GOVERNMENT BUSINESSES SCRUTINY COMMITTEE B
Wednesday 2 December 2009
Mrs Rattray-Wagner (Chair)
Hon Graeme Sturges, Minister for Infrastructure
Mr Gary Hill, Head of Office
TASMANIAN PORTS CORPORATION PTY LTD
Dr Dan Norton, Chairman
Mr Geoff Duggan, Chief Financial Officer and Acting CEO
Mr Nathan Spicer, General Manager, Business Development
Mr FINCH - Just on the subject of the Antarctic gateway, we had some concern expressed to us yesterday about the rumours, talk, innuendo that there could be a shift of some of TasPorts' operations from here to Fremantle. Dr Norton, are you aware of that rumour and discussion?
Dr NORTON - Yes.
Mr FINCH - How proactive is government and TasPorts being in consulting and staying across this issue for the future of us all?
Dr NORTON - I first became aware of that rumour several months ago. In fact, I had a discussion with the Treasurer about it. My people followed it up, talked with people at the most senior level at the Australian Antarctic Division, and made sure it was quite clear that they understood that we would do whatever we could as a component of the Tasmanian Government response to provide facilities that would satisfy their needs and certainly not be a reason for any move to Fremantle. Nathan may be able to follow that up because he has had discussions in relation to it too but at that time my understanding was that they were very satisfied with our responses. We also had discussions with the Department of Economic Development on it as well, so there was a coordinated response to it. It was seen to be a critical issue as far as the State was concerned, and we have been a part of trying to ensure that we are putting forward facilities, hence, although we had it on the plans beforehand, we have indicated our willingness to redevelop that No. 2 shed to help contribute to that.
Mr STURGES - If I could supplement what Dr Norton has said, I certainly had discussions with the Chairman and the CEO when this matter rose to the surface a few months or so ago, and I have been kept across, from an infrastructure point of view, the discussions that TasPorts were having. I was very much aware that DED had involved themselves and I, too, formed the opinion that they were satisfied with the response from TasPorts and the Government in relation to our preparedness to work with them to do what we can to provide whatever amenity and facility that would facilitate the conduct of their business.
Mr FINCH - So nobody involved in the Antarctic gateway would be nervous or negative about the response they might receive if they had some positive initiatives in respect to the Port of Hobart?
Dr NORTON - We do not control a decision that has been made in Canberra for someone else to move to Fremantle, but we will certainly provide whatever facilities we have to meet the needs in Tasmania, or to meet the needs in Hobart.
Mr SPICER - A couple of different points: there was some concern raised today, and I have had some meetings at director level within the AAD government department. There were some issues raised, particularly around their tenancy at Macquarie No. 4 shed, so we have had some communications. They attended the workshop mentioned earlier with Sullivans Cove that was run by the Department of Economic Development. We have explained to them our vision of what Macquarie No. 2 might look like, which they were quite excited about. The idea that cruise passengers would come off at Macquarie No. 2 and they might even have some display that they could walk through to give them a better understanding at the same time, appealed to them as well. The feedback that I received is that they like the idea and are awaiting the next stage, which is going through our process to see what the more detailed development might look like.
Mr FINCH - We were talking about the buildings and the concrete cancer and that sort of thing. Things generally seem to be a little bit on hold while they develop and we see what the future holds.
Mr STURGES - I do not think things are on hold, if we could just make that clear. There has been a lot of work happening.
Dr NORTON - We've put a couple of million dollars into the security centre on that wharf. We came second in a national award last week for security, so we are investing there. We have another shed adjacent to Macquarie No. 1 where there are some remediation issues. We will be remediating that, so it is not as though everything is on hold at all.
Mr STURGES - With respect, I certainly did not want that picture to be painted in that way, and I understand where the honourable member is coming from. Certainly there has been a lot of investment and development, and there are a lot of plans for the future. In fact, as I said, we have just gone out for expressions of interest for the development of Macquarie No. 1; we have received a couple of very solid expressions of interest there and we are engaged in the process now of developing that. Macquarie No. 2 will be developed, and remediation work has been undertaken in those areas where there is operational need.
