EDITORIAL: Examining in the Coalition's secret deal restricting Port of Newcastle

FINALLY, after years of dispute and denial, the state government has confirmed that it privatised Port Botany and Port Kembla in such a way that contractually renders a future container terminal in the Port of Newcastle financially unviable.

It has only done this after being confronted by the Newcastle Herald with the evidence in the form of a “strictly confidential” document known as a “port commitment”, which quite clearly sets out the financial commitment it has given to the lessee of Botany and Kembla. In simple terms, a future Newcastle container terminal would have to pay the state according to a formula that would add about $1 million to the cost of handling a typical container vessel. Newcastle would pay the state, which would pay the operator of Botany and Kembla. 

With this previously hidden fact revealed, it is no wonder a range of Coalition figures have insisted that a Newcastle container terminal would never stack up commercially: few businesses forced to double their operating costs – and to pay that extra cost to their competitor – would be able to survive.

Even after confirming the deal, the government is still telling the Hunter Region to stick to its knitting: you handle the coal trade and a bit of grain and other commodities, and leave the rest to us in Sydney. The arrogance is breathtaking, especially for a Liberal-led government that supposedly believes in free trade and open competition.

As it happens, port competition was already on the political agenda this week thanks to the latest in a series of criticisms by Australian Competition and Consumer Commission chairman Rod Sims, a former pro-privatisation advocate who says the Coalition state government has handled the port privatisations, especially, very badly.

On what the Herald has revealed, there would seem to be ample reason for the ACCC – and, indeed, the parliament itself, to formally investigate the tying of this massive ball and chain to one of the nation’s most efficient ports. If the government is so confident that a Newcastle container terminal is a bad idea, it should leave that judgement to the private sector it has entrusted to run the state’s ports for almost 100 years. Instead, it has massively advantaged the capital city, Sydney, at the expense of the Hunter.

If the government is wondering why the public is finding it hard to trust politicians, this betrayal of business and workers alike is a perfect example why.

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