THE Baird government’s cap on container ships in the Port of Newcastle was a “smart”, “generous” and “sensible” decision that will one day give the city “huge capacity for a container terminal”.
And despite the government’s steadfast refusal to admit that the cap existed until the confidential port commitment was revealed by the Newcastle Herald this year, Premier Mike Baird insists he had “nothing to hide”.
During his visit to Newcastle on Tuesday Mr Baird – who was the treasurer who announced the sale of the Port of Newcastle in 2013 – addressed the cap for the first time, defending it as an “economically sensible” decision that was part of the government’s overall port strategy.
“There’s a massive requirement for infrastructure to support [containers],” he said.
“There’s rail and roads which is a huge burden on taxpayers across the state.
“So it makes a lot of sense to be strategic in the allocation of capital.”
He said the “logistic chain” meant it made the most sense to invest in Port Botany and Port Kembla before Newcastle, but defended the cap as “very generous” and “flexible”.
“We have put a very generous capacity into the agreements they can continue here at the Newcastle and they can grow at 6 per cent a year,” he said.
“The economy grows at about 3 per cent if it’s at trend [so] there’s double economic growth that can come in here in terms of containers.
“In the not too distant future you’ll have a huge capacity for a container terminal here in addition to an economically sensible approach to investing in the infrastructure required to support containers full stop.”
The government repeatedly denied the cap existed until Minister for Roads, Maritime and Freight, Duncan Gay, outlined the details in parliament in August after it was first revealed by the Herald.
The agreement with the Port of Newcastle dictates once a “cross-payment” threshold of 30,000 containers – plus 6 per cent yearly growth – was reached at Newcastle, the operator would have to pay the owners of the Port of Botany $1 million for every ship.
Despite that Mr Baird said he had been “happy” for it to be released.
“It’s a very sensible arrangement that supports the local economy here and it also provides benefit to tax payers across the state ensuring that our investments to support and facilitate containers is done in a considered way,” he said.
But Canberra-based analyst Greg Cameron – a long-time advocate for a container terminal in Newcastle – said the government had tried to keep the cap “a secret”.
He said the same infrastructure needed to make Newcastle a viable option to service Sydney was needed in Botany and Kembla.
“Preventing a container terminal at the Port of Newcastle is a deliberate decision by the government to maintain an unacceptable cost penalty on northern NSW,” he said.