Questions for the NSW Government

Filed under Letters ~ by Editor on  9 May 2019

A Court date has been set for 22-05-2019 for file number NSD2289/2018 in relation to the application ‘COMPETITION LAW ACTION filed by AUSTRALIAN COMPETITION & CONSUMER COMMISSION(A) on 10-DEC-2018’.

The file number (above) is a link to the Commonwealth Courts Portal, displaying the file and application.

Questions for the NSW Government are:

1.       Did the Parliament authorise the Government to pay compensation to a lessee of Port Botany and Port Kembla, for container traffic at the Port of Newcastle above a minimal specified cap?

(a)      If yes, what is the Hansard record?

2.       Did the Parliament authorise the Government to require a developer of a container terminal at the Port of Newcastle to reimburse the Government for any cost the Government incurs in paying compensation to a lessee of Port Botany and Port Kembla, for container traffic at the Port of Newcastle above a minimal specified cap?

(a)      If yes, what is the Hansard record?

3.       Did the Government lease the Port of Newcastle for the purpose of requiring a developer of a container terminal at the Port of Newcastle to reimburse the Government for any cost the Government incurs in paying compensation to NSW Ports for container traffic at the Port of Newcastle above a minimal specified cap?

4.       Does the Government have a source of funds, other than the developer of a container terminal at the Port of Newcastle, to reimburse the Government for any cost the Government incurs in paying compensation to NSW Ports, for container traffic at the Port of Newcastle above a minimal specified cap?

(a)      If yes, what is the source?

5.       Did the (former) Minister for Roads and Ports, The Hon Duncan Gay MLC, inform Parliament on October 17 2013, that: “The Government has been clear on this all the way through the process, even before it indicated it would lease the port at the stage when Newcastle Port Corporation was in place. I have indicated in the House, as I have in Newcastle—indeed, I made a special visit to Newcastle to talk to the board, the chief executive officer and the local community—that part of the lease and the rationalisation was a cap on numbers there.”?

(a)      If yes,

(i) by “cap on numbers” does the Government mean the number of containers that can travel through the Port of Newcastle before the Government requires a developer of a container terminal at the Port of Newcastle to reimburse the Government for any cost the Government incurs in paying compensation to a lessee of Port Botany and Port Kembla?

(ii) what is the Hansard evidence that the Government informed the House about the “cap on numbers”?

(iii) what is the date that the Government informed the Board and Chief Executive Officer of Newcastle Port Corporation about the “cap on numbers”?

(iv) is there evidence that the Government informed the Newcastle community about the “cap on numbers” and if so, what is that evidence?

(v) if the answer to (i) is “no”, what does the Government mean by “cap on numbers”?

6.       Did the (former) Minister for Roads and Ports, The Hon Duncan Gay MLC, inform the Parliament on October 17 2013 that:

“The rules in the organisation that did the scoping study for Port Botany and Port Kembla and introduced guidelines there indicate that while general cargo is allowed there will not be an extension under the rules for the lease of Newcastle Port. So the short answer to the question is that we do not envisage that any compensation will need to be put in place.”?

(a)      If yes, did the Government instruct Morgan Stanley in 2012 about the “cap on numbers”?

7.       Did Hastings Funds Management write to the Government in 2013 proposing that the Government should require a developer of a container terminal at the Port of Newcastle to reimburse the Government for any cost the Government incurs in paying compensation to a lessee of Port Botany and Port Kembla, for container traffic at the Port of Newcastle above a minimal specified cap?

(a)      If yes, did the Government suggest the proposal to Hastings Funds Management?

8.       Did the (former) Treasurer, The Hon M Baird MP, announce a decision on June 17 2013 that the Government would lease the Port of Newcastle, subject to a scoping study?

(a)      If yes, did Mr Baird disclose to the Parliament the Government’s intention to amend Newcastle Port Corporation’s Term Sheets with Newcastle Stevedores Consortium by including a requirement to reimburse the Government for any cost the Government incurs in paying compensation to NSW Ports, for container traffic at the Port of Newcastle above a minimal specified cap?

9.       Did Mr Baird say in a media release dated October 28 2013: “While we are awaiting the scoping study on the proposed long-term lease of Newcastle Port and no decision has been made, Mr Whitlam’s experience in steering the Port Kembla and Sydney Ports Boards through a successful transaction process will prove to be incredibly valuable, should we proceed.”?

(a)      If yes, had the Government made a decision to lease the Port of Newcastle as at October 28 2013?

10.     On what date did –

(a)      the Government require Newcastle Port Corporation (NPC) to amend the Term Sheets with Newcastle Stevedores Consortium (NSC) to require NSC to reimburse the Government for any cost the Government incurs in paying compensation to NSW Ports, for container traffic at the Port of Newcastle above a minimal specified cap?

(b)      NPC amend the Term Sheets with NSC to require NSC to reimburse the Government for any cost the Government incurs in paying compensation to NSW Ports, for container traffic at the Port of Newcastle above a minimal specified cap?

(c)      NPC conclude its negotiation with NSC without reaching an agreement for developing the container terminal site?

NSW Ports cannot be guilty of contravening the Competition and Consumer Act (CCA).

The ACCC is alleging in the Federal Court that NSW Ports contravened the CCA because the “cap and fee” in the Port of Newcastle lease agreement is an anti-competitive consequence of the NSW Ports’ lease agreements in 2013 for Port Botany and Port Kembla.

Final competitive bids for the Port Botany and Port Kembla leases were lodged in April 2013.

Bidders’ profit forecast valuations relied on the NSW State Government (State) paying compensation if annual container traffic at the Port of Newcastle exceeded a minimal specified “cap”, for 50 years.

The State decided in 2012 that any cost of paying compensation would be recovered from the developer of a container terminal at the Port of Newcastle, by charging a “fee”.

The Port of Newcastle “cap and fee” was an instruction the State gave Morgan Stanley in 2012 for conducting a scoping study into leasing Port Botany and Port Kembla.

The State did not disclose the “cap and fee” to the public, the Parliament or the ACCC.

In 2012, Newcastle Port Corporation (NSC), a statutory State-owned corporation, had been negotiating with Newcastle Stevedores Consortium (NSC) since 2010, to develop a container terminal at the Newcastle port. Term Sheets were developed in 2010.

NSW Ports cannot be guilty of contravening the CCA because the State’s intention to include the “cap and fee” in the Term Sheets was an anti-competitive consequence of the State’s decision to lease Port Botany and Port Kembla, before agreements were signed with NSW Ports.

However, it is likely that the Term Sheets contravened the CCA in their own right.

NPC was carrying on a business for the purposes of the CCA when the negotiation with NSC commenced. If a court determines that NPC was still carrying on a business for the purposes of the CCA in November 2013, when the negotiation concluded (without a development agreement), it means that the inclusion of the “cap and fee” in the Term Sheets was illegal.

Terminating the negotiation with NSC left the State without the ability to meet its contractual commitment to NSW Ports to pay compensation.

The State was unable to meet its contractual commitment to NSW Ports while the Port of Newcastle remained under State control.

The State’s lease agreement for the Port of Newcastle is an anti-competitive consequence of the State’s decision in 2012 to pay compensation to a lessee of Port Botany and Port Kembla, before agreements were signed with NSW Ports.

It means the “cap and fee” provision in the Port of Newcastle lease agreement is unlawful and unenforceable.

Greg Cameron



Previous postWhat is the Australia We Want? Next postTenants lacks impartial access to Justice in NCAT
Our content: Terms of Use   |    © 2019 Newcastle on Hunter ~ Mostly Good News   |    Design by milo