydney Ports could be calculated in
advance. Upcoming reviews should consider possible future works to the OPT.
Part B Report‐ Study on the operational and physical constraints of the OPT
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4.7) Quay length and Water Depth
There is no requirement to increase the quay length to allow for larger vessels such as the Queen Mary 2
to berth. It is possible to install mooring ‘dolphins’ for restraint purposes.xiii There is sufficient depth at
the OPT for all vessels. It is recommended a cost estimate is undertaken for this exercise. Should the
OPT be able to berth larger vessels such as the QM2 then the operational importance of Garden Island is
somewhat diminished.
Drawing 10‐ Superimposed image of the QM2 at OPT
Part B Report‐ Study on the operational and physical constraints of the OPT
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4.8) Vessel turnaroundtime
In peak times (October to March) there is increased demand for berths both West and East of the
Harbour Bridge. Vessel turnaround time for yearly, seasonal, and round the world vessels can be
managed in 24 hours. Should the vessel require a berth for a longer period of time then Athol Buoy or
Point Piper Buoy could be utilized.xiv Vessels that require more than one days berthing tend to be in the
Round‐the‐World segment. Therefore for example in the month a February (peak demand) a maximum
of 28 vessels could berth. Based on current projections there will be 28 February vessel visits in 2020.xv
Therefore by 2021 the OPT will no longer be able to service the demand requirements of the industry
unless the scheduling for vessel arrivals changes.
4.9) OPT Structure and functionality
The building is a steel portal frame design with columns that are tapered and narrow at the bottom of
the structure. The columns curve up and over to join the beams at the top with web stiffeners with
suspended concrete slabs. Some structural foundation work was undertaken in the 2000 refurbishment.
It is recommended that a structural engineer reviews the current facility and is involved early on in the
planning process to determine what if any alterations may be feasible.
Facilities management is reviewing and upgrading plant and equipment as and when required. The
plant‐life cycle has now reached a point where some upgrading is required for the chillers, escalators
and the fire alarm panel.xviThere is a significant cost associated with the replacement of this type of
plant and equipment and If the middle to longer term plan was understood for the OPT then some of
the capital commitment that is currently envisaged could potentially be deferred until the revised
concept is approved. There has also recently been an upgrade of flooring in external balcony areas.
The functionality of the building has changed over its life‐cycle. The increasing number of restaurants
and bars adds both ambiance to an otherwise quiet area (on non‐ship days) and an income for Sydney
Ports Corporation. Given that the average vessel size is increasing in size and passenger numbersxvii,
meaning that many vessels will no longer fit under the Sydney Harbour Bridge within the next 5‐10 years
and that ship visits will become more and more frequent to the OPT the question needs to be asked as
to what the building is ultimately trying to serve. A home based passenger terminal has about 4000sqm‐
5000sqm dedicated to passengers and back of house operational issues.xviii The OPT now has about half
that dedicated space.
It should also be noted that if the OPT is to be used as a home port for passenger ships that there is no
fueling capability (bunkering) from the Quay.xix
Part B Report‐ Study on the operational and physical constraints of the OPT
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There are various operational elements currently managed by the Cruise Operators covered in this
report. Such as in section 4.2‐ Embarkation the Operator manages the number of check‐in counters. In
section 4.5‐ Access and traffic flow it is noted the Operators manage the hiring of police and marshals
outside the customs precinct zone as well as the scheduling of the providoring. It is recommended that a
‘service‐level agreement’ be considered that would formalize the organizational operation of these
functions. It could mean a third party is engaged by Sydney Ports and the Cruise Operator to manage
these operations.
4.10) Timetable
As noted in section 4.8‐ Vessel turn‐around‐time based on current projections of vessel growth the OPT
will not be able to service the demand requirements of the industry by 2021. This is working on the
assumption that Athol Buoy and Point Paper Buoy can be used for the round‐the‐world sector to berth
the vessels on the second days of their visits.
At present Garden Island (GI) is occasionally used (about one visit per year) to berth the larger passenger
vessels such as the Pacific Princess in November 2006, the Queen Elizabeth II in February 2008, and the
Queen Mary 2 visits in February 2007, February 2009 and March 2010. Berth access is not guaranteed
even once booked in as Navy operational contingencies may arise which may drive the need to
withdraw approval at short notice. In addition to this, availability of berth space at GI will be further
constrained by 2014 when the Navy takes receipt of the new ships due to enter the service, such as the
Landing Helicopter Dock (LHD) and Air Warfare Destroyers (AWD) that will be home‐ported in Sydney.xx
Based on this knowledge it is therefore recommended to install the dolphins at the OPT prior to 2014.
The cruise industry has expressed interest in co‐sharing the GI facilities in the future for passenger ships
and a continued dialogue needs to take place between the respective parties in order to determine
what may or may not be feasible.xxi
Part B Report‐ Study on the operational and physical constraints of the OPT
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5.0) Recommendations
5.1) Sydney Ports Corporation to commission a ‘Master Plan’ for the OPT. Conduct a full
study of the facility and what modifications may be required to make the terminal more
efficient from an operational perspective for cruise ships. Part of the Plan will involve
design works and architects, engineers and cost consultants would need to be engaged.
The ‘Place Manager’ will be required to approve the Plan.
5.2) Develop a timetable for key activities from the ‘Master Plan’ that need to take place if
the OPT is to accommodate the demand requirements of the industry in the future.
There will be a requirement for dolphin mooring installation by 2014 and the terminal
will be at capacity by 2021 unless the Cruise Operators can reschedule their vessel
arrival dates.
5.3) Undertake a high level financial costing analysis of the OPT from the ‘Master Plan’ and
identify potential funding sources from the cruise industry and other commercial
opportunities.
5.4) Consider the implementation of a ‘service level agreement’ with the Cruise Operators to
manage the embarkation, disembarkation, and traffic management processes.
5.5) Review lease expiry dates and locations of the lease premises. Consider not extending
any leases until the ‘Master Plan’ is signed‐off.
5.6) It is understood that Sydney Ports Corporation are currently undertaking an operational
study of the OPT. This study will be valuable document for the ‘Master Plan’ phase.
