Lid lifted on deal that could cost taxpayers billions

The Port of Newcastle has long wanted to diversify away from coal and expand its container market.

The Port of Newcastle has long wanted to diversify away from coal and expand its container market. Photo: AAP

Disrupting a monopoly covering almost every imported good in NSW has left taxpayers on the hook for between $600m and $4.3b, documents are set to show.

The figures have emerged from a Treasury-commissioned analysis of the previous NSW government’s privatisation of Port Botany, Port Kembla and Port of Newcastle.

The first two were sold in 2013 with a condition Port Botany’s stranglehold on the container market could not be freely disrupted by Newcastle.

The owners of the Port of Newcastle have long signalled a desire to diversify away from coal loading and expand its tiny container market – a move supported by local farmers and businesses.

The competition watchdog, the ACCC, tried in vain to blow up the deals but lost a Federal Court appeal in early 2023.

The compensation liability is due to be made public on Thursday when Treasurer Daniel Mookhey tables the contracts in parliament.

The analysis by Deloitte Access Economics estimated the state would have to pay about $600 million to $4.3 billion to the owner of ports Botany and Kembla should Newcastle develop a competing container terminal.

Any payment would depend on when certain triggers were met.

Mr Mookhey, who asked the port owners for consent to release the contracts, said the public had a right to know if they got a good deal.

“They shouldn’t have had to wait this long to see these contracts,” he said.

“All this government had to do was ask.”

A deal with the Port of Newcastle, also due to be made public, requires it to reimburse the state for any compensation paid to Botany and Kembla’s owner, NSW Ports.

An independent pricing tribunal is due to soon announce what Newcastle should pay to extinguish that provision.

That year-long inquiry began after Lake Macquarie independent Greg Piper-led legislation to determine what the Port of Newcastle would have paid for an unrestricted lease on the port.


Topics: Imports
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