A decision by the Independent Pricing and Regulatory Tribunal (IPART) for the Port of Newcastle to pay a one-off compensation of $10 million to the New South Wales government leaves just one regulatory hurdle before the port can become a container terminal.
In 2013-14, Port Kembla, Botany, and Newcastle were sold off. Ports Kembla and Botany, NSW Ports, were sold together for $5 billion to a consortium and Newcastle the following year for $1.75 billion.
The contracts – Port Commitment Deeds – gave exclusive rights for handling shipping containers to Kembla and Botany, locking Newcastle out of the market. Essentially the state government had to compensate NSW Ports if Newcastle’s container traffic went above a specific cap.
In 2018, the ACCC said the decision was anti-competitive and launched legal action. The case was dismissed in 2021 and then lost on appeal last year.
In 2022, the Port of Newcastle Extinguishment of Liability Act 2022 (NSW) was passed, and it was under that IPART made its determination.
Port of Newcastle CEO, Craig Carmody, said with the determination, the Port has one final regulatory roadblock to remove before meaningful progress can occur on a container terminal.
“Today is a significant and historic milestone for Port of Newcastle and regional New South Wales, a path forward that means we will no longer be penalised for wanting to offer choice and competition in New South Wales container trade,” Carmody said.
Carmody said attention will now turn to the NSW Freight Reform Review to ensure it reflects the legislation. The review is a determinant of state planning decisions.
“The current Freight and Ports Policy states that Port Kembla is the designated second port for a container terminal in NSW, which impacts Port of Newcastle’s ability to get planning approvals for its own container terminal.
“We hope the NSW Freight Reform Review will agree that there should be a level playing field for competition rather than the state trying to pick winners,” Carmody said.
“We can now assume, with the determination made by an independent body, that we have the support of all sides of parliament to move toward the expansion of container operations at Port of Newcastle.
“Our immediate focus will be the continued growth of container trade through our existing Multipurpose Terminal, which we have invested over $35 million in and currently has planning approval for 350,000 containers a year,” Carmody said.