Part B Report‐ Study on the operational and physical constraints of the OPT
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6.0) References i Working drawings from the 1960’s, 1980’s and 2000 supplied by Sydney Ports Corporation
ii Media Release, Sydney Cove Passenger Terminal, THE HON CARL SCULLY MP Minister for Transport,
Minister for Roads, Wednesday 19 December 2001
iii Floor plans provided by Sydney Ports Corporations
iv Briefing sessions with Sydney Ports Corporations held on 31.08.10 and 7.9.10
v SHFA background information for Opera House buffer zone
vi Briefing sessions with Sydney Ports Corporations held on 31.08.10 and 7.9.10
vii Briefing session held with Royal Caribbean on 16.09.10
viii Briefing sessions with Sydney Ports Corporations held on 31.08.10 and 7.9.10
ix Briefing sessions with Sydney Ports Corporations held on 31.08.10 and 7.9.10 x Briefing sessions with Sydney Ports Corporations held on 31.08.10 and 7.9.10 xi Cruise Ship Access to FBE/GI Berths‐ implications for Navy, September 2010
xii Briefing sessions with Sydney Ports Corporations held on 31.08.10 and 7.9.10 xiii Briefing sessions with Sydney Ports Corporations held on 31.08.10 and 7.9.10
xiv Briefing sessions with Sydney Ports Corporations held on 31.08.10 and 7.9.10
xv GHD Future Accommodation of Cruise Ships in Sydney working papers 1&2, June 2010
xvi Briefing sessions with Sydney Ports Corporations held on 31.08.10 and 7.9.10
xvii GHD Future Accommodation of Cruise Ships in Sydney working papers 1&2, June 2010
Part B Report‐ Study on the operational and physical constraints of the OPT
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xviii Briefing session held with Carnival on 15.09.10
xix Briefing session held with Royal Caribbean on 16.09.10 xx Cruise Ship Access to FBE/GI Berths‐ implications for Navy, September 2010
xxi Briefing session held with Carnival on 15.09.10
Report to the Minister for Planning, Minister for Infrastructure, Minister for Lands from the Passenger Cruise Terminal Steering Committee
Part B
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ATTACHMENT 6 – REPORT FROM NAVY STRATEGIC COMMAND OF SEPTEMBER 2010 ON CRUISE
SHIP ACCESS TO FBE/GI BERTHS - IMPLICATIONS FOR NAVY
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CRUISE SHIP ACCESS TO FBE/GI BERTHS - IMPLICATIONS FOR NAVY
Introduction
1. This paper has been developed by Navy Strategic Command to articulate the present and future challenges associated with providing berth space for cruise ships at the Fleet Base East /Garden Island (FBE/GI) complex in Sydney. In part this aims to inform consideration of this issue by the NSW Government‟s “Passenger Cruise Terminal Steering Committee,” which has been established to review future options to meet the anticipated demand for increased cruise ship berthing in the port of Sydney. It also aims to provide key Defence and other agencies with a broad appreciation of the issues involved.
2. Defence understanding of the issues associated with cruise ship visits to Sydney has been informed by involvement in this Committee and preceding dialogue. Additionally, knowledge of the impacts on Navy when cruise ships are berthed alongside FBE/GI has most recently been informed by five visits - Pacific Princess in November 2006; Queen Elizabeth II in February 2008; and Queen Mary 2 in February 2007, February 2009 and March 2010.
Cruise Ship Berthing in Sydney 3. The cruise ship season in Australia currently runs from October to April, peaking around January-March. Sydney is a most attractive location for cruise ship operators plying the Australia/Southwest Pacific market. Overall passenger numbers are rising as a product of both an increasing number of cruise ship calls and the increasing passenger capacity of these vessels. There was 18% annual growth from 2002-2008, culminating in an estimated 250,000 passenger arrivals in 2008/091. The cruise ship industry growth is expected to continue despite the global economic crisis, with some asserting this as the fastest growing tourism sector. The extent of the annual cruise ship season and peak visits to Sydney is therefore expected to expand, albeit limited by the capacity of the port to handle multiple ship visits.
4. Intrinsic to predicted future growth of the industry is the increase in the size and passenger capacity of cruise ships. Ships in excess of 80,000 Gross Tonnes are increasingly common; this is the approximate size which determines that their air draft is such that they are unable to pass under the Harbour Bridge to berth at cruise ship facilities west of the Harbour bridge.
5. The Overseas Passenger Terminal (OPT) located at Circular Quay is the only commercial berth on the seaward side (east) of the Harbour Bridge. Apart from Queen Mary 2, the OPT berth pocket is able to support the large cruise ships now operating around Australia. While the single OPT berth is currently not operating to capacity, industry predictions suggest this will be reached around 2016, with demand for two or more large cruise ships concurrently seeking berths east of the Harbour Bridge gradually increasing during the peak cruise season. The number of days on which this might occur remains subject to further analysis.
6. If unable to secure an OPT berth, the alternative for large cruise ships is to anchor in the Harbour. This is not preferred, due to various safety and weather risks and costs associated with moving up to 2500 passengers and their baggage to/from the ship, plus the need to embark larger quantities of stores and victuals (and occasionally fuel). FBE/GI is therefore seen by cruise ship operators as an attractive berthing alternative, due to its size, location and facilities.
FBE/GI Overview & Considerations
7. The primary function of the FBE/GI complex is to provide support and maintenance berths for the 11 major Royal Australian Navy (RAN) ships currently home-ported in Sydney,
1 Report to NSW Government from the Sydney Passenger Cruise Terminal Steering Committee, November 2009 – page 9.
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plus berths for other visiting RAN and foreign warships deployed to the area. This requires ships to berth alongside for extended periods, either associated with a range of contracted maintenance/repair activities, crew training alongside, or replenishment prior to return to sea.
8. The annual Fleet Reduced Activity Period (RAP), which generally runs throughout December and January each year, is particularly significant. This allows for some contracted maintenance to be combined with an extended crew leave break over the Christmas/New Year period, before ships commence their workup during the Fleet Concentration Period (FCP) in February/March each year. Various elements dictate the importance of the RAP, not least the personnel factors associated with acquitting outstanding leave after extended periods at sea, and when they are best able to spend time with their families; the personnel turnaround associated with routine postings; and the reduced duty watch arrangements which determine that ships are connected to dedicated shore power and services when alongside2.
9. The ensuing FCP normally runs through February and early March. During this phase, most Sydney-based warships, plus some from the west coast and New Zealand, are involved in a work up to full operational readiness. This begins with a harbour training phase, followed by graduated multi-threat exercises at sea over a three week period in exercise areas between Newcastle and Jervis Bay. This seagoing phase is interspersed with a weekend break in Sydney for replenishment and any necessary maintenance. The FCP is a vital element in maintaining the operational readiness of the Fleet and preparedness for future operations and deployments in coming months, and its timing each year is not negotiable.