Mr FINCH - Thanks for clarifying that, Minister, I was searching for words. What I wanted to get to was a maintenance program. Can you give me some idea of the maintenance schedule that you have for our wharf area in maintaining the buildings that are here now?
Dr NORTON - I do not have that detail in front of me now because I do not -
CHAIR - Can that be provided for the committee?
Dr NORTON - We can provide that on a port-by-port basis.
CHAIR - If we get a breakdown of the $8 million and the $14 million, then we will have that.
Dr NORTON - I think it is important that you get two bits of information. You get what we have spent in that year, but also I am happy to provide you with what we are intending to spend in this current financial year.
Mr FINCH - So, Dr Norton, are you suggesting that you have a plan, a maintenance plan?
Dr NORTON - Yes.
Mr FINCH - For every port in Tasmania that is in your bailiwick?
Dr NORTON - Yes. Two years ago we completed a maintenance assessment on every asset that we have. We are currently revisiting that again as we are getting to know more about our assets and other issues crop up. We feel that we know the major issues with the assets right around the State and, as I said, we are updating that again now. We will have an updated position going back to our board in the second half of this financial year which will be further guidance. But we are fairly cognisant of what the dollar spend is. The issue for us is how we prioritise that spend across the assets that firstly, are going to need it most and secondly, are going to be most beneficial for us from a commercial perspective and from a customer demand point of view as well.
Mr FINCH - So, Mr Duggan, over the last 12 months, what would have been expended on maintenance for TasPorts throughout Tasmania?
Mr DUGGAN - About $8 million and that was spread across the State to all ports.
Mr FINCH - Would you have a similar expenditure for the next year?
Mr DUGGAN - We have an annual maintenance target of $8 million a year and we have identified that is what we need in terms of routine, recurring maintenance. On top of that there is another significant spend in terms of the renewal or replacement of assets. We have to look at that carefully, particularly given the current economic environment that we are in. But we have probably protected our maintenance budget to a certain extent and also our capital expenditure budget. That is not to say that our maintenance guys do not come to us and say, 'We need more and we want to spend more', but we have to do that within the capacity that we have.
Dr NORTON - In other words, when he said 'protect', what Geoff was indicating is that when in the financial year - as indeed is occurring this year - you slip behind budget, as we did the first few months, we did not therefore say, 'Okay, we have to cut our maintenance spend'. We try whatever we can do to maintain our maintenance spend and our remediation spend because we realise that if you do not do it now, you are just building up the issues for the future. For our maintenance spend, the priorities are not all that difficult to understand: you fix what has to be fixed from a compliance and safety aspect. If you have any infrastructure that causes damage to the environment or it is unsafe for the people who use our waters, that is a high priority. Then you go down to a lower priority expenditure. How much could we spend? You could double that. You could spend $16 million but we think $8 million is a prudent amount to spend on balance.
FLINDERS ISLAND FISHING INDUSTRY
Mr FINCH - If we could come back to Flinders Island - we are scooting all over the show here - something was of interest to me and I would just be interested in your response, Dr Norton or Mr Duggan. I asked how many fishing vessels now operate out of Lady Barron and the answer was three. I thought that it would have had quite a thriving fishing industry but the suggestion was that because the port facilities are the way they are the fishermen do not function out of Lady Barron. Mr Duggan made reference before about spending money on infrastructure and suggested that if you outlay money there has to be some sort of commercial return on it. I am just wondering if I could get some understanding of how you view the fishing operations out of Lady Barron, and has it diminished because the port facilities are not up to scratch?
Dr NORTON - I am not aware that it has but if somebody raises that I am once again happy to follow it up. We put in a new finger pier that goes out at 90 degrees to the main port facility, which I understand can be used by the fishing industry. We can follow it but I am not aware of concerns that have been directly raised with us about inadequacies at Lady Barron that are hindering the capability of fishing vessels to use that port.
Mr FINCH - The fishers would probably need a cold storage and refrigeration facility. Would it be their responsibility to provide that for themselves or would TasPorts look to work in partnership with them? How would a facility like that come about?
