AN upper house committee inquiring into the privatisation of the Port of Newcastle will hear sharply differing views on the merits of a Newcastle container terminal when it questions a range of interested parties in Sydney on Thursday.
Although a Hunter contingent led by Port of Newcastle chief executive Craig Carmody and Newcastle Lord Mayor Nuatali Nelmes will argue strongly in favour of the project, the NSW government is backing NSW Ports – the private operator of Port Botany and Port Kembla – in dismissing a Newcastle terminal and casting doubt on the studies commissioned last year to bolster its case.
In its submission to the inquiry, the government says: “Recent studies commissioned by the Port of Newcastle suggest that a large number of infrastructure projects being delivered in Sydney could be deferred or avoided by having a containerised freight terminal at Newcastle.
“These studies suggest that little or no government investment would be needed to do this. This does not reflect the realities of current infrastructure investment, how supply chains currently work and the impact that a new container terminal would have on land-side transport networks.”
The government says Botany is unlikely to reach capacity before 2045 or 2050, and that Kembla is better placed than Newcastle to be an “overflow” port if required because it is closer both to existing warehouses in Sydney and the growing population of western Sydney.
In Newcastle City Council’s submission, Cr Nelmes and chief executive Jeremy Bath say a Newcastle container terminal would help achieve the government’s “regional development and economic priorities by supporting businesses through access to markets, being a direct source of employment and economic activity and supporting economic diversification in the Hunter”.
“The City of Newcastle is undergoing a transformation from its heavy industrial past to a service-based economy,” the council submission says. “Our port is similarly changing and planning for sustainable growth.”
The upper house inquiry was announced in November last year, and specifically canvases the originally confidential cap on Newcastle container movements, revealed by the Newcastle Herald in 2016 after repeated denials by the government.
The cap, which operates through documents known as Port Commitment Deeds, was expected to be a major focus of the committee’s investigations, especially for its non-government members.
But on December 10 last year, the Australian Competition and Consumer Commission launched Federal Court action against NSW Ports over the deeds, which it argues are “anti-competitive and illegal”.
Citing the court action, the government says “there are a number of matters within the terms of reference of this inquiry which could be expected to be matters in issue in those proceedings”.
It says the sub judice principle means it “has been unable to address, or to address fully, certain matters which are expected to be in issue” in the ACCC case, and it is asking the committee to observe the convention when questioning witnesses.
Canberra-based consultant Greg Cameron, who has enthusiastically promoted the container terminal since it was first proposed in the late-1990s during his time with BHP, will also give evidence to the inquiry.
In his submission, Mr Cameron says that as well as the port commitment deeds targeted by the ACCC, the privatisations of the ports themselves are “invalid”.
“The government gave a confidential commitment to bidders for the leases that payment would be made to the lessee if container traffic at the Port of Newcastle was above a minimal specified cap,” Mr Cameron says in his submission.
“The government committed to paying compensation for containers handled at the Port of Newcastle equivalent to the wharfage fee that the lessee would receive if the containers were handled at Port Botany.”
He says the legislation used to privatise the ports did not allow “government consolidated revenue to make the promised payment”, so the government privatised the Port of Newcastle to make it the source of any compensation.
“The ACCC is also alleging that it is illegal under the Competition Act for PON! to be the government's source of funds for paying NSW Ports under the PCDs.”
The Moree-based farmers’ cooperative GrowerCo, which will also give evidence, says its members would use a Newcastle terminal as an alternative to Brisbane, where they are exporting an average of 1.25 million tonnes of grains and chickpea each year at “a considerable cost penalty” of up to $20 a tonne.