Berth Access
10. Most berths in the FBE/GI complex are under Navy control while certain berths used for industrial ship repair and maintenance activities are currently managed under lease arrangements between Defence and Thales Australia3. This lease includes Thales use of the Captain Cook Dock4, plus Cruiser Wharf (and the associated Floating Dock) and East Dock Wharf. Navy has priority use of these wharves when required, subject to reasonable compensation to Thales. The remaining wharves (Oil Wharf, West Dock Wharf and FBE Berths 1-5) are controlled by Navy.
11. Attachment A and the following table provide an overview of FBE and GI berth dimensions. Current depths alongside remain subject to a periodic dredging programme. FBE Berths Oil
Wharf Cruiser Wharf
East Wall
West Wall 1 Nth 1 Sth 2 3 4 5
Length 120 m 150 m 150 m 140 m 160 m 150 m 157 m 270 m 190 m 185 m
Depth 12.0 m 11.5 m 11.0 m 10.5 m 10.0 m 9.5 m 9.0 m 8.5 m 8.8 m 8.9 m
Of particular note is the following:
a. FBE is 870 metres long (including use of the northern mooring dolphin), with a 10 degree „kink‟ at the 310 metre mark, which realistically provides two berth pockets. The northern FBE 1-3 berth pocket is 560 metres long, and the southern FBE 4-5 pocket is 310 metres.
b. The presence of the disused Hammerhead Crane at FBE 1N creates constraints on berthing larger ships on the FBE wharf continuum, particularly for ships with wharf overhangs or requiring vehicle and mobile crane use in this area. For example, this determines that Queen Mary 2 must berth south of the Crane, occupying all of FBE 1S-3.
2 Notwithstanding this, there have been a number of precedents where ships have been activated at short notice during such
periods to respond to various crises in the region. 3 Future dockyard management arrangements beyond the June 2013 expiry of this lease are yet to be determined. 4 This is the largest dry dock in the southern hemisphere, and a vital strategic asset for the refit and repair of RAN ships on the
east coast. It also provides an important facility for commercial ships in need of docking on the east coast, particularly those that are too large to access the floating dock in Newcastle or the Cairncross dry dock in Brisbane.
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c. Berthing of larger ships is constrained at the FBE 4-5 pocket due to limited water depth and manoeuvring space.
d. Proximity of FBE 4-5 berths to Finger Wharf apartments also places major limitations on the nature of maintenance and other work that can be undertaken at these berths.
e. Use of the Cruiser Wharf is limited by the semi-permanent Floating Dock (not certified for RAN use) located at the southern end, which takes up a proportion of available berth space. This wharf is a key commercial maintenance and ship refit/repair berth, which is largely unaffected by noise constraints which apply to berths closer to residential areas.
f. Although limited in length, the Oil Wharf is a vital berth for contracted maintenance activity that is not constrained by proximity to residential accommodation.
g. East Dock Wharf (Thales lease) provides a valuable maintenance berth for smaller ships.
h. West Dock Wharf (185 metres with the mooring dolphin) is also a valuable maintenance berth, and is the allocated submarine berth in Sydney, with dedicated fendering and other support systems.
12. Vehicle access to berths on Garden Island is variously constrained by the nature of the island‟s geography, with the dry dock central to the area. A relatively narrow road borders the island and is the only vehicular access and egress for activities conducted at Oil, Cruiser, and East Dock Wharves. Access to the FBE berths and to West Dock Wharf is less constrained, though as for all berths, is achieved during normal operations through the main entrance/security gate of Garden Island.
13. Availability of berth space in FBE/GI is already limited at peak periods and will be further constrained when new larger RAN ships enter service from 2014. The two Canberra class Landing Helicopter Dock (LHD) amphibious ships (231 metres) and three Hobart class Air Warfare Destroyers (AWD) (147 metres) will be home-ported in Sydney. These ships will require a range of new training and support facilities to be developed within the FBE/GI complex. Currently being defined in more detail, this is a major redevelopment project also incorporating upgrade to various services within the FBE/GI complex, for progressive delivery in the 2013-16 timeframe.
14. The total future requirement for berth space for RAN ships home-ported in Sydney, assuming all ships alongside simultaneously, and assuming the new strategic sealift ship and the new replenishment ship to replace HMAS Success are also based in Sydney, will stabilise around 1840 metres after 2018. The length and draft of the LHDs dictates they will usually berth at FBE 1-3, limiting overall berthing management flexibility at FBE/GI and compounding constraints at this important maintenance berth.
15. The total berth space available to Navy at FBE/GI is only 1670 metres (including the Thales leased wharves, totalling 460 metres). This requires that some smaller ships are berthed outboard of other ships („nested‟ or „rafted‟) during peak demand periods. This practice is sub-optimal, particularly for some maintenance periods when an alongside berth may be essential. It is not viable for the LHDs, due to the combined loading effect of these vessels on the wharf and bollards, and because their port and starboard access points do not align. Subject to maintenance or crane access requirements, present and future frigates and the AWDs will be able to berth outboard of other ships, which will alleviate some berthing pressures.
16. Of note is that total FBE/GI berth space can not be apportioned directly to ship berthage requirements. The need to maintain a manoeuvring/safety distance between ships will depend on the ship type/role, and in the case of the LHD may require added space for watercraft entry/egress.
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17. Berth space requirements would be further impacted by the presence of decommissioned ships at FBE/GI in the months prior to disposal. This factor could add up to 500 metres of additional berth space requirements and highlights the imperative for the rapid disposal or relocation of decommissioned ships.
Accommodating Cruise Ship Visits at FBE
18. When larger cruise ships call at Sydney they aim to re-provision (and occasionally refuel), conduct a passenger exchange and operate tours in and around the city and nearby regions. Cruise ship operators aim to conduct these “turnarounds” in a limited timeframe, usually around 12 hours. Generally only larger international (around the world) cruise ships expect to berth overnight.
a. Victualling. A cruise ship the size of Queen Mary 2 may have nearly 4000 personnel (total passengers and crew) aboard. To supply the vast quantities of victuals and other stores required, 15 or more semi-trailers must be brought onto FBE/GI. As turnaround time is critical, these vehicles need to arrive early so that storing continues unabated once started. Therefore all semi-trailers are prepositioned on the wharf at FBE 1-2 and the side roads around the Fleet Gymnasium. Truck parking and movement severely limits traffic flow in this vicinity.
