Nothing Stopping Newcastle Container Terminal

Filed under Letters & Opinion ~ by Editor on  14 Nov 2019

A container terminal can be developed immediately at the Port of Newcastle.

This government announcement misled the public, parliament and ACCC.

In July 2012, the NSW government announced that once Port Botany reaches capacity, Port Kembla will be developed as the next long-term container facility. The development of a dedicated container terminal at the Port of Newcastle will be considered when both Port  Botany and Port Kembla become fully developed.

This government announcement misled the public, parliament and ACCC.

The ACCC administers the “Competition and Consumer Act 2010” (CCA). What the government planned to do was likely to contravene the CCA.

The government planned to lease Port Botany and Port Kembla to the private sector for 99 years. The lessee would be paid for containers shipped through the Port of Newcastle above a minimal specified number. The government committed to billions of dollars in payments. The developer of a container terminal at the Port of Newcastle would be required to pay the government for any payment paid to the lessee of Port Botany and Port Kembla.

Requiring payment was likely to contravene the CCA by preventing or hindering the development of a container terminal at the Port of Newcastle. It would cost double to ship a container through the Port of Newcastle compared with Port Botany.

The ACCC took no action when Port Botany and Port Kembla were leased to NSW Ports in May 2013. Again no action was taken in August 2013 when the government required Newcastle Stevedores Consortium (NSC) to pay the government for any payment paid to NSW Ports. The ACCC simply did not know what the government was doing.

NSW Ports did not question the government over its source of funds. It didn’t know that the government’s intended source of funds was NSC.

NSC did not withdraw its proposal to the government. The government knew that it could not pay NSW Ports if a contract was signed with NSC that later proved to contravene the CCA. The government knew the ACCC would ask why it had not been informed.

Signing a contract with NSC also exposed the government to explaining to the public and the parliament why it contractually committed to pay NSW Ports payments of billions of dollars if NSC developed a container terminal at the Port of Newcastle.

When the government terminated the negotiation in November 2013, it needed an alternative method of preventing or hindering development of a container terminal at the Port of Newcastle.

When a government makes a “decision” about an asset, it no longer has to comply with the CCA in respect of that asset. The government made a “decision” in November 2013 to lease the Port of Newcastle.

The government was not authorised under the “Ports Assets (Authorised Transactions) Act 2012” to lease the Port of Newcastle to pay NSW Ports. NSW Ports may not be paid from consolidated revenue.

The government decided to lease the Port of Newcastle so that it could require the lessee to pay the government outside the operation of the CCA.

The government did not anticipate that the ACCC would take legal action against NSW Ports. Unlike the government, NSW Ports must comply with the CCA.

The ACCC is alleging that NSW Ports contravened the CCA because the ports’ lease arrangements prevent or hinder development of a container terminal at the Port of Newcastle.

NSW Ports’ defence is that the government’s Port of Newcastle arrangements have nothing to do with NSW Ports.

To this day, the government conceals its actual container terminal policy because the “Ports Assets (Authorised Transactions) Act 2012” did not authorise the government to lease Port Botany and Port Kembla with a contractual commitment to pay the lessee amounts in the billions of dollars.

The owners of the ports leases can improve their returns if they will agree to rail all containers in NSW.

Currently, most containers in NSW are trucked.

An orderly transfer of the state’s container terminal operations to the Port of Newcastle with back-up from Port Kembla, will enable a dedicated rail freight line to be built between the Port of Newcastle, Badgery’s Creek and Port Kembla. The line will be paid for by replacing all container trucking with trains.

Everyone in NSW will benefit.

Greg Cameron

https://www.containerterminalpolicyinnsw.com.au/



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