Dr NORTON - If there was a demand for cold store facilities then we would be happy to sit down and work through what might be possible. Once again, if we are going to put money into it, we have to be able to get a reasonable return on it. I cannot recall ever having had it mentioned that there was that need on Flinders Island.
Mr HILL - There has not been any fish processing on the island for a number of years other than, I think, abalone. For a while they were catching live crayfish and holding them there. If you are talking about a fishing industry using fishing vessels, they need to take the product to a processing plant because there is no processing plant on the island. Logically most of the processing plants are on mainland Tasmania in the larger ports, or a lot of the catch is taken to Victorian ports. I do not see the logic of why you would want to build a cool store facility on Flinders Island when very little of the catch is going there; the catch is normally taken to the market or the major processing places.
Mr STURGES - I have had a few meetings over recent months with TFIC - I know they have a new name - the Tasmanian Fishing Industry Council. They have raised a number of issues that they would like us to pursue but they have not raised the Lady Barron facilities with me at all, and they represent the professional fishers.
FISH PUNTS IN HOBART
Mr FINCH - You mentioned, Dr Norton, the Victoria Docks being a facility for fishers. I have heard some dispute recently over the people who function out of Victoria Docks, the punts that are there particularly. How does that unfold and what are the solutions going to be with that issue?
Dr NORTON - It is Constitution Dock.
Mr FINCH - That is where the fish punts are?
Dr NORTON - The punts are in Constitution Dock, and the commercial fishing is in Victoria Dock.
Mr FINCH - Yes, that is what I am interested in hearing about.
Dr NORTON - What is the issue, sorry?
Mr FINCH - The issue of the fish punts there and I think they had an issue with TasPorts.
Mr DUGGAN - I am not aware of any issues. They would be in contact with our property guys. There is nothing that has been elevated -
Dr NORTON - There was a press comment probably six or eight weeks ago where one of the people who have a fishing punt lease decided that they were not going to sublet it, they were going to use it themselves, but I am not aware of any issues there. Perhaps if we can follow that up and we will get back to you.
Mr FINCH - I have an e-mail from one of the punt owners in which she said to me:
'… they have a view they are not accountable, do not need to be consultative, my way or the highway mentality. They close off access to our businesses without consultation, do not respond to letters written to them and generally intimidate and bully those who stand up to them. Unbelievable really given that they must have a code of behaviour as public servants, which they should follow.
Happy to give further details if necessary (that is, specific examples as I have most communication with them recorded).
Obviously a solution is that processes are developed that guide how they handle situations which should include proper and timely consultation (can't believe they don't have this already!)'.
So it seems to me that there has been strong contact from this person with TasPorts.
Mr DUGGAN - The only issue I am aware of that had some press recently was the change to the parking arrangements outside of the punts, which was not something that we had control over.
Mr FINCH - The person was asked specifically about TasPorts and their response from TasPorts. This is Ann-Marie Johnson of the Mako Fresh Fish punt.
Dr NORTON - We can follow it up to make sure and we will report back to you with what correspondence we have had and so on.
Mr FINCH - I might table that as there is a name and a business to that. If the situation has developed to a stage where she would write something like that in an e-mail, obviously negotiations with whoever she is dealing with - I asked her specifically about TasPorts and that was the response that she gave me.
Dr NORTON - There is always tension with businesses in that area over the period that we are about to enter into because of the road closures that are required during the Sydney-Hobart Yacht Race and so on. Whether there were also issues with them in relation to the Wooden Boat Festival I am not sure. Some of those issues are our responsibility and some of them are Sullivans Cove Waterfront Authority issues. We can follow it up.
Mr FINCH - Obviously the issues are not getting further up the chain if you are unaware of the minutiae of the issue.
Dr NORTON - I am at the bottom of the chain but anyway - I haven't been aware of anything yet.
Mr FINCH - Thank you.
OUTSOURCING SECURITY AT BURNIE PORT
Mr FINCH - There was some evidence given that security at the Burnie port has been outsourced to the mainland. Is there an understanding of that? I think there was a concern that you might be able to have security on the Burnie wharf area covered by a Tasmanian firm that was outsourced.