b. Passenger exchange. This covers passengers and crew permanently leaving or joining the ship (but not those on tours or sightseeing). All passengers and crew joining or leaving a cruise ship must pass through customs and quarantine inspection facilities in similar fashion to an international airport. Most dedicated cruise ship berths have permanent facilities to enable this process, such as search areas, baggage scanners, etc. FBE has no such facilities, and these must be hired in by cruise ship‟s agents. To meet Australian Customs and AQIS requirements, large marquees are set up on the wharf to house scanners, X-ray machines and search areas, as well as to provide a controlled zone through which all passengers and crew must be screened. The controlled zone must be set up adjacent to the ship‟s gangway to ensure positive passenger control at all times. At FBE, this zone is set up between the ship and the main gate on Flinders Road (adjacent to the main gate). The zone needs to cater for at least 1000 passengers and therefore consumes a significant amount of space, effectively cutting off all access to FBE via Flinders Road. Once processed at the wharf, departing passengers are transferred from FBE via coach to Darling Harbour Wharf 8 facilities, whence they depart for their next destination. The reverse applies for joining passengers. This necessitates a large number of coaches waiting for departing passengers or arriving on the wharf at FBE. For the visit of Queen Mary 2 in March 2010, this passenger exchange involved use of charter vessels to transport passengers to/from their shore terminal to large pontoons on the outboard side of the ship berthed at FBE. This considerably alleviated the number of coaches needing to access the wharf.
c. Tours. Many passengers not permanently disembarking will take a tour in and around Sydney. Due to the tight windows imposed by rapid turnarounds, the tour operators pre-position passenger coaches on the wharf at FBE 3-5 prior to the ship‟s arrival. Combined with those required for departing passengers, there may be 50-60 coaches pre-positioned on the wharf awaiting the ship‟s arrival. After berthing, tour passengers are escorted from the cruise ship to their coaches, which depart from the FBE southern gate. Coach arrival and departure times vary according to destinations; this results in coaches occupying the wharf for the majority of the visit. All tours return one hour prior to departure.
19. The above activities all happen concurrently, resulting in the entire wharf and associated hardstand of FBE 1-5 being occupied in direct support of the cruise ship. Due to the large
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number of trucks, coaches, taxis and cars involved, road congestion makes access to Garden Island highly problematic, and movement about the western side of FBE/GI becomes impossible. FBE essentially grinds to a halt, clogged by the immense logistic tail of the cruise ship operation. The activities of any ships berthed at FBE 4-5 are significantly constrained by vehicles on the wharf. Operations on the eastern side of the island are affected to a lesser extent, but such that Thales and other contractor activities across Garden Island are impacted adversely. While the cruise company provides commercial security personnel on and around FBE1-3 from shortly before ship arrival until just after its departure, this does not address the added security issues associated with erection and removal of marquees and associated vehicle and people movements on (part of) a military facility. Management of this risk falls to Defence and contracted security staff at GI.
Managing Cruise Ship Berth Requests
20. Previous single cruise ship visits during the peak season have mostly been accommodated during the February seagoing phase of the annual Fleet Concentration Period. During this phase, most warships are conducting annual workup exercises at sea, affording some spare berth capacity at FBE/GI. Notably, Queen Mary 2 has become a factor in Navy‟s annual planning, due to the ship‟s size and inability to berth elsewhere in Sydney.
21. Requests from cruise ship operators for ship access to berthing at FBE/GI will continue to be considered by Navy on a case by case basis. Consideration is invariably focused on access to FBE 1-3 berths, which has the least impact on activities at Garden Island. Use of the Cruiser Wharf is not contemplated due to the major disruption this would cause for all activities on the eastern side of the island, with increased security challenges and vehicular movement problems.
22. An appropriate proforma5 has been developed to facilitate and formalise the berthing request process. This access request proforma is considered initially by the Navy Port Services Organisation in Sydney, which manages the berthing and movements of all home-ported and visiting warships in Sydney. If forecast activities indicate a potential cruise ship berthing window exists, the Defence Support Group will liaise with NSW Maritime and the Commonwealth Department of Finance and Deregulation for issue of a licence to access Defence facilities, and begin negotiation with the cruise company over related charges as a necessary precursor before access can be agreed.
23. More recently Navy has affirmed that once a cruise ship access request has been formally approved, Navy will commit to provision of a FBE berth (unless emergency circumstances mandate otherwise) Once given, this will become a fixed commitment in the FBE/GI berthing programme. However the ability to predict - and thus approve – FBE/GI berth availability a year or more in advance to meet cruise industry planning imperatives remains highly problematic, and inevitably will limit such approvals.
24. The occasions when this might be possible will diminish beyond 2014, due to the berthing demands of the new LHDs. The presence of just one LHD at FBE 1-2 in future would effectively deny access to a cruise ship. A cruise ship could not safely berth south of an LHD alongside FBE 1-2 (taking into consideration the 300+ metre length of the cruise ships that seek access to FBE). Equally if there was a ship alongside FBE undergoing maintenance requiring crane support, waste removal or large equipment on the wharf, for example, this would be adversely impacted by a visiting cruise ship.
5 This was introduced in June 2009 and so far has been used by Carnival Australia for visits by Queen Mary 2 for 7-8 March 2010, 22-23 February 2011, and 2012 visits planned for 13-14 February and 7-8 March.
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Passenger Cruise Terminal Steering Committee
25. This Steering Committee first met on 15 June 2009, chaired by Mr Mike Collins of the Sydney Harbour Foreshore Authority. Navy is represented, as is Sydney Ports Corporation and key shipping, tourism and cruise industry representatives. The Committee will meet regularly through to late 2010, reviewing Sydney‟s cruise ship infrastructure issues in two parts. The Part A report assessing potential cruise ship infrastructure west of the Harbour Bridge was submitted to the NSW Minister for Planning in November 2009. The NSW Premier subsequently announced her Government‟s decision to construct a new terminal at White Bay to replace the present Wharf 8 terminal at Darling Harbour by 2012. Commenced in early 2010, Part B is examining options east of the Harbour Bridge, including further development of the OPT at Circular Quay and prospects for alternative cruise ship berths or moorings (including access to naval berthing and other facilities at FBE/GI).
26. Of note, this Committee has produced a generic functional brief for any cruise passenger facility west of Sydney Harbour Bridge. This articulates a complex range of requirements for berthing of passenger vessels and the loading and unloading of passengers and goods from or to those vessels. Related activities include occupational health and safety and security, the provision of public and private transport to and from the passenger terminal and the provision of parking at the terminal, plus its potential use for events, exhibitions, conventions and functions. Importantly the brief argues that any proposed new facility must not be less useful, less operationally convenient or less efficient than the existing OPT.
