NSW PORTS Port Kembla

Regional Ports Conference

20 November 2013

Who Is NSW Ports

• NSW Ports is a consortium of leading institutional investors and represents more than 80% Australian superannuation funds. The NSW Ports consortium comprises:

Industry Funds Management

(IFM)

45.01%

Australian Super Pty Ltd

20%

Tawreed Investments

(Tawreed)

19.99%

Global Infrastructure Partners (GIP) on behalf of

The State Public Sector Q

Super

15%

We are investors and managers of some of Australia’s most critical infrastructure

• NSW Ports members are long-term investors, with interests in a range of key infrastructure assets throughout Australia including: – Ten Airports, three seaports, three toll roads, one rail station and 16 social infrastructure assets.

3

Western

Australia

Northern

Territory

Queensland

New South Wales

Victoria

South

Australia

Tasmania

Perth Airport

Perth Law Courts

Northern Territory Airports

Port of Brisbane

Eastern Distributor

Brisbane Airport

Melbourne Airport Southern Cross Station

We have invested in NSW since 1998

NSW Ports members are also investors in critical NSW road infrastructure including the Eastern Distributor and M5 South West motorway

We are delighted with the opportunity to invest in NSW’s most important seaports

Investment Description Location Year

Acquired

M5 South

West

Motorway

Toll road Sydney 1998

M4 Motorway Toll road Sydney 1998

M1 Motorway

/ Eastern

Distributor

Toll road Sydney 2000

Wyuna Water Water

treatment

Illawarra,

Woronora 2003

Axiom

Education

School

buildings Sydney 2003

NSW Rent

Buy

Public sector

housing Sydney 2005

Sydney

Airport Airport Sydney 2008

Sydney

Desalination

Plant

Water

treatment Sydney 2012

Port Botany &

Port Kembla Ports

Sydney,

Illawarra 2013

New South Wales

Wyuna Water

Axiom

M1, M4, M5, Sydney

Airport, Sydney

Desalination Plant,

NSW Rent Buy

Port Kembla Port Botany

Port Botany & Port Kembla are critical assets that support the well being of the State

NSW Ports recognises the critical importance of both Port Botany and Port Kembla to NSW’s future economic growth, development and well-being

NSW is the largest state economy in Australia and accounts for almost one-third of the Australian economy

Both Port Botany and Port Kembla are very high quality assets

Port Botany is Australia’s 2nd largest container port and sole container port servicing Sydney, the largest population centre in Australia

Port Kembla is Australia’s largest vehicle import facility and a key gateway for coal, grain and bulk products

The combination of these two ports represents one of Australia’s most critical and strategic assets

We are committed to the responsible management of, and investment in, both assets for the long-term due to the vital role they play in economies of the Sydney, Illawarra and greater NSW regions

We will actively seek to work with all stakeholders to maintain high quality port services and effective customer interactions

Our vision is to create an integrated, world class port management company

• Promote safe, responsible and reliable operations

• Capitalise on the strengths of each facility

Develop both ports to their full potential

• Bring out the best from the combined organisation by having a highly engaged workforce

• Support management and staff to deliver effective outcomes

Responsible and efficient operation of the

organisation

• Maintain strong customer relationships

• Work with other stakeholders including government, stevedores, transportation logistics companies and local communities to solve off port issues

Build strong relationships with all

stakeholders

• Committed to managing and developing the ports in a safe, secure, efficient and environmentally responsible manner

• Be a good corporate citizen that employees and investors can be proud to be part of

Focus on sustainable growth

Trade Results 2013/14

Commodity Trade Tonnes

Coal 13,382,000

Steel 6,117,000

Motor Vehicles 5,691,000

Grain 2,638,000

Copper Cons 782,000

Oil 222,000

Acid 50,000

Total 28,882,000

500

600

700

800

900

1000

2011/12 2012/13

Ship Visits

2013 Major Highlights

• Transition from Government to Private ownership on1 June 2013

• Cement Australia project well underway

• Port Kembla Coal Terminal enhancement in progress

• Design for first OH berth completed

• Approval to increase first OH berth capacity to 16 mta in progress

• New rail services contract finalised

• Tender for OH access road awarded

• Work continues on Maldon – Dombarton and Port rail capacity

BAU - TRANSACTION DETAILS

• 99 Year lease of Commercial activities • Lease price $5b • PKPC & SPC remained as SOC’s – currently under review • Regulatory functions remained with PKPC & SPC • Pilotage remained with PKPC & SPC • Contracts agreed with TfNSW for channel use, development over

seabed, dredging, maintenance of nav aids, etc • Some lease differences between SPC & PKPC • Service level agreements established between NSW Ports, PKPC &

SPC – ongoing & temporary • All eligible PKPC staff transferred • Review Port development plan – 6 mths post transaction then 5 yr

BAU – CHALLENGES (1)

• Integrating separate PKPC and SPC systems and procedures

• Developing policies to suit both entities

• Integrating different cultures

• Optimising use of staff skills & experience across both Ports

• Extricating systems from the SPC & PKPC network

• Implementing a new suite of IT systems & procedures

• Ongoing relationship between NSW Ports, PKPC & SPC

BAU – CHALLENGES (2)

• Maintaining staff morale • Changing culture – government > private • Perception that PK will be driven from Sydney • Perception that regional focus will be lost • Perception that decision making capability will be

reduced • Job uncertainty • Management of future EBA negotiations • Impacts of standardised procedures/processes/policies • Changing information needs etc

Port Developments – In progress

Project Value

National Biodiesel Project (project structure being reviewed)

$250m

Cement Australia grinding mill $180m

Coal Terminal upgrade $300m

Gateway Storage shed $2m

Port Rail Upgrade $2m

O/H Access Road $3.5m

Demolition no 3 Jetty $3.0m

Approved Port Developments Project Value

1) New export facility $65m

- Berth 103 extension – post Panamax

- Dry bulk storage facilities approx 110000 tonnes

- Mobile shiploader/conveyor

2) New fuel storage facility $20m

- Fuel storage tanks/pipelines

3) Port Coal Terminal rail upgrade $20m

4) Bulk Liquid exports facilities $?m

Potential - Port Projects

Project Status

1) TriMinsCom – Woodlawn mine Feasibility – 3 yrs

2) E3 Steel Iron ore exports Feasibility 5 years

3) Standard Iron Exports JORC – 3 -5 years

4) Australian Bauxite 2016 -2018

5) Hume Mining Feasibility 5 -7 years

6) Others In discussion

Artist’s Impression – Outer Harbour Development

Cement Australia construction site - Outer Harbour

www.nswports.com.au

Thank you