Mr DUGGAN - We have outsourced some aspect of our on-the-ground security but most of our security is controlled through our security centre in Hobart. That provides us with real live television footage of activity across all the ports. When I say 'all the ports', I mean the four main working ports within the State. That is controlled centrally through Hobart. We have engaged a company to provide some on-the-ground security-type services, particularly around cruise ships.
Mr FINCH - Yes, and they are Tasmanian companies that provide that service?
Mr DUGGAN - They have a Tasmanian base.
Dr NORTON - Whether they have a presence elsewhere, I don't know.
Mr DUGGAN - They may have a presence elsewhere, but they certainly have a presence in Tasmania and they are employing Tasmanian people to conduct the service. They have recently been advertising for more staff.
Mr FINCH - Okay.
Mr DUGGAN - It wasn't something that we did internally before.
Mr FINCH - It is a company that you use on your ports around Tasmania - the same company?
Mr DUGGAN - I believe so, yes.
Mr FINCH - Okay.
FUTURE OF BELL BAY
Mr FINCH - In respect to the future of Bell Bay and being the major container port for Tassie, is the suggestion that more interaction -
Mr STURGES - With respect, a big container port.
Mr FINCH - A big container port.
Mr STURGES - We are not going to start picking off ports, as has been the case.
Dr NORTON - It is international dimension as well.
Mr FINCH - This is what I want to get on to. Is there a suggestion that extra international shippers will include Bell Bay in their journeys?
Dr NORTON - I would think in that sort of time the answer is yes. A lot of it depends on the destination of the exports. If some of the irrigation developments that are starting to materialise occur, leading to more direct exports, there are two ways of doing it. You can send a container off bases across on the domestic service to Melbourne and export it from Melbourne or you can have ships coming into Bell Bay. The 000 service already comes into Bell Bay and we would envisage that over the long term there will be additional requirements for direct exports out of Bell Bay.
Mr FINCH - Thank you.
APPOINTMENT OF PAUL WEEDON AS THE NEW CEO
Mr FINCH - I did not want to let the opportunity pass for you, Minister, or Dr Norton, to comment on the appointment of Paul Weedon as the new CEO. I will say that when we carried out some investigations on the mainland, we were given some really solid feedback that this is an absolute coup for Tasmania to be able to draw him out of Sydney and to Tasmania. So can we talk about the future under Paul Weedon and his development of the strategic plan and new business opportunities?
Dr NORTON - Very briefly, we are very pleased to get him. Robert Barnes we think did a fantastic job at a very difficult time. For personal reasons, he was unable to take another contract. We did a search and Paul Weedon was identified. We think he brings experience in the commercial arena, internationally and domestically which will be a great advantage. He is very customer-focused. He will be going around meeting our key stakeholders and key customers as a person who does not have any baggage of the past and he will be undertaking that from when he starts on 1 February.
We are also mindful of the comments that have been made about communication - customer-stakeholder relationship. Also the board has agreed that we will put in place an annual, independently assessed customer assessment process by independent people going out and getting the feedback from our customers so that we have a more accurate indication of what the problems are. That also provides a benchmark year after year to see how we can improve that performance.
Paul is very customer-focused. He was also able to attend our strategic planning session that we held here in Hobart a couple of weeks ago. From that he has an understanding of the strategic issues and quite clearly understands that his real challenge is to meet the needs of our existing customers and also to work with our customers and our owners in the community to identify a viable way of moving into the future strategically to provide the infrastructure we need.
Some of our pricing, Mr Gaffney, is very much less than commercial and that is a two-edged sword because you need commercial returns to generate the funds to put into the investment. So it is not as easy as giving all the benefits to the customers.
CHAIR - Well done. I should have had that earlier on in the day.
Mr STURGES - Very quickly, if I may, just on that matter and it is very important, firstly I welcome the announcement of Mr Weedon as the new CEO of TasPorts, but just as importantly, can I place on public record my thanks and that of the State Government for the work that Robert Barnes has done as CEO. He has faced some very big challenges during his time here and I thank him personally, and I thank him on behalf of the Government.
CHAIR - Your comments are noted.