Some Realities
27. With the increased number of cruise ships anticipated to visit Sydney in future, coupled with the lack of commercial port infrastructure to support modern large cruise ships, it is inevitable that Navy will be approached more frequently for cruise ship access to berths at FBE/GI. Accommodating this access has far-reaching implications for Navy. The provision of significant berth space for cruise ships, combined with the logistic tail and temporary infrastructure required, places a heavy impost on the entire FBE/GI precinct. The significant adverse impact of potentially multiple cruise ship visits on Navy‟s maintenance activities and operational readiness should not be underestimated.
28. Navy‟s ability to respond positively to occasional requests for cruise ship use of spare berths will always remain subject to contracted and opportunity Fleet maintenance planning and operational readiness priorities or contingencies, such as the requirement for large Navy ships to load out in Sydney at short notice to meet Government-directed humanitarian and disaster relief operations in our region. These can and do change on a regular basis, and certainly inside the planning window needed for cruise ships to obtain a guaranteed berth space. The future notion of guaranteeing access for multiple cruise ship visits to FBE over an extended period either coinciding with Navy‟s peak berthing demand, or at other times, is anathema and is totally impractical.
29. In an era when personnel retention remains a high priority, Navy senior leadership is committed to the well-being of all personnel, both afloat and ashore. Any external imposition that would potentially detract from the working conditions and respite for seagoing personnel when their ship is alongside in Sydney would not be treated favourably.
30. Maintenance of physical security within the FBE/GI perimeter is a major issue for Navy and other Defence occupants. Following a Defence Base Security Review conducted in 2009, various security enhancements at Garden Island are presently being developed commensurate with the recommendations of the Review. Management of one cruise ship visit per annum is challenging but feasible and proven. A more frequent demand would not only impact on work activity in the FBE/GI complex, but would regularly compromise the security aspects of this
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strategically vital naval facility. The stream of passenger transport, baggage handling, re-provisioning and other vehicles requiring access to the FBE/GI complex adds a range of new security risks, regardless of how well controlled the cruise ship passengers and crew might be.
31. There is no known naval base in the world that is willing to establish permanent cruise ship facilities within its perimeter. Use of Defence facilities and berths at FBE/GI is markedly different and generally not comparable with the 1-2 day high intensity turnaround activity associated with cruise ship visits to commercial passenger terminals, where there are no maintenance/repair, crew training or other demands reliant on specific shore facilities. Cruise ship schedules are fixed long in advance. This does not apply to warships whose programmes can change at relatively short notice to meet unpredicted maintenance and repair requirements or contingencies determined by Government.
32. On 1 March 2010 the Minister for Defence endorsed the following key points to be conveyed to the Passenger Cruise Terminal Steering Committee:
a. FBE/GI is a strategically vital Defence asset necessary for operational, training, maintenance and logistic support to east coast based RAN Fleet units, and to other visiting RAN and allied warships. Its present location is assured.
b. Priority for berth allocation must remain with naval units. As a general principle RAN ships will not be moved from FBE/GI to commercial berths elsewhere in the port, which lack alongside power and other support services, in order to temporarily accommodate visiting cruise ships.
c. Berths at FBE for larger cruise ships unable to berth elsewhere in Sydney may only be made available when not required by Navy. d. These occasions will be very infrequent, and while every effort will be made to commit to accepting a cruise ship once Navy agreement in principle has been given and necessary Defence licence arrangement put in place, industry must accept that operational contingencies which arise at short notice may drive the need to withdraw approval at short notice.
e. This would only occur in case of true operational need and once Navy had done all that is reasonably within its power to make the berth available. However this will not override the need for Navy to be able to respond to short notice contingencies directed by government.
Conclusion
33. Navy‟s challenges in meeting the berthing demands of Sydney–based and visiting RAN and foreign warships are already significant, and will be complicated if/when berths are taken out of service temporarily during the Garden Island upgrade. They will be magnified further when new, larger ships with specific berth requirements and overall increased wharf space demands enter service over the next decade, and particularly if the Hammerhead Crane is not removed. This will further reduce the already limited scope and predictability needed to provide occasional berths for large cruise ships visiting Sydney. Establishing a permanent cruise ship facility at FBE/GI is not a viable option, and the ability to provide occasional berth access for large cruise ships unable to pass west of the Harbour Bridge will remain very limited.
Navy Strategic Command 14 September 2010 (Edition 5)
UNCLASSIFIED
8
UNCLASSIFIED
ATTACHMENT A
Report to the Minister for Planning, Minister for Infrastructure, Minister for Lands from the Passenger Cruise Terminal Steering Committee
Part B
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ATTACHMENT 7 – SPC ALTERNATIVE BERTHING OPPORTUNITIES
Report to the Minister for Planning, Minister for Infrastructure, Minister for Lands from the Passenger Cruise Terminal Steering Committee
Part B
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ATTACHMENT 8 – PORT BOTANY PLAN
Report to the Minister for Planning, Minister for Infrastructure, Minister for Lands from the Passenger Cruise Terminal Steering Committee
Part B
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ATTACHMENT 9 – NEWCASTLE CRUISE SHIPPING INDUSTRY
Report to the Minister for Planning, Minister for Infrastructure, Minister for Lands from the Passenger Cruise Terminal Steering Committee
Part B
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ATTACHMENT 10 – COSTS AND ECONOMIC BENEFITS
Report to the Minister for Planning, Minister for Infrastructure, Minister for Lands from the Passenger Cruise Terminal Steering Committee
Part B
1 Author: Crown Project Services
ATTACHMENT 10 – TBL ANALYSIS FRAMEWORK
As part of the TBL Analysis the following economic, social and environmental benefits will need to be
identified and quantified on an annual basis, over the 20-year period:
additional in-port visitor expenditures (per visitor, per day)
Combination of state passenger head taxes, on board Ocean Ranger staff tax, gambling tax per ship on all Alaskan cruises
US$23.50 to $38.50 per head (taxes are redistributed on a per head basis back to Juneau and Ketchikan and other ports for capital works financing)
4. Bermuda Passenger cabin tax (while in port) US$10 - $14/head per night at berth
5. Bahamas (USA) Passenger tax disembarking at terminal (discount applies if cruise ship arrivals meet specific annual targets)
US$15/head
6. Hawaii (USA)
State policy of no passenger taxes on arrival at terminal (taxes apply to ship berthage/wharfage) [defined as non-commissionable fees (NCFs)]
nil
7. Port of New York and New Jersey, USA Passenger disembarking tax US$8.50/head
8. Port of Southampton (UK) (largest of cruise ship bases in the UK)
Passenger embarking tax (prior to sailing) [negotiated by type of cruise ship/length of stay prior to departure]
(US$ equivalent)
$30 to $70/head
9. Port of Hamburg (Germany) Passenger disembarking tax (for capital recovery of new cruise terminal at Altona)
(Euro)
€21/head
10. European Cruises (based in Hamburg) - up to 7 countries
Passenger terminal taxes levied for all port visits (7 days) [A similar formulae applies to French and Scandinavian cruise vessels]
US$200/head
Schedule of Port Charges – Ef fective 1 July 2010
Page 1
Schedule of Port Charges
Effective 1 July 2010
Navigation service charge All commercial vessels, including cargo and passenger vessels, piloted fishing vessels, research vessels and piloted t ugs entering either Sydney Harbour or Botany Bay are required to pay a Navigat ion Service Charge.
