Port of Newcastle and DP World no longer talking over containers

CONFIRMATION that a major terminal operator, DP World, has walked away from the opportunity to build a container terminal at the Port of Newcastle is the latest twist in the tortuous history of a project that has existed in various guises for 20 years.

While both sides have officially confirmed a termination of their negotiations, confidentiality agreements apparently remain in place, meaning that piecing together a picture of the situation has meant relying on off-the-record briefings from the parties involved.

Despite this limitation, the view from the DP World side of things is clear enough.

The major sticking point to a northern container terminal remains the secret fee imposed on Newcastle by the state government. By privatising Botany and Kembla together, with a promise of protection from container competition, the government ensured that whoever bought the Port of Newcastle was doing so with a sizeable limitation. Even so, sources on the DP World side say that this is not the only problem. From a shipping perspective, they say Newcastle is too close to Sydney to justify the expense of a second stop. And once the containers are off the ship, Newcastle’s relative distance from Sydney is seen as adding prohibitively to handling costs.

Countering this view, the Port of Newcastle insists these claims are wrong. It argues that the deal is not only economically sound, it is beneficial to the Hunter and will help ease worsening congestion in and around Botany.

If DP World is now talking to Newcastle’s competitor – Botany and Kembla  owner NSW Ports – then it is highly likely that commercial considerations are in play, as the major players jockey for financial advantage in a multi-billion-dollar market place.

Is it, as container terminal advocate Greg Cameron says, that the shipping industry would rather preserve the status quo than be subjected to disruption?

Given the importance of this project to the region, the people of the Hunter deserve to hear more from the stakeholders involved.

Unfortunately, the playing field in this situation is anything but level. The government says the Port of Newcastle is the best judge of its own business, but while ever a Newcastle container terminal would be forced to compensate Port Botany, it’s a business chained to a massive anchor.

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