Newcastle cruise terminal costs go beyond funding allocation, Port of Newcastle says

Outgoing Port of Newcastle chief executive Geoff Crowe confirmed he had asked for more in funding for the project, which was unveiled with much fanfare in September 2016 by then-premier Mike Baird.

Mr Crowe said a “heated” construction market had led to increases in building costs, along with extra geo-technical expenses and the engineering aspects of the “iconic” curved roof that was a centrepiece of the design.

He said the extra funding being sought was “less than $4 million”. Asked why the private port should not pay the extra cost, Mr Crowe said it was already providing the land and the other port facilities required as part of what he said was “a genuine partnership”.

Parliamentary Secretary for the Hunter Scot MacDonald, said he was working with the private port operator on the funding issue.

“We will consider what they are saying but it would be a misuse of taxpayers’ money if we were to hand over more funding every time someone came to us and said they’d miscalculated how much something would cost and could we cover the extras.”

Mr MacDonald said that although a solution would be found to the impasse the terminal would not be ready for the forthcoming summer cruise season, which was the expectation in 2016.

Michael Cassel, who heads up Revitalising Newcastle and the Hunter Development Corporation, said he was working with Mr MacDonald on a solution but in the end it was the privately owned port that had committed to build the terminal, on the agreed amount of funding

He said money would not be handed over until the project was ready.

“The HDC called for funding submissions as part of the Hunter Infrastructure and Investment Fund process,” Mr Cassel said. “The submissions were considered by the HIFF board and the port entered into an agreement with Infrastructure NSW, which administers the grant.

“The government has an agreement to build the terminal on the original budget and we expect the port to proceed on that budget.”

Government sources said it was not unusual for tenderers to come back to government to say that costs had blown out and so funding should be increased, but it may depend on the wording of the funding deed signed by the two sides.

Mr Crowe said Port of Newcastle had done a lot of detailed design work in its original application for the funding, which included quantity surveyors’ estimates and engineering works to show the project could be built for the amount being asked for.

He said the port had provided a lot more new information to the government since it realised that costs had risen, and it was ready to start construction, with a preferred tenderer already selected, once the financing was sorted.

He said the curved roof was an important part of the design. They could build it within the existing budget, but design changes would need to be made, including the loss of the iconic curved roof. Once the funding was solved, construction would take 12 months.