The charge is payable by t he vessel ow ner/agent and is based on vessel Gross Tonnage (GT) per port entry.
RATE PER GROSS T ONNAGE PER PORT EN TRY Rate
excluding GST
GST Rate
including GST
Standard charge (excluding passenger, bulk liquid and gas) $0.423 $0.0423 $0.4653
Standard charge for passenger, bulk liquid and gas carrier $0.473 $0.0473 $0.5203
Environmental services charge. Addit ional charge applicable to vessels t ransport ing noxious bulk liquid, gas and oil cargos only $0.163 $0.0163 $0.1793
One port approach Vessels t ransit ing between and w ithin Sydney Harbour and Botany Bay w ill not be charged an addit ional Navigat ion Service Charge.
Passenger vessels A 35 percent reduction in t he standard Navigat ion Service Charge applies to passenger vessels.
Promotional visits A 50 percent reduction in t he standard Navigat ion Service Charge (but not the Environmental Services Charge) applies to vessels calling at Sydney f or promot ional purposes only (such as photographic w ork).
Non-cargo vessel operations A 50 percent reduction in t he standard charge applies to all vessels entering Sydney’s ports exclusively f or non-cargo operat ions such as maintenance and repair w ork.
Bunkering A 75 percent reduction in t he standard Navigat ion Service Charge (but not the Environmental Services Charge) applies to all vessels w hich call f or bunkering purposes only.
For the latest version, please visit w w w .sydneyports.com.au
Page 2
Site occupation charge The Site Occupat ion Charge is a t ime-based charge for use of the Sydney Ports’ common user or non-leased berths. Certain berths are leased t o private operators, w ho set and raise their own charges.
A Site Occupat ion Charge is payable f or t he t ime a vessel is alongside a berth or its cargo is on the berth, and for t he embarkat ion or disembarkat ion of passengers. It is payable by the stevedore or occupier of the site. A minimum charge of one hour w ill apply f or vessels occupying a site for less than an hour.
RATE PER V ESSEL PER H OUR
Standard Rate
excluding GST
GST Rate
including GST
Lay Up Rate
excluding GST
GST Rate
including GST
Nos. 1, 2, 7 and 8 Glebe Island $100.00 $10.00 $110.00 $30.00 $3.00 $33.00
Nos. 2 to 6 White Bay $100.00 $10.00 $110.00 $30.00 $3.00 $33.00
Small non-commercial vessels $30.00 $3.00 $33.00 - - -
Lay up rate The Lay Up Rate applies to those vessels which are undergoing repairs, emergency maintenance, or which cannot otherw ise carry out normal cargo t ransfer operat ions. Written not ificat ion must be provided to the Shipping Manager of the intent ion t o use a berth for lay up purposes.
Schedule of Port Charges – Ef fective 1 July 2010
Page 3
Wharfage charge A combined Wharfage Charge and PCAC* is payable by t he cargo ow ner, usually via the Shipping Agent. Containerised cargo is charged per Twenty Foot Equivalent Unit (TEU); non-containerised cargo is charged per Revenue Tonne. A Revenue Tonne is the greater of mass or volume of the cargo measured in units of tonnes, cubic metres, or kilolitres.
CONTAINERISED CARGO AND CARGO ON PLATFORMS Rate per Twenty Foot Equivalent Unit (TEUs)
Rate excluding
GST GST
Rate including
GST
Overseas import $98.23 $9.82 $108.05
Overseas export $60.24 $6.02 $66.26
Local (coastal inwards or outwards) $32.56 $3.26 $35.82
Transhipment (inwards or outwards) $16.28 $1.63 $17.91
Empty container overseas $10.84 $1.08 $11.92
Empty platform overseas $2.71 $0.27 $2.98
NON-CONTAINERISED CARGO Rate per Revenue Tonne
Dry bulk cargo $1.02 $0.102 $1.122
Overseas general cargo – import $2.05 $0.205 $2.255
Overseas general cargo – export $1.75 $0.175 $1.925
Transhipment and local general cargo (inwards or outwards) $1.00 $0.10 $1.10
* Wharfage Charges apply to imports and exports. Wharfage Charges include Port Cargo Access Charge (PCAC), w hich represents a c harge applied by, and remitted to, NSW Government to recoup government costs relating to the ports. Wharfage Charges also include a security component for cost recovery of marit ime security imposed under the Commonw ealth Marit ime Transport and Offshore Facilit ies Security Act 2003.
Transhipment Transhipped cargo is cargo unloaded f rom one vessel and re-loaded onto another vessel in Sydney Ports w ithin 14 days f rom date of unloading. Transhipment charges for all cargoes are applicable t o both the inward and outward t rip.
For the latest version, please visit w w w .sydneyports.com.au
Page 4
Mooring fee The Mooring f ee is a t ime-based charge applied t o vessels secured t o a buoy.
RATE PER V ESSEL PER H OUR Rate
excluding GST
GST Rate
including GST
Buoy $30.00 $3.00 $33.00
Where a navigat ion light is removed and re-attached f or vessels secured to a buoy, a Navigat ion Light Handling Fee w ill be applied.
RATE PER V ESSEL PER U SE Rate
excluding GST
GST Rate
including GST
Navigat ion Light Handling Fee $500.00 $50.00 $550.00
Pilotage services Sydney Ports Corporat ion offers a Pilot Service, t he Sydney Pilots can be contacted on + 61 2 9296 4888, and for further details please v isit www .sydneyports.com.au
For Pilotage charges, p lease refer t o “ Schedule of Pilotage Charges for Sydney Harbour & Port Botany” .
