Large cruise ships are often too big to sail under the Harbour Bridge to Sydney’s alternative passenger terminal at White Bay. Photo: James MorganLess than two years after a major facelift, Sydney’s Overseas Passenger Terminal is already at risk of becoming overwhelmed by a new generation of superliners needed for the booming cruise industry.
And two of the world’s largest cruise companies are warning that, because Sydney is already one of the most expensive ports in the world for passenger ships to visit, any further increase in fees threatens its attractiveness.
Royal Caribbean has told the state’s pricing regulator that the Overseas Passenger Terminal has “effectively reached capacity” during the summer cruise season from October-November to April.
And just 18 months after a $22 million upgrade was completed, the company said the terminal at Circular Quay would need to cater for cruise ships significantly larger than those it was built for.
The terminal’s facelift, which included a mezzanine level and larger baggage and storage areas, was designed for ships carrying up to 3900 passengers, but it now has to play host to cruise liners that can sleep 4900 passengers.
The use of ever-larger ships will increase pressure on the next federal government to allow passenger liners to berth at the navy’s historic base at Garden Island.
Large cruise ships are often too big to sail under the Harbour Bridge to Sydney’s alternative passenger terminal at White Bay in Balmain.
In order to cope with growth in demand for cruises, Royal Caribbean has been sailing larger ships such as Explorer of the Seas to Sydney because of difficulties gaining slots in the schedule for berths at the Overseas Passenger Terminal. At present, berths for cruise ships in Sydney are hired for 24-hour periods.
Royal Caribbean said the alternative of turning around ships anchored in the harbour at Athol Buoy was “prohibitively expensive, logistically challenging and inconvenient for passengers and crew alike”.
The cruise industry has been lobbying for years for Garden Island to be opened to passenger liners. In the lead up to the last federal election in 2013, then prime minister Kevin Rudd unveiled plans for a high-powered taskforce to consider moving the naval facilities from Garden Island to Queensland.
Premier Mike Baird has asked the Independent Pricing and Regulatory Tribunal to provide advice on the maximum charges that should be levied on cruise ships docking at the Overseas Passenger Terminal and White Bay.
In a veiled threat, Royal Caribbean said Sydney’s port costs and charges were “uncompetitive” and highlighted its recent decision to pull out all three of its ships from Brazil after higher taxes were imposed.
“We simply do not cruise there any more,” it said.
“The opportunity for growth in the Australian cruise market from the rapid expansion of cruising in Asia could increasingly be placed at risk if our cost base continues to rise with no correlation to reality, simply because it is thought that we will be able to continue to charge what we like.”
However, the Sydney Harbour Association said fees should be set to allow the state’s Port Authority to recoup costs in order to protect nearby residential areas from the impact of cruise ships berthing at terminals, especially at White Bay.
“We see no reason for any special or concessional treatment of the cruise industry,” the community group said.
“Their legitimate interest in cost containment is likely to influence heavily their approach to the structure of port fees and charges.”
A spokeswoman for Maritime Minister Duncan Gay said the upgraded Overseas Passenger Terminal met the needs of ship turnaround times “better than ever before”, and work had started on a new mooring bollard to allow access for the next generation of vessels.
“The NSW government is committed to keeping Sydney open, available and accessible to the growing number of ships wanting to come here,” she said.
Since it opened in 2013, the $57 million terminal at White Bay has been the subject of hundreds of complaints from local residents, who have argued emissions, vibrations and noise from cruise ships berthed at the facility are making them sick.
Carnival Australia, whose brands include P&O, Cunard and Holland America Line, said the number of ships berthing at White Bay was likely to drop in the longer term as cruise companies replaced older liners with larger vessels.
The company said port access and pricing for Sydney was of national interest because it was Australia’s “cruise hub”, and “the impacts will be felt in every state”.
It argued port charges in Sydney had reached an “unprecedented level”, and were “among the highest in the world, if not the highest”.
Sydney’s costs of $132 per passenger compare with $92 for the three key cruise ship ports in the US, and $72 for Auckland, according to Carnival Australia.
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