Labor slams state government over $75m consultants bill for Newcastle Port privatisation

The bulk of the money went to financial advisers Morgan Stanley, who were paid $23.1 million, accountants Pricewaterhouse Coopers, who were paid $19.4 million for tax and accounting advice, and law firm Minter Ellison, who received $18.3 million for legal advice.

The Labor opposition is questioning the amount of public money spent on consultants, and the outcome of the spending, given that the Botany/Kembla privatisation included a secret section that protected Sydney from competition from Newcastle.

A  similar proviso was written into the Newcastle lease a year later, which the port’s owners are now saying should be removed. Its existence was only admitted by the government in 2016 when the Newcastle Herald obtained a copy of a “port commitment” deed marked “strictly confidential”.

Read more: Government admits secret Newcastle charge

Consultants took home $24,796,419 for the 2014 privatisation of Newcastle, a year after picking up $49,499,477 worth of work when Botany was privatised with Port Kembla.

As well as the Morgans, PWC and Minters jobs, environmental Resources Management received $2.9 million for environmental engineering advice on Botany/Kembla and $2.4 million for Newcastle. For technical engineering advice, GHD was paid $2.4 million for Botany/Kembla and $1.3 million for Newcastle.

Real estate agents Colliers were paid just over $1 million for property expertise on both deals. RSM Bird Cameron received just over $560,000 for probity advice on both.

Newcastle MP Tim Crakanthorp said the government used its consultants to come up with a scheme that makes the port compensate its competitor if Newcastle handled more than 30,000 containers a year.

The Australian Competition and Consumer Commission has begun investigating both privatisations for possible breaches of the Competition and Consumer Act for “substantially lessening market competition”.

Mr Crakanthorp said he met on Thursday with ACCC chairman Rod Sims as part of his effort to “prosecute the case against the State Government’s  dodgy deal putting the handbrake on Newcastle and the Hunter’s future economic well-being”.

Read more: ACCC looking at Newcastle fee

“The penalty is specifically designed to stifle the growth of Newcastle Port, suppressing desperately-needed jobs in the Hunter region, and damaging local industry through higher transportation costs,” Mr Crakanthorp said.

“I have been raising this issue since 2015 and asked over 80 questions of the Minister in Parliament; this deal has been dodgy from the start. This is $75 million that could have been in invested in our local schools and hospitals. This ‘port rort’ has robbed Newcastle of jobs, investment and productivity. As further details are revealed we can truly see how much of a dodgy deal this really was.”

Canberra consultant Greg Cameron, who is pushing for the Newcastle container terminal, said “the NSW government spent money on lawyers to conceal its actions over the Port of Newcastle from the parliament and the public”.

Port Stephens MP Kate Washington said the fees were “an appalling use of public money”.

“Every step of the way, Premier Berejiklian has fought to keep the details of this dodgy deal a secret from the public. Now we find out they spent an eye-watering amount of money to apply the handbrake on the Hunter’s economy. 

Read more: Why Sydney is looking again at Newcastle container terminal

A spokesperson for Treasurer Dominic Perrottet justified the spending, saying the government raised $5.1 billion for Botany and Kembla and $1.75 billion for Newcastle, with the money contributing to major infrastructure projects.

The government has previously said its reform program often “requires external expertise held outside the bureaucracy” and that this advice helps “achieve the best possible outcomes for taxpayers”.