Other port services Contact details f or other port services providers are available f rom Sydney Ports’ w ebsite www.sydneyports.com.au
Vessel bookings Not ificat ion of vessel arrivals and bookings are to be made electronically t hrough Sydney Ports’ ShIPS system. Port service providers including pilots, t owage operators, line handlers, and Sydney Ports accept and confirm the provision of services electronically t hrough ShIPS. A ll booking enquiries and berth allocat ions should be directed t o the Shipping Manager.
Terms of trade Sydney Ports’ invoices for charges referred to in t his sc hedule are payable as below :
· Navigat ion service charge 28 days f rom the date of vessel ar rival.
· Site occupat ion charge 28 days from the earliest of either the date of vessel’s first line ashore or cargo ar rival at berth.
· Wharfage charge i) Inward cargo – 28 days f rom the date of vessel arrival.
ii) Outward cargo – 28 days f rom t he date of vessel departure.
An incent ive rebate for w harfage is payable t o shipping agents who t ransmit manifests electronically t o the Corporat ion and sat isfy the above Terms of Trade.
About this schedule This schedule is a summary of port charges applicable t o the commercial use of Sydney’s ports ef fect ive 1 July 2010. It does not contain all t he regulat ions and procedures applicable t o Sydney Ports’ charges.
If you are unfamiliar w ith the regulat ions and procedures relat ing t o t he Schedule of Port Charges please contact the Trade and Commercial Analyst , Shipping Manager or Revenue Controller.
Report to the Minister for Planning, Minister for Infrastructure, Minister for Lands from the Passenger Cruise Terminal Steering Committee
Part B
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ATTACHMENT 12 - FINANCIAL IMPACT OF CRUISE SHIPS TO THE NSW ECONOMY
Report to the Minister for Planning, Minister for Infrastructure, Minster for Lands from the Passenger Cruise Terminal Steering Committee
Part B
1 Author : Dr Robert Noakes - Crown Project Services
FINANCIAL/ECONOMIC IMPACT OF CRUISE SHIP VISITS TO SYDNEY 1. Scope
This analysis focuses on an assessment of the financial and economic impact on the Sydney/NSW
economy created by cruise ship calls to Sydney’s Passenger Cruise Terminal. Excluded from the
analysis are round-the-world cruises and cruises which include overnight hotel stays and
international airfares for arriving and departing cruise passengers. The primary purpose of the
estimation has been to identify the size of the economic penalty or loss to the NSW economy, should
future cruise ships not be able to be ‘accommodated’ at Sydney’s Passenger Cruise Terminal.
The time frame is for the year 2009/10. It is an analysis of the average level of expenditures incurred
per passenger per day (< 24 hours) in Sydney. It also reports the total direct, indirect and induced
financial revenues and economic impacts generated by each ship call.
Distinction is made between cruise ship vessels which are unconstrained and constrained by size and
which cannot sail under the Sydney Harbour Bridge. The differentiation is: (a) ships with an average
gross registered tonnage (GRT) of 55,000 (in the range of 50,000 GRT to 70,000 GRT); and (b) ships
with 80,000 GRT or more. The major financial/economic impact variation relates to the scale of
berthing fees (navigation service charges), navigation charges (related to number of trips, line boats,
gangways, etc.) and the size of the provisioning expenditures.
2. Key Concepts
The financial/economic impact can be disaggregated as follows:
(i) Direct financial expenditures by cruise ship passengers (per day).
(ii) Direct financial expenditures by cruise ship crew members (per day).
(iii) Direct financial costs to cruise ships for all services/time incurred at the terminal
(including berthing and departure).
Report to the Minister for Planning, Minister for Infrastructure, Minster for Lands from the Passenger Cruise Terminal Steering Committee
Part B
2 Author : Dr Robert Noakes - Crown Project Services
(iv) Indirect financial impacts associated with the use of other cruise ship industry services.
To be consistent with Access Economics and other industry studies, a multiplier impact
from expenditures on locally/regionally-produced food, wine, beer, jewellery and
souvenirs has been included.1
(v) Induced economic impacts associated with additional employment in providing
additional support.
3. Data Sources
Estimates for each of the four (4) financial and economic impacts have been derived from a range of
sources. These include:
(i) 2010 expenditure survey results form Melbourne’s Station Pier cruise ship terminal (with
industry trend extrapolation to Sydney). A ‘premium’ or additional expenditure level of
20% has been assumed for Sydney visits. This is a minimum industry estimate.
(ii) 2010 cruise passenger expenditure survey data for Darwin (Commonwealth Government
survey).
(iii) 2010 Tourism Tasmania cruise ship survey data (Hobart).
(iv) Sydney Port cruise ship tariffs and charges.
(v) Other cruise ship services expenditures (based on Access Economics/Carnival Australia
data, Dec. 2009).
(vi) Navigation and tug/mooring costs (based on industry survey estimates).
1 Access Economics, Dec. 2009, The Cruise Ship Industry in Australia Report; and the AEC Group, 2007/08, The Economic Impact of Cruise Shipping in Australia. Both studies utilised input-output tables and multipliers, developed by the Australian Bureau of Statistics. For NSW, the indirect tourism expenditure multiplier was estimated at 0.91, i.e. for every 1 dollar of direct expenditure, a further 91 cents was likely to be generated. [This assumed that all items of direct expenditure were capable of generating additional expenditure flows, i.e. it required that all items were initially produced within the NSW economy].
Report to the Minister for Planning, Minister for Infrastructure, Minster for Lands from the Passenger Cruise Terminal Steering Committee
Part B
3 Author : Dr Robert Noakes - Crown Project Services
(vii) Induced direct employment estimates based on Melbourne industry estimates [2006/07
Victorian Government data].
4. Financial/Economic Estimates
Table 1 provides a detailed breakdown of direct daily cruise passenger expenditures, by major
category. For Sydney, the average daily expenditure was $256. [This represents a direct expenditure
flow, which would be lost to the Sydney/regional economy, if cruise ship calls were cancelled].
Comparative expenditure estimates for Melbourne, Brisbane, Hobart and Darwin are reported.
Table 2 provides a similar expenditure breakdown for cruise ship crew members. [The importance of
cruise ship personnel is best illustrated by the industry estimate that at least 50% of all crew
disembark, and that average expenditures can be at least 80% of cruise passengers]. The average
daily crew expenditure in Sydney was estimated at $215.
Table 3 summarised the average daily expenditures by cruise ship passengers and crew members,
related to both direct and indirect (multiplier) expenditures effects. The total estimates were $299
for cruise ship passengers and $249 for crew members.
