An inquiry into Port of Newcastle sale arrangements which favoured Port Botany and Port Kembla has found the “Port Commitment Deeds including the conditions of sale and the levy were not disclosed to the public or the Parliament” and should be investigated further.
The New South Wales (NSW) Legislative Council's Public Works Committee (PWC) launched the ‘Impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales’ inquiry last November. This followed the 2014 sale of the port by the state of New South Wales to a consortium, now made up of The Infrastructure Fund and China Merchants Group, after which it was revealed that Port Botany and Port Kembla were protected by the NSW Government from container competition after privatisation with a secret fee on any Newcastle container development to be passed to the ports.
Firstly, the PWC recommended: “That the Legislative Council consider establishing an inquiry into the ports transactions, and specifically container limitations and associated financial obligations contained within the Port Commitment Deeds, at the conclusion of the Federal Court proceedings involving the Australian Competition and Consumer Commission and NSW Ports or at such time as the House determines.”
ACCC proceedings
In December, NSW Ports Operations Hold and its subsidiaries Port Botany Operations and Port Kembla Operations had proceedings launched against them by the Australian Competition and Consumer Commission (ACCC) for making deals with the Australian state of New South Wales (NSW) that the ACCC claims had an “anti-competitive” purpose and impact.
The inquiry also recommended “That the NSW Government conduct a detailed investigation of freight rail options between Ports Botany, Newcastle and Kembla, including options for line duplication and dedicated freight-line construction, to ensure strategic future corridors are preserved, to optimise rail modal share of freight transport, to better align capacity to meet future demand and to improve the rail service reliability.”
Thirdly, it recommended: “That the NSW Government conduct a review of the state's ports policy, including the potential for a container terminal at the Port of Newcastle, at the conclusion of the Federal Court proceedings involving NSW Ports, or at such time as the House determines.”
A KPMG report published this month concluded that the NSW Government’s container port strategy, which would see Port Kembla developed as the next container port in NSW to augment capacity at Port Botany, makes the most sense.
The PWC’s inquiry report noted that limitations on Newcastle container port operations “have not significantly impacted expenditure required on transport infrastructure projects in Sydney.”