Tables 4a and 4b set out the range of revenues generated/costs incurred by the actual ship visit by
ship size. A range of services and impacts have been estimated. The average total ship call impact by
the shipping line is estimated at $146,400 for unconstrained ships and $162,300 for ships unable to
pass under the Sydney Harbour Bridge. This includes direct and induced financial and economic
impacts. *Should a ship call be cancelled or ‘lost’ due to lack of infrastructure capacity to address the
height restriction in particular, the total loss of financial revenue/economic benefit would be at least
$162,300]. With the inclusion of indirect or multiplier effects, the ranges of per day cruise ship
impacts can be expected to vary from $146,400 to $279,000 for a vessel of 55,000 DWT and from
$162,000 to $309,000 per call per day for larger vessels of 80,000 GRT or greater, unable to pass
under the Sydney Harbour Bridge.
Report to the Minister for Planning, Minister for Infrastructure, Minster for Lands from the Passenger Cruise Terminal Steering Committee
Part B
4 Author : Dr Robert Noakes - Crown Project Services
Table 1: Direct Expenditures by Cruise Ship Passengers Per day: Australian Ports 2009/10: A $
Type of Expenditure
Melbourne 1/ %
Sydney 2/
Hobart 3/
Brisbane 4/
Darwin 5/
Meals/Drinks 25 (12%) 42 15 35 32
(at restaurants/bars)
Food/Beverages (at stores) 3 (1.5%) 10 2 12 10
Shopping 107 (51%) 110 57 47 24
Entertainment 2 (1%) 6 1 4 4
Local Transport 17 (8%) 21 8 22 12
Organised Tours 46 (22%) 52 43 56 58
Other, e.g. books/medicines 9 (4.5%) 15 6 10 4
Total 209 (100%) 256 132 186 144
1/ Based on Port of Melbourne survey data for sampled cruise ship passengers in April 2010. Used as a basis for the Victorian Cruise Ship Strategy revision.
2/ Expenditure figures estimated to be 20% higher for Sydney than Melbourne, representing a 'premium' or
additional expenditure allowance for Sydney environs and attractions.
4/ Based on 2006/07 Department of State Development Survey, extrapolated to 2009/2010; Queensland Ports data on estimated daily passenger expenditures.
5/ Derived from Commonwealth Department of Resources, Energy and Tourism/Tourism Research Australia, Darwin Cruise Ship Research, November 2010.
Report to the Minister for Planning, Minister for Infrastructure, Minster for Lands from the Passenger Cruise Terminal Steering Committee
Part B
5 Author : Dr Robert Noakes - Crown Project Services
Table 2: Direct Expenditures by Cruise Ship Crew Members Per Day: Australian Ports
A $
Type of Expenditure Melbourne
1/ Sydney
2/ Hobart
3/
Meals/Drinks (at restaurants/bars) 20 36 16
Food/Beverages (at stores) 2 8 13
Shopping 86 89 54
Entertainment 2 4 1
Local Transport 14 18 2
Organised Tours 37 49 5
Other, e.g. books/medicines 7 11 14
Total 168 215 105
1/ Average crew expenditures were estimated to be 80% of total daily passenger expenditures (based on international experience). Based on Victorian Department of Transport estimates.
2/ Estimated to be 85% of total daily passenger expenditures (based on early NSW Tourism data).
3/ Derived from 2009/10 Tourism Tasmania Cruise Ship Survey.
Report to the Minister for Planning, Minister for Infrastructure, Minster for Lands from the Passenger Cruise Terminal Steering Committee
Part B
6 Author : Dr Robert Noakes - Crown Project Services
Table 3: Direct and Indirect Expenditures By Cruise Ship Passengers
and Crew Members Per Day: Port of Sydney
2009/10: A$
Cruise Ship Passenger
Crew Member
Direct 256
215
Indirect 1/ 43
34
Total Per Day 299
249
1/ Covers expenditures or locally-produced food and beverage items (meat, fish, vegetables, fruit, dairy products, wine, beer, etc.). These expenditures provide flow-on effects to other sectors of the NSW economy. Indirect or multiplier impacts exclude expenditure effects on imported items such as liquor, clothing, jewellery, handbags, leather goods, electronic items, etc.
Report to the Minister for Planning, Minister for Infrastructure, Minster for Lands from the Passenger Cruise Terminal Steering Committee
Part B
7 Author : Dr Robert Noakes - Crown Project Services
Table 4a: Direct Expenditure/Revenue Generated by Cruise Ship Arrivals
(Per 24-Hour Visit)
[Unconstrained by the Sydney Harbour Bridge]
Port of Sydney
(Passenger
Cruise
Terminal)
Type of Expenditure/Revenue Generation (A $)
1. Cruise Berthing
navigation service charge 1/ 9,900
site occupation charge 2/ 2,800
utilities (water, waste) 3/ 2,500
2. Passenger Services 4/ 18,300
(Security, baggage handling, cleaning)
3. Navigation Charges 5/ 37,000
(Pilotage, line boats, fire prevention, mooring, gangways)
1/ Assumes an average ship size of 55,000 GRT ($0.18 per GRT). 2/ $110 per hour. 3/ Minimum average fees. No tug services. 4/ 24-hour security (land side) and associated travel services. 5/ As required for safe navigation, berthing and sailing.
6/ Commonwealth Government services are mandatory requirements.
7/ Based on a gross estimate of $40,500. Only 30% is assumed to be sourced from Australia
(bunker fuel, imported food, liquor are 'leakages' or transfer payments out of the NSW economy).
8/ Based on additional or induced employment (part-time for cruise ship visits). Assumes 30 jobs
for 2 days @ $195 per day (excludes PAYE/Company taxes).
Report to the Minister for Planning, Minister for Infrastructure, Minster for Lands from the Passenger Cruise Terminal Steering Committee
Part B
8 Author : Dr Robert Noakes - Crown Project Services
Table 4b: Direct Expenditure/Revenue Generated by Cruise Ship Arrivals
(Per 24-Hour Visit)
[Constrained by the Sydney Harbour Bridge]
Port of Sydney
(Passenger
Cruise
Terminal)
Type of Expenditure/Revenue Generation (A $)
1. Cruise Berthing
navigation service charge 1/ 14,400
site occupation charge 2/ 2,800
utilities (water, waste) 3/ 3,000
2. Passenger Services 4/ 21,000
(Security, baggage handling, cleaning)
3. Navigation Charges 5/ 42,800
(Pilotage, line boats, fire prevention, mooring, gangways)